Civ Pro Law School Outline


Civ Pro Outline

PLEADINGS

  1. Intro
    1. In General: P begins a civil action by filing in a court of appropriate J a complaint seeking some sort of judicial relief against specified Ds. The court thereupon issues its process (e.g. summons) directing the named Ds to appear. A D “appears” by filing some sort of response (e.g., answer, motion, and demurrer), after which other pleadings and motions may be filed until the case is “at issue.”
    2. Objectives: Basic purpose is to give notice of the general character of the controversy between the parties. Under code pleading (used in CA), the pleadings are also intended to narrow and formulate the issues involved in the case.
  2. History of Pleading
    1. Common Law Pleadings: The original common law courts could grant relief only in accordance with certain recognized forms of action, each representing a particular theory of substantive law (ex: trespass, trover, etc), and pleadings had to be drawn in terms of one of these recognized forms. Thus, the P was forced to fit the out-of-court transactions of which he was complaining into the mold of one of the forms.
    2. Code Pleading (CA)
      1. Single form of action: Unlike the rigid common law forms, the fundamental requirement of code pleading is that the P’s complaint be in the form of a statement of fact showing a right to a remedy. This has been described as abolishing the forms of action and providing for one form of action (FRCP 2).
        1. Effect: The P thus mp longer has to select and set forth in the pleadings the particular legal theory of his case. He is entitled to recover under any legal theory applicable to the facts pleaded and proved.
      2. Merger of law and equity: Also eliminates the separate courts of law and equity. The same court is vested with J to grant both equitable & legal relief (FRCP 1)
        1. Remedies – distinct: While the distinctions between legal and equitable procedure have been abolished, the distinctions between legal and equitable remedies remain intact. The nature of the relief available depends upon the circumstances shown (whether damages has actually resulted for ex).
      3. Fact pleading: a pleading under the codes must set forth the facts constituting the cause of action in ordinary and concise language. This is interpreted as requiring an allegation of the ultimate facts of the cause of action (or defense) involved.
        1. Ultimate facts: facts that describe in adequate detail but without legal argument the circumstances that the P believes entitle him to a remedy. If the allegations are too general, they are deemed conclusions; and if too much detail is given, it is an impermissible pleading of evidence.
        2. Consequences of improper pleadings of facts: failure to allege ultimate facts constituting every essential element of the cause of action (or defense) involved makes the pleading insufficient and subject to a general demurrer or, under some codes, a motion to dismiss (equivalent to a general demurrer).
          1. If sufficient ultimate facts are alleged, evidentiary allegations and conclusions of law can be treated as surplusage
          2. If the allegations are too vague, the complaint is also subject to a special demurrer.
    3. Pleading under the Federal Rules (Notice Pleadings): FRCP have further liberalized pleadings standards and have eliminated many of the technical requirements under the FRCP.
      1. Pleadings permitted: FRCP 7 governs the basic pleadings allowed.
        1. Note: the demurrer has been eliminated din federal courts. In its place, the motion to dismiss for failure to state a claim is used (FRCP 12(b)(6)).
      2. Notice pleading: The FRCP eliminates the code requirement of pleading facts constituting a cause of action. Instead, the FRCPP simple require a short and plan statement of the claim showing the pleader is entitled to relief. (FRCP 8(a)(2)).
        1. Rationale: The purpose of pleading under the FRCP is simply to identify the transaction out of which the P’s claim arises, so that the D has notice of the claim. Discovery and other pretrial procedures are relied on for full development of the facts. Under the FRCP, the distinctions among ultimate facts, evidentiary facts, and conclusions of law are therefore said to be unimportant. Any claim may be stated in general terms, and stylized precision in identifying the cause of action is not required. However, generality can be taken too far. A pleading must show that the pleader is entitled to relief, and courts insist that pleadings include sufficient support for the claims included.
  3. Complaint: A civil action is commenced by the filing of the P’s complaint (FRCP 3)
    1. Form: The essential parts of the complaint are: the caption, J allegations, body, prayer for relief, and subscription.
      1. Caption: the complaint must set forth (FRCP 10(a)):
        1. The name of the court
        2. The number assigned to the action
        3. A designation of the pleading (ex: Complaint for Damages)
        4. The names of the parties
          1. Notes – Suing “John Doe” Ds is permitted in CA if the P does not know the true names of all the Ds.
            1. Caution – Doe Ds questionable in federal court: Due to SMJ concerns, use of Doe Ds may not be allowed in cases based on diversity J.
          2. Effect of errors – Under modern rules, pleadings must be construed as to do justice (FRCP 8(e)). Accordingly, the courts will disregard errors in the form or caption of the complaint that do not mislead the other party.
            1. Name of party wrong or incomplete – Generally a harmless error. However, if there is also error in the summons and as a result the intended D is not adequately warned that he is being sued, the action may be subject to dismissal for insufficient process.
      2. J allegations – In federal court, the complaint must contain allegations showing the ground upon which the SMJ of the federal court is invoked (FRCP 89a)(1)). Since federal courts are courts of limited J, a complaint that fails to set forth the J grounds must be dismissed unless the ground can be supplied by amendment.
        1. State practices – J allegations generally are not required in state court practice, because state courts usually have general J.
      3. Body – A statement of facts upon which recovery is sought. In code pleading states, this requires a statement of the ultimate facts constituting the cause of action, while under the FRCP there must be a short and plain statement of the claim showing that the pleader is entitled to relief.
        1. Separate causes of action – Each claim or coa should be set forth in a separate group of serially numbered paragraphs; and each paragraph should be limited to a statement of a single set of circumstances.
          1. Under code pleading practice, this was an essential requirement. A complaint that lumped together several causes of action was subject to demurrer
          2. Under modern law, however, a failure to state separate claims separately is simply a formal defect – and is not even a basis of objection in some states (CA).
          3. Under certain circumstances, it may be important for the Ds to know exactly the grounds on which the P is proceeding (ex: where several different claims have been lumped together and the statute of limitations is different on each claim). In such cases, the D’s remedy is to file a demurrer for uncertainty under code pleading practice or a motion for more definite statement under federal practice.
      4. Direct Allegations – The allegations in the complaint should be simple, concise and direct (FRCP 8(d)(1)).
      5. Allegations on information and belief – Ordinarily, the P’s allegations should be based on personal knowledge. However, if the P lacks personal knowledge of some element of his claim, in code pleading states the P may still make the allegation on information and belief. Information and belief may be insufficient under the FRCP, however. In federal courts, allegations can be made only after reasonable inquiry and with a belief that the pleading is likely to have evidentiary support (FRCP 11)
        1. Denials – similarly, in code pleading states, a D may deny allegations based on lack of information and belief. And under the FRCP, a statement that the D is without knowledge or information sufficient to form a belief as to the truth of an averment has the effect of a denial.
      6. Alternative and inconsistent allegations
        1. Inconsistent legal theories – a P may properly allege facts based on inconsistent legal theories. But FRCP 11 may limit this latitude.
        2. Limitationelection of remedies: However, while a P may go to trial on both theories and have a verdict on each, he will have to elect one theory prior to judgment because he cannot have two remedies.
          1. Not required to make this election until after a jury verdict and before judgment.
          2. Inconsistent facts – a pleader is also permitted to plead inconsistent versions of the facts (FRCP 8(d)(3)). However, some J requires that the facts alleged indicate some reason why the P could not know which version was true.
          3. Alternative Ds: The P can also plead one version of the facts against one D and another version against another D.
        3. Defenses need not be anticipated – Ordinarily, the P is not required in the complaint to anticipate any defense that the D may arise.
          1. Well-pleaded complaint rule: The rule regarding anticipating defenses corresponds to the well-pleaded complaint rule for federal questions subject matter J, which provides that the existence of a federal defense is not considered in deciding whether a P’s claim arises under federal law.
          2. Reply to affirmative defense: Although it is not automatically required, a court may order a P to reply to an affirmative defense asserted in an answer. (An affirmative defense is a defense relying on new matter that the D must prove to avoid the P’s claim). (FRCP 7(a)). The SC has observed that such a reply may be appropriate when a D asserts a defense of qualified immunity.
      7. Prayer for Relief: A complaint must also contain a prayer for relief, i.e., a statement of the relief sought.
        1. In default cases – if the D defaults by failing to defend, the relief granted cannot except what is prayed for in the complain or differ from it in kind. By failing to appear and contest the action, the D has, in effect, acquiesced in the entry of judgment against her; but the judgment entered must conform to the consent given. (FRCP 54(c)).
        2. In contests cases – The P is not limited to the relied prayed for in the complaint. The court may award any relief to which a party is entitled under the pleadings and proof – even if different from or greater than that prayed for in the complaint (FRCP 54(c)).
      8. Subscription: The complaint must be signed by the attorney (FRCP 11).
        1. Effect of signature – federal practice: Signature certifies that:
          1. To the best of the pleader’s knowledge, formed after reasonable inquiry, the allegations have evidentiary support or are likely to after further investigation or discovery.
          2. The claims or defense are warranted by existing law or a good faith argument for change in existing law
          3. The claims or defense are not interposed primarily for an improper purpose.
        2. Verification – an affidavit at the end of the pleading which avers that the pleading is true to the best of affiant’s knowledge, information, or belief. The affidavit is made by the party, or by an attorney or other person on her behalf if the pleader cannot do so or if another person with better knowledge of the facts is willing to make the verification for the party.
    2. Pleading Specific Claims
      1. In general – substance & procedure aspects in elements of a coa
        1. Substance – determines whether a specific incident or transaction results in liability to the P. Ex – calling someone a subversive results in liability for defamation only of the substantive law so provides
        2. Procedure – The procedural aspect is one of allocation: The P must allege enough particulars about the incident to constitute a prima facie case. Other particulars may be relevant, but will be considered only if they are injected into the case by the D, ordinarily in an affirmative defense.
          1. State Pleading – pleading requirement are particularly important for code pleading stats, where the general rule is that every essential element of the coa sued upon must be pleaded by allegations of ultimate fact.
          2. Federal pleading – this is not to imply that the elements off a coa may be disregarded in notice pleading Js: FRCP 8(a) requires that the complaint show that the P has a right to relief; and FRCP 12(b) authorizes a motion to dismiss for failure to state a claim upon which relief can be granted. However, under the FRCP:
            1. Less detail and specificity are required
            2. Omission of allegations is never fatal (they can be supplied by amendment).
      2. Form Complaints – complaint forms are published for the types of claims that are commonly made. These complaints are usually presumptively sufficient. For example, the forms appended to the FRCP are explicitly declared to be sufficient under the rules. (FRCP 84).
    3. Splitting of Claims – A pleader cannot split a single claim or coa into several different parts and file separate suits on each one. If the P sues on only part of the coa he has against the D, he is barred from suing later on the balance. This results from the doctrine of res judicata, i.e., that a judgment on any portion of a single coa merges the coa into the judgment, so that there is nothing lefts on which to sue. Where judgment has not been entered, and two cases are pending, attacks on the pleadings are possible.
      1. Obvious splitting – If the P is proceeding in two separate actions and the splitting appears on the face of either complaint, some states permit a special demurrer on the grounds that there is another action pending between the same parties for the same cause.
      2. Splitting no obvious – more frequently, the splitting will not appear on the face of either complaint, in which case the objection must be raised by the D in her answer (on the ground that another action is pending between the same parties for the same cause).
    4. Joinder of Claims
      1. No compulsory joinder of claims – while res judicata may prompt the P to bring suit upon her entire claim or coa, there is no requirement that she join in a single action what are separate and independent claims. Even where the claims are factually related, the P has the option of instituting a separate suit on each separate claim although, as a practical matter, Ps usually join related claims because of the danger of collateral estoppel.
      2. Permissive joinder of claims
        1. Code Pleading Rules – A P is restricted as to the causes of action that could be joined in a single complaint. All causes joined have to be the same type of claim (e.g. for all injuries to person, for injury to property, or all contract claims, etc), or at least arise out of the same transaction; all such causes have to affect all parties to the action; and no cause could required a venue different from the others.
      3. Federal Rules – the modern viewpoint on joinder of claims is represented by FRCP 18(a), which abolishes all restrictions on the joinder of claims and provides that a party asserting a claim for relief may join as many claims as she has against an opposing party, regardless of subject matter.
        1. Limitation in multi-party cases – While there are no restrictions on the number or nature of claims that may be joined where a single P is suing a single D, the rules on joiner of parties impose limitations where there are several co-Ps or co-Ds. Where there are multiple parties, at least one of the claims by or against each party must arise out of the same transaction, occurrence, or series of transaction or occurrences and must involve a common question of law or fact affecting each of the parties joined (FRCP 20(a)).
          1. Effect – The joinder of parties rules thus limit the joinder of claims in multi-party cases to those among which there is a subject matter relationship.
        2. Separate Trials – in its discretion. The trial court may remedy any possible inconvenience or prejudice caused by the joinder of claims by ordering separate trials.
        3. Distinguish – SMJ – In federal court, SMJ requirements must also be satisfied. For claims that arise out of the same transaction, there would ordinarily be sup J as long as one claim is a federal claim, but otherwise there must be an independent basis for SMJ (such as diversity of citizenship) with regard to permissively joined claims.
    5. Consolidation of Separate Actions
      1. Can transfer courts to consolidate when more than one action involving related facts is pending in dif courts
  4. Challenges to Complaint
    1. In General – before responding to the factual allegations in the P’s complaint (by admitting or denying them, or setting forth some defense or offset thereto), a D may challenge the legal sufficiency of the complaint.
    2. Common Law – at cl, defects in the pleadings could be raised by a demurrer. There were two kinds:
      1. General demurrer – challenged the substantive sufficiency of the cause in the complaint. It did not specifically state the reason for demurring, but asked the court to pause (demur) and look at the complaint to see if it stated a valid case. Otherwise, why prolong the proceeding?
      2. Special demurrer – this common law demurrer specially stated a matter to be scrutinized in the complaint – e.g., incapacity of P, allegations that were too vague, etc. Hence, the special demurrer challenged matters of form.
    3. State Practice – Code used in CA but not in other states or federally but generally the same in this respect
      1. Demurrer – a pleading filed by one party for the purpose of challenging the legal sufficiency of the other party’s pleading
        1. Pleadings subject to demurrer – the most frequent use of the demurrer is to challenge the P’s complaint. However, the P may demur to an affirmative defense, counterclaim, or cross-complaint filed by the D.
        2. Grounds for demurrer – the grounds for demurrer usually included the following:
          1. Lack of jurisdiction over the subject of the action
          2. The P’s lack of legal capacity to sue
          3. Defect to misjoinder of parties
          4. Failure to state facts sufficient to constitute a coa – the general demurrer
          5. Complaint is uncertain
          6. In an action upon a contract, inability to ascertain whether the contract is oral or written.
        3. General v Special demurrer – a demurrer for failure to plead facts sufficient to constitute a coa is considered a general demurrer. A demurrer on any other grounds is a special demurrer.
          1. Issue – In ruling on a general demurrer, the court must accept all facts pleaded as though they were true. The issue is whether – assuming that the well-pleaded facts are true – the facts would entitle the P to some form of judicial relief.
          2. Standard – I the complaint alleges facts sufficient to constitute some valid cause of action; the general demurrer will be overruled. The test is whether the complaint sets forth any good coa.
        4. Ruling on demurrer – effects
          1. Where demurrer is overruled – if overruled, the D will be ordered to answer the complaint within a period of time designated by the court. The D will then have to make a decision either to: (i) file an answer; or (ii) refuse to do so, allow the P to obtain a default judgment, and appeal the default judgment
            1. If the D files an answer, she waives any error in the overruling of a special demurrer. However, the D retains the right to object that the complaint does not state a coa.
            2. If the D does not file an answer and appeals the resulting default judgment, she takes a big risk: an appellate court will not reverse unless the judgment was so plainly erroneous as to constitute an abuse of discretion.
          2. Where demurrer is sustained
            1. Specify grounds – In CA, the court must specify the particular ground or groups upon which the demurrer is sustained.
            2. Leave to amend – having sustained the demurrer, the court normally grants the P leave to amend the complaint.
              • If the court is convinced that the defect cannot be cured by amendment (especially where the P has already tried unsuccessfully to amend), it may sustain the demurrer without leave to amend. In that event, a judgment of dismissal is entered (from which the p can appeal).
              • If the P is granted leave to amend and amends the complaint within the time permitted, the D against has the choice of answering or demurring to the amended complaint.
              • If the P chooses not to amend (or fails to amend within the time permitted), a judgment of dismissal will be entered. The P can then obtain appellate review; but the appellate court will affirm the dismissal if
                1. The complaint was defective in substance, even though the trial judge was incorrect as to the ground on which it was defective
                2. The complaint was defective in form and the party failed to use an opportunity given him in the trial court to clarify his pleading.
        5. Effect of failure to raise ground for demurrer – Grounds for demurrer are waived unless raised in the D’s initial pleading – demurrer or answer.
          1. Exceptions – Failure to state facts sufficient to constitute a coa and the court’s lack of SMJ are never waived.
          2. Waiver of objections to PJ and process – Since a general demurrer constitutes an appearance in the action, it results in a waiver of objections to personal J and to sufficiency of process. In some code pleading states (CA), a DD may be able to preserve objections to PJ even though he files a demurrer by simultaneously filing a motion to quash service of process.
      2. Motions to strike – the only other challenge usually permitted against the form or contents of a pleading is a motion to strike, which normally lies to reach defects not subject to demurrer. Filing a motion to strike extends the time within which to answer the complaint. This enables the D to obtain a court order striking improper allegations from the complaint before being obliged to answer them.
        1. Formal defects – the usually grounds for a motion to strike are that the pleading attacked contains irrelevant or redundant matter (e.g., evidentiary matters or conclusions of law) or has some defect in form which is not a ground for demurrer (e.g., lack of verification or subscription, late filing).
        2. Substantive defects – a motion to strike can also be used to eliminate part of a claim that is otherwise valid (e.g., punitive damages sought in a suit for breach of contract).
    4. Federal Practice – The FRCP have deemphasized pleadings and accordingly limit the form and manner in which pleadings can be attacked
      1. Motion to dismiss – under the FRCP, the motion to dismiss is the basic challenge to the legal sufficiency of adversary pleadings (FRCP 12(b)). Making such a motion is always optional with the D, since he can raise the same objections in his answer.
        1. Permissible grounds – the motions to dismiss can be made only on the following grounds:
          1. Lack of J over the SM
            Lack of J over the person
          2. Improper venue
          3. Insufficiency o process
          4. Insufficiency of service of process
          5. Failure to state a claim upon which relief can be granted
          6. Failure to join a party whose joinder is required by Rule 19.
        2. Failure to state a claim – when the motion is made under FRCP 12(b) (failure to state a claim), its function is basically that of a general demurrer. Assuming the facts pleaded are true, do they constitute a legal claim upon which the P is entitled to judicial relief?
          1. Test for sufficiency of complaint – In testing the sufficiency of the complaint in connection with a Rule 12(b)(6) motion, the following principles are generally applied.
            1. Facts” not explicitly required – the complaint generally need not contain the ultimate facts; FRCP 8(a)(2) requires only a short and plain statement of the claim showing that the pleader is entitled to relief.
            2. Liberal standard for sufficiency – The SC stated in the 1950s that the complaint should not be dismissed unless the court is certain that the P cannot prove a set of facts in support of his claim that would entitle him to relief.
              • New Standard –plausible – However, in 2007 the Court declared that the no set of facts directive should be retired because a complaint in federal court must show affirmatively that the P’s factual allegations make the P’s entitlement to relief plausible.
              • Code Pleading standard compared – Nevertheless, the federal standard is more lenient than the requirements imposed by code pleading states. For example, Form 9 of the FRCP states that the following is sufficient to allege negligence: “D negligently drove a motor vehicle against P.” This relaxes the requirement in some code states that the P specify the underlying failure of the D upon which the claim of negligence is based.
            3. Continuing need to set out factual matter – despite the absence of a specific requirement for allegations of fact in the rules, the P’s complaint must contain factual matter sufficient to show that the P is entitled to relief against the D.
          2. Fraud of mistake – where claims are based on fraud or mistake, the FRCP requires the P to plead with particularity (FRCP 9(a)).
            1. Claims affected – This requirement of added specificity applies only to claims where the substantive right to relief depends on proof of fraud or mistake. Examples include common law fraud, securities fraud, and actions to rescind or modify a contract for mutual mistake. Rationale: Courts explain that the added specificity is important to provide added notice and that it protects Ds against unfounded claims that damage their reputations. However, it is difficult to understand why the claims covered give rise to especially troubling problems compared with other claims not covered by the rule.
            2. Application – courts usually look to whether the P has provided specifics concerning the date and content of representations on which a fraud claim is based. In cases involving multiple Ds, it may be necessary for the P to specify the involvement of each one that allegedly gives rise to liability, sometimes requiring very great detail. However, some courts say that to satisfy Rule 9(b), the P need provide only slightly more than that which is required by Rule 8(a)(2).
            3. State of mind – Rule 9(b) also provides that malice, intent knowledge, and other conditions of mind can be averred generally. This exempts all allegations on these subjects from the particularity requirement of the rule. Nevertheless, some courts apply the particularity requirement to allegations relating to state of mind.
            4. Requirements of Private Securities Litigation Reform – Under the PSLRA, most federal securities fraud claims must specify each statement alleged to have been misleading, the reason or reasons why the statement is misleading and, if the d is liable only for acting with a certain state of mind, state with particularity facts giving rise to a strong inference that the D acted with the required state of mind, Under this standard, the P must include factual allegations that make the inference of scienter cogent and compelling, and at least as strong as any other inference that could be drawn from the factual allegations.
          3. Heightened specificity for other types of claims – with regard to certain other types of claims, some federal courts have developed pleading requirements that seem to go beyond the liberality of Conley
            1. Civil right claims
            2. Other claims analogous to fraud
            3. Qualified immunity
            4. Stimulus for heightened pleading requirement
            5. SC disapproval of heightened specificity requirements
            6. Alternative of requiring reply or entertaining motion for more definite statement
    5. Amendment by P if motion to dismiss is granted – granting or denying leave to amend rests in the discretion of the court, but leave must be liberally granted.
      1. If the P amends – he waives any error in the ruling on the original complaint, unless he can show that the outcome of the action was prejudiced by the erroneous dismissal of the original complaint.
      2. If the P chooses not to amend – (or if leave to amend is denied), the court will enter a judgment of dismissal. The ruling on the motion is not an appealable order, but the judgment can be appealed.
        1. If the P appeals and wins – the complaint is reinstated, and the D must answer.
        2. If the P loses on appeal – or fails to appeal, this generally bars any further proceedings in the action. However, the appellate court has discretion to remand in order to permit an amended complaint to be filed.
    6. Answer by D if motion is denied – If the D’s Rule 12(b) motion is denied, she must answer and proceed with the litigation – i.e., the appellate ct will not reexamine the denial of the D’s motion as such. However, the D can raise the same issues on appeal from the final judgment and by subsequent motions (motions for judgment as a matter of law, for directed verdict, for judgment notwithstanding the verdict, etc), which can also be reviewed on appeal from the final judgment.
  5. Motion for more definite statement – Rule 12(e) permits a very limited attack on the form of the pleadings (and to this extent serves somewhat the same function as the special demurrer for uncertainty in code pleading practice). However, the motion will be granted only where the pleading under attack is so vague and ambiguous that it would be unreasonable to require the moving party to reply to it.
    1. When available – a motion for a more definite statement is appropriate only if the pleading being attacked requires a response. If no response is permitted to the pleading under attack (e.g., a D’s answer), the motion is never proper
    2. As predicate for Rule 12(b)(6) motions – numerous cases have found that the motion for a more definite statement should not be used as a predicate for a Rule 12(b)(6) motion to dismiss for failure to state a claim. But the SC has recognized that in some circumstances it is an important way of making Ps put forward specific nonconclusory factual allegations. Thus, although there may be a bias against using a Rule 12(e) motion as a precursor to a Rule 12(b)(6) motion, it appears to be proper to do so if there actually is a substantial threshold question that may be dispositive (e.g., whether the facts are sufficient to overcome official immunity).
    3. Motion available even if complaint states a claim – If a complaint is unduly wordy or otherwise in improper form, a court may require a more definite statement even though the complaint states a claim. Moreover, if the P fails to comply, the complaint may be dismissed even if it is not wholly without merit.
  6. Motion to strike – Either party may move to strike an insufficient defense or any redundant immaterial, impertinent or scandalous matter in the other’s pleading (FRCP 12(f)).
    1. Limited use – the motion to strike is said to be disfavored and generally will be denied unless the allegations attacked have absolutely no possible relation to the controversy. If the alleged matter is merely of doubtful relevancy or doubtful legal value, the motion will be denied. Rationale: pleadings are not read to the jury in federal court (except in unusual circumstances where they have special relevance – e.g., when they contain an admission). Consequently, it serves little purpose to strike allegations in the pleadings.
    2. Strike portions of complaint – a motion to strike may also be used to attack separate portions of the complaint which are insufficient as a matter of law – e.g., where a P seeks punitive damages in a breach of contract action even though, as a matter of law, such damages are not available on such a claim, or where a D asserts an affirmative defense that is not applicable to the P’s claim.
  7. Procedure on motions under Rule 12 – a motion under Rule 12 must be in writing and must specify the ground upon which it is based (FRCP 7(b)(1)).
    1. Facts – if the motion is based on asserted facts, these must be established by accompanying affidavits, declarations, depositions or other evidence. One a Rule 12(b)(6) motion, scrutiny is ordinarily limited to the face of the complaint.
    2. Time – the motion must be served within the time permitted the D to serve the answer (normally 20 days after service of a summons and complaint). The filing of the motion operates to extend the time within which the answer is due until the court rules on the motion
  8. Effect of failure to include defenses in motion – The D is never compelled to file a motion under Rule 12; but if she does, she must include therein all defense and objections that she could then raise by motion. If she omits an available defense or objection, she may not make a further motion on the omitted ground (FRCP 12(g)). She will, however, be able to raise the ground in her answer, unless it is a ground that is waived by failure to raise in the first responsive pleading or motion.
    1. Waiver – the following defenses are waived unless raised by motion or in the first responsive pleading (FRCP 12(h)(1)):
        1. Objections to the form of the complaint
        2. Objections to venue, PJ, or to sufficiency of process
  1. Rationale – A party who invites the court to pass upon a threshold defense should bring forth all such defense, in order to prevent waste of time by piecemeal presentation of defects.
  2. Defenses not included in answer – most other defense must be raised in the answer to be asserted later in the case. If a D fails to raise a given defense in the answer, it is sometimes said that it is waived, but actually it can later be raised if the D obtains leave to amend the answer to add the omitted defense.
    1. Defenses that need not be raised in answer – (FRCP 12(h)(2), (3))
      1. Lack of SMJ
      2. Failure to join an indispensable party
      3. Failure to state a claim upon which relief can be granted.
    2. Limitation – the waiver pertains only to the defense that could be raised by a Rule 12 motion. Thus, there is no waiver of substantive defenses (e.g., release, novation, payment, etc), which can be raised only in the answer.
    3. Distinguish – forfeiture of defenses due to delay in asserting – Under some circumstances, even where a D complies with Rule 12(h) and includes a preliminary defense in her answer, her failure to assert that defense by motion in a timely fashion may be found to forfeit the defense.
  1. Other Procedures – While the demurrer (state practice) and Rule 12 motion (federal practice) are the procedures most commonly used to attack the sufficiency of a pleading, other procedures are likewise available – the most important of which is the motion for judgment on the pleadings
  2. Additional Rules of Pleading
    1. Materials considered
      1. Pleading on its face – in general, challenges to the sufficiency of the pleadings are limited to the allegations of the pleadings lone, and consideration of evidentiary materials, no matter how persuasive, is not allowed.
        1. Distinguish – summary judgment –
        2. Conversion to summary judgment – in federal ct, if materials outside the complaint are submitted with a motion to dismiss for failure to state a claim are not excluded by the ct, the motion is to be considered a motion for summary judgment (FRCP 12(d)) – motion to strike complaint based on materials outside the complaint treated for summary judgment.
  3. Answer – the function is to put at issue the factual allegations in the complaint. The answer accomplishes this by denying the allegations of the claim and/or by setting forth some affirmative defense (“new matter”) that avoids the effect of the P’s allegations.
    1. Denials – to put at issue the allegations of the complaint, the D’s answer must contain effective denials. Allegations not denied are deemed admitted
      1. Form –
        1. General denials – a single general denial will controvert all of the allegations in the complaint (e.g., D denies each and all of the allegations in P’s complaint). In most Js, this no longer good practice.
          1. Federal pleading – in federal practice, the basic requirement of good faith based upon reasonable inquiry in pleading (FRCP 11) means that a general denial is rarely proper b/c there is usually something in the P’s complaint (e.g., allegations about the P’s personal identity and J allegations) which the D in good faith should admit.
          2. State Pleading – In some states a general denial is not allowed in response to a verified complaint. In such a case, the answer must also be verified and specific denials are required.
            1. Exception – verified general denials to a verified complaint may be allowed where the amount in controversy is small.
        2. Specific denials – anything less than a general denial can be considered a specific or qualified denial. Several different types of allegations may be used in this regard:
          1. Specific denial by parts – the D can go through the complaint, paragraph by paragraph or sentence by sentence, admitting or denying each part as appropriate. Where only part of a paragraph or allegation therein is true, the D should admit that which is true and deny the balance.
          2. Negativing P’s allegations – a denial may be effect merely by repeating the allegation but prefacing it with a word of denial.
        3. Denials on lack of information – if the D is without sufficient knowledge or information to enable her to form a belief as to the truth of allegations in the complaint, she may so state in her answer. Such a statement operates as a an effective denial (FRCP 8(b)(5)).
      2. Effect of failure to deny – constitutes an admission of the allegations (FRCP 8(b)(6)).
    2. Affirmative Defenses – The D in her answer must also plead any defense or objections that constitute new matter or an affirmative defense. Such matter is not in issue (and hence may not be introduced in evidence at trial) under a simple denial.
      1. Definition – basically new matter is anything that the D must prove in order to avoid the P’s claim – i.e., even assuming the P’s allegations were true, an independent reason why the P cannot recover. The test usually is whether the D would bear the burden of proof on the issue at trial; if so, it is new matter.
      2. Federal practice – although burden of proof is generally deemed to be a substantive question for Erie purposes, pleading rules are clearly procedural. Hence, if an affirmative defense falls within FRCP 8(c), it must always be specially pleaded; and this is true whether or not the D would have the burden of proof on this issue under state law.
        1. Rule 8(c)- lists various defenses that must be affirmatively alleged.
    3. Allegations of Answer deemed Controverted – Except where the answer contains a counterclaim, no reply to an answer is permitted in federal practice unless the court so directs. FRCP 7(a). Allegations of new matter in the answer are made controverted – meaning that the P has the right, without further pleading, to introduce evidence to defeat or avoid the allegations. (FRCP 8(b)(6)).
      1. Replay required – The SC has observed that a reply may be appropriate when a D asserts a defense of qualified immunity and some courts now require a reply in that situation.
    4. Challenges to Answer – A P who desires to challenge the legal sufficiency of an affirmative defines may file a demurrer or a motion to strike any insufficient defenses under FRCP 12(f).
      1. And Note – The P may also employ a motion for judgment on the pleadings or motion for summary judgment to challenge the new matter.

Counterclaims and Cross-Claims

Federal Practice

  1. Counterclaims – as part of the answer, the D may set forth by way of counterclaim any claims that she has against the P. Such claims need not be related to the claims set forth in the complaint. (FRCP 13(b)).
    1. SMJ –
      1. Compulsory counterclaims – if the counterclaim is compulsory (i.e., based on the same transaction or occurrence as the P’s claim), it is deemed ancillary to the P’s claim, and therefore within SMJ.
      2. Permissive Counterclaims – However, if the counterclaim is merely permissive, SMG requirements must ordinarily be satisfied on some independent ground of federal J (e.g., if the P’s claim is based on a federal question, the D’s counterclaim would have to be based on some federal question or on diversity. It may be, however, that the sup J statute allows assertion of permissive counterclaims that satisfy the statute’s common nucleus of operative fact standard to be part of the same Article III case as the P’s claim even though not compulsory under Rule 13(a).
    2. Venue – counterclaims have no effect on venue. The venue statutes regulation where the action may be brought; and this refers solely to where the P files his complaint.
    3. Pleading – the sufficiency of a counterclaim is tested by the same rules of pleading applicable to a complaint.
      1. Form – the cc should be set forth as part of the D’s answer, rather than as a separate pleading FRCP 13(a)).
      2. Caption – a counterclaim should always be labeled as such
      3. P’s reply – a responsive pleading by the P is required to a cc labeled as such. The reply may contain denials, affirmative defense or even a cc to the cc.
        1. Note – All matters in the reply are deemed denied or avoided under FRCP 8(b)(6).
        2. But note – the D can attack the reply by a motion for judgment on the pleadings or a motion to strike under FRCP 12.
    4. Joinder of other parties to cc – Although a cc is against the P, it can be an occasion for the joinder of additional parties.
      1. Permissive joinder – When making a cc, the D may join other persons in accordance with the provisions of Rule 20 & Rule 13(h).
        1. Caution – SMJ – Note, however, that when a cc is permissive, there must be some independent basis for federal SMJ
      2. Joinder by order of court – If a D does not join a party that should be joined under Rule 19(a), the court may order that party joined on motion of the P or, if the party is not joined, proceed to determine whether the case should be dismissed pursuant to Rule 19(b) if it is not possible to join the additional party.
        1. SMJ – If the D has asserted a compulsory cc, ordinarily sup J would permit the addition of claims against parties who should be joined under Rule 19(a).
      3. Voluntary dismissal by P – to protect the D’s right to relief on the cc, FRCP 41(a)(2) provides that once a cc is asserted, the P cannot dismiss the action without the D’s consent.
    5. Permissive v. compulsory ccs
      1. Permissive – If the D’s claim against the P is unrelated to the claims set forth in the complaint, it is optional (or permissive) for the D to assert them by way of cc, i.e., the D may, if she chooses, assert the claims in an independent action.
      2. Compulsory ccs – however, if the D’s claim against the P arises out the same transaction as the claim set forth in the complaint, the cc is compulsory – meaning that it must be asserted in the action or it will be barred. (FRCP 13(a)).
        1. When cc is compulsory – compulsory if:
          1. Arises out of the transaction or occurrence that is the SM of the P’ claim; and
          2. Does not require the presence of third parties over whom the court has no J. (FRCP 19).
        2. Scope of transaction or occurrence – in determining whether the cc is compulsory, the phrase “transaction or occurrence” appears to be construed differently, depending on the context:
          1. Broad view: J in first action – When the Q is whether is whether the cc is within the court’s sup J, a broad definition of “transaction” is used – the object being to permit the cc and thereby to avoid multiplicity of suits.
          2. Narrower view: scope of preclusion in later action – on the other hand, if the Q is whether a D who failed to interpose a cc is barred from later suing on it, a narrower definition may be used it would be inequitable to bar the later suite.
      3. SOL problems – an important issue is whether a cc is barred by the sol if it is filed after the statute has run, but the action (i.e., the P’s complaint) was filed before the statute ran. The question is considered substantive for Erie doctrine purposes, and hence is resolved by appropriate state law.
        1. Majority view – the general view is that if the cc arises out of the same transaction as the P’s claim, it will not be barred if the P’s complaint was filed before the running of the statute. Rationale: The P’s filing of the complaint places before the court all rights and obligations of the parties to the transaction in question. In addition, in terms of the policies of the sol, a P who files suit is clearly on notice of the transaction and has an incentive to preserve evidence about it
        2. Minority view – view goes further and allows any cc (same transaction or not) to be used defensively – i.e., as an offset to the P’s claim – even though the statute has run.
        3. Cross-demands deemed compensated – CA reaches the same result via statutes that provide that where cross-demands for money have existed between the parties at any point in time, they are deemed compensated – i.e.,, the P’s claim is deemed paid to the extent of the D’s offsetting claim, If the O later sues the D, the D can set up her cross-demand to show payment (an affirmative defense), even though an independent action on the D’s claim would then be barred by the sol.
          1. Limitation – such statutes apply only if the cross-demands are for money. Thus, if the P is suing for recovery of property, the sol will continue to run on any cross-demand which the D has against the P
        4. Cross- claims – In federal court actions, the D may set forth in the answer any claims that she has against a co-D that relate to the transaction or occurrence or to any property that is the subject of the P’s complaint. Such cross-claims are never compulsory (FRCP 13(g)).
          1. Jurisdiction – Since the cross claim must relate to the transaction in the existing action, the better view is that it is within the sup K of the court, and no independent ground for fed J is required.
          2. Pleading
            1. Form – Like a cc, the cross claim should be set as part of the D’s answer rather than as an independent pleading
            2. Responsive pleading – the co-D against whom the claim is assert must file an answer to the cross claim (FRCP 7(a)(4)).
          3. Parties – the basic cross-claim must be against a co-D. As with ccs, however, the cross-claimant may add new parties against whom it has claims growing out of the same transaction (FRCP 13(h)).
          4. Other procedures compared –
            1. Counterclaims and cross-claims – ccs lie only against the opposing party (the P), whereas a cross-claim lies against a co-party (D2)
              1. A cc is sometimes compulsory, whereas a cross-claim is always permissive
            2. Impleaders and cross-claims – Impleaders are claims against a third person who is a transfer to the action, whereas a cross-claim lies against a co-party (D2). Moreover, an impleader claim is limited to a claim for indemnification or contribution, whereas a cross-claim can be asserted for any claim D1 has against D2 arising out of the transaction that is the basis for the P’s action.
  2. State Practice – Cross-Complaint – most state rules governing pleading of claims by a D against the P or third parties follow the FRCP. However, CA does not recognize the counterclaim or cross-claim but provide that a D’s claims against any party (P, co-D, or a third person not yet a party to the action) may be asserted in a cross-claim.
    1. Form – the cross-complaint is a separate pleading (i.e., not part of the answer).
      1. Procedure – if the cross-complaint is filed at the same time as the answer, it may be filed as a matter of right. Otherwise, leave of court must first be obtained for a cross-complaint against current parties to the case. Cross-complaints against new parties can be filed w/o leave of court until a trial date has been set.
      2. Service – the cross-complaint must be served on every party to the action
    2. Joinder of parties – a cross-complaint may be filed against the P, a co-D or a third person not yet a party to the action. In the latter case, a separate summons is issued on the cross-complaint.
      1. Note – the usually rules with respect to necessary and indispensable parties apply here as well.
    3. Joinder of claims
      1. Against P – unlimited scope – the D may assert any and all claims she has against the P. There is no requirement of any subject matter relationship to the P’s complaint.
        1. Compulsory cross-complaints – However, if the D’s coa is related to the subject of the P’s complaint, failure to assert it constitutes a waiver thereof. Basically, the same rules apply as for federal compulsory counterclaims.
      2. Against other parties – SM relationship – A D can assert a cross-complaint against a co-D or third party only if the coa sued upon is related to the P’s complaint – i.e., arises out of same transaction or series of transactions, or involves the same property or controversy.
        1. Effect – as long as there is one such coa, the D can join with it any other coas she has against any of the cross-Ds. A D may join additional cross-Ds, although they were not formerly parties.
        2. Note – The Ca cross-complaint can thus be used to assert the claims asserted under the FRCP by compulsory counterclaim (same transaction), permissive counterclaim (different transaction), cross-complaint (against co party), or impleader (bringing stranger in as third-party D).
      3. Responsive pleading required – Each dross-D must file an answer (or demurrer) to the cross-complaint. If no such response is filed, a default judgment may be entered on the cross-complaint.
        1. Grounds for demurrer – The grounds for demurrer to a cross-complaint are the same for a demurrer to the original complaint.
        2. Additional cross-complaints – A cross-D, in turn, is permitted to file a cross-complaint against any other party or against any stranger to the action. This means that the cross-D is subject to the compulsory cross-complaint provisions (above).
        3. Note – indemnification – A special statute in CA allows broader defense where the cross-complaint is for indemnification (e.g., P sues D; D cross-complaint against Third Party, alleging that Third Part is liable to indemnify D against P’s claim, so that if P wins against D, Third Party is liable to D). In such cases, the cross-D (Third Party) is permitted to assert any defenses to the underlying coa (P v D) that could be asserted by the person seeking indemnification from him (D).
          1. Rationale – The purpose of this rule is to protect against collusion on the underlying coa (i.e., D admitting or defaulting to P’s claim, in order to saddle Third Party with the liability).

Amended and Supplemental Pleadings

Amendments Prior to Trial

  1. Amendments Prior to Trial
    1. Amendments as a matter of right – Either party may amend his pleading once as a matter of right, either (i) before a responsive pleading (as opposed to a mere motion) is served by the other party or (ii) if the pleading is one to which no responsive pleading is permitted (e.g., D’s answer) and the action has not been placed on the trial calendar, at any time within 20 days after the pleading is served (FRCP 15(a)(1)).
      1. Note – even though there is a right to amend,, the alteration must be within the permissible scope of amendment or it is subject to being stricken
    2. Amendment by permission of court – In any other situation, a party may amend his pleading only by leave of court; however, such permission is usually granted liberally prior to trial.
      1. Rationale – modern courts stress that the primary function of the pleadings is to give notice of the pleader’s claim (or defense). As long as the original pleading gave such notice, the claim may be expanded or changed in the course of litigations.
      2. Effect – leave to amend will usually be granted unless some actual prejudice to the other party appears or the trial schedule will be disrupted. In the absence of such prejudice or disruption, refusal to permit an amendment may be an abuse of the court’s discretion.
    3. Procedure
      1. Motion for leave to amend – Unless the amendment is a matter of right or the parties consent, the party seeking leave to amend must file a formal motion with the court, attaching a copy of the proposed amended pleading, and an appropriate showing (usually by affidavit) of the grounds upon which the amendment is sought.
      2. Service – If leave to amend is granted, the amended pleading must then be filed and served in the same manner as the original pleading.
      3. Response to amended pleading – if a response to the original pleading was required (e.g., complaint or counterclaim), then a response to the amended pleading is required as well. The response to the pleading – be it an answer, reply, or motion – must be served within 10 days after service of the amended pleading (FRCP 15(a).
    4. Permissible scope of amendment
      1. State practice – The test is simply whether the proposed amended pleading is based on the same general set of facts as the original pleading.
      2. Federal practice – The basic Q is whether (and to what extent) the amendment results in prejudice to the opposing party.
        1. Effect – Under fed practice, it is immaterial that the proposed amendment changes the theory of the case, states a claim arising out of a transaction different from that originally sued on, or causes change in parties.
        2. Amended answer – the same liberal rules apply to the D’s answer, except that defenses that are waived if not asserted in the D’s first pleading (answer or motion) – e.g., improper venue, defective service of process – cannot be revived by amendment
        3. Effect of trial date and Rule 16 limitations on time to file motions – Another fact that increasingly bears on whether a party is granted leave to amend is the court’s schedule for completion of pretrial activities and trial of the case. If the motion is made after the cutoff for making motions under a Rule 16 scheduling order, or if the scheduled date for trial might be disrupted, the court may deny leave to amend.
    5. Relation back doctrine – sol problems – If the P seeks to amend the complaint after the sol would otherwise have run on the claim, there is a question of whether the amended claim “relate back” to the date of the original complaint
      1. Relation back usually permitted – in most Js, the amended claim relates back – i.e., is deemed filed as of the date of the original complaint – as long as the claim asserted in the amended pleading arose out of the same conduct, transaction, or occurrence set forth in the original pleadings (FRCP 15(c)(1)(B)/
      2. Effect – as long as the same basic transaction is involved, the P may therefore amend his complaint to established new theories of recovery, or even to show new facts entitling him to recover, after the sol would other =wise have run.
      3. Rationale – The D is not prejudiced b/c she had notice, within the limitations period, that the P was asserting some claim against her on the basis of the transaction involved. Consequently, a change in the nature or theory of the P’s claim does not prejudice the D.
      4. Rule regarding new parties – An amendment of the complaint cannot avoid the sol with respect to a totally new party (as P or D). Rationale: The fact that the P has filed an action against one D does not toll the sol on such claims he may have against other Ds.
      5. Federal rule for relation back – In federal ct, relation back is permitted I an amendment changes the party or the naming of the party against whom a claim is asserted (FRCP 15(c)(1)(C)). This relation back is permitted only in cases in which the new claim arises from the same transaction as that asserted in the original complaint (FRCP15(c)(1)(B)); and the new party has notice of the suit.
        1. Liberal interpretation superseded – Some earlier cases interpreted the rule liberally to permit the addition of Ds involved in the events subject to suit so long as they were on notice of the filing of the suit. Later cases have taken a stricter view of the relation back in such circumstances. Courts may continue to use the more liberal approach in situations in which: (1) the added D is an entity related to the original D, (2) the P has a strong interest in obtaining relief against the added D, and (3) the entity will suffer no prejudice due to the delay in naming it.
        2. Misnamed D – The relation back provision was clearly directed to the situation in which the P simply uses the wrong name for the D.
        3. Unnamed Ds – If the P knew the identities of some, but not all, Ds, earlier cases might permit relation back to add those additional Ds when their identities became known. More recent cases have disapproved relation back in such circumstances.
        4. Time and nature of notice – For relation back to apply with regard to a claim against a D different from the one originally sued, the D must have been on notice within the time allowed by Rule 4(m) for service of complaint – 120 days after the filing of the complaint. The notice need not be by service of the complaint, but may come from any source. However, the notice must alert the new D that, but for a mistake concerning the identity of the proper party, the P would have brought the action against this D. This may sometimes be found backing if the theory of the claim against the new D is different from that against the original D.
        5. Added Ps – Rule 15(C)(1)(C) speaks only of adding Ds, not Ps, so ordinarily relation back is not allowed for claims of new Ps. However, relation back has allowed in situations in which the new P is the real part in interest, or to permit the original P to assert a claim in another capacity
          1. Distinguish: class actions – The filing of the class action tolls the running of the sol for all members of the class. Class member may therefore be included in the suit after a class is certified, or benefit from this tolling of the limitations period if a class is not certified, or if they opt out of a class that is certified.
        6. Distinguish – “Jane Doe” Ds named (state practice) – CA permits the filing of a complaint against fictitious Ds where the true name of the D is not known when the action is filed. In CA, the complaint can be amended to name the D when her identity is discovered – even if the sol has then run.
      6. Amendments in federal diversity case – The FRCP permitting relation back (FRCP 15(c)), is applied by federal courts in diversity cases even if there is no similar local rule. Thus, a P may be able to assert a claim in an amended pleading that would be barred by the state court under the same circumstances.
        1. State rule may be more liberal – where the state rule regarding relation back is more liberal, the state rule should be applied if state law provides the applicable sol (FRCP 15(a)(1)(A)).
    6. Amendment supersedes original pleading

Joinder of Parties

  1. In General – Determining which parties are to be joined as Ps or Ds requires consideration of the rules of compulsory and permissive joinder. Compulsory joinder rules cover parties who must be joined (indispensable parties) and those who should be joined if possible (conditionally necessary parties). The rules of permissive joinder apply to parties who may be joined (proper parties).
  2. Permissive Joinder – at cl and under the early codes, a P’s joinder options where limited. Under the FRCP and modern codes, however, a P may join anyone involved in the transaction that is the subject matter of the suit.
    1. Modern approach – Today, parties may join or be joined in one action if:
      1. A right to relief asserted by (or against) them jointly, severally, or in the alternative
      2. The right to relief arises out of the same transaction of series of transactions; and
      3. There is at least one question of law or fact common to all parties sought to be joined.
        • FRCP 20(a)
    2. Relief sought
      1. Separate or joint – each P is not required to have an interest in every coa or in all the relief prayed for. If there are several Ps, they have the option to seek separate relief or joint relief. Likewise, if several Ds are joined, relief may be sought against each separately or against them jointly.
      2. In the alternative- p in doubt – Sometimes, a P may be in doubt as to which of several Ds is liable for his injuries. In such a case, it is property for the P to set forth a claim against each D in the alternative, so that their perspective liabilities can be determined
    3. Same transaction requirement – the requirement that the right to relief arise from the same transaction or series of transactions is construed very broadly. Some causal relationship or interrelation among the Ds’ conduct, or in the interest being asserted by multiple Ps, is sufficient. This tends to merge with the common question requirement.
      1. Note – where Ds are joined in the alternative b/c the P is in doubt about which one caused his injuries, the injury issue supplies the requisite relationship between the claims joined, even where the conduct of the 2 Ds is otherwise factually unrelated
    4. Common question requirement – It is sufficient if there is a single question of law or fact common to all parties joined. However, it is not necessary that the common question be in dispute.
    5. Additional unrelated claims – as long as the requirements for joinder of parties are met, each of the parties joined may assert as many claims as she has against any opposing party. (FRCP 18). The policy of the law is to allow unlimited joinder of claims as long as there is a transactional connection along all parties.
    6. The Power of court to order separate trials – to curb expense or delay, or to avoid prejudice that might result from the joinder of numerous parties asserting numerous separate claims against one another, the court may order separate trials for various claims joined, or otherwise regulate the proceedings to minimize the difficulties involved.
    7. Attacking improper joinder – Under the FRCP, a misjoined claim may be dismissed on motion of the party against whom it is asserted; and the whole action may be dismissed as to the party if no claim for relief remains against him. (FRCP 21). Under code pleading practice, a demurrer will lie for misjoinder of claims.
    8. SMJ – In addition to the requirements of PJ over Ds, deferral smj requirements must be satisfied as to all parties (whether P or Ds) permissively joined. Sup J does not extend to permissive joinder when the permissively joined matter is not part of the same case or controversy with the claim over which the federal court has original J, or in diversity cases where banned by 28 USC 1367(b).
  3. Compulsory Joinder – Joinder is required for any person who has a material interest in the case and whose absence would result in substantial prejudice to the absentee or to other parties before the court (FRCP 19).
    1. Modern approach – practical considerations – modern rules recognize that the labels necessary and indispensable merely reflect conclusions arrive at for other reasons. Hence, these rules focus on the practical consequences if a party with an interest in the action is not before the court.
      1. Persons to be joined if feasible – FRCP 19(a) provides that any person with an interest in the SM of a pending action shall be joined as a party if;
        • In his absence, complete relief cannot be accorded those already parties (FRCP 19(a)(1)(A); or
        • His interest is such that to proceed without him would be substantially prejudiced as a practical matter because it would:
          1. Impair his ability to protect his interest in later proceedings (FRCP 19(a)91)(B)(i);
          2. Expose the parties already before the court to the risk of double liability or inconsistent obligations (FRCP 19(a)(1)(B)(ii).
    2. Effect of nonjoinder – possible dismissal – If a person to be joined cannot be made a party (ex; PJ issues), the court must determine whether in equity and in good conscience the action can proceed without him or whether the action should be dismissed. The court’s determination is based on the following practical consideration Rule 19(b):
      1. The extent to which any judgment rendered in the action would be prejudicial to the interest of the absent party, or the interest of those already before the court
      2. The extent to which such prejudice could be lessened or avoided by appropriate court action
      3. Whether relief rendered without the absent party would be adequate; and
      4. Whether the P has another adequate remedy if the action is dismissed for nonjoinder of the absent party.
  4. Impleader – a procedure that permits the D to bring into the lawsuit a third person who is or may be liable for all or part of the P’s claim against the D (FRCP 14). In same states, the same remedy may be secured by a cross-complaint bringing in the third person. Two features of impleader guard against prejudice to the third party: (i) the third party may plead any defenses that the D might have against the P’s claim and may participate fully in defending against the claim (ii) the court may grant a separate trial on any separate issues of the third-party claim if needed to prevent under confusion or prejudice.
    1. Limited to claims for indemnification – Impleader under the FRCP is conditioned to those situations in which the defending party has a right to indemnity, in whole or in part, against the impleaded third party – i.e., where the D asserts that if he is held liable to the P, he would be entitled to collect all or some part of the judgment from the third party. This includes a claim to contribution in states where a D is allowed to claim contribution from a person that the P did not originally joined as a D.
      1. How right is determined – whether the D has any such right to indemnification, etc, is a question of substantive law, and under the Erie doctrine, the fed ct must therefore refer to the appropriate state statutes and case law
        • No right to indemnification under state law – if the appropriate state law does not recognize such a right, the fact that the impleader procedures available in federal ct does not create one for the D
        • Liability under state law may be “accelerated” – However, federal impleader may accelerate liability created by state law, For example, if, under state law, the D can seek indemnity from a third person only after paying a judgment to the P, the D in federal ct may implead a third person and assert his claim conditionally. If the P recover, the D should get judgment – thereby closing the time gap between liability to the P and receipt of an indemnity judgment against the third party.
      2. Potential liability sufficient – Rule 14 authorizes impleader of any person who is or may be liable for any part of the P’s claim. Thus, impleader is proper before any loss actually has been paid by the D
      3. Sup J over related claims – In federal court litigation, the court has sup J to adjudicate a claim by the original D (third part D in the impleader) for his own injuries when joined with a claim for indemnity.
        • But note – at least in diversity actions, there is no sup J over a claim by the original P against the third-party D even if it arises out of the transaction originally sued on.
    2. Pleadings & procedure- Leave of court is not required for impleader if the D (third party P) finds a third-party complaint of impleader within 10 days after he serves his original answer. Thereafter, leave of court is required, and grant of the motion is at the discretion of the ct. (FRCP 14)
      1. Answer – The impleaded party must file an answer to the third-party complaint, and the answer may raise whatever defenses could be asserted to the original cause of action. Rationale: the purpose is to prevent collusion between the original parties – the D admitting or defaulting to the P’s claim, in order to affix liability on the impleaded party.
      2. Counterclaim or cross-claim – the impleaded party may also file a counterclaim or cross-claim against existing parties, or may implead any person who may be liable to him, subject to the jurisdictional limits noted below (FRCP 14(a)(2)).
      3. Possibility of separate trials – the trial ct has discretion to order a separate trial of the impleaded claim to avoid under trial confusion or prejudice (FRCP 42(b)).
      4. Effect on J and venue – an impleader claim is usually deemed ancillary to the main claim and has no effect on J and venue requirements. Thus, an independent ground of federal J need not be established, and the impleaded D cannot object to venue.
      5. Distinguish – cross claim – impleader is somewhat similar to the cross claim procedure. However, there are significance difference:
        • An impleader can be asserted only against a person not yet a party, whereas a cross claim is filed by one party against another party to the action
        • Impleader must be based on a claim for indemnification or contribution, while there is no such limitation on cross claims.
  5. Intervention – a procedure whereby a nonparty, upon timely application may become a party in a lawsuit in order to protect her interests in that action. Whether intervention is allowed depends on a balancing of two conflicting policies: (i) that the P should be allowed to be master of his action in the sense of joining such parties whim him or against him as he wishes; and (ii) that other interested parties and the court have an interest in avoiding multiplicity of litigation or inconsistency or result, which may require overriding the P’s choice of parties.
    1. Types of intervention in federal cases – there are several types of intervention under FRCP 24
      1. Intervention of right – fed statute – intervention is granted as a matter of right where a federal statute confers an unconditional right to intervene (FRCP 24(a)(1))
      2. Intervention of right – to protect intervenor’s interest – Intervention of right is also granted when the applicant claims an interest relating to the property or transaction that is the subject of the action and is so situated that the disposition of the action may, as a practical matter, impair or impede the applicant’s ability to protect that interest (FRCP 24(a)(2)).
        • Nature of interest – The SC has stated that only a significantly protectable interest suffices to support intervention of right. Some lower cts emphasize a direct, substantial, and legally protectable interest to satisfy this standard, while others take a more relaxed attitude.
        • Outcome of litigation may impair intervenor’s interests – The intervenor must also show that the resolution of the litigation would impair her interest. This is not limited to legally binding effects, such as res judicata, but looks to the practical impact of resolution of the litigation on the intervenor’s interest.
        • Intervenor not adequately represented by present parties – If the intervenor claims the right kind of interest and shows a threat of practical impairment, intervention could be denied on the ground that the intervenor’s interest is adequately represented by the present parties.
          1. Minimal burden – the SC has said that the burden of demonstrating inadequacy of representation is minimal.
          2. Factors – a variety of factors can be considered in evaluating the adequacy of representation, including the amount at state for the intervenor and the present parties, the ability and resources of the present parties to litigate effectively, and the existence of any conflicts of interest between the present party and the intervenors.
        • Distinguish: compulsory joinder – The grounds for intervention of right are analogous to the grounds for finding nonparties to be necessary parties under Rule 19(a)(1)(B). as a result, if there is a question on an examination raising issues under one of these rules, the effect of the other should be considered:
          1. Intervention more flexible – Even though the language of the rules for intervention and necessary parties is similar, courts seem more willing to find a nonparty’s interest are of the protected type and are threatened and therefore protected, when intervention is sought. This is because the nonparty intervenor has indicated a desire to participate in the litigation and the conclusion that intervention of right is proper does not mean that the litigation should not proceed unless al similarly situated nonparties are joined. Under Rule 19, the finding that a person with a certain interest should be joined means that all others with that interest should also be joined.
          2. Adequacy of representation requirement – this difference in treatment is confirmed by the adequacy of representation requirement for intervention. Under Rule 19, the adequacy of the present parties to protect the interest of the nonparty ordinarily does not relieve the court of the duty to add the necessary party. When Rule 19 is invoked by representation seems adequate, treatment as a class action may be in order.
        • Conditions on intervention – Although this form of intervention is designated “of right,” the court may nevertheless impose conditions, such as limiting the intervenor to claims already raised by other parties, or requiring that the intervenor obtain permission from one of the original parties to make motions and take discovery. This authority derives from the court’s general power to control the litigation before it.
      3. Permissive intervention – the court has discretion to permit a nonparty to intervene if:
          1. A federal statute confers a conditional right to intervene; or
          2. A question of law or fact in common with the main action is part of the applicant’s claim or defense

FRCP 24(b)(1)

        • Common question
          1. Distinguish – permissive joinder rules – permissive intervention is the counterpart of permissive joinder under FRCP 20(a). The standard for permissive intervention corresponds to that for permissive joinder – i.e., a common question, interpreted as claims arising from the same or a related transaction.
        • Broad discretion in court – the trial ct has very broad discretion under FRCP 24(b) in granting or denying permissive joinder; and a reversal on appeal is almost impossible to obtain
        • Conditions imposed by court – the court will often condition intervention in a lawsuit by limiting the intervenor’s claims to those directly involved in the pending action.
      1. Timeliness of intervention – whether the intervention sought is of right pr permissive, the motion for leave to intervene must be made in a timely fashion. However, since a potential intervenor of right may be seriously harmed if excluded from the action, intervention motions rarely should be denied as being untimely.
    1. Effect of intervention in federal cases
      1. SMJ – If the action is in fed ct solely on grounds of diversity, there is no sup J over claims by intervenors or claims by the P against persons who intervene. In those circumstances there must be an independent basis for federal court J to permit assertion of the claim. If fed J does not depend solely on diversity of citizenship, there would usually be sup J over claims by or against intervenors of right.
      2. Venue – The intervenor cannot question the propriety of venue in the original action, since her act of intervening is a submission to the court in question. Venue objections, however, may be raised by someone who is already a party to the action.
      3. Judgment – any judgment rendered subsequent to intervention is binding on the intervening party as if she had originally been a party, and she has a similar right of appeal
    2. State practice – most states have intervention provisions patterned on the FRCP. In other states, statutes, on intervention provide that a person having an interest in the matter in litigation may intervene in an action between other parties.
      1. Broad discretion in court – the term ‘interest” in such statutes is very vague, but usually has been limited to a legal interest. The term “may” indicates that intervention is never of right. Thus, intervention in state ct actions largely depends on the discretion of the trial ct. Often, permission is denied on the ground that the P has the right to choose the parties to his action.
      2. Modern trend to permit intervention – However, under the influence of federal intervention rules, state courts are becoming more liberal in permitting intervention.
  1. Consolidation of Separate Actions – Even when joinder rules do not permit the addition of new parties to an action, almost the same result can be achieved by consolidating separate suits pending in the same ct. The ct has broad discretion, on its own motion or on the motion of a party, to consolidate actions involving common issues. Consolidation can be complete so that the separate suits effectively become one, although they are technically not merged; or it may be partial – e.g., consolidation for purposes of determining liability, with separate trials on the issue of damages (FRCP 42).
  2. Interpleader – Interpleader is a device that enables a party against whom conflicting claims with respect to the same debt or property are asserted to join all the adverse claimants in the same action and require them to litigate among themselves to determine which, if any, has a valid claim to the debt or property involved. Once the stakeholder’s right to interplead is established and he has deposited the fund or property in court, he can be released or discharged from the litigation; it is up to the adverse claimants to litigate their claims to the property.
    1. Procedure – The party against whom claims are being made may institute the interpleader action himself (naming all claimants as Ds); or he may interplead in any action pending between the adverse claimants. If he is named as a D in such an action he may interplead by filing a cc.
      1. Deposit “stake” with court – to invoke statutory interpleader, the P must deposit the entire amount in his possession that is claimed by the claimants, and may not hold back amounts that he claims,
        • No deposit required for rule interpleader – with Rule 22 interpleader is properly invoked, there is no requirement that the stake be deposited in court.
      2. P may claim interest – Interpleader is permitted even if the P denies any liability or claims some offset or defense. Such cases are often referred to as actions in the nature of interpleader. The difference is that classic interpleader involves a disinterested stakeholder, making no claim to the property, while an action in the nature of interpleader is brought by an interested stakeholder such as an insurance company denying liability.
      3. Ds may cross-file claims – Where the stakeholder initiates interpleader, the adverse claimants can and usually do file cross-claims against each other to obtain a judicial determination of their respective rights in the fund or property interpleaded.
    2. Types of federal interpleader actions – 2 distinct interpleader remedies:
      1. Statutory interpleader – interpleader is permitted by 28 USC 1335, which contains special provisions as to J, venue, and service of process, if:
        • Two or more claimants of diverse citizenship are making adverse claims to the same debt, instrument, or property owed or held by the P; and
        • The debt, instrument, or property has a value of at least $500.
      2. Rule 22 interpleader – FRCP 22 permits interpleader in any action that meets the normal J requirements in federal ct – i.e., a sufficient amount in controversy and proper diversity or federal Q.
    3. Differences b/w statutory and Rule 22 interpleader – Rule 22 interpleader is needed for cases that do not meet the specialized requirements of statutory interpleader. Statutory interpleader is framed to focus on situations involving scattered claimants. The basic difference between interpleader under 13355 and under Rule 22 are:
      1. Requirements for diversity J – Depending on the type of federal interpleader action, either minimal or complete diversity is required.
        • Statutory interpleader – sufficient that diversity of citizenship exists between any two adverse claimants, but at least two claimants must be diverse. As long as such minimal diversity exists, the citizenship of the P-stakeholder and any other claimants is immaterial.
        • Rule 22 Interpleader – in an interpleader action under Rule 22, there must be complete diversity between the P-stakeholder and all of the adverse claimants, or a federal question must be involved.
        • Distinguish – all claimant citizens of one state – where all the claimants are citizens of one state and the stakeholder is a citizen of another, the suit can be brought only under Rule 22, since statutory interpleader requires some diversity among the claimants.
      2. J amount – statutory interpleader requires only that the debt or property involved be valued at $500 or more. Under Rule 22, if the case relies on diversity J, the J amount is the same as in any other civil action ($75,000).
      3. Limits on process – in statutory interpleader, the reach of process is nationwide. Under Rule 22, service of process is the same is in any other civil action – i.e., within the territorial limits of the state in which the district court is located, except as extended by any applicable long arm statute.
      4. Cross-claims and counterclaims – the interpleaded claimants may cross-claim against each other, counterclaim against the P, and implead third parties, unless J problems prevent their doing so.
        • SMJ – any additional claims that relate to the original interpleaded claim should fall with the sup J of the court. Any other additional claims may be asserted only if there is an independent basis for SMJ.
        • Service of process – When a D is before the court only b/c of nationwide process under statutory interpleader, he is subject to additional claims through cross-claims, etc., only if they are part of cleaning up the original interpleader claim.
      5. Venue – In statutory interpleader, venue is proper in the district in which any claimant resides. With interpleader under Rule 22, venue is the same as in any other civil action –i.e., in the district in which a D resides, if all reside in the same state, or a district in which a substantial part of the events or omissions giving rise to the claim occurred. Alternatively, venue is proper in a district in which a substantial part of the property that is the subject is located. The location of the property may be a convenient venue in many interpleader cases.
    4. Erie doctrine – The Q of whether the interpleader remedy is available is a procedural matter and is decided pursuant to federal interpleader standards. To determine the law to be applied to the merits of the case, the fed ct will look to appropriate state law.

Class Actions

  1. Class Actions – Authorizes suits wherever there are questions of common or general interest of many persons, or when the parties were numerous and it would be impracticable to bring them all before the court.
    1. But note – the courts usually limit class actions to those asserting what formerly had been equitable (as distinct from cl) claims – e.g., stock-holder derivative suits, creditors’ bills to reach the asserts of debtors, and injunction suits.
    2. And note – the decisions were split as to whether the judgment in a class suit was binding on the absent members of the class.
  2. Class actions under the Federal Rules
    1. Former FRCP 23 – as originally adopted, FRCP 23 provided for three different kinds of class actions.
      1. True class actions – a true class action was one where the rights of all members of the class were joint or common. A judgment rendered in such an action bound all members of the class, including absentees. For example, stockholders’ suits and suits by or against the members of labor unions or other unincorporated associations were true class action.
      2. Hybrid class action – one in which the subject of the action was a specific fund or property, and the members of the class had separate rights therein (eg suits on behalf of numerous co-owners of an oil well against a drilling co to enforce a royalty contract). A judgment in such an action was conclusive upon the rights of all members in the specific fund or property involved, but did not otherwise affect or bind class members not before the court.
      3. Spurious class action – one in which there was simply a common question of law or fact affecting all members of the class, and the claims of each member were separate. A judgment in such an action bound only those members of the class actually before the court. Accordingly, this was not really a class action, but rather a permissive joinder device.
    2. Present FRCP 23 – Now Rule 23 eliminates the distinctions above and provides that members of a class can sue of be sued with binding effect on the class as a whole.
    3. Class Action Fairness Act – expanded federal court SMJ to include certain class actions that present claims based on state law. In addition, the Act provides additional protections and limitations regarding the settlement of class actions that are applicable to all class actions in federal ct.
  3. Prerequisites to Class Action – Under FRCP 23(a), all four of the following conditions must be established in any type of suit. All class action must also fit into one of the categories of Rule 23(b).
      1. Numerous parties – the class must be so numerous that joinder of all members individually is impractical (Rule 23(a)(1))
      2. Common question – the action must involve questions of law or fact common to the class (Rule 23(a)(2))
      3. Representative’s claim typical – the claims (or defenses) of the persons maintaining the action on behalf of the class must be typical of those of the class generally (Rule 23(a)(3))
      4. Adequacy of representation – the persons representing the class must be able to fairly and adequately protect the interests of all members of the class (Rule 23(a)(4)).
  1. Numerous parties requirement – As indicated by the treatment of the real part in interest problem, ordinarily litigation is to be conducted by the persons whose rights are involved as named parties. Only where they are too numerous to be joined is class treatment considered necessary.
    1. No fixed minimum – if the number is 50 or less, whether a class will be permitted usually turns on the following factors, and note that the trial ct has considerable discretion in this matter:
      1. The size of each member’s claim (the smaller the claim, the more likely a class suit will be allowed)
      2. The practical likelihood that individual suits will be brought (the lower the likelihood, the more likely a class suit will be allowed)
      3. The public importance of the right being enforced (the greater the public importance, the more likely a class action will be permitted)
      4. The geographic location of class members (the more difficult the geographic location makes it for class members to intervene, the more likely a class suit will be allowed.
    2. Minimum number of class members for Class Action Fairness Act J – Under the Act, special J provisions apply to certain state law class actions, permitting them to be filed in federal ct. Under the Act, these J provisions are available only if the class has more than 100 members.
  2. Common question requirement – There must be questions of law or fact in common to the class (FRCP 23(a)(2)). Rationale: Unless there is some common question, there would be no efficiencies to be achieved by adjudicating the rights of the class members in a single proceeding.
    1. Predominance of common questions – In actions brought under Rule 23(b)(3) (i.e., cases where questions of law or fact common to the class predominate), there must not only be a common Q, but also common questions must predominate. Under Rule 23(a)(2), on the other hand, predominance is not required.
    2. Fact question needed – as a practical matter, it is usually essential the common question have factual content that would make common litigation desirable.
    3. Distinguish – permissive joinder – Ordinarily, a close factual connection is required to satisfy the class action common question requirement than the common question requirement for permissive joinder.
    4. Problem of individual damages – if class members have suffered individual damages that present individual (as opposed to class) question. However, the need to assess individual damages will not always prevent a class action b/c there may also be common questions regarding liability.
    5. Problem of variation in state law – if the claims asserted in a class action are based on state law, and class members live in a number of states with varying laws, common questions might not be present because the factual questions to be resolved turn on different legal principles. The court may not homogenize the law of various states to overcome this problem. In such cases, however, the law of various states will fit into a few patterns so that recurrent common question are presented.
  3. Typical claim requirement – The claims of the representative suing on behalf of the class must be typical of the class generally. Rationale – B/c the class representative acts on behalf of others, the court wishes to be assured that she will have the same objectives as the class members and sufficient motivation to protect their interests. This should flow from the fact that he claim makes her typical of the class members.
  4. Subclass – If an action is otherwise properly brought as a class action, but there is a significant divergence of interest among segments of the overall class, the court may divide the class into subclasses, appoint a representative for each subclass, and allow the suit to proceed in that manner.
  5. Three grounds for class actions – if the foregoing conditions are all present, the class may be based on any one of the following grounds. (FRCP 23(b)).
    1. Prejudice from separate actions – under FRCP 23(b)(1), a class action is permitted if the prosecution of separate actions would create either of the following risks
      1. Establishing incompatible standards of conduct for D through inconsistent adjudications – to justify a class action on this ground, the court must find that a number of individual action are otherwise likely to be filed, and that the conduct required of the D under various judgments might be inconsistent.
      2. Substantially impairing the interests of other members of the class – to permit a class action under this section, the court must find that separate actions would interfere with the interests of other absent persons having similar claims (FRCP 23(b)(1)(B)
  6. Common predominant question – The most common basis for a class suit is under FRCP 23(b)(3) – the situation in which questions of law or fact common to the class predominate over questions affecting only individual members, and, on balance, a class action is superior to other available methods for adjudicating the controversy.
    1. Relevant facts – in deciding whether common issues predominate and whether a class action is superior to individual litigation, the court will consider:
      1. The interest of individual members in personally controlling their cases
      2. The nature and extent of any litigation in progress involving the same controversy
      3. The desirability of consolidating all claims in a single action before a single court
      4. Any probably difficulties managing a class action
    2. Predominance of common questions – to find that common questions predominate, the court must compare the relative importance of the common questions and the individual questions presented by the case. It cannot merely compare the number of common and individual questions. Damages, for example, may present individual questions as to each class member, but may not defeat a finding that common questions predominate. Instead, the court is to determine whether the common questions are so important to the resolution of the lawsuit, and whether they will occupy sufficient time and effort in the resolution of the case, that it may fairly be said that they predominate over individual questions.
    3. Manageability and superiority – Assuming common issues predominate, the court must also ask whether a class action would be manageable, and whether it would be superior to other methods of adjudicating the case.
  7. J Requirements in Class Suits
    1. SMJ –
      1. Diversity of citizenship – for purposes of federal diversity J, only the citizenship of the representative is considered, This facilitates maintenance of a class suit in federal court. Note also that the named representative must also meet the requirements of venue
      2. J amount – Until the adoption of the sup J statute, the rule had been that in any class action in which the individual class members would be entitled to separate recoveries, when the amount in controversy requirement applied, each member of the class had to have a claim for more than $75,000. The effect of the Zahn case requirement had been to exclude from federal court most diversity class actions, such as consumer class actions based on state law, because the claims of each member is such cases usually do not exceed $75,000.
        1. Impact of sup J statute – The Sc has held that the sup J statute (1367) overrules Zahn, allowing sup J over claims of unnamed members of a P class in a diversity class action even when those claims do not exceed $75,000. However, this holding has no effect on the rule that the separate claims of individual class members cannot be aggregated to satisfy the $75,000 amount in controversy requirement for original J. Note, however, that the Class Action Fairness Act allows Ps to aggregate their claims under certain circumstances.
        2. Class Action Fairness Act – provides for federal ct J for class actions that are based on state law if the aggregate claims asserted on behalf of the class exceed $5 million, so long as the class has more than 100 members and there is minimal diversity.
      3. PJ – It has been held that in an action involving a nationwide class, a state court could assert PJ over absent members of the P class if they were afforded an opportunity to opt out and chose not to do so.
        1. Requirement of right opt out – It is unclear whether the right to opt out is required to justify person J in all cases, such as actions brought under Rule 23(b)() or 23(b)(2). The SC reserved ruling on this point.
        2. D classes – it is also unclear whether the same analysis would apply to a D class when the right to opt out was afforded the unnamed members of the class
    2. Procedure in Conducting Class Suits
      1. Certification hearing – at an early practicable time after the filing of an alleged class suit, the ct must determine whether to certify the action as a class action (FRCP 23(c)(1)(A)). This determination is commonly called class certification. If the court concludes that class certification is not proper, the suit may be continued as an individual action.
      2. Consideration of merits for class certification – the ct may not make a preliminary inquiry into the merits of the suit to decide whether it can be maintained as a class action.
    3. SOL – the filing of a suit as a class action suspends the running of the sol for all putative members of the class until class certification is decided. Rationale: unless they could rely on the pendency of the class action to protect their rights, unnamed members of the class would have to file their own suits to guard against the running of the limitations period. This would defeat the purpose of Rule 23 to achieve the efficient combined resolution of cases suitable for class action treatment
      1. Effect – From the date the class action is filed until class certification is decided, the running of the limitations is suspended. If class certification is denied, the period begins to run again, and class members have the remainder of the period to file their own actions or to intervene. If class certification is granted, class members who remain in the class action are protected against a limitations defense, provided the class action was filed in time.
      2. To-outs – if class certification is granted and some class members opt out, the limitations period begins to run again and they must file individual actions to protect themselves against the running of sol.
      3. Tolling not dependent on grounds for denial – the suspension of the running of the sol applies even if the class certification motion is denied for lack of commonality or typicality.
      4. D class actions – the suspension of limitations has been held to apply to a D class action which the unnamed member of the D class did not even have notice of the filing of the suit within the limitations period
      5. Successive class action – the suspension of limitations has been held not to be available in a second class action that is timely only b/c a deficient class action earlier suspended the running of limitations.
    4. Notice Requirements –
      1. When notice to individual class members is discretionary – If the basis for a class action is to avoid the risk of inconsistent adjudications (FRCP 23(b)(1)(A)), or the claim is for injunctive or declaratory relief for the class as a whole (FRCP 23(b)(2)), the appropriate form of notice to class members is left to the discretion of the court. (FRCP 23(c)(2)(A); FRCP 23(d)(1)(B). Individual notice to class members is not required by due process if the class representation is adequate.
      2. When individual notice is mandatory
        1. Damages class action – in such a case based on a predominant question common to the class, members of the class must be given the best notice practicable under the circumstances, including individual notice all members who can be identified through reasonable effort.
        2. Settlement or dismissal – once a suit has been certified as a class, some type of notice to the class is required before any type of class action may be settled or dismissed (FRCP 23(e)(1)).
        3. State rules may be more flexible – state courts usually require individual notice only where members of the class have substantial claims, because in such cases it is essential for them to decide whether to remain in (and be bound by RJ) or opt out and pursue their independent remedies. Where the membership of the class is large and damages to each member small, individual notice might not be required and notice by publication may be sufficient.
      3. Effect of notice – In a class suit, the notified person is already provisionally bound through representation. Hence notice has the following effects:
        1. If accompanied by an opt out directive in a Rule 23(b)(3) suit, the notice allows the notified person to terminate his involvement in the action
        2. In other types of class suits, the notice:
          1. Gives absent members of the class the opportunity to intervene and protect themselves
          2. Gives the opposing party more assurance that the eventual judgment cannot subsequently be attacked by an absentee claiming that the representation was inadequate.
      4. P must pay costs of notice – Under Rule 23(c), the P initially must pay the costs of notifying all members of the class. If the P wins the action, she can ultimately recover such expenses from the D as necessary court costs.
        1. Cost of identifying class members – the p must also pay the costs of identifying class members.
        2. Effect – the cost of notice has inhibited large class actions in federal ct, because the larger the class, the less likely it is that any single P can afford to bear the costs of notice (and thus fairly and adequately represent the class).
    5. Opting out by class members – in class action under Rule 23(b)(3), unnamed members of the class may opt out, thereby excluding themselves from the binding effects of the class action.
      1. Timing – usually the decision to opt out must be made before the court decides the merits, to avoid the risk of one-way intervention
      2. Effect on sol – once a class member opts out, she loses the class action’s effect of suspending the sol and must file her own suit within the remainder of the limitations period to protect her rights.
      3. Rule 23(b)(1) and 23(b)(2) class actions – there is no mandatory opt out right in the rule for action. In some cases, the court may permit opting out, but that could undermine the purpose of certifying a case of this type in the first place. When class members have monetary claims, however, it may be an abuse of discretion to deny the right to opt out.
      4. Right to claim collateral estoppel – it has been held that were class members opt out and the class action is successful, the opt outs may not claim collateral estoppel (i.e., claim that the issues decided against the D in the class action control here as well).
  8. Settlement before certification – if a class action is settled before certification, the notice and hearing requirements depend on the nature of the settlement.
    1. Settlement of class claims – if the settlement purports to resolve class claims, the settlement approval requirements of Rule 23 apply. The settlement may propose that a class be certified, but the court must scrutinize class certification under Rules 23(a) and (b) and may not simply accept it because it is proposed by the parties. Besides evaluating class certification, the court must, when class claims are to be settled, perform a full examination of the fairness of the proposed settlement (FRCP 23(e))
    2. Settlement of individual claims – if the settlement purports to settle only the individual claims of the proposed class representative, the court need not perform any fairness review. Under prior law, most court held that they should examine the individual settlement to determine whether there was an indication of abuse of the class action device or prejudice to absent class members. This review is no longer authorized.
  9. Objections by class members – any class member may object that the settlement is not adequate, but an objection may be withdrawn with court approval (FRCP 23(c)(5)).
    1. Appeal by objector – if the DC approves the proposed settlement despite objections, an objector may appeal the approval of the settlement without intervening in the case
  10. Protections under the Class Action Fairness Act
    1. Coupon settlements – sometimes, class action settlements provide for class members to receive coupons good for purchase of further goods or services from the D. The court may approve such a settlement only after holding a hearing and making a finding that the settlement is fair, and it may also require that unclaimed coupons be distributed to charitable organizations. If attorneys’ fees in such cases are to be based on the value of the settlement to the class, they must be limited to the value of the coupons actually redeemed by class members, rather than the total amount available to class members. Alternatively, attorney’s fees can be based on the amount of time class counsel reasonably expended on the action.
    2. Protection against loss by class members – In some consumer class actions, some class members have actually lost money, because attorneys’ fee awards required them to pay the lawyers more than they received from the settlement. A court may approve a settlement that would have the effect only if makes a written finding that nonmonetary benefits to the class member substantially outweigh the monetary loss.
  11. Effect of judgment in class action – a central issue in class actions is whether the judgment binds members of the class who were not actually before the court
    1. State rules – some states retain the distinction between true, hybrid, and spurious class actions, under which the nature of the action determines whether the judgment is binding on absentees.
    2. Federal Rule – Under FRCP 23, however, these distinctions are eliminated. A valid judgment in any class action (whether or not favorable to the class) binds all members of the class who do not affirmatively request exclusion (opt out). A person who excludes herself from the action will not be bound by an adverse judgment. Conversely, however, she may be unable to assert collateral estoppel in her own action if the judgment turns out to be favorable to the class.
  12. D Class Actions
    1. Rule 23(b)(2) class actions – Rule 23(b)(2) authorizes actions for injunctive or declaratory relief against the party opposing the class, seemingly precluding a D class action. Nevertheless, there is a division in the courts on whether it is permissible to have a class action seeking an injunction against a D class.
      1. PJ – In upholding the authority of a state court to exercise PJ over absent P class members, the SC distinguished the situation of Ds, for an out of state D summoned by a P is faced with the full power of the forum state against it. It is uncertain whether this mandates granting unnamed D class members more than the right to simply opt out to overcome their PJ objections.

PRECLUSIVE EFFECT ON JUDGMENTS

  1. In general – the RJ doctrine has two component: (i) claim preclusion (ii) issue preclusion
  2. Claim Preclusion (aka Res Judicata) – a final judgment on a claim or coa precludes reassertion of that claim or coa in a subsequent suit.
    1. Merger – if judgment was for the P on the claim, there is a merger of the claim in the judgment – i.e., the prejudgment claim is transformed into the judgment claim
    2. Bar – if judgment was for the D, it is a bar against the P’s suing again on the claim
  3. Issue Preclusion (aka Collateral Estoppel) – Preclusion prevents not only relitigation of a claim, but also, in some circumstances, relitigation of issues of fact resolved in a prior proceeding, even when the later case involves a different claim. A decision on an issue of fact may be binding in subsequent litigation between the same parties, or, in some circumstances, between one of the parties and a different adversary.
  4. Purpose – the purposes of these doctrines are twofold: (i) to avoid the time and expense of multiple litigation over the same matter; and (ii) to give stability to the results of adjudication – to prevent inconsistent results.

 

Claim Preclusion (RJ)

  1. In General – before any judgment can have claim preclusive effect, it must be (i) final, (ii) on the merits, and (iii) valid.
  2. Policy Basis
    1. Judicial Efficiency – resolving all claims in a single lawsuit avoids waste of judicial resources on repeated litigation of the same claim
    2. Avoiding vexation of Ds – allowing Ps to sue Ds repeatedly on the same claim by changing their legal theories would raise the risk of oppression of Ds. Ds should be assured that they will not be forced to answer a given claim more than once
    3. Consistency – although it would often be legally consistent for a P to lose on one theory and then prevail on another with different elements, requiring litigation of all theories for a claim in a single action promotes the public appearance of consistency.
    4. Effect – foreclosing matters that were never litigation – the net effect of claim preclusion is, therefore, often to foreclose matters that were never litigated because they were never raised in the first litigation
      1. Distinguish – issue preclusion – Estoppel (particularly collateral estoppel) applies preclusion only to matters that were actually litigated and decided in the first lawsuit.
    5. Meaning of Claim – Breadth of Preclusion – Determining the scope of the claim in the first lawsuit is often difficult. Unless the claim in the second lawsuit is the same, claim preclusion does not apply (although issue preclusion may).
      1. Traditional tests – the tradition tests were derived from the code pleading concept of the coa. The idea was that the first litigation was RJ only as to the same coa. The courts developed tests to give effect to this concept
        1. If the P asserted a violation of the same basic right in the second case as in the first, preclusion was applied.
        2. If the second claim turned on essentially the same evidence as the first claim, preclusion was said to apply.
        3. If the second suit merely changed the legal theory upon which the earlier suit relied, preclusion applied.
      2. Modern approach – transactional test – The Restatement (second) of Judgments adopts a transactional approach to the scope of claim preclusion: claim preclusion applies to all or any part of the transaction, or series of connected transactions, out of which the action arose.
        1. Flexible definition – “What factual grouping constitute a transaction, and what groupings constitute a series, are to be determined pragmatically, giving weight to such considerations as whether the fats are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties expectations or business understanding or usage.” This analysis requires an examination of the facts underlying the claim similar to that called for in assessing permissive joinder of parties under FRCP 20.
      3. Claims by or against different parties usually nor foreclosed – ordinarily a claim by one P is considered a different claim for preclusion purposes from that of another P, and so is a claim against a different D. However, these rules may not apply if the parties are in privity, but closely similar claims can survive a final adjudication.
        1. Successor of interest – if the first P’s claim is assigned to the second P, or passes by action of law, the second P is precluded, Thus if before death a victim of a car accident sues the other driver and recovers for her injuries, the executor of her estate cannot file a second suit against the other driver to recover wrongful death damages for the estate
        2. Liability of one D depends on liability of another – in some situations, one potential D may be held to be responsible for some situations, one potential D may be held to be responsible for the conduct of another. In such cases, a judgment exonerating one potential D precludes an action on the same claim against the other.
    6. Final – A ruling at a pretrial hearing or the determination of an issue served for trial does not decide a claim until judgment is rendered. However, if a claim has been separately determined in the course of an action, it may be treated as the equivalent of a final judgment for RJ purposes, even if the action is still pending. The question for issue preclusion is whether the prior adjudication of an issue in another action is determined to be sufficiently firm to be accorded conclusive effect. The finality requirement is interpreted somewhat more strictly for purposes of merger and bar, since the question then is the creation of a new claim based on the judgment (merger) or extinguishment of the claim (bar).
      1. Effect of appeal – whether a judgment on appeal is final for purposes of RJ is determined by the law of the J in which the judgment was rendered
        1. Federal practice – in fed practice, once a judgment is entered it is deemed to be final even though an appeal therefrom is pending. The judgment remains final and valid until reversed or modified by the appellate court. In such Js, preclusion attaches immediately upon entry of the judgment.
          1. Note – Any suit to enforce the judgment, or in which the RJ issue is otherwise involved, is likely to be abated or continued until the pending appeal is determined
          2. And note – Even courts that have somewhat expanded the notion of finality for preclusion purposes may look to whether there was an opportunity for appellate review. A partial summary judgment followed by a settlement that prevents appellate review, for ex, will ordinarily not be given preclusive effect.
        2. State Practice – the taking of an appeal automatically postpones finality until the appeal is determined. Until then, no RJ attaches.
      2. Modifiable judgments – many civil judgment are nonfinal in the sense that they are subject to modification (eg, alimony awards, child custody determination, etc). Such judgments do not prevent reconsideration of the relief granted, for example, when conditions have changed. But they are RJ until modified.
    7. On the merits
      1. General rule – a judgment is deemed to be “on the merits” if the claim has been tried and determined – i.e., if the court has ruled that the P has (or has not) established his claim. This includes a determination by summary judgment, judgment on the pleadings, nonsuit, and directed verdict, as well as a determination after trial and verdict.
        1. Note – Rulings not on the merits generally are preclusive only as to issues. If the court dismisses on a ground that does not relate to the merits (eg, for lack of J, improper venue, or a dismissal expressly without prejudice to a new action), the judgment or dismissal usually does not bar a subsequent action.
        2. But note – Such a judgment is determinative of issues decided. Example: A dismissal for improper venue because the D is not a resident of the county where sued is determinative of that issue in a subsequent suit. When the second suit is on the same claim, this relatively uncommon form of issue preclusion is known as direct estoppel.
    8. Meaning of “on the merits” – if an action is dismissed on a ground closely related to the merits, the following approaches apply:
      1. Dismissals – if dismissal is for failure to state a claim, but it is possible that the complaint could be amended to state a valid claim, or if there was a dismissal for failure to diligently prosecute the action, earlier cases held that the judgment was not on the merits and hence not a bar.
        1. But note – today, such dismissal is considered a bar – on the theory that the P had a fair opportunity to get to the merits (by amending his pleading, appealing, etc)
      2. Default and consent judgments – these terminate the coa and hence have claim preclusion effect (i.e., result in merger on bar of the claim). Note, however, that a default judgment may be less effective in regard to issue preclusion.
      3. Punitive dismissals – is a dismissal based on a party’s refusal to obey trial court orders – eg, a dismissal of a P’s action for failure to prosecute diligently, or a default judgment against a D for refusal to obey discovery order. Because such judgments terminate the coa, they have claim preclusion effect but they do not involve issue preclusion regarding issues going to the merits.
    9. Valid” – the third requirement for claim preclusion is that the judgment be valid. A judgment is valid unless
        1. The court lack SMJ of the case
        2. The notice given to the D failed to conform to due process requirements, or substantially departed from the requirements of statute or court rule concerning the form of notice; or
        3. The court lacked PJ over the

I.Determination of validity – If the question of validity was litigated in the original action, that determination is itself RJ. This is an example of direct estoppel.

A.And note – RJ also applies to decisions concerning the court’s SMJ and the adequacy of notice.

  1. Claim Preclusion when J is in rem or quasi in rem
    1. Definition – J in rem or quasi un rem is based on the presence of the property about which the lawsuit is concerned. For ex, a state can exercise J to determine rights under a mortgage pertaining to land in that state
    2. RJ effect – if J is exercised in rem or quasi in rem, the rules of claim and issue preclusion apply essential as they do in personam judgments, except that the preclusion is limited to claims in the property.
  2. Exceptions to Claim Preclusion – only under extraordinary circumstances may a party relitigate a claim that has been reduced to judgment. The losing party would have to establish grounds for setting aside the judgment (eg, fraud on the court) and that she has a good case on the merits. The policy is very strongly against relitigation.
  3. Defenses and Counterclaims
    1. Effect of compulsory counterclaim rules – requires that the D set up any counterclaim she has against the P arising out of the same transaction as the P’s claim (FRCP 13(a)). If she fails to do so, she is barred from thereafter asserting the counterclaim, either as a defense or as the basis for affirmative relief in an independent action. Hence, the judgment in the former action is preclusive as to claims that were or should have been asserted as compulsory counterclaims in that action.
    2. Where no compulsory counterclaim rule involved – if no statute or rule applies, claim preclusion does not prevent the D from asserting the same matter first as a defense to the P’s action, and later in a separate suit as a basis for impendent relief against the former P.
      1. But note – b/c of issue preclusion, the issues actually litigated and decided in the first action may not be relitigated
      2. Exception – nullifying initial judgment – if a former D seeks relief in a later suit based on a claim that could have been asserted as a counterclaim, and the relief sought would nullify the judgment entered in the earlier suit, the later action is barred even if there was no applicable compulsory counterclaim rule in the earlier action.

Issue Preclusion

  1. Direct Estoppel – issues actually litigated between the parties are binding on them in subsequent actions concerning the same claim.
  2. Collateral Estoppel – if the second lawsuit involves a different claim (and hence no merger, bar, or direct estoppel), the first judgment may be invoked as to all matters actually litigated a determined in the first action and essential to the judgment.
    1. Actually litigated” – The issue preclusive effect of a prior judgment applies to issues actually litigated in the former action, but not to these that merely could have been litigated therein
      1. Default judgments – there is a split of authority on whether a default judgment creates issue preclusion
        1. Conclusive – many decisions hold that a default judgment is conclusive as to all issues that were necessarily involved in the former suit, even though the action went by default and there was no actual litigation thereof
        2. No conclusive – However, there is substantial authority contra, holding that “actually litigated” requires evidence presented to, and a decision by, a trier of fact (so that default judgments do not qualify).
          1. Rationale – This is believed to be the better view, because a person defaulting to a complaint may not have foreseen that the admissions created thereby would return to haunt him in a subsequent, unrelated lawsuit.
      2. Stipulated judgments – there is likewise a split of authority on whether a stipulated (consent) judgment is issue preclusive
        1. Comment – even if an issue conceded through a default or consent judgment is not treated as within the rule of issue preclusion, it will be admissible under the law of evidence as an admission
      3. Jury v nonjury trial – the presence or absence of a jury in the first trial is a neutral factor – i.e., matter actually litigated in action 1 may be held collaterally estopped in action 2, even if there was no right to a jury in the earlier action (eg, a suit in equity) and the present suit is jury triable (eg, action for damages).
    2. Essential to first judgment – Collateral estoppel applies only to those matters decided in the earlier lawsuit that were essential to the court’s determination – i.e., essential to the coa (or defense) established by the judgment therein. Other matters involved in the earlier lawsuit, even though actually litigated are no binding in a later action.
      1. Test – an issue is essential to the court’s judgment in the former action only if it appears that the judgment could not have been reached without determining the issue.
      2. Alternative findings – there is a split of authority on whether alternative findings, either of which would have been sufficient to support the judgment, should create estoppel in other proceedings. The 9th circuit allows estoppel.
        1. Significance of appeal – some courts distinguish between cases in which the earlier judgment was appealed and those in which it was not. If no appeal was taken, they will hold that neither finding is preclusive. If an appeal is taken, however, there is preclusion with respect to those issues that the appellate court reaches that support its judgment.
      3. Ultimate” vs. “evidentiary” facts – some cases have held that the previous determination of an issue is conclusive when the ultimate facts in the two actions are the same, but not when the first finding is simply a step (i.e., a “mediate or evidentiary fact”) toward the ultimate fact in the second action
      4. Modern approach contrary – this distinction generally is no accepted – issue preclusion applies to ANY fact determination actually litigated and essential to the judgment, without any distinction between ultimate and mediate or evidentiary.
    3. Identical issue – the issue decided in the prior adjudication must be identical to the one presented in the instant action. Mere similarity is not enough.
    4. Exceptions – issue preclusion is not as strictly applied as claim preclusion
      1. When the two actions involve the same parties, the loser may be allowed to relitigate an issue in a subsequent action if, for example:
        1. As a matter of law, appellate review of the initial action was unavailable.
        2. Even if review was available, the nature of the proceedings in the court handling the first action was informal or expedited, as in a small-claims court
        3. The stakes involved in the second suit are much larger, as when the first action was in small-claims court and the second involves a major personal injury claim
        4. The issue is one of law and the claims in the two actions are substantially unrelated
        5. The burden of proof is materially different or has shifted; or
        6. There is a clear and convincing need for a new determination because, for instance, the party who lost on the issue could not have been expected to foresee that the issue would arise in a later action
    5. When the second action involves a different party, all these exceptions apply and, in addition, the loser may relitigate if there are other factors that justify allowing her to do so.

Persons precluded by Judgments

  1. Parties and Privies – Judgments may have a preclusive effect on parties and this in privity with a party
    1. Parties – a party to a judgment is bound by claim preclusions (so that she cannot relitigate the claim) and issue preclusion (so that, ordinarily, she cannot relitigate an issue determined in the first action).
    2. Privies – a person in privity with a party is usually bound to the same extent as the party. Privity is a legal conclusion, indicating that the person in question has a relationship to the party such that he should be bound. Whether privity exists depends in part of the type of claims involved. There are two general categories of privity:
      1. Procedural privity – If the party acted in the first action as the representative of the nonparty, the judgment therein binds the nonparty.
      2. Substantive Privity – Privity may also arise out of substantive legal relationships, with the nonparty bound because of a prior legal relationship to the party. Ex. include:
        1. Bailment – either the bailee or the bailor can sue a third party for injury to the bailed chattel; and an action by one precludes an action by the other
        2. Medical losses of child or spouse – in most states, medical expenses paid by a parent or spouse can be recovered either by the injured person or by the parent or spouse who paid them. Hence an action by one of these who could recover the expenses precludes an action by any of the others
        3. Successor in interest – a successor in interest to property is bound by a judgment regarding that interest to which his predecessor was a party
        4. Beneficiary of estate – is bound by an action litigated on behalf of the estate by the trustee.
        5. Public official authorized by law to act on person’s behalf – the person is then bound by the official’s litigation on his behalf
        6. Virtual representation – in unusual circumstances, courts may say that even if there is no formal representational role, an earlier litigant was the virtual representative of the later litigant, and the later litigant is therefore bound. This is narrowly interpreted and available only in special circumstances
      3. Distinguish –family relationships – The fact that parties have a legal relationship with each other does not of itself make them privies. Thus, a husband’s lawsuit is not binding on his wife (unless, in a community property state, the husband represents the community in maintaining the suit); neither does a parent necessarily represent a child. Whether “privity” exists depends on whether there is a representative capacity arising out of the relationship.
  2. Nonparties
    1. Nonparty not bound – in general, a nonparty is not bound by judgment. Such a person has not had his day in court and, as a matter of due process; he cannot be denied a valuable interest (his right of action) without one. Instances of privity are exceptions to the rule, justified on the ground that the nonparty’s interests were adequately represented by the party to the first action.
      1. Federal statutory exception – for cases involving federal employment claims, Congress, in the Civil Right Act of 1991, gave binding effect to a litigated or consent judgment or order when the nonparty had adequate notice and opportunity to present objections, or when the nonparty’s specific interests had been adequately represented by another
      2. Due process limits on extreme application of state preclusion – Although states are generally free to decide the content of their own preclusion law, federal due process principles impose some limits on extreme applications to nonparties. Thus, individual taxpayers who sought to challenge a county occupation tax levied upon them could not be bound by a prior, unsuccessful non-class action brought by a city against the county challenging the same tax, when the taxpayers received no notice of the first action and the court and parties had done nothing to assure adequate protection of their interests.
    2. Nonparty may benefit – a nonparty may benefit from the judgment in an action to which he was not a party
      1. Claim preclusion – in a number of situations, two potential Ds will have a relationship such that one is responsible for the conduct of the other. Examples include employer and employee (under the principle of respondeant superior) and insurer and insured (the insurer being liable, up to the policy limits, for acts of the insured). When this relationship of vicarious responsibility exists, a judgment exonerating either potential D precludes an action on the same claim against the other.
        1. Not applicable to joint or concurrent liability – This form of claim preclusion applies only in situations of vicarious responsibility and not in cases of joint or concurrent tort liability. Thus, if P is injured by the concurrent of Driver and Owner (each of whom operates his own car) and P sues Driver and loses, that judgment does not bar P from suing Owner. But if Driver was driving Owner’s car, and P lost in an action against Driver, P could not sue Owner based on Driver’s conduct.
      2. Issue preclusion
        1. Basic rule – a party who litigates an issue against one party and loses may not relitigate that issue with another party.
          1. Rationale – if a party has had a full and fair opportunity to litigate an issue in one action, there is no reason to waste the time of the court and other persons in relitigating that issue.
        2. Offensive v defensive use of prior judgment – Earlier decisions held that issue preclusion could be used defensively against a P, but not offensively against a D (to block D’s attempt to relitigate issues on which he had lost in the earlier trial). However, the SC has held that this is not a critical distinction
        3. Limitations – although issue preclusion can be used offensively or defensively, the benefits of such estoppel may be denied under certain circumstances
          1. Issue would not be conclusive between parties – if the issue would not be treated as conclusive between parties to the first action; it cannot be conclusive in favor of a third person not a party to the first action.
          2. Unjust under circumstances – in addition, a third person cannot have the benefit of issue preclusion against a party to the first action if it would be unjust in the circumstances. In deciding whether preclusion would be unjust, the court may consider relevant facts such as the following:
            1. Whether the person seeking the benefit of preclusion could have joined in the prior action, but decided instead to sit it out
            2. Whether the prior determination was inconsistent with an earlier determination of the same issue
            3. Whether the consequences in the second action are much more serious that those in the first action
            4. Whether the party to be estopped has procedural opportunities in the second action (eg, broader discovery, ability to compel live testimony of important witnesses) that were not available in the earlier action
            5. Whether the prior finding was apparently a compromise verdict
            6. Whether the issue is one of law whose reconsideration should not be foreclosed
            7. Whether other compelling circumstances justify relitigation

Interjurisdictional Preclusive Effects of Judgments

  1. Basic Rule – The basic rule regarding interjurisdictional preclusive effects of judgments is that the preclusion principles of the court system that rendered the judgment should be used to determine its preclusive effect
    1. State court judgments constitutionally entitled to effect in other state courts – under the Full Faith & Credit Clause – “Full faith and credit shall be given in each State to the judicial proceedings of every other state.”
    2. State court judgments given effect in federal and state court by statute – The Full Faith and Credit Statute (28 USC 1738), directs that state court judgments shall have the same full faith and credit in every court within the US and its territories and possessions as they have by law or usage in the courts of such state, from which they are taken.” This statute requires federal courts, and courts of other states, to give effect to state court judgments, and also direct that preclusion principle of rendering J be applied.
    3. Federal court judgment generally given effect according to federal principles of preclusion – even though there is no explicit constitutional or statutory provision to this effect, it is accepted that federal court judgments are entitled to preclusive effect, and that this effect is determined according to the federal common law of preclusion.
      1. Diversity cases – federal common law governs the preclusive effect of federal courts’ judgments in diversity cases; but, because state substantive law is at issue, no uniform federal rule is needed. Hence, absent a federal interest such as enforcing a sanction for discovery misconduct, the federal common law governing the preclusive effect of a federal court’s diversity judgment is the law that would be followed by the courts of the state in which the federal diversity court sits.
    4. Scope of effect of first judgment – Although the preclusive effect of a judgment is determined in the first instance by the preclusion law of the state that entered it, that effect cannot exceed the scope of what the judgment could legitimately conclude, eg, it could not bind persons not parties to the judgment.
  2. Prohibition Against giving broader preclusive effect than required – ensuring that judgments of sister states are give due respect might seem to permit giving them more effect than would the courts of the state where the judgment was rendered. Nonetheless, the SC has interpreted the Full Faith & Credit Statute to forbid a federal court to give more effect to a state court judgment than is called for by the preclusion rules of the state
  3. Preclusion Regarding Claims within Exclusive Federal J – A frequent problem arises when a federal suit asserts a claim that could not have been raised in an earlier state court action because it was subject to exclusive federal J, and a party argues that the federal claim is nevertheless precluded by the judgment in the state court case.
    1. Rule of J competence for claim preclusion – the law of most states is the claim preclusion is not available with respect to a claim over which the court does not have SMJ. Rationale: If the court cannot entertain the claim, it should not be able by its judgment to extinguish the claim
    2. Distinguish – issue preclusive effects – If the state court decision of a state law claim resolves issues that are also presented by a federal claim, those determinations can be given effect in a later federal suit asserting the federal claim even if the claim is within exclusive federal J.
    3. Possible argument for exception to Full Faith and Credit Statute – If state law indicates that a state court judgment should be given preclusive effect even with regard to a claim within exclusive federal J, there may be a basis for finding an exception to section 1783 if the grounds for prohibiting state courts from adjudicating such claims support finding a partial repeal of the statute. But the SC has said that this is a relatively stringent standard for finding such a repeal, depending on the irreconcilable conflict between section 1738 and Congressional grant of exclusive federal J.

DISCOVERY

  1. Federal Rules – Ultimately, the FRCP made pretrial discovery an integral part of the process of defining the issues for trial. Similar discover procedures have now been adopted in almost every state. However, increasing concern about excessive discovery has led to repeated revisions of discovery rules.
  2. Purpose and Effect of Discovery Procedures
    1. Obtaining factual information – A party who has made effective use of discovery can go to trial with the best evidence available to prove his contentions and with a good knowledge of the presentation that his adversary made. Surprise and delay are thus largely avoided, and the change that the judgment will rest on accurate findings of fact is enhanced.
    2. Narrowing the issues – Discovery can help to eliminate fictitious issues, claims, or defense by revealing overwhelming evidence on one side, thereby paving the way for stipulations, settlements and summary disposition.
    3. Promoting Settlements – it was hoped that discovery would facilitate more and earlier settlements by providing each side fuller knowledge of the strengths and weaknesses of its case.
    4. Simplification of pleading – the availability of discovery makes it unnecessary to rely heavily upon the pleadings for exchanging information, narrowing issues, or disposing of untenable claims or defenses. Accordingly, where discovery is available, pleading is simplified and technical challenges to pleading are disfavored.
    5. Costs to litigants – to the extent that discovery produces settlements and stipulations, it can substantially cut down costs to one or both parties. At the same time, the discovery process itself can be very costly in terms of time spent by lawyers, parties, witnesses, and court reporters.
    6. Substantive consequences – the forgoing effects of discovery can have substantive implications as well. Claims and defense otherwise difficult to establish may be made effective by the availability of discovery. Antitrust claims, for example are often proved with evidence discovered in the possession of the defense. And the availability of discovery may enable a tenacious and resourceful litigant to wear down one who is weaker or less energetic.
  3. Basic Discovery Devices
    1. Prediscovery Disclosure – FRCP 26(a)(1) provides for disclosure of certain info before commencement of formal discovery. Rationale: formal discovery is too time-consuming and expensive as to certain core information that will undoubtedly by revealed during the formal discovery process.
      1. Early conference of counsel – to accomplish the objective of the disclosure provision, counsel are to meet and confer as soon as practicable after the suit is filed. The purpose of this conference is to allow the parties to discuss the nature and basis of their claims and defenses, to discuss any issues about preserving discoverable information and to develop a proposed discovery plan, as well as to specify the materials that should be included in the prediscovery disclosures (FRCP 26(f)(2)).
        1. Presented to court – The discovery plan is to be presented to the court in writing within 14 days, or orally at the court’s scheduling conference pursuant to Rule 6.
      2. No formal discovery until meeting of counsel – formal discovery may be undertaken, except on stipulation or court order, under the Rule 26(f) conference has been completed
      3. Disclosure of materials disclosing party may use – prediscovery disclosure is required regarding witnesses and documents that the disclosing party may use to support its claims or defenses.
      4. Objection to Disclosure – if a party object during Rule 26(f) attorney conference that disclosure is not appropriate in this action and states that objection in the Rule 26(f) report to the court, the obligation to disclose is suspended until the court rules on the objection. (Rule 26(a)(1)(D)).
      5. Disclosure by later added parties – a party first served or otherwise joined after the Rule 26(f) conference must take its disclosure within 30 days. (FRCP 26(a)(1)(D)).
    2. Material to be disclosed
      1. Identity of witnesses – each party is to disclose the name and, if known, the address and telephone numbers of each person whom it may use to support its claims or defenses (FRCP 26(a)(1)(A)(i)).
      2. Documents that may be used – each party is to disclose a copy or description by category of all documents in its possession that it may use to support its claims or defenses (FRCP 269a)(1)(A)(iii)).
        1. Broad concept of use – the expected use of a document or witness that mandates disclosure is not limited to use at trial. The expectation that a document or witness will be used in connection with any motion or a pretrial conference is sufficient. Sufficient use even includes certain discovery events, such as questioning a witness by using a document. However, the concept of use here does not extend to the mere use of a document or witness’s name to respond to another party’s discovery inquiry.
      3. Damages computation – each party claiming damages should disclose a computation of those damages and produce the documents on which the computation is based.
    3. Timing of disclosures – These disclosures should be made at, or within 14 days after, the meeting of counsel pursuant to Rule 26(f) unless otherwise agreed by the parties or ordered by the court.
    4. Form of disclosure – Every disclosure is to be signed by at least one attorney of record for the disclosing party. That signature represents that to the best of the lawyer’s knowledge, formed after a reasonable inquiry, the disclosure is complete and correct ass of the time it is made (FRCO 26(g)(1)(A))
    5. Sanctions for failure to disclose – A party failing to disclose as required by Rule 26(a)(1) or to supplement as required by Rule 26(e)(1) is subject to sanctions.
      1. Exclusion of evidence – unless the failure to disclose was harmless, the party will not be permitted to use the material as evidence. This sanction is said to be automatic, and it applies not only at trial but also at motion hearings, as on a motion for summary judgment.
      2. Additional sanctions – the court may impose the sanction authorized by Rule 37(b), which usually require an order compelling discovery as a prerequisite, and can inform the jury of the failure to make disclosure.
        1. Stipulation to limit disclosure obligation – the parties may stipulate to limit or alter the initial disclosure obligation
    6. Depositions – a deposition is an examination of a witness under oath in the presence of a court reporter. All parties have a right to be represented by counsel at a deposition; and counsel may examine and cross-examine the witness. The examination may be held in the presence of a judge if the witness is recalcitrant
      1. When timely
        1. Before the suit filed – a deposition may be taken before an action is filed or while an appeal is pending from a final judgment, but only by leave of court granted for the purpose of perpetuating testimony based on a showing that the party see long to perpetuate testimony is unable to cause the action to be brought. (FRCO 27(a)).
        2. Moratorium after commencement of suit – Federal Rule 26(d)(1) provides that formal discovery (except depositions of witnesses about to leave the country) must be deferred until after the parties meet and confer on a discovery plan pursuant to Rule 26(f).
          1. Defendant’s head start – where a moratorium does not apply, as in state court, D;s usually are protected against imitation of formal discovery by the P until a certain time after service of the complaint
        3. Simultaneous proceedings – all parties may take depositions simultaneously unless the court otherwise directs. Hence, neither side is entitled to discovery priority before the other side can commence discovery
      2. Optional to parties – depositions are optional. Each party has the right to take the disposition of any witness – without a showing of good cause – but is not required to do so. A party is also entitled to interview any willing nonparty witness without court supervision.
    7. Numerical cap on depositions- to curb abuse, Rule 30 imposes a 10-depositions limit
      1. Limit per side – the 10-deposition limit is not per party, but rather is calculated cumulatively for Ps, Ds, and third-party Ds
      2. One deposition per witness – the rules provides that a given witness’s deposition may be taken only once
      3. Change by stipulation or order – the parties may stipulate in writing to vary the deposition limitation, and the court may so order
    8. Durational limit on depositions – Due to concerns that some depositions may be too long, depositions in federal court are limited to one seven-hour day.
    9. Compulsory appearance of witness
      1. Issuance of subpoena – At the request of a party, the court clerk will issue a subpoena commanding the named witness to appear and give testimony at the designated time and place. An attorney admitted to practice before the court may also issue a subpoena.
      2. Service of a subpoena – a subpoena is served on the witness personally and must be accompanied by a tender of the fee for one day’s attendance, plus reimbursement for mileage.
      3. Place of deposition – a witness may be required to appear at a deposition at any place within 100 miles of the place where he resides, is employed, or transacts business.
  4. Trial Preparation Materials
    1. Work product – Hickman v Taylor rule
      1. Qualified Privilege – materials prepare and information developed by or under the direction of party or her attorney in anticipation of litigation are subject to discovery only if the discovering party can show a substantial need and an inability to obtain equivalent material by other means.
      2. Purpose – this qualified privilege is desiged to maintain the adversary process by enabling each party to prepare her own case, with free rein to develop her own theory of the case and her own trial strategy; but this purpose must be reconciled with the overriding need to require full disclosure of the facts
      3. Matters protected – the focuse of this protection is onn the process of preparing for litigation. Thus, it is very broad; the FRCP 26(b)(3)(A) covers any materials prepared in anticipation of litigation or for trial.

 

Summary Judgment

Summary judgment t is a method for getting beyond the allegations of the pleadings and examining evidentiary material without holding a full-on trial. If the evidentiary material shows that there is actually no genuine controversy that requires a trial, summary judgment can avoid unnecessary delay and expense in deciding the case.

  1. Pleadings Motions Compared – Summary Judgment differs from pleading motions attacking the sufficiency of a claim or denese in that summary judgment allows the court to look at evidentiary material.
    1. Relevance to pleadings to summary judgment – the pleadings delineate what is in controversy in the case. Thus, if certain allegations have been admitted, those admissions may form part of the basis for summary judgment.
    2. Reliance on pleadings in response to summary judgment motion – An opposing part may not rely on the allegations in her pleadings to defeat a summary judgment motion (FRCP 56(e)(2))
  2. Judgment as a Matter of Law Compared – is similar to summary judgment in that it uses essentially the same standard to determine whether there is a triable issue. However, there are some important differences:
    1. Timing – the summary judgment motion can be, and normally is, decided before trial. A D may move for summary judgment at any time and a P may do so 20 days after commencement of the action. (FRCP 56(a), (b)). A motion for judgment as a matter of law usually is made at the close of evidence at trial and it may be renewed after a verdict is returned.
    2. Nature of material considered – the summary judgment motion is based essentially on pretrial written submissions, whereas a motion for judgment as a matter of law is based on live testimony and other evidence presented during the trial. However, note that SJ may be based on live testimony from despositions, which is usually recorded in a depo
    3. sition transcript or videotap
    4. e.
    5. Burden of proof – initial showing requirement – Summary judgment also differ from judgment as a matter of law in that on summary judgment the moving party must make an initial showing to justify scrutiny of the evidence, which is not required for the motions at or after trial if the moving party does not have the bop.
      1. Opposing party with burden – if the moving party would not have the bop at trial, to obtain judgment as a matter of law, he could allow the opposing party to put on her case and then point out the insufficiencies of that case. To obtain summary judgment, such a moving party would have to make an intial showing of the insufficiency of the evidence of his opponent’s case. Only if such an itital showing is made does the opponent then have the burden of bringing forth sufficient evidence to show that there is a genuine issue for trial.
      2. Distinguish – moving party with burden – if the moving party has the bop on the issue raised at the summary judgment stage, making that showing before trial does not represent an additional burden on the party because the party would have to put on such evidence at trial to justify a directed verdict. However, suh a part must make a compelling case for entry of summary judgment, because a trial should be held if a reasonable jury could disbelieve the moving party’s proof.
    6. Summary judgment may be may difficult to obtain – In many courts, it is said that summary judgment is more difficult to obtain than judgment as a matter of law – i.e., it must be clearer to the court that the case can reasonably be decided only one way. However, it appears that courts are gradually becoming more accepting of summary judgment
  3. Impact on Right to Trial – the traditional relucatance to grant summary judgment resulted in part from the belief that a litigant has a right to have her claims tested at trial. Nevertheless, there is no right to trial where there is no genuine dispute about the facts, and the SC early upheld the validity of summary judgment against argument that it violated the right to a jury trial
  4. Trend Favoring Use of Summary Judgment – Since the mid-1980s, it has seemed that the courts have become more receptive to deciding cases on summary judgment. The SC has observed that summary judgment is properly regarded not as a disfavored procedurl shortcut, but rather as an integral part of the FRCO as a whole and noted that it has an important role with the advent of noticepleading, the motion to dismiss seldom fulfills this function (isolating factually insufficient claimes or defenses) anymore, and its place must be taken by the motion for summary judgment.

Standanrd for Grant of Summary Judgment

  1. Basic Standard – the court is to grant summary judgment when it determines that there is not genuine issue as to any material fact (FRCP 56(c)), or that there is no triable issue as to any material fact.
  2. Relation to Standard for judgment as a matter of law – the US SC has stated that in federal ct the standard for entry of judgments is the same at the summary judgment stage as at the judgment as a matter of law stage. This makes it appropriate to focus on whether the moving party has the burden of proof on the issue raised by the summary judgment motion.
    1. Moving party with bop – If the party moving for sj has the bop on the issue raised by the motion, sj should be granted only if the evidence favoring the moving party is of such strength that the jury could not reasonably disbelieve the moving party’s evidence.
    2. Opposing party with burden – If the party moving for sj does not have the bop on the issue raised by the motion, sj should be granted only of the opposing party fails to present sufficient evience to permit a jury reasonably to find for him. Put differently, unless the opposing party comes forward with sufficient evidence to support a verdict in her favor, sj should be entered in favor ooof the moving party
  3. Case by Case Determination – The ct’s evaluation process must be made on a case-by-case basis. As with judgment as a materr of law, therefore, it is difficult to generalize rules for making summary judgment decisions, but there are a number of general principles that are helpful in approaching problems.
    1. All reasonable inferences indulged in favor of opposing party – the court is to make all reasonable inferences in favor of the opposing party. And to view the evidence in the light most favorable to the party
    2. Court may not weigh the evidence – the court is to determine whether there is a genuine dispute; if there is, it may not choose between two version of events and grant summary judgment to the party whose versions seems more persuasive.

 

 

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