Civil Procedure Class Notes
Double
class! I forgot and missed the first five minutes.
This
is not the best drafted statute ever. §
1367(a) grants supplemental jurisdiction based on Gibbs. Stuff that arises from the same claim or
controversy comes into play under § 1367(a).
Finley
v.
This
is what used to be called a “pendant party” claim. It’s a plane hitting a power line. The plaintiffs sue both the FAA for the tort
of allowing the plane to hit the power line, and they’re suing the electric
company for having the power line that close to a landing strip. The plaintiff and the power company are
non-diverse parties. The Supreme Court
said that Finley barred pendant party jurisdiction unless there was an
independent basis for it. § 1367 tried
to undo this result and allow pendant party jurisdiction to go forward
on efficiency grounds. Let’s hear it all
as one convenient trial package.
So
does § 1367 apply to Finley?
Sure, it involves the “joinder or intervention of additional parties”.
These
are two big ways that Congress got it right.
They codified Gibbs and reversed Finley.
Finley
was
resolved by the Supreme Court, and the Supreme Court said that the state law
claim was invalid in federal court. But
when Congress drafted the statute, they tried to undo that result and allow
that type of claim to go forward.
So
if a similar case would come up today, we would look at § 1367 and see that
pendant party jurisdiction is okay under § 1367(a).
But
we’ve got problems!
This
is difficult, bad, nasty, and poorly drafted according to Fairman. What this sub-section tries to do is to protect
complete diversity. It takes away
supplemental jurisdiction under certain circumstances.
If jurisdiction
is founded solely on diversity, then district courts shall not have
supplemental jurisdiction…under certain circumstances.
Owen
Equipment & Erection Co. v. Kroger
Kroger
sued the
In Owen
v. Kroger, the Supreme Court says that the state law negligence claim of
Kroger against Owen cannot go forward in federal court against a non-diverse
party.
What
can Kroger do? She’s been told that she can’t
sue Owen in the same lawsuit with the power company. She can either file the whole thing in state
court, or divide her claim somehow such that her original claim goes forward in
federal court while her claim against Owen proceeds in state court.
Would
§ 1367(b) allow this suit to go forward?
Would
the statute deny supplemental jurisdiction?
Yes, because it is a suit by a plaintiff against a party that is joined
under Rule 14. (The power company joins
Owen under Rule 14.)
What
about the power company’s claim against Owen? It’s
still good.
The
drafters create this statute based on claims by a plaintiff, and then they
enumerate specific rules. Thus, they screw
up, because they don’t understand how litigants’ positions may change
during litigation.
Hypothetical
Let’s
say an
Another
example: A plaintiff sues a defendant in state court on a state contract
claim. Let’s say that they’re diverse
parties. The defendant removes to federal
court. Then the defendant makes a
counterclaim against the plaintiff. Against
that counterclaim, the plaintiff brings in (sues) a third party under Rule
14a. Would the statute allow this? How did we get into federal court? We used removal. Does the statute apply given that it was
removed? This argument gets a lot of
play in the academic literature, but not a lot of play in the courtroom.
Did
we have a claim by a plaintiff against a person made a party under Rule
14? Yes.
But this doesn’t make sense!
The plaintiff is acting exactly as the defendant acted in Owen v.
Kroger. The plaintiff brought the
third party in solely to defend against the counterclaim. The plaintiff is acting in a defensive
posture.
Say
we take out the original claim and the “defendant” had filed the lawsuit
against the “plaintiff” in the first place, followed by the joinder of a third
party by the plaintiff under Rule 14. This
would have been fine! How is that
fair? So the plaintiff’s defensive claim
is barred by § 1367(b), but if just the converse happened, it would be allowed.
What
about Zahn?
We
talked about the Rule of Zahn in relation to the class action
rules. To have a federal class action,
you would have to have every single class member have more than $75,000 in
claims. Does § 1367 change this result? Yes, because class actions are Rule 23,
which isn’t part of the list in § 1367 of kind of joinder-type-stuff to be
excluded.
This
leads many to say that the Rule of Zahn is now…gone!
Different
circuits have taken different positions.
The Supreme Court granted cert, but O’Connor recused herself and there
was a 4-4 split.
Fairman
says that Congress punted! All
these law professors were writing articles about how the other professors were
stupid.
28
U.S.C. § 1367(c)
This
is probably the most screwed-up procedural statute. Congress is fine with this statute, but there
are unanswered questions about it and it is controversial.
So
the supplement jurisdiction statute is a mess.
But Fairman wants us to know how the statute is supposed to work. § 1367(a) codifies Gibbs and Finley,
and § 1367(b) takes away part of the supplemental jurisdiction based on diversity. But we won’t need to know the complicated,
nitty-gritty weird stuff that we talked about earlier. They didn’t intend to revoke the Rule of Zahn,
but oops, they did.
What
about removed cases? Do they have a
place in § 1367(b)? Something that has
been removed is there theoretically based not only on § 1332 (the
diversity jurisdiction statute), but also § 1441 (the removal statute). Some courts believe this, but some don’t.
Removal
This
is the defendant’s forum selection option.
28
U.S.C. § 1441 is the main statute for granting removal.
(a) This is the
general provision.
(b) This is the
diversity only provision.
(c) This is the
removal of combined state and federal claims.
(d) This is
removal by a foreign state.
(e) This says that
exclusive federal jurisdiction not a bar to removal.
Subsection
(a) is the grant of the right itself.
The defendant can take an action that could have been filed in federal
court and put it in federal court.
Subsection
(b) tells us that when federal court have jurisdiction under a federal question,
you don’t have to worry about citizenship.
On the other hand, if the federal basis is diversity, you can’t remove
if there is a home state defendant.
Strategically, plaintiffs will try to sue home state defendants to
anchor the case in state court if that’s what you desire.
Here
are some problems on removal.
1. If a claim
couldn’t have been brought in federal court in the first place, you can’t
remove it to federal court. For example,
you can’t remove an action that would fail the well-pleaded complaint rule
test.
2. If you have
something like a copyright claim, that’s something that can only be brought in federal
court. Something like this can be easily
removed.
3. What if the plaintiff
alleges a violation of civil rights?
That would make the claim a federal question under § 1331.
4. How about
5. Here, the plaintiff
brings in a federal question. If you
look at § 1441(c),
the case would be removable because mixed cases are removable. The court would have the discretion to remand
the state part if they wish.
6. Here, we’re
suing in
28
U.S.C. § 1446 gives the procedure for removal.
The procedure is fast. The
defendant signs a notice for removal that’s short and sweet. The “then and now” rule says that you must
allege that the amount in controversy is over $75,000 both “then and now”. The defendant has to file the notice within
30 days of the filing of the lawsuit.
Most of this will be eaten up by the client’s waffling.
If
the initial pleading does not show its removability, the clock starts running
again as soon as the complaint shows removability. If the plaintiff amends the complaint such
that it becomes removable, you can move for removal at that point. There is an absolute cap of one year for
removal. That’s a pure efficiency rule.
How
about
How
about
The
30 day rule is an equity rule. It’s
either 30 days after the complaint is filed or 30 days after it is amended (or
anything else happens that makes the case removable all of the sudden). Then one year is a hard cap.
Lewis,
from
Lewis
also sues Whayne supply in
Liberty
Mutual Insurance, from
The
insurance company intervenes!
That’s Rule 24. This is how
outsiders butt into your lawsuit. There
are two types of interventions: permissive interventions, and interventions of
right.
The
insurance company had a stake in the dispute. They had to pay workers’ comp, and they want
to recoup that cost from the defendants in Lewis’s case.
This
lawsuit was originally filed in state court in
The
original lawsuit was anchored to state court in two ways: you both had
non-diverse defendants, and a home-state defendant.
But
again, Lewis settles with Whayne. What
does Caterpillar do? They remove the
case to federal court.
Is
this removal proper? No. There is
Let’s
say you’re Lewis. You’ve been wrongfully
removed to federal court. What do you
do? Lewis files a motion to remand. The motion gets denied, and that’s wrong
too! It should have been
granted. That’s the second error
in this case.
Ultimately,
Whayne settles with Liberty Mutual as well.
It turns out that at the time of trial in federal court, the parties were
appropriately diverse. Caterpillar wins,
and then we start the appeals process.
So,
Lewis loses in federal court. Lewis
appeals to the 6th Circuit, which reverses, saying there was no jurisdiction. The jurisdictional issues are considered at
the time the lawsuit was filed, namely, when the lawsuit was removed to federal
court. Lewis and Whayne were both parts
of the lawsuit at the time, which means that diversity jurisdiction was no good
at the time.
What
the Supreme Court says (wrongly, according to Fairman), is that once the case
has been tried in district court, you can’t go back due to efficiency
grounds. Caterpillar should not have
removed the case; the district court should not have accepted jurisdiction. However, it is argued that time cures all
ills because by the time of the trial the parties were diverse.
Lewis
did everything right here. Does he have
any recourse? He could have tried filing
an interlocutory appeal under 28 U.S.C. § 1292. The district court wouldn’t have flinched.
The
rule is that you look at the time that the lawsuit is filed.
Where
are we? There is more to say about Caterpillar. Next is