Civil Procedure Class Notes
More
on Caterpillar
When
do enough wrongs make a right? This
started off as a regular old state case.
Lewis
sued Caterpillar and Whayne. There was
no diversity at that point. However,
when Lewis settles with Whayne, that claim falls out of the picture, but not
Whayne as a party.
At
the last possible moment, Caterpillar removes to federal court, but it was wrongful
at the time. Lewis points this out, but
the federal court denies the motion to remand, and that was a mistake at the
time. BAD! BAD!
Subsequently,
Whayne is dismissed as a party. By the
time we get to trial, we have a perfectly decent and respectable federal
diversity case.
But
what’s our rule? You must have jurisdiction
at the time the action is initiated.
Allowing this case to go forward violates this fundamental rule.
Lewis
appeals to the Sixth Circuit, which reverses because they find there was no jurisdiction.
The
Supreme Court reverses, and Ginsburg says that it’s not worthwhile from a cost
standpoint to send the case back down after it’s already been, in some sense,
properly adjudicated insofar as jurisdiction became proper by the time of
trial.
Recall
Mottley: how does
this go together with Caterpillar? Mottley was supremely
inefficient. The same issues were tried
and appealed through the federal court system and then again through the whole
state court system and right back up to the Supreme Court again!
What
happened in the initial federal trial in Mottley? There was never a trial on the merits. On the other hand, Caterpillar had already gone to a trial
and a verdict.
What
about Saadeh? This went to trial and the plaintiff
won. But the D.C. Circuit dismissed for
lack of jurisdiction after the trial!
Why didn’t efficiency win out here like it apparently did in Caterpillar? Could there be a constitutional question
here? It might be unconstitutional if
the court in Saadeh lets the case go
forward. Furthermore, there has never
been jurisdiction in federal court at any level for alien v. alien.
Also,
Caterpillar was removed,
rather than initiated in federal court.
But
it’s tough to distinguish Saadeh. The Supreme Court has recently granted cert
in a case called Atlas Global.
Atlas is suing Data Flux for breach of contract. Atlas sued in federal court based on
diversity. Atlas is a partnership, and
as was mentioned with Gibbs,
partnerships’ citizenships are determined by all of their members.
Atlas
had members from three places:
What
the plaintiffs did was boot the Mexican partner. Nobody complained. The case went to trial, and the plaintiff
won. Then, Dataflux filed to
dismiss for lack of subject matter jurisdiction. Why can they make this motion that late? It’s the most favored motion! You can raise it at any time! Even the court can raise the motion sua
sponte! Why did Dataflux wait? Had Dataflux won, they wouldn’t have made
this motion. They’re trying to get “two
bites of the apple”. They want to either
win on the merits or get a dismissal for lack of subject matter jurisdiction.
There
wasn’t complete diversity at the time of filing, but there was
complete diversity at the time of trial.
The
motion to dismiss for lack of subject matter jurisdiction is granted. The plaintiff appeals to the Fifth Circuit. The Fifth Circuit cites Caterpillar’s efficiency argument to
reverse the motion to dismiss.
A
case like Caterpillar, which
suggests that we can ignore an established rule of law for efficiency reasons,
can cause a lot of mischief. Fairman
guesses that the Supreme Court will limit the holding of Caterpillar.
SLUSA
is a federal statute that (1) preempts state securities class actions, (2)
makes purely state law securities fraud cases removable, and (3) orders the
dismissal of the removed class actions.
Steve
Y. says that SLUSA uses removal as a tool not just to move things around,
but as a tool to restrict a substantive right.
That’s not what we usually think of when we think of the uses of civil
procedure.
Are
we ready to move on and leave subject matter jurisdiction? Noooooo!
Don’t make us do Erie!!!
Two
big questions:
1. Does any court
in the state have power to hear the case?
(Personal jurisdiction)
2. If so, which
court? (Subject matter jurisdiction)
Federal
courts can hear federal questions, diversity cases, supplemental jurisdiction,
and removal cases.
Another
big question: what law applies in federal court?
What
does a federal court do when it sits in diversity? What law does it apply?
The
It’s
all the Founding Fathers’ fault for creating the dual court system and allowing
federal courts to hear diversity cases based on state law. But what state law are the federal
court going to apply in such cases?
The
Fairman
says that most of the time, the
That’s
where the Rules of Decision Act (RDA) comes in.
It says that federal courts will use state law to decide diversity
cases. The RDA has survived virtually
unchanged to the present day: 28 U.S.C. § 1652.
But
what does the statue mean by “the laws of the several states”?
Yeazell
spared us from having to read Swift v. Tyson and its interpretation of
the phrase “the laws of the several states”.
In
modern times, almost everything is statutory and not a whole lot is common law. In the old days, there was a lot more common
law and a lot fewer statutes.
If
you want to look up the law, we might look up statutes as well as case
law. Swift had to figure out what
law applied.
Justice
Story says that court decisions are not laws. Story said that “laws equal statutes”.[1]
The
Court finds that state statutes will bind federal courts. But what if there are no statutes? How do we will the gap? The
Story
says that the law is The Law, and is the same and unchangeable everywhere. This is an idea grounded in Natural Law philosophy. It’s hard for us to get our minds around this
philosophy of law.
That
leads us to…
What
are the facts? Tompkins is going to
The
suit is brought in the Southern District of New York against the railroad. The subject matter jurisdiction is
diversity. No problem with personal
jurisdiction because the plaintiff sues the railroad in its home state. But what law shall we apply? There’s a very specific legal issue they’re
trying to settle: will the Pennsylvania common law of negligence apply, or will
New York common law of negligence apply, or something else altogether?
So
the issue is: what is level of duty owed by the railroad to the guy walking by
the railroad tracks? Different jurisdictions
have different ways of describing that duty.
Why
does this matter? This is all or nothing: the
choice of law will determine the outcome of the case. The greater the duty owed to Tompkins, the
greater the chance is that he will win.
Why
won’t
The
railroad appeals, and the Second Circuit affirms. The Second Circuit says that Swift
applies because there is no statute, and thus federal common law is applied.
Then
it goes up to the Supreme Court, and they reverse. How come?
·
There is a claim that something is unconstitutional.
·
The Court says that Swift allows federal
judges too much discretion.
·
Swift was designed to create uniformity of law, but it
failed to do so.
Easy
Erie
(C.f.
Glannon)
In diversity cases, a federal
court must apply the law that would be applied by the courts of the state in
which they sit. By “the law”, we mean
court decisions as well as statutes.
Therefore,
on these facts, the
This
isn’t the problem; the problem is all the stuff Brandeis says in the opinion.