Civ Pro 2 Outline
Table
of Contents
Pre-answer motions – Rule 12(b)
Interrogatories and depositions – Rules 30
and 33
Production of documents – Rule 34
Requests for admissions – Rule 36
Confidentiality in settlements
Judicial management of litigation
The Five Themes of the Course
Hopefully, everything we do
with touch these themes.
The Five Pedagogical Objectives
Why are the Federal Rules of
Civil Procedure important? Most of the
states’ rules have modeled their rules after the Federal Rules. Remember
Congress can intervene
unilaterally by creating their own
rules, separate from the Federal Rules of Civil Procedure. Fairman thinks this is bad. Other people think it’s
good.
The state of modern litigation
One of the common criticisms
is that we live in an overly litigious society.
Yeazell challenges the idea that there is an explosion of
litigation. Public perceptions cause
Congress to make changes in federal practice.
Tort reform and class action reform stem from that. 98% of litigation is at the state level. Very little is federal. But the state rules are still modeled on the
Federal Rules. We don’t even have an
Ohio Rules course! So
only 3% of litigation goes to trial.
Most litigation settles.
Everything we talk about up to pleading, joinder, and disposition prior
to trial is pretty much where litigation is.
Very, very little gets to the trial stage. There are more jury trials than bench
trials. Contracts plaintiffs and torts
defendants tend to win. So Fairman and
others think that tort reform is bad.
What does medieval English
royal power have to do with procedure?
Fairman’s scholarship is chiefly in the area of pleading and
pleading practice. What’s the
relationship between common law pleading practice and the modern Federal
Rules? What does the King of England
have anything to do with it? Let’s go
back to Medieval Times! There were two
types of courts: the royal courts or king’s courts and the courts of equity. With the royal courts of justice, you had to
get the king’s attention somehow. What
develops initially as an oral tradition evolves into the system of writs: paper documents that spelled out
different causes of action, such as the trespass writ. This was what Wright called “the elaborate
dance of pleading”.
When you were served with a
common law writ, do you demurrer or do you plea? The demurrer
challenged the sufficiency of the writ: “So what? I assume that everything you’ve said is true,
but it doesn’t matter.” The pleas agreed
that the writ was sufficient but raised other objections. Dilatory pleas dealt with either jurisdiction
or venue: “Not here, not now.” The bars
either said: “Not true” or “yes, but”…these were traverse or confession. There was a formulaic way to get into court
and a formulaic way to respond. Today, a
12(b)(6) motion is quite similar to the common law
demurrer. For jurisdiction and venue, we
have 12(b)(1) and 12(b)(5). For traverse and confession, we have denials
and affirmative defenses. So this is why
it’s worth being familiar with common law pleading practice: its elements are
still present in the Federal Rules today.
Here’s something that Yeazell
doesn’t mention: there was a whole parallel court system to the royal courts,
namely, the equity courts or courts of chancery. The courts of equity didn’t follow the same
rules of pleading as the common law courts and you could appeal upon the
chancery courts for relief because it was right and fair. They issued injunctions. There was no power at law for the equity
courts to order this. They could order
specific performance as a remedy. They
also had no jury trials. You wouldn’t
need a jury to decide issues of equity.
The equity courts develop their own way of doing things.
So we have a complicated,
crappy system! By the mid-nineteenth
century, we get a reform effort in the form of the Field Codes, or Code
Pleading. It starts in
This sets the stage for the
next level of reform. Charles Clark was
a federal appellate judge and professor at Yale. This was the “New Deal” for the federal
courts! Clark and his draft committee
had a vision of what he wanted the rules to do.
He believed that both code pleading and common law pleading
inappropriately kept people from getting their day in court. A system of rules was developed around that
premise. It all starts with Rule 1:
there will be no more split between law and equity courts. Federal courts will be able to give relief at
law and in equity. Rule 2: there will
only be one form of action. Then we go
to the famous Rule 8, upon which Fairman’s career is
based! This is our “short and plain
statement” rule! It sets the bar
relatively low. The facts are gone, the
writs are gone, the cause of action is gone. You just need the short and plain
statement. It’s notice pleading!
Look at Form 9 under the
Federal Rules…a guy gets hit by a car on a certain date. The car was driven negligently. The plaintiff has his leg broken and had some
expenses. The plaintiff demands
payment! That’s notice. We don’t know why the defendant was negligent.
Maybe the defendant sped! Maybe
he drove recklessly! Maybe he ran a stop
light! We assume that there was only one
accident on June 1st. The guy
won’t have to puzzle over why he was sued.
The Rules tell us that these forms are sufficient. Wright says: “Rule 8 is the keystone!” All the other old burdens of pleading will be
provided by other rules and other steps in the process. Facts will be discovered in discovery, and
that’s also where we’ll narrow the issues.
We can resolve meritless claims with motions
to dismiss and summary judgment.
Pleading is made simple: we perform other procedural tasks with other
techniques.
This isn’t to say that there
aren’t elements of code pleading still around.
There are states that still have state pleading rules based on code
pleading. The California Code of
Procedure requires a statement of facts, just like the Field Code did. On the other hand, even though the rule is
there, that’s not really what they want.
The influence of the Federal Rules has been so great that the recitation
of the facts required in the past is not necessary. You can use a standard “check-the-box”
form. This is a far cry from what Field
intended! How does all of this work?
Haddle v. Garrison – We’re taken through this litigation to try to
explain the way pleading has developed in the modern era. It’s a whistle-blower case. Haddle testifies
against his former employers at Healthmaster who were
involved in Medicare fraud. Haddle gets fired!
That doesn’t seem right! So he
sues in the
What do the Healthmaster defendants do?
They file a 12(b)(6) motion to dismiss! They claim that he suffered no
constitutionally-protected injury. They
say “so what”! The guy was hired, he
cooperated with an investigation, then he was
fired. The pleading basically says:
“Yeah, we did it. So
what?” At the time,
So this is how modern
pleading has developed. The notice
element is there, but there’s a whole lot more to the story in the Haddle complaint
than the drafters of the Rules might have anticipated. We also see the overlay of the review of law
where the courts agree, but then disagree as to whether the legal issue was
right. Haddle
wins, kind of. He doesn’t win much
money. But the attorneys win big
time! They get over $250,000 in legal
fees from a Magistrate Judge. We will
continue to think about this: the Rules create costs and benefits. Part of the negative impression of lawyers in
the public mind, according to Fairman, is due to stories like this where the
lawyers get a lot more money than the client.
Is this inequitable? The jury can
certainly limit damages. The Magistrate
Judge didn’t grant all the fees that were asked for. They were basically cut in half.
We left off with the short
story of pleading. The bottom line is
that Rule 8 is “notice pleading”. Notice
should be sufficient to withstand a motion to dismiss. It’s possible to have a statement that’s too
long. A complaint could be so detailed
that a court could dismiss it on the basis of prolixity. A 4,000 page complaint is too damn much! Notice that you can plead inconsistently. It’s
provided for in Rule 8(e)(2). You can set forth alternate or hypothetical
statements of claims or defenses regardless of consistency. This may make us uneasy that we can plead
things that are internally inconsistent.
But
Ethical limitations
Yesterday, we looked at the
plight of Haddle.
Haddle lost in the trial court because the law
of the circuit said that he had no property interest in his continued
employment. What if the law said that had a property interest if the company
had promised it would only terminate him for cause? In other words, he’s still in an at-will
state, but the company has promised only to fire him for cause. Could Haddle amend
his pleading to avoid 12(b)(6)? Shouldn’t he have thought of that the first
time around? Why can’t he make that
point going forward, though? But we
don’t know whether the company promised him he would only be dismissed for
cause. You can’t just lie to get past
12(b)(6).
Rule 11
Rule 11 is a long rule. Every piece
of paper filed in a court shall be signed by at least one attorney or pro
se party. Stuff that’s filed has to be
signed! The reason it’s important comes
in 11(b): you assert that you’ve done a reasonable investigation and you, in
good faith, think you’re properly filing the document. You can’t harass or delay! You have to have non-frivolous claims! You have to have facts that can be supported
by evidence! There is a tension in the
Rules: plead quickly and get the lawsuit started, but Rule 11 says that you must have done reasonable investigation
first. What are the consequences? The court can impose sanctions! Attorneys, firms, or parties can be
sanctioned. Rule 11(c) sets out a
detailed process for how we do this.
You can mostly just read Rule
11 and you’ll get it. If it ain’t filed with the court, it ain’t
a Rule 11 violation! If there’s no
document, or it’s not filed, or there’s no court…no violation. What about groundless discovery? Rule 11 doesn’t apply to discovery! There’s a different part of the Rules that
deal with discovery abuses: Rule 26. The
penalty scheme there is different. What
about a client who brings in a frivolous lawsuit and you rush to file it? The attorney can get knocked for Rule 11(b)(3). It looks like
there was no investigation! You need an
“inquiry reasonable under the circumstances”.
That means you might be off the hook if the client comes to you when the
statute of limitations is almost over.
If you only have a day to file the lawsuit, they might go easier on you.
Walker v. Norwest Corp. – This is a case of lawyers failing to investigate
the law, which isn’t that common. The
lawyer filed a lawsuit in federal court claiming diversity. We must have complete diversity. The
Walkers are from
Why does Massey argue that
Rule 11 sanctions are inappropriate here?
He says it would be too hard to figure out where the defendants are
from! Tough, dude! Plaintiffs have managed to do this basically
forever. So the argument is stupid on
its face. It’s not surprising the
sanctions were affirmed given that that’s the extent of his argument.
Pay attention to what Norwest
does. They’re represented by
sophisticated litigation counsel. Do
they follow appropriate procedure? Rule
11(c)(1)(A) tells us that we initiate sanctions by
motion after we first give the other party 21 days to withdraw their
motion. Norwest sent the guy a
letter. They didn’t really serve him. Norwest appears to have messed up! To do this right, they should have drafted
its motion for Rule 11 sanctions, served it on Massey, waited 21 days, see if
he dismissed the lawsuit, and only then
file the motion with the court. This is
the safe harbor provision. It tries to let lawyers work these issues out
without taking up the court’s time. So
how do we get an affirmation of the sanctions?
Luckily, there’s another bit, Rule 11(c)(1)(B),
which lets the court impose sanctions sua sponte. Did the
district court issue a show cause order?
We don’t know. Law firms can have
their own Rule 11 procedure. You would
have to get your Rule 11 motions approved by your firm’s ethics committee.
Christian v. Mattel, Inc. – There are dates stamped on the back of Barbies’ heads! If
the plaintiff’s attorney had done even the most basic research, he would have
found that the suit was absolutely meritless. The plaintiff’s attorney, Hicks, did lots and
lots of stuff wrong. Why would Mattel
have pursued the strategy it pursued? It
files its motion for summary judgment first and then files for Rule 11
sanctions as opposed to filing for Rule 11 sanctions first and getting the
lawsuit dismissed. This massively runs
up the bill, where you could have had the same result much faster and cheaper. But Mattel wants to send a message: don’t
screw with us. They chose a more expensive and protracted strategy. This is similar to how WalMart
vigorously litigates slip-and-fall cases.
The district court’s Rule 11 orders are vacated! The district court, in all its excitement,
imposed sanctions for stuff that you can’t impose sanctions on under Rule
11. You can only be sanctioned for the
filing of improper papers! The district
court goes beyond that in its justification.
Hicks gets a short term victory in the Court of
Appeals, but he’ll get hammered when it goes back to the district court. It’s a victory, in the long haul, for
Mattel. Mattel made a mistake when they
offered up all these different grounds for Rule 11, including some that weren’t
right.
The bottom line is that Rule
11 provides a way to control the behavior of lawyers based on the filing of
documents in court. It’s a good
rule! Do you factual investigation!
We left off looking at the
conflict between what one pleads in order to meet Rule 8 and what one must do
in order to meet Rule 11. The Rules
present inconsistent burdens: the lawyer must have, theoretically, the facts in
order to prove that you’ve done a reasonable investigation before filing, but you don’t have to plead those facts per
the notice pleading standard. Today, we
continue, skipping the ethical part and looping back to the pleading part.
The drafters of the Rules
envisioned a limited situation where more specific pleading would be required:
pleadings involving fraud or mistake.
This is found in Rule 9(b): “…all averments of fraud or mistake…shall be
pleaded with particularity.” In certain
cases, the pleading must do more than notice by articulating some factual basis to develop the claim. This is pretty much a fraud rule because
there isn’t a body of law in mistake. So the drafters’ ideal world would be notice
pleading for everything except for fraud.
Stradford v. Zurich Insurance Co. – This isn’t even a published opinion. It’s rather unremarkable. How is this pleading requirement
applied? What did Dr. Stradford do? He had
insurance covering his office. He let
his insurance payments lapse. The
insurance company cancelled the policy for a certain period of time. Then he starts paying again, and the
insurance company lets him restart coverage by saying that he had no claims
during the period where he missed his payments.
But very soon after the policy was reinstated, he filed a claim saying
that frozen pipes caused damage in his office.
The first claim was about $150,000, which was pretty big. The company paid the claim. But then he submitted a revised claim for
$1.38 million!!! That’s a red flag to an
insurance company if you ever saw one!
The company starts investigating more thoroughly. They end up believing that the loss actually
occurred during the time when the policy had lapsed. They don’t pay the big claim!
The dentist sues for this
claim, and the insurance company countersues for the
$150,000, plus punitive damages and investigation expenses. Does it matter for the purposes of Rule 9
whether it’s a claim or counterclaim? Apparently not. One
of the issues around Rule 9 is what it applies to. All courts will apply the standard to claims
and counterclaims. What about a subset
of a claim that has a “fraud-like” element to it? The counterclaim is for common law
fraud. But what if it were a state
statutory claim for fraud? Would that
make a difference to the pleading standard?
There isn’t consensus on that point: some courts contend that this is
limited to only common law fraud, but this is a minority view. Yeazell chose a common law case so we don’t
have to get into the issue.
Why do we have a different
rule for pleading fraud than everything else?
What does the court say? How do
we interpret the “circumstances constituting the fraud”? What did the drafters mean? Is there sort of a “legislative history” of
the Rule? Neither Congress nor the
There are Circuits that
require you to “detail the statements”: you must provide the statements that
were made that were allegedly fraudulent.
You must identify the speaker.
You must identify when and where the statements were made and you must
explain why they were fraudulent. You
need the “who”, “what”, “where”, “when” and “why”. That’s the mainstream argument, but it’s not
the only one. This truncated version is
used because there is no question of who.
So let’s say we have the newspaper standard. Some standards require you to plead the
elements of fraud, which is clearly wrong.
The best practice is to always plead the elements, based on what your
jurisdiction wants. There’s also a
standard that says that you must give fair
notice of fraud. That’s the better
view, says Fairman, because you should read Rule 9 in relation to Rule 8. Rule 9, it is argued, wasn’t meant to change
the way pleading is done, but it’s just a slight “tweak” done to fraud cases. In some jurisdictions, the standard varies
depending on the complexity of the case.
None of these standards are
found in the Rule! It’s hard to figure
out what the proper approach to Rule 9 should be. It simply depends on your jurisdiction. But how does this all come together
theoretically? We have reasons that are
given as to why we want to have heightened pleading for fraud claims. The major rationales are to (1) protect
settled transactions, (2) protect the defendant’s reputation, (3) deter
frivolous suits, and (4) provide notice (“the right one”).
At common law, the equity
courts were the only courts that recognized fraud as an affirmative
defense. You couldn’t go to the law
courts if someone sued you on the contract and defend it by saying that you
were fraudulently induced into signing it.
You would have to wait until there was a law judgment against you. Then you would go file a separate suit in the
equity court to undo the judgment of the law court. Pleading with more particularity makes sense
in the Middle Ages, since you’re trying to overcome
the judgment of another court. But the
law courts, over time, begin to adopt all the basic affirmative defenses that
the law courts used. When the two
systems are eventually merged, you can still see a “glimmer” of why the rule is
there: perhaps you’re trying to protect the transaction itself. But why is this extended from an affirmative
defense to a claim for fraud? Doesn’t make sense to Fairman. If someone has defrauded you, you typically
want something back. Whatever rationale
for having these suits in the equity courts is now gone. This requirement is extended to the Field
Codes and remains as a legacy. This
isn’t a justification you see very much.
Courts don’t particularly understand it, for one thing.
How about protecting the
defendant’s reputation? How would that
work? Is Dr. Stradford
on notice of what the insurance company means by the counterclaim? Well, sure!
If the pleading had been judged by a Rule 8 standard, there’s no way it
would have been dismissed. Would it
affect your decision about going to a dentist if that dentist was sued for
fraud? We don’t require heightened
pleading for professional malpractice!
That will probably hurt a dentist’s reputation even more than
fraud. What about intentional torts or
wrongful death claims? Those claims
don’t have heightened pleading! Why do
we single out fraud? If this is the
justification, then this is an underinclusive
rule. There are a lot of claims that are
probably worse that, according to this logic, ought to have heightened pleading
too.
Let’s say you file a fraud
claim and someone rushes in with a motion to dismiss. If you don’t require heightened pleading for
fraud and you use a notice pleading standard (just as the rules intend), then
these suits are easy to file. Then you
do discovery and try to find the facts later.
Because of this dynamic, there is at least some merit to the rationale
of deterring frivolous “strike suits”.
It’s argued that the claims are too easy to plead and too hard for
defendants to get out of. Fairman’s problem with this is that he thinks there are no
frivolous lawsuits. He thinks that’s a
myth. How do you know a lawsuit is
frivolous? The same lawsuit is never
both tried and not tried in order to find out if it was really frivolous. Fairman claims that you can’t prove any
particular lawsuit is frivolous. You can
look at what kinds of cases are dismissed at particular stages, but that might
be due to circular reasoning.
We hope to get to, and
through, the pleading burden issues in the Gomez
case, which also ties into heightened pleading.
It appears that notice pleading applies for everything except for a
certain small subset. Recall that courts
have required particularity in pleading for fraud allegations in a variety of
ways. Fairman thinks that Rule 9(b)
doesn’t make much sense! We wrapped up
by asking whether Rule 9(b) is justified by deterrence of frivolous strike
suits. Fairman says that only a small subset of all frivolous claims are fraud claims or
fraud-like.
What’s docket control? It has to do with giving judges the power to
dismiss lawsuits based on their belief that certain cases are more likely to be
frivolous. But Fairman fears that this
will cause suits that are truly meritorious to be dismissed at an early
stage. He says it goes against the
preference built into the Federal Rules for trying cases on the merits.
The only rationale for
heightened pleading for fraud is “heightened notice”. What did I, the alleged fraudster, say that
misrepresented a material fact? I need
to know the specific statement so I know the specific allegation. But then Fairman says that this simply
reduces to notice pleading. If you need
more information for notice, then you need to articulate more facts in the
pleading.
Let us return to the
case. What’s missing from the insurance
company’s allegations? What is Stradford’s fraudulent conduct? The insurance company believes that he lied
about when his pipes froze, saying that it happened while he was covered when
it really happened after his coverage lapsed.
He would have gotten away with it, too, if he hadn’t gotten greedy! We can figure out when the fraud occurs from
the complaint. Where did the fraud
occur? It most likely occurred at the
office. Would it be hard to restate this
claim to meet the particularity requirement that the court wants? No way!
So why bother? The plaintiff wins
on the small point, but the defendant wins out in the end because they’re
allowed to move for summary judgment.
The motion to dismiss based on Rule 9(b) is granted, so the claim fails
to meet heightened pleading under the Rule.
But the amended complaint is immediately accepted. The remedy, typically, is that the insurance
company gets the right to replead, or, in other
words, to try again. As a general rule,
the courts will give you a second chance and sometimes more at getting the
pleadings right. Here it will be pretty
easy.
It looks like the judge has
taken a peek at the merits and found that Stradford
is a liar and will get booted. So the
question of who wins here is both easy and
difficult. There will be zero damages
for the plaintiff. Why did the insurance
company counterclaim for fraud? It’s all
about the punitive damages!!! They want
to do more than win. They want to win and beat the guy down by
getting punitive damages. This case will
actually make money for the insurance company (if the dentist has any money).
As to common law fraud,
heightened pleading doesn’t do a whole lot of mischief or havoc. These claims are tried and resolved on a
daily basis. But heightened pleading
doesn’t keep itself neatly contained to where the rules provide for it. Yeazell mentions two other big areas: the
first is civil rights cases, like Leatherman and Swierkiewicz. So in Leatherman, it
was a Monell
action against the cops and the city.
Cities used to have immunity until the Supreme Court decided Monell: cities
can be liable if they have a policy or practice of unconstitutional
violations. But in the Fifth Circuit and
many others, courts required heightened pleading for civil rights cases even
though the Rules have no provision for that whatsoever. The city in Leatherman filed a 12(b)(6) motion for failure to meet the heightened pleading
standard. That created a circuit split,
because the Ninth Circuit disagreed. In
a really short decision by Rehnquist, they said: “Look at the rules! Heightened pleading for fraud and mistake, not
civil rights! You’re wrong!” So Fairman came along in the aftermath of Leatherman. He wrote a note on the circuit split before Leatherman…and of
course, now the question is answered, so he didn’t get published. Undeterred, he eventually got his big article
published in the Texas Law Review. So
there you go.
There’s a whole bunch of
stuff that’s requiring heightened pleading even though they shouldn’t! There’s this slim comment from Rehnquist
saying that heightened pleading might be okay with civil rights cases against
“individual government actors” who are entitled to qualified immunity. So much law was made from that sentence. There was another circuit split! The Seventh and Tenth Circuits said: “Leatherman says what it says”. The Fifth and Eleventh Circuits said:
“Heightened pleading okay in everything but Monell.” The Ninth and D.C. Circuits said heightened
pleading is okay if intent is an element of the constitutional tort.
Say there’s a police officer
using excessive force. Actually, intent
doesn’t matter. In the Ninth Circuit,
notice pleading would rule. But if you
allege judicial deception by an officer in obtaining a search warrant, for
example, the officer’s intent is an element of the offense. The Ninth and D.C. Circuits say that in this
case you should have heightened pleading.
The Rules explicitly say that intent can be pled generally! How do you plead facts about the defendant’s
intent? Only the defendant knows what
was intended!
The Fifth Circuit is even
weirder! They hate to be reversed! They sort of reverse the Supreme Court! They come up with this alternative system using
Rule 7 and replies to answers. Here we
have Schultea v. Wood, where the Fifth Circuit
cleverly decides that they will require notice pleading for civil rights cases,
an answer, and then, if there is qualified immunity involved,
a heightened reply from the
plaintiff! The Rules don’t seem to
explicitly prohibit this. The Supreme
Court actually approves of this in a later case! Unbelievable!
Because of the confusion and
resistance that resulted from Leatherman, the Court had to revisit the issue in Swierkiewicz,
which dealt with an unpublished Second Circuit opinion. The court basically refuses to accept Leatherman! The court grants cert on the issue of whether
an employee suing his employer must do anything more than put the employer on
notice. The court reverses with the
exact same rationale! You’d think this
would be the end of the story, but it’s not!
Then we get the
There’s at least one category
of cases that’s handled outside of the rubric of the Federal Rules. Courts have imposed heightened pleading
without any Rules-based justification!
The Supreme Court has slapped them down twice, in Leatherman and Swierkiewicz! What more could the Court do? Why is there a resilience of heightened
pleading in the civil rights context?
This has something to do with the pleading burden.
But please note that the
Rules aren’t the only place we’ll get heightened pleading requirements. For example, the PSLRA gets Congress directly involved in creating procedural
requirements (as opposed to indirectly through the Rules Enabling Act). The statute creates two different burdens: a
general particularity requirement, which requires the statement with
particularity of all facts that caused people to be mislead,
and a requirement to plead with particularity facts that show the defendant
acted with a required state of mind.
Congress is directly contravening the Federal Rules of Civil
Procedure! So they make the plaintiff
plead the defendant’s state of mind!
Congress was motivated to do
this because they believe securities fraud suits are largely frivolous. They want less of them, and thus they make it
more difficult to plead them. There’s
another provision that provides for a mandatory
discovery stay: once a complaint is challenged with a motion to dismiss
based on the statute, the court must stay all discovery, meaning that there is no chance that plaintiffs will be able
to get enough information to plead specific facts. But has the PSLRA decreased the number of
securities suits? No. Has it increased the quality of the
suits? Maybe. But there’s a three way circuit split, and
the Supreme Court has twice denied review of the issue.
The same particularity
requirement as to intent cropped up in the Y2K Act. Fairman fears that Congress is using this as
a technique to discourage certain kinds of lawsuits. So proceduralists
are annoyed! The Rules are usually built
up from the “grass roots” instead of being imposed from above. Fairman wants Federal Rules that are transsubstantive
– that have nothing to do with substantive law.
Yeazell thinks that Congress is a better choice for making rules, since
Congress does approve all changes to
the Federal Rules. But usually they
would just accept or reject rules that have gone through the whole Rules
Enabling Act process. Fairman has no
confidence in Congress’s ability to get procedure right.
So the classic “notice
pleading except for fraud” vision is not accurate in practice! But is civil rights an anomaly? No way!
There’s heightened pleading in antitrust, RICO, conspiracy, copyright,
negligence, and CERCLA, too! These are
both statutory and common law causes of action, old and new! This became his second paper. Take antitrust, for example. There are cases in the antitrust areas that
will dismiss complaint for “conclusory allegations”
or “bare legal conclusions as to the facts”.
Every jurisdiction has language like this, but the problem is that many
courts use this as a “euphemism” for heightened pleading! There are cases where there are no special
pleading requirements for antitrust.
Other cases carve out a subset, like antitrust conspiracy claims, and
require heightened pleading as to the object and accomplishments of the
conspiracy. Fraudulent concealment is
dealt with under 9(b) and must meet the particularity requirement. More dramatically, some courts say you must
plead “facts with particularity sufficient to support each element of the antitrust action”. This is the infamous “hyperpleading”! Finally, there can be dismissal for
prolixity: too many facts! There you
have the “pleading circle”.
If you trace back where the
courts imposed all these different heightened pleading requirements, they
almost always go back to the “germ” of 9(b) and fraud, saying it’s “fraud-like”
or arguing that we should treat other substantive areas the same way. So Fairman wants to eliminate 9(b). He proposes leaving “condition of mind”. So that’s the next article! Coming soon!
The Supreme Court has so
muddled the substantive law of qualified immunity, circuits
like the Fifth Circuit didn’t know what to do.
They looked for other ways to protect defendants who they believed were
acting properly in their offices.
Pleading burdens
There are three kinds of
burdens: pleading burdens – who has to allege the
element, production burdens – who must produce the evidence, and persuasion
burden – who must persuade the trier of fact.
These burdens can be distributed and shifted among different parties. Summary judgment, for example, has a whole
bunch of burdens shifting back and forth really fast.
Gomez v.
§ 1983 deals with deprivation
of constitutional rights under color of law.
It creates a federal cause of action against government actors, acting
under their authority. But along with
this, the Supreme Court has imposed the doctrine of qualified immunity, meaning
the government actors are off the hook if there was an objectively reasonable
belief that the acts were lawful and that the officer acted with the belief
that what he was doing was right: both an objective
and subjective component. If you have both, you’ll be off the hook. Qualified immunity is always raised by a
defense by government actors sued under § 1983.
So the battle here is a pleading battle.
Gomez claims that he must
simply plead state action, violation of his constitutional rights, and that he
was injured. Then, according to Gomez,
Recall Schultea: the Fifth Circuit
resurrected heightened pleading for qualified immunity cases using Rule 7. What if we put the two cases together? Gomez files his complaint without qualified
immunity in it because the Gomez case
says he doesn’t have to.
Notice that Gomez, on the law, is bad law. The case says describes the law of qualified
immunity as having two prongs: “objectively reasonable” and “subjectively
reasonable”. But the Supreme Court
changed that law in Harlow v. Fitzgerald
and struck the “subjective” prong. So
now it’s only a single, objective
test. That’s not procedure, but that’s
what the law of qualified immunity is.
What are motions? It’s a paper document. When you file a motion, you must know what it
means in the jurisdiction in which you’re filing it. First, you need a document that provides
notice, which is often a single page document that is a notice of filing a
motion. Then you need the motion itself,
which may be short or long depending on the jurisdiction. That’s where you ask the court to do
something. The motion may have
supporting affidavits or other evidence attached to it. It’s also often accompanied by a brief or
memorandum of law in support of the motion.
Often, you also supply a “proposed order” for the judge to sign if he or
she agrees with your motion. In some jurisdictions,
you can combine this stuff together, while in others you can combine it. We’ll just refer to motions in general.
Pre-answer
motions – Rule 12(b)
One of the first motions you
would likely file are pre-answer motions.
The most popular by far are the 12(b) motions. If you litigate, you will consistently have a
docket of 12(b) motions to file or respond to.
One thing about this motion is that it affects your answer date. 12(a)(4)(A) says that if you file any of the
12(b) motions, you don’t have to answer the complaint until 10 days after the
12(b) motion has been ruled on. That
buys you time, so there may be strategic as well as legal reasons to file these
motions. 12(b) is the substantive part
of the rule. It tells us that every
defense will be asserted in the answer except certain ones that you can make by
motion. That means that we could combine all this in our answer,
but there’s no strategic reason to do so.
Here are the motions:
12(b)(1): Lack of subject matter jurisdiction
12(b)(2): Lack of personal jurisdiction
12(b)(3): Improper venue
12(b)(4): Insufficiency of process
12(b)(5): Insufficiency of service
of process
12(b)(6): Failure to state a claim upon which relief can be
granted
12(b)(7): Failure to join an indispensable party under Rule 19
There are other important
parts of Rule 12. Rule 12(e) is a motion
for a more definite statement. If the
complaint is too vague, the party can move for a more definite statement. This was
12(g) create the “hierarchy”
of 12(b) motions. Not all 12(b) motions
are the same. If a party makes a motion
under the rule but omits an available defense, they can’t make the motion
later. You basically get one shot to
make your 12(b) motions, otherwise you have waived
those defenses. It’s a use-it-or-lose-it
rule, except to the extent that 12(h) tells you differently. 12(b)(2), (3), (4)
and (5) are disfavored defenses and always waived if not brought up right
away. They all have to do with the
propriety of where the lawsuit is taking place and whether it’s proper that
you’re there. 12(h)(2)
tells us that the defenses in 12(b)(6) and (7) are favored and can be used in
any pleading, judgment on the pleadings, or at trial. But you can’t make the motion a second time. So
beware of this trick! 12(h)(3) says that 12(b)(1) is the most favored defense of all, and can be brought up at any time by
anybody, including the court itself!
Hypotheticals
My opponent files a 12(b)(6) motion for failure to state a claim. The court denies the motion. Then they file a 12(b)(3)
motion to dismiss for improper venue.
What do you do? They can’t file
it! They’ve already waived that defense
due to the combination of 12(g) and 12(h)(1). So I respond to this by filing a motion to
deny the 12(b) motion on the grounds that it’s been waived by 12(g) and
(h)(1). Nothing happens on its own! You must raise the issue, or else you can
never raise it on appeal (unless it’s subject matter jurisdiction).
Say the other person files
the 12(b)(6) and it gets denied, but then they file a
12(b)(7) for failure to join an indispensable party. This is technical. What can we do? They can raise the defense, but they can’t
make the motion. The issue is still alive, based on 12(h)(2), which tells us that we can still raise this. But 12(h) also
says that the issue can’t be raised in another Rule 12 motion. It must be raised in a different way, like in
a judgment on the pleadings or later on at trial. Realistically, the judge will probably be
willing to recharacterize the motion as a motion for
judgment on the pleadings. We don’t want
to boot people out of court for labeling their motions wrong! That’s the whole point of the Federal Rules!
Say the 12(b)(6) is denied, and then they move for the 12(e) motion for
a more definite statement. Is that
valid? Nope. 12(g) says that you have to raise this objection along with your other Rule 12
motions. So you already waived your
12(e) motion, it will be denied. But
what if they had their 12(b)(6) denied and then tried
to do 12(b)(5). No good, under 12(g) and
12(h)(1). 12(g)
says bring them all at once or lose them! What if they had their 12(b)(6)
denied, but then they come back with 12(b)(1)?
The defense is preserved! Can
they do the 12(b)(1) motion? No, they can raise the defense, but it must
be done in some other form. By practice,
the courts allow you to raise this issue by motion, labeling it something
different, typically judgment on the pleadings or summary judgment.
What if the other side just
goes ahead and files a complete answer?
Then they want to move to dismiss for improper venue. Can they do it? Nope!
Rule 12(h)(1) says that the defense is waived
if it’s omitted from the answer. 12(g)
doesn’t say anything about an answer! It
only says that if you make a Rule 12 motion, you waive everything else.
Think of Rule 12 this way:
you receive a complaint. Here’s what you
should do: think about the universe of possible things you might be able to say
about the complaint. Do you have a
plausible subject matter jurisdiction argument?
What about personal jurisdiction?
What about venue? What about
process or service of process? Is there
a claim? Are there parties that need to
be joined? Could you get judgment on the
pleadings? Think about all the
stuff. Then you have to figure out what
you must do now in order to not waive
it. Can you save some of the stuff for a
motion for summary judgment under Rule 56?
You can present challenges in a lot of different ways. There are strategic choices that you can
make, and there are bad choices you
can make. The Rules are designed to
encourage you to do certain things first.
If you don’t do them first, you’re going to lose them. You must use these defenses either before
your answer or in your answer. If you make a Rule 12 motion, you lose
everything else unless it’s saved by Rule 12(h). That part explicitly gives us the hierarchy.
Rule 15 tells you that you
can amend your pleading once before the answer comes back. But that doesn’t help the defense. If you notice your mistake quickly, you’ll be
able to catch it. But the amendment
option won’t help you much in general.
This is stuff you get to do
as a defendant after the complaint is filed.
We know something about answers from Rule 12 talking about the
interrelationship between Rule 12 motions and when your answer may be
filed. When you file Rule 12 motions, it
delays your answer date. So you file a
Rule 12 motion to avoid having to answer.
You have to file an answer within 20 days of being served if you don’t
file a Rule 12 motion. 20 days is a
short amount of time! You always need to
check right away when the answer date is.
But the Rules provide a way to extend this date. You get 60 days to answer if you waive
service of process under Rule 4(d).
Pretty much everybody waives service of process these days.
You have a duty, as a
defendant, to avoid unnecessary service costs.
The Rules require people who get sued to avoid unnecessary service
costs. One way to do this is to waive
the technicalities of service. The
defendant also has to pay for service
if they don’t waive it. There’s both a
carrot and a stick! Also, waiving
service doesn’t waive any of your defenses (except of course process and service
of process). So there’s nothing to
lose! Rule 4(d) tells you how you go
about doing this. You attach a waiver of
service form to the complaint, ask the defendant to
send it to you, and that’s it. You don’t
need to hire the sheriff or a process server.
Nowadays, in corporate litigation, this is mostly done by counsel. You have a reasonable time, at least 30 days,
to return the waiver. You have 60 days
to respond! A plaintiff might choose not
to use this, though, if they’re in a jurisdiction where the state statute of limitations is about to
run out. You may have to be personally
served before the clock starts. As a plaintiff, worry about the statute of limitations.
So we have to do our answer
20 days or later. In the answer, we’ll
do denials and affirmative defenses.
Denials are back in Rule 8. You
can either admit or deny the averments.
If you don’t have enough information and you’re not sure, you can say
that too. When you can only admit or
deny part of the allegations, you must do so piece by piece. That’s where the case comes from, and this is
why you try to delay doing an answer.
It’s a painstaking process! If
you fail to deny, you automatically admit!
So be careful!
Zielinski v. Philadelphia Piers, Inc. – Zielinski is on a forklift and he gets hit by
Johnson. It’s a forklift wreck! Zielinski sues PPI. The other forklift said “PPI” right on the
forklift! But the problem is that PPI
isn’t doing that business anymore! It’s
CCI! There’s still a relationship
between the companies, but technically CCI would have been liable under tort
law for the actions of its employee.
Basically, the wrong company has been sued! What’s PPI’s answer
to this allegation? They deny the whole
thing! The problem is that the
allegation contains a lot of stuff. Of
course you’ll deny that your employee was negligent. They should have denied the first part, that
they owned, operated and controlled the forklift! Then the plaintiff would have realized his
mistake and everyone would have been happy.
But PPI is sloppy and doesn’t take the individual allegations
separately. That perpetuates the
plaintiff’s misunderstanding.
In discovery, they found out
that notice was received the same day as the accident. That seems to suggest that they sued the right person. They gave the information to the insurance
company after a brief investigation.
They weren’t trying to deceive the plaintiff. There was no bad faith. They were answering the questions to the best
of their ability and not trying to deliberately hide any information.
So the accident was on
February 9th. The complaint
was filed on April 28th. The
answer was filed in May, discovery in June, and a pre-trial conference way later, when they’re outside of limitations: the right person
to be sued can no longer be sued! The
court sticks it to the wrong
person! That’s pretty amazing! The court will allow the wrong defendant go
to trial! The judge will tell the jury
that the defendant admitted that they
owned the forklift! This is absolutely
untrue and everyone except the jury will know it. How can that be? Where’s the justice in that?
The end result here is that
the court requires that there is a deemed
admission that PPI is the owner of the forklift, which means, essentially,
they’ll be subject to liability if it can be proved that they were
negligent. The judge gives us several
reasons for this: (1) It was an ineffective denial
under the Rules. A proper denial would
have broken down the component parts, which would have been a signal to the
plaintiff that the plaintiff sued the wrong party. The plaintiff could have then amended his
pleadings. (2) The judge finds that
there was no bad faith. This is often a
consideration when judges decide what to do on the pleadings. What really underlies this case is the party
in interest here: the insurance company, which insures both PPI and CCI. As a
practical matter, neither defendant will pay the judgment. The insurance
company will pay. So it doesn’t
really matter who gets sued! The
liability will pass through. But you
can’t ignore all the Federal Rules of Civil Procedure to get to that result: so
the judge says that it’s an ineffective denial.
But we can see how this fact colors the procedural ruling. It seems like a harsh penalty, but in reality
it may not be since the insurance company pays either way!
Layman v. Southwestern Bell Telephone Co. – The classic defense is the statute of
limitations. Affirmative defenses must
be set forth affirmatively! There’s a
big list in the rules. If you fail to
set out your defenses in your answer, you can have big problems!
Layman argues her case in the
Court of Appeals. She says that an
easement must be pleaded as an affirmative defense, but it turns out that it’s
not listed in the
What if easement evidence had
come out in the discovery phase? Then
there would have been no surprise.
Layman would have had notice and would have been able to properly
proceed to trial on the merits. The
court says that
Some states, like
These relate both to amending
the complaint and amending the answer.
This is in Rule 15. There are
three ways to amend: one way for the plaintiff, one way for the defendant, and
one way the judge can help you out. You
may amend once “as a matter of course” before you get the answer. This is basically a plaintiff’s rule. The plaintiff files a complaint, and you can
amend it once before the answer comes back.
If there is no responsive pleading due (like an answer, because there’s
nothing that comes after it), you have 20 days to amend it. Typically, you also have 20 days to answer
the complaint, so it’s kind of a mirrored rule.
If you don’t qualify for one of these two windows, you must ask for the
leave of the court, which will be freely given as justice requires. But just what does justice require?
Beeck v. Aquaslide
‘N’ Dive Corp. – Beeck
gets injured by a waterslide. Doh! He sues the
manufacturer. He sues Aquaslide on product liability claims. They bring in the insurance companies. They all check out the slides and they’re
positive that Aquaslide really made it. After the lawsuit is filed, Aquaslide answers, and in the answer they admit that they
make the slide. On the basis of the
insurance companies telling Aquaslide that it was
their slide, they say in discovery that it really was their slide. The statute of limitations runs! Now the president of the company goes to look
at the slide, and lo and behold, it’s not an Aquaslide
after all! In his deposition, he says
so. After the statute of limitations has
run out, Aquaslide wants to amend their answer to
change their response as to whether it was really their slide. They’re obviously out of the 20 day window,
so they have to throw themselves on the mercy of the court! Why didn’t this happen in Zielinski? It turns out that the Rule didn’t exist
then! That would have been the
appropriate procedural remedy if it had existed at the time.
There’s a Supreme Court case
on this: Foman v. Davis gives us a test. Leave to amend will be freely given in the
absence of any reason that leave shouldn’t be granted. Courts mustn’t allow delay, bad faith, or prejudice. Is there a good reason for why you messed up
in the first place? Will fixing it not
hurt the other side too much? They’ll
always be hurt some because your being better off
always makes them at least a little worse off.
Let’s apply the law. Aquaslide is not said to have acted in bad faith because
their answer and interrogatory responses were based on the insurance company,
and you’d think that their investigation would be accurate! The court says that “blame should be shared
equally”…the plaintiff could have made this discovery in the course of their
own investigation…but then again, if the insurance company couldn’t tell, how
could the plaintiffs? Did the plaintiffs
really do anything wrong? There’s a good
reason to grant leave to amend, though.
The plaintiff says that there
is prejudice, though, because the statute of limitations has run! The plaintiff can’t turn around and sue the
true manufacturer for personal injury.
But the court says that the plaintiff might have causes of action that
can get around the statute of limitations, the court
says that the prejudice isn’t so great as the plaintiff says. There’s a later state court suit filed by the
plaintiffs against Aquaslide for misrepresentation in
their federal pleadings (lying in the federal lawsuit) because it was
discovered that the company knew there were counterfeit slides all over the
country! It wasn’t a one time thing! That’s why the president went to go and look:
he knew ahead of time that it might not be their slide. Armed with that knowledge, the state courts
were much more generous with the plaintiffs.
Statute of limitations and relating back
Absent some absolute cutoff,
you can always beg the court to amend. But
if the statute of limitations has run, the cause of action is cut off. Rule 15(c) talks to us about what we can do
with regard to amending our petitions and having those amendments relate back
to when we initially filed the complaint.
This is a tool to get around limitations. If we can get our amendment to relate back,
then we’ve avoided the statute of limitations problem. It will relate back if it relates to the same
“conduct, transaction, or occurrence”.
This was an unclear, problematic amendment when it was adopted, but now
there is more clarity about when it applies.
Relation back of amendments
Why did the judge say that
these things didn’t arise out of the same transaction or occurrence? The amended complaint did not relate back to
the original complaint because there was no negligence mentioned in the
original complaint. The doctor wasn’t on
notice that he had a negligence claim against him! The concept behind pleading is that we put
you on notice. But all the doctor knew
about was the claim involving informed consent.
Bonerb v. Richard J. Caron Foundation – The plaintiff was injured while playing basketball
at the rehab center. He slipped and
fell. He was involved in a mandatory
exercise program. He claims that the
court was negligently managed by the facility.
The statute of limitations runs out.
He tries to amend his complaint with a new allegation of counseling
malpractice. The defendant objects,
saying that this claim doesn’t relate back.
The court decides that the original claim and new claim relate to the
same facts, and so the motion to amend is granted.
Let us take the two cases
above together. Both people have
negligence claims, a statute of limitations that has run, and they both want to
amend their complaints. Aren’t they arguably
both wrong? In the second case, the
rehab center is sued for negligent maintenance of a basketball court. But then, the amended complaint says that
they counseled the plaintiff negligently.
In contrast, in the medical malpractice context, if you get sued as a
result of a surgery and the claim is one for lack of informed consent, it’s
lack of informed consent because something went wrong with the surgery. Wouldn’t that give some notice that what Dr.
Baker allegedly did something bad in surgery?
It doesn’t seem reasonable that the two allegations aren’t part of the
same set of facts. You might argue that
these should have been switched.
What are the
differences? Summary judgment was filed
in the first case. How would that make a
difference? It means that discovery has
probably come to an end. The motion for
summary judgment isn’t ripe until the close of discovery. That means this case is coming to an end, and
probably an abrupt one. In this case,
Dr. Baker is on the verge of victory.
All of the sudden, he’s hit with a surprise of a new cause of
action. In the other case, discovery may
still be going on. So one reason the two
cases are different is the surprise
element. Courts are more willing to let
you relate amendments back if it’s not going to be to the detriment of the
other side. Another suggestion has to do
with the way the amendments were crafted.
In
Notice that there is a
portion of Rule 15(c)(3) that deals with changes in
the party’s name. The amendment will
relate back if you’re simply changing the name of the person you’re suing
because you’ve sued the wrong person.
This is what Zielinski did. If
Rule 15(c) had been in operation at the time, this would have been the way to
resolve the problem.
“All of the interesting
things in procedure relate to joinder.”
We’ll deal with complex joinder issues, but today we must look at the
pedestrian issues of claim joinder. We
simply look at a combination of the Federal Rules on the one hand and the
issues of jurisdiction and preclusion on the other. Rule 18 tells us that a party asserting a
claim can do so as a claim (regular old plaintiff suing a defendant), a
counterclaim (if the defendant has a cause of action against the plaintiff
too), a cross-claim (a suit between the defendants), or a third-party claim
(like an insurance company or some other party brought in by the
defendants). In contemporary litigation,
we may see all of these at once!
How can claims be brought
together? Let’s say a wrongfully
discharged employee wants to sue under § 1983 and also sue under state law in
Could you
do a state law car wreck claim with a § 1983? They are far
removed from each other! Under the writ
system, you bring all of your causes of action against a single person if you
wanted, even if they were unrelated.
This is permissible under the rule, but not under supplemental
jurisdiction. The statute tells us that
we can join other parties. This is what
we used to call “pendant party jurisdiction”.
So it’s okay! If you’re going to
party that would bust diversity jurisdiction, that’s not okay. So joinder of claims is always okay under Rule 18, but not necessarily under the other
statutes and principles that govern us.
Don’t worry about supplemental jurisdiction now,
we’ll come back to it later.
Claims are governed by Rule
18, but counterclaims are governed by Rule 13.
There are two types: “compulsory counterclaims” and “permissive
counterclaims”. If a claim arises out of
the same transaction or occurrence, you must “use it or lose it”. In Rule 13(b), we have permissive
counterclaims, which means you may
bring them and raise claims that don’t
arise out of the same transaction or occurrence.
Plant v. Blazer Financial Services – Blazer loaned some money to Plant. Plant sued based on truth-in-lending (failure
to disclose). The defendants
counterclaim for the unpaid balance of the loan. The plaintiff didn’t pay! Their counterclaim is that they’re still owed
money on the loan even if they didn’t fully disclose. So is the counterclaim compulsory or
not? One way to look at this is to flip
the situation. If the bank had sued
Plant on non-payment of the debt, would her truth-in-lending claim have been
compulsory? It doesn’t seem like she
would have lost her truth-in-lending claim if she hadn’t brought it up when she
got sued for non-payment. You wouldn’t
think that violating disclosure rules in a loan is part of the same transaction
as non-payment.
The court starts with the
rule itself, which gives us the test.
Does the counterclaim “arise out of the same transaction or
occurrence”? There’s a laundry list of
different tests that can be used. The
court decides to use the “logical relationship” test. But not every circuit agrees that these two
types of claims have to be brought together.
Much like the Rule 15(c) amendment issue, we have the same transactional
test that can be viewed by courts quite differently based on the test that they
choose and the spin that they decide to put on the facts. If you were cynical, you might find that the
Fifth Circuit is biased towards creditors and against debtors.
Say you’re backing out of a
driveway and an
Mosley v. General Motors Corp. – How is the situation above, separate acts of
negligence against a common defendant, different from this case? They’ve joined together and they’re filing
Title VII lawsuits against GM and their union.
Should these cases proceed together (the ten plaintiffs against one
defendant) or should they be severed into ten separate causes of action? The district court decides to sever. Rule 20 is the permissive joinder rule, which
tells us that all persons may join as plaintiffs if they assert the right to
relief “arising out of the same transaction, occurrence, or series of
transactions or occurrences”. Why do we
have rules like this? It’s a convenience
and efficiency rule. Let’s not have ten
separate lawsuits if they’re all really the same thing. The court in Mosley reminds us of Gibbs:
the rules want to bring the largest scope you can into a convenient trial
package to maximize both fairness and efficiency.
Why do the plaintiffs want to
sue together? This is all a matter of trial strategy and civil rights
litigation. You want the claims joined
so you can see a pattern of bad treatment by a common defendant. You need multiple defendants to be able to
testify! Here, the plaintiffs ask for
interlocutory appeal on the district court judge’s decision to sever the
cases. They don’t want to screw up and
then have to try the whole case over again.
This is unusual, though. The
Court of Appeals doesn’t have to accept the interlocutory appeal. But it did here.
The court in Mosley looks at both “transaction and
occurrence” and “common question of law or fact” in looking at Rule 20. They make an analogy to Rule 13(a). The language is exactly the same, so we
figure it must be able to guide us at least somewhat. Plant used
a bunch of different tests in a wishy-washy way. The court here is willing to look at that as
part of an explanation for why the plaintiffs ought to be able to proceed
together. The Court of Appeals argues that the plaintiffs all suffered under
the same public policy, and that’s why the plaintiffs are logically related to
each other. With the “common question of
law or fact” part of the analysis, the court looks to Rule 23(a), the class
action rule. There’s a provision in that
Rule that requires commonality of
questions in a class. This isn’t a class
per se, but the court decides that the alleged discriminatory conduct becomes
the common factual characteristic.
It’s all kind of
complicated. There are different classes
of people with different kinds of claims against different divisions. Does the umbrella of company-wide
discrimination hold true? Lots of civil
rights cases proceed as class actions because the plaintiffs represent not just
themselves but also others in the company who suffered the same harms. But this isn’t a class action! This isn’t a typical way you’d see courts be
willing to treat ten plaintiffs with different types of complaints, each
seeking relief only for themselves. What
could GM do if they didn’t like the fact that all the plaintiffs are being
brought together? Is there any way they
can remedy having all this tried at one time?
Yes! Rule 21 can bust up joined
stuff…this is misjoinder. Misjoinder doesn’t
lead to the dismissal of the actions, but rather severing them and then letting
them proceed separately. The court can also use Rule 42 to do this: it
allows for both consolidation and separate trials. It’s best considered as an efficiency rule.
In general, Rule 20(a) isn’t
that active a rule in federal litigation today.
It’s a very liberal rule that allows you to join people together. There isn’t a lot of litigation over this
rule. There are a lot of tools to sort
through the complexities of this rule without litigation.
Price v. CTB, Inc. – Impleader is not to be confused with interpleader or
intervention. The impleader rule, Rule
14, doesn’t have a lot of controversy either.
This case talks about who the defendant can bring in, and we usually
think of this rule as a defendant’s rule.
Price hired Latco to build a chicken
house. Price later sues Latco, saying that the chicken house was defective. Latco says: “It’s
not my fault! It’s the nail
manufacturer’s problem!” So they want to
bring in ITW as a third party. Latco says that to the extent their coop is bad, that
liability should be shouldered by ITW.
Rule 14 allows you to do this! A
defendant, in Rule 14(a) can bring in someone “who is or may be liable to the
third-party plaintiff”. The key is that
you can only implead them under Rule
14 if the liability is derivative. You don’t have to admit that you’re liable,
and Latco probably said they weren’t. But they said that if they are liable, the liability goes to the
third party.
This is most often seen in an
insurance case. If you’re responsible
for an accident and get sued but you’re insured, you’ll implead the
insurer. This is so common that the
insurance company usually comes in directly and controls the litigation because
they’re the ones who will ultimately pay.
Can ITW implead into this case?
The court lets them in. There’s a
bunch of stuff about
Andy gets assaulted by Blair,
and Blair’s defense is that it wasn’t him that did it, but
Consider the original set of
facts. Could ITW implead the steel
company that provided the steel for the nails?
Let’s check the Rule: is there any reason why we couldn’t do this? The Rule is designed to bring in parties to
whom you may be liable derivatively.
It’s an efficiently rule. Is the
“nail as to steel manufacturer” lawsuit any different than “chicken coop as to
nail”? No! You can string these along for as long as you
want as long as you have a derivative liability relationship. But the court can still choose to sever these
cases if they think that’s most fair and efficient. But maybe “bad chicken coop, bad nails, bad
steel” is an efficient trial package.
What if we have a counterclaim
by Latco that Price never paid for the chicken
coop? Can they bring the
counterclaim? This is like Plant.
Is not paying for the chicken coop related to the cause of action for
defective production? We look at our
logical relationship test, whatever that means, and it looks like it’s the same
transaction. The coop isn’t being paid
for because it’s defective, so the counterclaim would probably be okay under
Rule 13. It’s debatable, though. Could the farmer turn around and implead the
bank for failing to pay the bills? Sure,
it can be done under Rule 14(b)! It’s a
lot shorter than 14(a), but a plaintiff can
bring in a third party when a counterclaim is asserted against the
plaintiff. It’s basically just a
reciprocal rule. That’s a perfectly good
example of derivative liability.
Some of these claims will get
in under supplemental jurisdiction, but others will fail due to poor drafting,
oversight, or both! These situations are
pretty much the same, really. If we
erase the defective coop claim and have Latco sue on
the unpaid bill as to the plaintiff, Price is acting the same way in that
lawsuit as the defendant as he is here as the plaintiff bringing in a
third-party defendant related to the counterclaim.
A current affair
The House passed, about 50
votes, a bill to change the Federal Rules.
They’re trying to make John Edwards look bad. The bill they passed is another case of
Congress ignoring the REA and the process of changing the Rules. Congress wants to tinker with the rules
itself! The supporters of the bill seem
to believe that federal judges will not sanction attorneys. They are trying to amend Rule 11 to make it a
requirement that a judge impose a sanction if the Rule is violated. A revision like this would never have made it
through the REA process. Next, they try
to impose Rule 11 on state cases if the case affects interstate commerce. They also try to federalize procedure as to
Rule 11.
They purport to limit the
places a personal injury claim can be brought.
That would change all
of our personal jurisdiction as to minimum contacts by establishing
certain forums where certain types of lawsuits can be brought. For most injuries, this will get the likely
forums: where the plaintiff lives, where they lived at the time of the injury,
where the injury occurred, or the defendant’s principal place of business. But consider a traffic accident. Under this statute, you wouldn’t be able to
sue the defendant where the defendant resides!
So as to individual defendants, you can’t sue them where they live! They also take away from the plaintiff their
choice of forum. It gives us definitions
of what constitutes these types of claims.
They also try to apply the bill to any claim filed in federal or state
court. Where does Congress get the power
to do this in the Constitution?
This illustrates the conflict
related to just who will have the power to set the rules in the courts. Will the judges make their own rules, or will
Congress do it for them? Fairman doesn’t
believe that there are lots of frivolous lawsuits, and even if there are, he doesn’t
think this will stop them. The
motivation is that if we make sanctions more available, we’ll keep lawyers from
bringing “junk lawsuits” because more federal judges will use Rule 11
sanctions. But if this statute is
passed, Fairman guesses you’ll actually see less use of Rule 11 and more use of
other discretionary powers.
Fairman expects that nothing
will happen in the Senate, or at least it will go slowly enough that he can
write a scathing critique!
Let’s do some problems to
help set the stage for these issues and how they play into the supplemental
jurisdiction statute. Say we have a
single plaintiff who buys a car from a dealership. He thinks it’s defective. He sues both the dealership and the
manufacturer. There’s nothing fancy
about the lawsuit. It’s a single cause
of action with one plaintiff and multiple defendants. The plaintiff says: “One of these two
defendants or a combination of the two is liable.” Let’s say the dealer wants to file a claim of
indemnity against the manufacturer.
Maybe the manufacturer is contractually obligated to indemnify the
dealer. The dealer can file a
cross-claim! Rule 13(g) lets you do
it. Rule 14(a) would have worked if the
manufacturer hadn’t already been in the lawsuit. Impleader could bring them in as a third-party defendant.
What if the manufacturer
wants to raise the claim that the defect was the dealer’s fault and not their
fault? They just file their Rule 8(b)
answer, where you put your denials and defenses. There’s nothing else special that you have to
file. You’re just denying your own
liability. What if the manufacturer
wants to assert a claim for non-payment of other vehicles other than the one
that’s allegedly a lemon? The only way
that the manufacturer could make this as a cross-claim would be to use 13(g),
but there’s no transactional relationship!
They have to file a separate lawsuit.
Can the dealer countersue the plaintiff for
not paying for the car? Yes! You don’t need the same transaction or
occurrence, depending on whether it’s a permissive or compulsory counterclaim. If it’s a permissive counterclaim, you can do
it under 13(b), which doesn’t require anything except that you have any claim against the opposing
party. If it were a compulsory counterclaim, then the dealer would have to bring it or
risk losing it under preclusion doctrine under Rule 13(a).
Why wouldn’t Rule 18 help
us? It says that you can join as many
claims as you have against anybody you want!
The Rules are a system. Even though this Rule says that you can bring
any cross-claim you want, you must read this Rule as being limited by other
Rules that add more specificity. The
specific always trumps the general. If
this was the only Rule you were looking at, you would screw up a lot! You have to view the Rules as a system and be
guided by the principles that are involved in the construction of the Rules
themselves. You want to bring claims and
parties that seem to come out of the same events together because it appears to
be an efficient trial package. The only
problem that messes this up is if you have jurisdictional issues that make
joinder cumbersome.
Owen Equipment & Erection Co. v. Kroger – Yeazell starts with the Circuit case to work us up
to the Supreme Court case. What’s going
on in the underlying lawsuit? Kroger was
employed by a steel company. They were
moving a crane, and he got electrocuted and he died. The widow, Mrs. Kroger, sues for wrongful
death. Who can we sue? We ought to be able to sue somebody. We could sue the employer! That would be a great option! He could sue the Omaha Public Power District,
which owns the lines and sold them. Then
there’s the people who leased the crane, Owen. Everybody would think to sue the employer
first, but it’s precluded as a matter of substantive law by worker’s
compensation. It was an on-the-job injury,
which is part of what state tort law does.
Who would we rather sue between Owen and Omaha Power? Who is more involved in these events? The plaintiff’s lawyer chose to sue Omaha
Power. Why did the plaintiff make that
decision? They ultimately bring a claim
against Owen. Maybe the facts weren’t as
fully developed when the plaintiffs brought the suit, or the plaintiffs’
lawyers didn’t do their homework.
What does OPPD do? They implead Owen. The suit was filed as a diversity
action.
We have jurisdictional
problems! A plaintiff may assert any claim
against a third-party defendant that arises under the same transaction or
occurrence. After summary judgment, the
power company has dropped out, and all that’s left is the claim against Owen. But there is testimony that Owen actually has
its principal place of business in
What should the court do in
this situation? On the one hand, the
federal courts are courts of limited jurisdiction. If the court doesn’t have subject matter
jurisdiction over the case, theoretically the court has no power over the
defendant. It’s all a matter of whether
the court will give substance to that rule of law or try to ease out of
it. The Supreme Court views it as a
diversity issue. But recall the source
of diversity jurisdiction: Article III gives the federal courts power to try
cases “between citizens of different States”.
It doesn’t say anything about complete diversity. Statutory jurisdiction comes from 28 U.S.C. §
1332, which has the same language. But
decisions like Strawbridge give us
the rule of complete diversity, where
we interpret the statute to mean that you can’t have a party on one side who is from the same state as the other. Justice Stewart says that this is different
from the Rule 14 issue in that here we have a non-federal claim asserted by the
plaintiff that could have all been brought in state court. When you use impleader, you may not have other
options because you weren’t the master of the complaint.
All of this answer that we
get from Owen v. Kroger is later
codified by the supplemental jurisdiction statute: 28 U.S.C. § 1367. It’s difficult. The general rule is that there is supplemental jurisdiction over claims
and parties that are part of the same case or controversy in a constitutional
sense. This includes joinder of
additional parties. That’s an efficiency
rule. What makes the statute difficult
is that this is the general grant of power that is then restricted as to
certain types of claims brought in certain types of ways. Subsection (b) takes away certain types of
jurisdiction. You can’t get supplemental
jurisdiction when jurisdiction is based only on 28 U.S.C. § 1332 (diversity jurisdiction)
and when you’re trying to join up people (in certain ways, like Rule 14, 19,
20, and 24) who would destroy complete diversity. So (a) says that you have supplemental
jurisdiction over claims and parties, but (b) says that if you don’t have diversity,
you don’t have supplemental jurisdiction, as long as you’re within certain
categories.
So the intent of Congress was
to codify the result of Owen v. Kroger. How did they do? In Owen,
all the claims arise from the same case or controversy. We could have three different cases if we
wanted to, but it’s more efficient to put them all together. What about OPPD’s
claim against Owen? The statute
generally says that we’ll grant jurisdiction for anything that comes from the
same case or controversy, but it’s a
diversity case, and you don’t have supplemental jurisdiction over claims made
by plaintiffs against third parties. But
this is a claim by a defendant, so there’s no problem! What if Kroger had a federal question claim
she could raise against Owen, like a federal statute about the operation of
cranes? Could she bring that claim? § 1367 says this isn’t based solely on §
1332, so it’s good!
What if Owen sues Kroger for
vandalizing the crane? The defendant can
certainly plead that claim, and § 1367(b) wouldn’t get in the way because it’s
not the plaintiff’s claim. It’s a claim by a third-party defendant
against a plaintiff, which doesn’t fall into any of the § 1367(b) excluded
categories. Therefore, it must be okay! If that’s okay, can Kroger then bring the
wrongful death claim? Is it a compulsory
counterclaim? Check out the
statute. Yeazell says that Kroger is now
acting as a defendant, but Fairman says that the statute doesn’t allow
this. Kroger is still a plaintiff! It looks like the wrongful death claim is
still a claim made by a plaintiff against a person made a party under Rule
14. This is one of the big problems of
the statute: plaintiffs’ defensive claims barred by § 1367(b). It doesn’t make any sense for them to be
precluded, because the plaintiff was acting as if it were a defendant.
Say we have a plaintiff from
The Rule of Zahn
This rule says that in a
diversity class action, every member of the class must exceed the amount in
controversy ($75,000+). It will be hard
to put together diversity class action unless they’re major mass torts. The
problem is that the statute doesn’t say anything about Rule 23. The way it’s constructed, you would only need
one person to meet the $75,000 requirement, and then you could just bring in
everyone else as supplemental. The
legislative history of the statute actually says that they want to preserve the
rule of Zahn. But the statute doesn’t say this! The Fourth, Fifth, Seventh, Ninth, and
Eleventh Circuits have said Zahn is no longer
good law after § 1367. The First, Third,
Eighth and Tenth Circuits say Zahn is still good.
The Sixth Circuit sided with the Circuits that say it’s not good law. Fairman blames the sloppy statute drafters!
You must read the
supplemental jurisdiction statute very carefully. Who makes the claim and who is brought in
makes a difference as to whether the court has jurisdiction. This
will very likely be on the exam.
This has also been described
as joinder of “necessary and indispensable parties”. Rule 20, permissive joinder, allows you to
bring in essentially everybody. Rule 19
is talking about when people have to
be brought in, and if they can’t be brought in, what the court should do. Rule 19(a) determines whether they’re a party
that is necessary for complete adjudication.
If complete relief can’t be given to the people who are already parties
without another person, or the person could be subjected to multiple or
inconsistent obligations in their absence, then they had better be brought
in. If their relationship to the lawsuit
is so important that the people in the lawsuit can’t get relief or they would
be hurt if they’re not brought in, then they’re necessary parties.
In Rule 19(b), the court has
to decide whether the action should proceed or be dismissed. Do we have to dismiss the lawsuit when we
lack a person? There are certain factors
the court considers: (1) the extent to which a judgment will be prejudicial to
parties already involved in the lawsuit, (2) whether the judgment will be
adequate without that person’s interest being represented, and (3) whether the
person will still have a good remedy if you dismiss them for non-joinder.
Temple v. Synthes Corp. – This case is trying to tell us that the Rule has two
parts in a sequence. If you don’t fit in
part (a), you never get to part (b). The
plaintiff has spine surgery. There is a
plate and screw device implanted that broke.
The guy with the hurt back is a
There’s no problem with
personal jurisdiction for filing both suits in state court in
But if Synthes
wanted the doctor and hospital in the suit so bad, why didn’t they just implead
them under Rule 14(a)? Because impleader must be based on derivative liability.
If there was a contract between Synthes and
the doctor and hospital, then there might be a chance to implead them, but
there’s no basis for derivative liability on the facts that we know them. So why does Synthes
want them involved in the lawsuit? If
the plaintiff loses the federal suit, he doesn’t necessarily lose the state
suit. We have to think about strategy
here. What’s the risk that the
defendants are facing when they’re separated?
They could both get hit
because it’s two different causes of action!
Typically, as a plaintiff, you would want both defendants in the same
lawsuit because they’ll make your case for you.
Factually, it turns out that Synthes had such
a close relationship with the doctor and hospital that they thought it was
unlikely they would point the finger at each other.
How does the Supreme Court
deal with this issue? Are the hospital and
doctor, as the manufacturer claims, parties that have to be joined? It’s not
even a close case! The district court
went immediately to Rule 19(b) to look at the prejudice factors, but they
failed to make a determination under Rule 19(a) that they were necessary to
begin with. By avoiding the threshold
question, they circumvented the Rule, according to the Supreme Court. You need to find a “home” for yourself in
Rule 19(a) before you get to the balancing test in Rule 19(b). The Fifth Circuit was so careful in its
analysis that it didn’t even read the notes to the Rule! Joint tortfeasors are not necessary and
indispensable parties! There aren’t that
many parties that are truly indispensable.
Let’s say for example, a
husband and wife own land a buyer wants to buy it. He enters into a contract with the husband
only. There is a breach, and the buyer
wants specific performance. Is the wife
going to be a Rule 19 party? Is the wife
a necessary and indispensable person?
There’s no way on these facts that the buyer can get specific
performance of the land contract if it’s jointly owned by the husband and
wife. Without the wife being there, the
court can’t adjudicate the wife’s half-interest in the land. This is something brought up by the defendant
trying to get out of the lawsuit rather than the plaintiff trying to join other
parties. Other examples would include
people with joint interests in property, joint obligors/obligees, represented
parties and limited pools/multiple claimant.
Helzberg’s Diamond Shops v.
The contract between Helzberg’s and the shopping center cannot adjudicate all of
Lord’s rights. If the injunction holds,
Lord’s will have to file their own suit against the
shopping center. Is the shopping center
hurt? The opinion says that it’s their
fault for getting into two contracts that appear to be inconsistent. They basically say: “tough luck”. With the Helzberg’s
judgment in hand, Lord’s would sue the shopping center for breach.
Are there other things the
court could do? They could have
dismissed the lawsuit. Is there a place
where this whole lawsuit could go on? It
could maybe go on in
Let’s change the situation,
and make Lord’s from
We left off with Rule 19 and
“necessary and indispensable parties”.
Rule 19(a) says they must be someone you can’t go without. If they meet this category and can be joined,
they are joined, as long as there is
no jurisdiction problem. But the problem
is what happens if they destroy jurisdiction.
In the first case, the court skipped over the (a) inquiry altogether and
went to the (b) inquiry. That’s wrong,
and we learn this from the Court of Appeals, which tells us that joint tortfeasors
are never indispensable parties. But we
know that a husband and wife would be indispensable parties for this purpose.
Another example would be when
there is a dad who set up a trust for himself and his kids, and the dad wants
to sue the trustee for trust abuse. Are
the kids Rule 19 parties? What if the
kids are already adults? Can complete
relief be given in the kids’ absence?
Sure. Will there be multiple or
inconsistent obligations without the kids?
No. What about impeding the kids’
interests? It may depend on how we
classify the various interests. The kids
are Rule 19 parties, because the dad
could ask for some kind of relief that would affect the income stream at the
expense of the remainder of the corpus of the trust, which would in turn affect
the kids’ remainder.
We ended up with Helzberg’s. There was no question that its interests
would be impeded if Lord’s was in the case.
They sue the mall, not the other jewelry store. There is no question that the other jewelry
store is a necessary party, but, in equity, should the action proceed or be
dismissed? You could also transfer to
another venue that would be more appropriate.
The court could allow the lawsuit to go forward if it could cobble
together ways to limit the prejudice against the parties. In this case, the court decided that the mall
got itself into its own mess, and it can sort it out itself. The conclusion is that Lord’s is a Rule 19
party that can’t be joined, however, the lawsuit is allowed to go forward.
Rule 19 has to do with what
we do with parties who somebody wants to bring in from outside. Rule 24 has to do with outsiders butting in
to a lawsuit where nobody wants
them. The Rule has two parts: a
mandatory part and a permissive part.
There’s 24(a), intervention of right.
If you’re timely, you shall be allowed to intervene where you
claim an interest such that if you’re
left out that interest could be impaired,
unless you’re already adequately represented by someone who is
already there. To
intervene permissively under Rule
24(b) when your claim has a question in common with the main action (a very
soft standard!).
If a court wants someone to
intervene, they can almost always create a justification under Rule 24(b),
because there will almost always be some common question of law or fact. The district court will almost never be
reversed on appeal because the standard of review is abuse of discretion. There is not a whole lot of litigation
activity in the 24(b) area that’s helpful to understand the Rule. You have a relatively soft standard that is
efficiency-driven and is very hard to overturn.
So much of the litigation activity is in 24(a): what happens if someone
wants to intervene as of right and is denied, and then argues on appeal that
they were wrongly kept out?
Natural Resources Defense Council v.
What’s different about United
Nuclear than the other parties? The
district court only let that one party in.
They are the company that already was granted a license before the suit
started. The court argues that the other
companies are adequately represented by United Nuclear. The NRDC is trying to enjoin the issuance of
that license because it was issued without an environmental impact
statement. That was the event that led
to the lawsuit in the first place! So
United Nuclear could really be affected!
It’s no wonder they’re included.
Why was Kerr-McGee
rejected? As a practical matter, their
interests must be impaired. It was
argued that Kerr-McGee wasn’t a party to the lawsuit,
therefore they wouldn’t be bound by any decisions made in the lawsuit. They would arguably be free to litigate the
same issue in their own suit. The
district court accepts this argument, and the Court of Appeals rejects it. The Court of Appeals notices that, as a
practical matter, even though Kerr-McGee isn’t bound, it’s unlikely that the
Tenth Circuit would come to a different conclusion in a similar lawsuit as to a
different company. The Tenth Circuit
will use stare decisis to decide the subsequent cases! That’s the sort of “practical” impairment
courts look for. But why isn’t
Kerr-McGee adequately represented by United Nuclear? They’re different because one has a license
and the other is only a prospective licensee.
Maybe United Nuclear would be willing to settle the other mining
companies out for their own benefit. The
divergence of interest need not be great to say that one party doesn’t
represent the other. The court doesn’t
seem to put a lot of weight on this prong, according to Fairman.
So why wasn’t the American
Mining Congress allowed to intervene?
They’re the trade association for all
the mining companies. Don’t they have
the most interest involved here? It
doesn’t matter if the court says environmental impact studies are
required! They’re not a business,
they’re a trade association. They do have some interest, and it may be more broad-based than the other
potential parties. Will that interest be
impaired? Sure, to the extent that they
are the representatives of a constituency.
Are they adequately represented in the suit? The district court says no way, but the Tenth
Circuit brings them in to represent all kinds of mining companies.
Gulf, Anaconda, and Phillips didn’t
appeal. If they had appealed, what would
the Tenth Circuit have done? It would
depend on whether they were adequately represented because there’s no question
that they have an interest that could be impaired. We have a big company, a small company, a
company with a license, a company without a license, and a trade association to
represent all the others. But why not
just bring them all in? The other
companies are defendant interveners who are trying to prevent the environmental
impact studies from having to be performed.
The most entities you get, the more likely you’ll get extraneous issues
creeping into your lawsuit. So it’s not
surprising that Gulf, Anaconda and Phillips don’t appeal, because Kerr-McGee or
the trade association could represent their interests. They’re better off taking the free ride!
This is typical of Rule 24(a)
action in public law. What if someone is
hurt at a stadium fireworks show and sues the stadium, and then another person
wants to intervene as a plaintiff? The
second person won’t be bound by the first lawsuit. But if the outcome of the first lawsuit was
that the stadium wasn’t negligent, it could have implications for the second,
third and fourth lawsuits. But no judge
would allow the second person to intervene in the lawsuit because it’s private litigation! The courts are much less likely to allow
intervention by strangers in private lawsuits than in public lawsuits.
Rule 24 intervention has to
do with other people trying to “muscle” into lawsuits nobody wanted them
in. To intervene, you need to be timely,
you need to have an interest in the matter that may be impaired, and you can’t
already be adequately represented by someone else. What if a public lawsuit gets settled through
a consent decree? Consent decrees are
court orders that courts have continuing power to enforce. All judges hold hearings on whether they
should grant consent decrees. They may
hold them open to anyone who thinks they may have an interest. What if Kerr and United Nuclear protested the
consent decree but their arguments were rejected? Could they sue the NRC? The only way they could be precluded from
bringing a lawsuit is if they were parties to another lawsuit. But they weren’t; they were just participants
in the consent decree hearing. The
effect of such participation is what the next case is all about.
Martin v. Wilks – Up until this case, there was scholarly debate and
judicial indecision as to who has the burden of bringing parties into
lawsuits. Is it the parties already
there who have the obligation, or is it the obligation of outsiders to monitor
where their interests will be affected?
This case is good law for everything except the factual situation in
this actual case. The case starts out as
a lawsuit by the NAACP against the city of
Then we have a new group of
parties, featuring Wilks. They sue the city for reverse
discrimination. Wilks
basically has the same interests as the BFA.
Wilks wasn’t a party to the original lawsuit
and wasn’t bound by it. Wilks’ lawsuit is dismissed. At the district court level, the NAACP argues
that Wilks and the white firefighters were bound by
the decision that came out of the original lawsuit because they had notice (and
in fact they participated) and they didn’t try to intervene in the lawsuit until
it was too late. The district court
accepts this, but they’re also protecting their own consent decree. What would Wilks
and the others argue? They argue that
they weren’t parties to the lawsuit, they aren’t bound, and thus they must be
able to attack in a new lawsuit. The
Eleventh Circuit buys this argument on appeal.
The Supreme Court tells us
that the Eleventh Circuit is right.
Why? It’s a battle between two
different rules. Are we going to have
Rule 19 be the important Rule for who is brought in or excluded from cases, or
will it be Rule 24?
The burden is very different.
Under Rule 19, it’s the obligation of the parties already present to
identify the indispensable parties and bring them in if possible at the risk of
dismissal. But under Rule 24, it’s up to
the outsiders to make that decision and see if there is someplace that they
want their interests protected. In
short, it’s their responsibility to “butt in”.
The Rehnquist 5-4 majority says that joinder (as opposed to notice) is
traditionally the way that parties are subjected to the jurisdiction of a
court. The idea is that the parties who
are already in the lawsuit have a better idea about just who they want in the
lawsuit and just who they want to bind.
Stevens, in dissent, says
that sideline sitters get what they deserve: actual notice plus the opportunity
to intervene means you can’t complain.
If you could have butted in, you should have. There is power that comes from the preclusive
effect of judgments and their binding nature that makes courts reluctant to
expand it to parties who aren’t in the lawsuit.
This case says that if you’re not a party to a lawsuit, you’re not bound
and you can challenge the result again and again. As a litigant, this becomes part of your
lawsuit. Who do you want bound? If you leave a party out, they can challenge
your result. Why not bring everyone
in? You might not know who’s in the group
you would be bringing in. Later,
Congress changed the law of civil rights to prevent ongoing challenges to civil
rights settlements, recognizing that there could always be a group not party to
the original lawsuit that could prevent closure.
Here we have a situation
where you’re holding on to some kind of property that’s not yours and you don’t
know who it belongs to. You want to
protect yourself from multiple, inconsistent judgments. Impleader is third-party practice under Rule
14. Intervention is “butting in” under
Rule 24. Interpleader comes in two
variants: (1) statutory interpleader and (2) Rule interpleader. Interpleaders are
great, but only if you get all the parties.
Statutory interpleader is
more common. The statute tells us the
federal courts have original jurisdiction over interpleader actions with $500
in controversy and minimal diversity (only
as between claimants). You deposit the
thing with the court. So this is
different than regular old diversity jurisdiction, where you need complete
diversity. Where will these lawsuits
happen? There is an interpleader venue
statute, § 1397, which says you can bring the action in a district where one or
more claimants reside. How about personal
jurisdiction? § 2361 gives us nationwide
service of process! You can issue
process or all claimants and stop other lawsuits in order to bring everybody
together. Everything about these
statutes is designed to make it easy to bring everyone together.
On the other hand, we have
Rule interpleader. It’s a simple
Rule. The Rule doesn’t take away from
statutory interpleader, but it’s still governed by the rule of complete
diversity. The only time this is used is
if all your claimants are in one state and you can’t use statutory interpleader. Otherwise, it’s kind of a “dead Rule”.
Cohen v. The Republic of the
Cohen puts the art in the
court registry, saying he’s the stakeholder but he has no interest in the
paintings. Why does Cohen want to do
this? If he gives the paintings to the wrong
person, Imelda or the
Should we allow Marcos to
intervene? Yes. She’s timely.
She has an interest in the paintings.
Could her interest be impaired if she’s not a party to
the lawsuit? Yes, because the
paintings could go to someone other than her if she’s not a party! The only way to get it is to become a
party. Will anyone else in the lawsuit
represent her interests? No way! Everyone else is pretty much against
her. This is a classic case where
someone would want to intervene as a matter of right under Rule 24(a). If we could have served her, she would have
been interplead in the first place.
Class action is an area that
warrants our study. The more interesting
aspects of procedure often relate to class actions. Class actions change the focus of
litigation. The system was designed with
the single plaintiff and single defendant in mind. When the Rules were created, class actions
were not much more than an afterthought.
Class actions were rarely used until the amendments of 1966. Now, we have a class of plaintiffs unified
against a single defendant. When you have a large number of plaintiffs, the person in control
of the litigation changes. Most
of the controversy arises out of class actions because of the increased
importance of the lawyer running class litigation. It shifts the focus from trying cases to
settling cases. Instead of providing a
device to efficiently deal with cases that would be filed anyway, the class
action is viewed by some as a device that drums up cases that would never be
filed but for the device. Class actions
are thus a frequent target of tort reform proposals. The Rules themselves were changed in December
2003 to reflect these concerns.
Start with the text of Rule
23. There are prerequisites to a class
action. If a class action meets the
prerequisites, then it must be maintainable.
First off, the class must be so numerous that joinder of all members
would not be practicable – numerosity. The
members of the class must have common questions of law or fact – commonality. The claims of the representatives of the
class must be typical of all members of the class – typicality. The representatives
must fairly and adequately protect the interests of the class – representativeness.
How many people do you
need? It depends. You’ll never get a class that’s a problem
because it’s too numerous. The problem
is when you have too few members. There
is not much action in the numerosity
characteristic. Commonality deals with
whatever issue is at the heart of the class action. Typically, there isn’t much of a problem
because you’ve thought about what legal issues the class has. Typicality says that if the class as a whole
has certain characteristics, the named plaintiff must be like the people in the
class. Representativeness
has two parts, but tends to hinge on the adequacy of legal counsel. Class litigation is driven largely by the
lawyers involved, and they must have the experience and resources to adequately
handle the litigation. Before class
litigation begins, a court will conduct an analysis as to each of these
factors.
Next, we ask whether the
class can be maintained under Rule 23(b).
The drafters of the 1966 amendments had three distinct examples in mind
of when they thought classes would be appropriate, and then one catch-all
category. The catch-all has caused most
of the problems. A 23(b)(1) class is one where separate lawsuits would basically
violate Rule 19. Basically all Rule 23(b)(1)
is trying to do is use a Rule 19 standard when you’ve met the prerequisites of
the class: lots of and lots of plaintiffs who are too numerous to join.
Here’s an example of 23(b)(1)(A), incompatible standards of conduct. Say a city wants to issue bonds to build a
stadium. A group of citizens are opposed
to the issuance of the bond, and there is a group in favor of the bond. If one sues to enjoin the issuance of the
bond and the other sues to compel them, there is the risk that if one suit goes
forward, the city will be under a court order not to issue the bonds but also
to issue them, meaning they would be subject to inconsistent obligations. You avoid this by bringing the parties
together as a 23(b)(1)(A) class. Here’s an example of 23(b)(1)(B):
it’s kind of interpleader writ large.
There are limited funds. Say
there is an insurance policy with lots of claimants who will exceed the value
of the policy. If you couldn’t use
interpleader, you could use 23(b)(1)(B) instead. There is almost no litigation over Rule 23(b)(1) classes. There
are rarely parties so numerous that they can’t be joined. Joinder takes care of 23(b)(1)(A),
and interpleader tends to take care of 23(b)(1)(B).
Then there’s a 23(b)(2) class. This is,
in essence, a class asking for injunctive relief. They had cases like Martin v. Wilks in mind: civil rights
litigation. The firefighters wanted to
represent themselves as well as future firefighters who the city might
discriminate against. We can call this
an injunction class.
The 23(b)(3)
is the catch-all class. It’s a loose
rule that gives a lot of discretion to the district courts. This is where the problems have come in. If the court feels that the class members
have enough in common and that a class action is a better way to resolve the
controversy than separate suits, then they can allow the class action to be
maintained. Courts don’t always go
through the listed elements. They ask:
“Are there small claims such that people don’t have enough money to sue
individually?” Then we have an
efficiency class. “Do we have mass
torts?” This would include asbestos,
tobacco litigation, and so on. Wright
didn’t think this was the right way to do it.
In the context of classes, 23(b)(3) is an efficiency class. For the other types, you must fit into the
criteria. Rule 23(b)(3)
gets special treatment. The class issues must predominate over the individual issues. That’s not so for Rule 23(b)(1)
and (2). The class action must be the superior way to do the trial. Finally, the class action must be manageable, which isn’t necessary under
the other classes.
But there are other
requirements now embedded in Rule 23(c).
There has always been a requirement in this section to say that the
court must hold a hearing on whether to certify the class. Now it says that they must do so at “an early
practicable time”. It doesn’t have to be
done first, but it must be done early in the litigation. The problem is discovery: once you qualify as
a class, you’re entitled to get discovery.
If the defendant isn’t certain whether they’ll have to litigate discovery,
they’ll have to spend a lot of money preparing to do so, which places them
under settlement pressure.
Rule 23(c)(2)(A)
is a new Rule that tells us that the court may
direct appropriate notice to the class.
There used to be no notice requirement.
All of us are probably bound by all sorts of classes that we have no
idea we’re bound to. We’ll never know
until we file an individual lawsuit. But
if you’re a Rule 23(a)(3) class, the court must give
the best notice practicable, including individual notice, to everyone who they
can. This is a heavy burden! The plaintiff must bear the cost of
individual notice. If claims are really
small and plaintiffs are really numerous, the cost of providing individual
notice may exceed the recover cost. This
can effectively insulate defendants from suit.
So the notice cost is not to be discounted! The court must exclude from any class any
member who requests exclusion. If they
request exclusion, then the effect of any class judgment doesn’t bind them. This is called an opt-out right. When you get
notice, you can choose to opt out of the class.
Say a university wants to
raise tuition for only out-of-state students.
The SBA president, who is an in-state student, wants to file a lawsuit
to enjoin the fee increase. What’s the
problem? Will this plaintiff meet the
prerequisites of Rule 23? The class is
probably numerous enough. It would consist of all out-of-state students
who will pay the tuition increase. Would
the class have a common issue of law
or fact? Sure. They are all worried about the tuition
increase. Is the SBA president typical
of the members of the class? Nope. Will he be harmed by the out-of-state tuition
increase? Doesn’t he represent the
students as SBA president? Well, how
hard is he really going to litigate on behalf of his class when he has no stake
in the class? A court would probably say
that he is neither typical nor representative. If this were going to be a class action, it
would have to be a 23(b)(2) class because this student
is looking for an injunction.
Let’s say an out-of-state
student files a lawsuit asking for reduced tuition. Say the student files the lawsuit as an
individual. What’s the problem with
filing an individual lawsuit? The
student’s stake is relatively small. The
tuition increase is probably not enough to make it worth an individual
suit. What’s a strategic reason for
pursuing this as a class action? One
problem is that you can drag out the litigation until it’s
moot (the student graduates). Also, you
get much more leverage when you bring a class action than when you only bring
an individual suit. But if we define a
class of both present and former students, then the issue will always be
live. You’ll band together for leverage
and ask for money damages. What happens
to the class? They must be a 23(b)(3) class. When you ask
for money, you’re a (b)(3) class, which means you’ve
brought in all the burdens of (b)(3).
You have the burden of individual notice. You must show that this is the best way to do
the litigation. You must show that it’s
manageable.
Rule 23 sets up two different
categories: the prerequisites under Rule 23(a), (1) numerosity,
(2) commonality, (3) typicality, and (4) representativeness,
and maintaining your class status under Rule 23(b), (1) inconsistent adjudication
classes, (2) injunction classes, or (3) efficiency classes. If you come under the Rule 23(b)(3) category, there are extra requirements that are
restrictive and expensive.
Communities for Equity v.
They try to certify a class
of “all present and future female student athletes enrolled in member high
schools who participate in interscholastic athletics or who are deterred from
participating in interscholastic athletics” due to discrimination. This is typical of the way a class will be
described, which is by way of characteristics. This class is quite sweeping. It includes present and future female
students. It includes those who
participated and those who didn’t participate because of the discrimination. The class is limited to people who were
harmed by the defendants’ conduct.
The court must decide whether
this lawsuit will meet the class characteristics. This is the sort of thing we would want a
class for because it would become moot at the time an individual female student
plaintiff graduates. So we have an
organization trying to deal with the class issues on behalf of all of these
female students.
There is no problem with numerosity here.
There are lots and lots of present and future students. There are a bunch of common issues of law or
fact. Though the different types of
complaints might apply differently to different individuals, there must be at
least one issue common to all the class members. What about typicality? No one is probably going to suffer all the
harms. That’s why they let a community
group go forward as a collective representative. But it is likely they will later add
specific, named students who suffered some of the specific harms listed. Also, some of the class members might have
competing interests. The remedy that
might be crafted might be good for some class members and not others. How do we solve the problem? You can divide the class into subclasses
under Rule 23(c)(4)(B). You could have subclasses based on people who
fall into different subcategories. How
about representativeness? You wouldn’t be part of the class if you’re
not adversely affected. That’s why you
include that language: to avoid representativeness
problems. Much care goes into how you
define the group! You can define away
all the legal problems if you’re careful.
There is also the MHSAA. They’ll represent the high schools’ interests
directly. They will be protecting the
status quo and all of those students who are happy with the way things are
now. Wright says that as long as there’s
a representative for the status quo and one for the people who want change, you
can maintain a class action.
So the Rule 23(a) criteria
have been met. This is a Rule 23(b)(2) class because they’re seeking injunctive relief. Let’s say that the girls lose on the
merits. Let’s say a new female student
moves to
Heaven v. Trust Company Bank – What’s happening?
The plaintiff leased a car from Sun Trust and sued later saying that
they didn’t comply with disclosure requirements. Heaven sued for statutory damages but no
actual damages. She wanted to certify a
23(b)(3) class.
The trust company counterclaims, saying that individual class members
failed to pay their lease. This is
similar to Plant v. Blazer Financial
Services, Inc. in that if there are compulsory counterclaims, the court
says you must deny the class certification of the plaintiffs. Is this court bound by Plant? Yes, because the
Eleventh Circuit used to be part of the Fifth Circuit! So the court must boot the case for failing
to meet the requirement in Rule 23(b)(3) that this
class action is superior to other ways to adjudicate the dispute. This could
go forward as a class, but it can’t be maintained under Rule 23(b)(3). But the
Eleventh Circuit adds its own caveat, which is that they might have done it
differently, but the district court didn’t abuse its discretion in booting the
whole thing.
Notice that the bank wouldn’t
really sue the individual lessees because it wouldn’t be worthwhile to get
judgments. They just brought up this
counterclaim as a defensive measure.
Even if the class had gone forward, the class plaintiffs probably would
have wanted to opt-out anyway!
The Rules now provide for
interlocutory appeals for the grant and denial of class certification under
Rule 23(f). If the court is wrong here,
the plaintiffs have the right to get a look at this. The suit might continue with just the named
plaintiffs and not the class. Most
states are adopting rules like this.
So far, we’ve seen the
rudimentary structure of the way Rule 23 works and how it’s applied in the
federal courts. The Rule has two parts:
23(a), which establishes the four prerequisites, and 23(b), which classifies the
classes into one of three rigid categories.
Hansberry v. Lee – The Hansberrys bought a
house in
We didn’t have the class
action rule that we have today back in 1940.
Burke purported to represent herself and other
property owners in similar situations.
So it was a plaintiffs’ class against an individual defendant. The Illinois Supreme Court decided that it
was indeed a class action and that Hansberry is a
member of that class, and thus is bound by the stipulation that 95% of the
signatures had been achieved. But was Hansberry really represented by the plaintiff class in Burke?
No! There was a problem! Burke’s class representatives were trying to uphold the restrictive covenant! They didn’t represent Hansberry’s
interests! They were adverse to his
interests! Justice Stone says that Hansberry is not part of the same class as the Burke class.
This case stands for three
things: (1) class members are entitled to adequate representation as a matter of constitutional law as a
prerequisite to being bound by class litigation. (2) Since Hansberry
isn’t going to be bound by the ruling in Burke
v. Kleiman, he can dispute the factual finding
that 95% of the residents signed the covenant.
If you’re not an active participant in the class litigation, you can
collaterally attack that litigation to see if you’re really bound by the former
class because you were adequately represented by it. (3) If you are adequately represented, class members are bound by the result
of the class litigation.
To what decree are the
differences in the classes and the different requirements that the Rules embody
creatures of efficiency as opposed to dictated by what
the Constitution requires, especially along the lines of notice?
Phillips Petroleum v. Shutts – So we have Phillips Petroleum. Phillips spews forth oil. The leaseholds are owned by individuals such
as Shutts.
Phillips is trying to screw the little guys by paying them royalties on
prices that are too low. Shutts wants to recover interest on the money that was
withheld. There are 33,000 people in Shutts’s position who get together to sue for the interest
the oil company owes. Shutts sues in
Justice Rehnquist says we
don’t need opt-in. Why? The issues of personal jurisdiction are not
the same when you talk about a class of out-of-state plaintiffs than when you talk about out-of-state defendants. When you’re a class-action plaintiff, the
state may exercise jurisdiction over
the claim of an absent class-plaintiff, even though that plaintiff may not have
minimum contacts. But the minimal
requirements of due process must be met: there must be notice plus the
opportunity to be heard and the ability to opt out. This later gets built in to Rule 23.
What happened to Zahn (every
member of the class must meet the amount in controversy requirement)? The Circuits were split. The Supreme Court granted cert on more than
one case to decide whether Zahn is preserved or is gone.
How do we end class
actions? How do lawyers get paid? This is the issue that has created the most
controversy behind class actions. There
is the perception that the lawyers get lots of money but the class itself gets
next to nothing. Lawyers could get an hourly
rate or work on contingency. But if the
class is highly nebulous, the named plaintiffs don’t want to bear this
burden. You can’t enter a contingency
agreement with an unknown class. So here
we have the common fund doctrine, which allows for the lawyers to be paid out
of the pool of money that they are able to acquire for the class itself. As they create a fund for the relief of the
plaintiff class, they get paid out of it.
This arrangement has a contingency “flavor” to it. Typically, the common fund doctrine uses the
lodestar: a calculation of how many hours one would reasonably expect to spend
on the litigation times a reasonable hourly rate.
Say we have a solo
practitioner working for a class of automobile consumers who have been
overcharged. He spends three years on
the case and gets a $100,000 settlement on the behalf of the class. He works 1500 billable hours over those three
years. As a solo practitioner, he
wouldn’t have charged as much as an experienced attorney, but an experienced
attorney would have done it faster. We
will give him $75 because that’s what he’s worth. How many hours will we credit him for? It would have taken the experienced attorney
less time. If we had $75 times 1300
hours, we would have to pay the lawyer just under $100,000. The plaintiffs would only get $12.50
each! That’s stupid.
What if we have a 500 person
class suing some defendant? The
defendant makes a settlement offer that will give $95,000 to the lawyer and
$5,000 to the class. Should the court
approve it? Does it just look at a bribe
to the lawyer? The class plaintiffs would
probably object. The Rules have been
recently amended to empower the court to do specific things in this
situation. Rule 23(h) is brand new and
talks about attorneys’ fees in class actions.
The court may award reasonable attorneys’ fees. It must be done by motion under Rule 54. Notice of that motion must be served on all parties in a reasonable manner. The class must be told about the
settlement! Then they have the chance to
come and object. The court can hold a hearing
if they want to. At the class counsel
appointment stage at the beginning of the class action, the court can request
the different lawyers competing to be class counsel to bid against one
another. But will this really happen? Could it be good for the class?
What are settlement class
actions? They are class actions where
the complaint, answer, class certification and settlement are filed
simultaneously. The parties have already
worked out all the details. This is like
the Amchem
case. This is a framework that is a
target of criticism. It “reeks of
collusion”! Both sides have already
agreed how to settle the suit, and the terms are usually highly favorable to
the lawyers. Under the old Rule 23,
there were a series of “trash for the class” settlement class actions where the
lawyer would get a settlement offer that essentially bought off the
lawyer. Sometimes the named plaintiff
would get an “incentive award” that comes out of the attorneys’ fee award. How do mass small wrongs get righted? The 2002 reforms make it a bit tougher to get
such a high level of inequity. But have
the new rules done much? Almost no one
will opt out of class litigation because their stake is so small. The tradeoff is between trying to redress
many small grievances and giving a windfall to the attorneys.
Anchem Products, Inc. v.
An administrative plan was
proposed that would pay exposure-only plaintiffs in a similar way to workers’
compensation. Such a scheme would be
cheaper for the asbestos companies than lawsuits. It is proposed as a settlement class action
with all of the terms included. Both
plaintiff classes and the attorneys will get paid. The District Court of Pennsylvania certifies
the class as a (b)(3).
The Third Circuit says it’s not fair.
The Supreme Court upholds the Third Circuit and says you can’t do
it. What’s the ethical situation
here? You couldn’t agree not to
represent future clients in return for settling a case. The ABA Rules forbid so-called “lock-out
agreements”. A lawyer can’t agree to
restrict his own right to practice law.
What if they plan on settling all present and future cases? This seems substantially similar, but it’s
not technically a lockout agreement. The
global solution would be to bind everyone, which requires the use of
administrative settlement procedure. The
questions of law and fact in common must predominate. The district court found that the shared
experience in asbestos exposure and interest in receiving money is what
predominated. Ginsburg says Congress
should create the asbestos fund, not courts.
Notice that the current
plaintiffs get money, and the exposure-only plaintiffs get an administrative
settlement procedure only (just the possibility of money). Here, the lawyers are representing two
different groups with different interests.
The inventory plaintiffs want money now, the
exposure-only plaintiffs want money later.
They could have remedied this by having separate counsel to represent
each of the different groups. But that
probably also would have blown up the global settlement: the exposure-only
lawyers never would have agreed to such a scheme.
Discovery is the method by
which a party to a lawsuit, or other potential parties, obtain information and
preserve it for trial. There are lots
and lots of rules with lots of detail.
The discovery process is one of the most important innovations of the
Federal Rules. Discovery includes rules
related to disclosures, requests for production, depositions, interrogatories,
requests for admissions, and requests for mental or physical exams. Rule 37 is the sanction motion, used to get
people to comply with the rules of discovery.
In 2000, we had our last
series of changes to the Rules related to discovery. They used to relate the scope of discovery to
the “subject matter” of the action, but that was seen as too broad. The Rules were changed to indicate that the
scope of discovery should be defined to claims and defenses as served in the
pleadings. The intent is to limit discovery. Some said that these amendments wouldn’t lead
to much change, and experience has shown that they were basically right.
Steffan v. Cheney – Steffan was
“constructively discharged” from the Navy for proclaiming himself gay. What’s the discovery problem? The Navy was deposing him and wanted to know
if he had engaged in homosexual conduct while he was a midshipman. Steffan refused to
answer on Fifth Amendment grounds (which you can do in a civil matter as well
as a criminal matter). What does the
Navy do? They file a motion to compel Steffan to answer.
They also file a request for sanctions (including simply dismissing the
case). Steffan
argues that the questions that he’s being asked are not relevant. The district court judge doesn’t buy it. Steffan refuses to
answer, and the case is dismissed. Then
he appeals to the D.C. Circuit. The only
reason there is a right to appeal on this discovery issue is that he’s been
poured out of court entirely. He appeals
his dismissal on the grounds that the discovery ruling and sanction were
wrong. Compare this to the previous
case: there was no appeal of the discovery ruling until the entire case is
finished, at which point the standard for review is whether the discovery ruling
caused you to lose the case. So most action on discovery is at the district court level.
The Court of Appeals says
that the question is not relevant. The
original administrative proceeding was based only on his statements and not his conduct. The Rule here says that discovery is relevant
if it relates to claims or defenses. Steffan claimed
that he was discharged because he said he
was gay, not because of any conduct.
Does that make sense? Are they
splitting hairs here? They take a very narrow view of the “claims or defenses”
standard. Evidence as to discovery is a
case-specific issue, and that’s why there is so much litigation over discovery
disputes: there is so much to work with.
Is this good policy? It drives up
the cost of litigation because discovery is, by far, the most expensive part of
the lawsuit. It can give one side a
strategic advantage in the lawsuit.
A hypothetical
We have Albert and
Barbara. Albert sues Barbara for
negligence. Albert wants to discover how
much money Barbara has. Can he do that? No, because it’s not relevant to whether she
was negligent. The claim is for negligence, and the amount of money that the person you’ve
sued has to pay you if you win is not one of the elements of negligence and is
thus not discoverable. You do want to find out how much money
people have. What if your claim is for
an intentional tort? Because punitive
damages are part of the law that goes along with the intentional tort and part
of the recovery that you request, courts will find that how much money the
other person has is relevant as to punitive damages. This is why when you sue a company for an
intentional tort you get to find out how much the company is worth: you craft a
punitive damages award that will hurt them.
What if the defendant is
insured and you have a simple negligence action? If I can’t find out how much money you have
in the bank, why can I get your insurance coverage information? There’s actually a Rule, 26(a)(1)(D), that says you are required to disclose whether
you’re carrying insurance. It’s not because
it’s relevant to the claim or defense, but rather it’s so integral to this
lawsuit that we force you to disgorge the information as soon as the lawsuit is
filed.
We left off talking about
Rule 26. Basically, anything that’s not
privileged and is related to claims or defenses is discoverable.
Say Albert sues Barbara for
an intentional tort. Let’s say Barbara
gets asked in a deposition whether Barbara intentionally hit Albert. Is it relevant? Of course. Is this information privileged? Is there a privilege that might be
raised? Sure, she could plead the Fifth
Amendment. But this is a civil
suit. She’s not being tried of
anything. Why can she use that
privilege? Even though this is a civil
case, what is said in the civil case is a statement that can be used in other
actions, civil or criminal, against Barbara.
This is precisely where you
want to raise the Fifth Amendment to avoid offering up free incriminating
evidence to the state.
Let’s say Albert is claiming
damages for emotional distress. Let’s
say Barbara’s counsel wants to question Albert’s doctor about his emotional
state. It’s relevant. Though usually there is a confidential
relationship between doctor and patient, this will probably be an exception to
that privilege. Albert put his own
health at issue: he can’t hide behind the privilege and not have to answer questions.
Rule 26(a) deals with
disclosures. You must disclose the
contact information of people who might have useful information. You must disclose any key documents you’re
using to support your claim or defense, such as the contract in a contract
dispute or a codicil in a will dispute.
You must show a calculation of your damages. You also have to provide copies of any
insurance agreements, even though such agreements aren’t typically admissible
as evidence. All of this stuff must be
coughed up within 14 days of the Rule 26(f) conference. Date counting is very important! Prior to the 2000 revisions, the disclosure
Rule was optional, and virtually every District Court opted out of enforcing
this Rule. Now it’s mandatory and it
actually plays a role in answers questions of what is and is not properly disclosable at the start of a lawsuit.
Let’s say that Albert has
medical records that will support his injuries and damages. He has wage statements which are used to
support claims of lost wages. He has
information that he was about to be fired from his job. He has a poor driving record. He probably has to fork over both the medical
records and the wage statements. The
witness must be mentioned if he will be used.
How about Barbara? She has an
insurance policy. She has a mechanic and
a boss. She had a fight with her boss on
the way to work. There is also another
eyewitness who will claim that Albert is at fault. But that eyewitness has substance abuse
issues. Who and what do we disclose? Barbara must disclose her insurance
policy. The mechanic might be a good
witness to claim that the car was in good working order. We don’t want to disclose the boss. But what about the drunk witness? We’re not sure whether we want to use that witness
or not. If you’re going to use the
witness, you must disclose the witness.
Are the things that we don’t disclose not discoverable? They may be discoverable even if it’s not
necessary to disclose them.
Say your client is a used-car
salesman. The customer thinks she’s made
a deal, but the salesman doesn’t agree.
The customer sues for breach of contract. What disclosures would we have to make? We wouldn’t have to disclose anything, but
maybe we would say that the salesman himself is a person with knowledge of
claims and defenses. You could also list
yourself as a person with knowledge of the claims and defenses. So disclosures are mandatory, but they may
not create any burden in a particular case.
On the other hand, what does the plaintiff have to disclose? The plaintiff would have to disclose some
kind of damage computation.
Interrogatories
and depositions – Rules 30 and 33
Interrogatories are lists of
questions that can be submitted to other parties to the lawsuit only. The other side’s lawyer will help them
answer. You’re limited to only 25 questions,
including discrete sub-parts. This
limitation is a response to what was seen as an abuse of the process. Interrogatories are cheaper than depositions. It’s pretty easy to write questions and send
them to the other side. But these are
also less useful: the questions are crafted by lawyers and answered by other
lawyers. As a result, you “game away”
any possible use of the device.
Depositions, on the other
hand, are live questioning. Here, you have the chance to follow-up. Depositions can be used against any person, not just a party to the
lawsuit. These are limited to ten per
side, and seven hours per deposition.
You can have a full day of deposition of up to ten people. But how do you determine “per side” when
there are co-plaintiffs or co-defendants?
That can vary case-by-case. These
are more expensive than interrogatories.
They are more costly in terms of time (and consequently, money, in the
form of legal fees). But depositions are
very useful! You never know what people
might say! Rule 31 also offers
depositions upon written questions, but these aren’t very useful because they
count towards the ten depositions yet don’t allow for follow-ups.
Let’s say there is a toaster
accident, and we’re going to sue the manufacturer for product liability. We serve 55 interrogatories against the
manufacturer and 20 against the store that sold it. What’s the problem with the store? You can’t ask them interrogatories because
they’re not party to the lawsuit. And
the interrogatories against the manufacturer are too numerous to be
allowed. But discovery rules can be
modified by court order under Rule 26(b)(2). So we can ask the court to let us have more
interrogatories! But we have to prove to
the court why the case is so special that we should be given more
interrogatories.
Do you have to give a
specific name of a person from whom you want to take a deposition? Not necessarily. We’re doing discovery because we’re trying to
discover stuff. You can ask for depositions based on
“descriptors” under Rule 30(b). You can
say that you want information from a corporation about certain stuff, and then
the corporation sends someone who is competent to testify about that
thing. There is a lot of strategy
here. You want to offer up someone who
can testify but who is as ignorant as possible.
You never want to offer up the CEO or president. They know lots
of things, and most importantly, they’re less easily managed by attorneys.
Let’s say we ask the designer
of the toaster what his qualifications are as well as the financial structure
of the corporation. The corporation’s
lawyer instructs him not to answer as to the financial structure
questions. Can the lawyer do that? The rules of discovery don’t limit what you
can ask in a deposition. This is a typical
battle. The lawyer cannot tell the guy
not to answer except when one of several things is true under Rule 30. You could try to claim that the question is
not relevant because it’s outside the scope.
But that doesn’t prevent the client from having to answer. They still do have to answer. But your objection is preserved for
trial. If you screw around during a
deposition, sanctions could be in your future.
What if the lawyer objects for seven hours straight? What if you want to continue, but the corporate
counsel says no? How do we deal with
this? We would have to invoke Rule 30(d)(2), which lets the court grant additional time. You can’t ask questions about the person
said to their lawyer.
Production
of documents – Rule 34
This is the most expensive
part of the discovery process. The Rule
itself, though it’s written as “the inspection of stuff”, has become more “the
production of copies of documents”.
These documents include computer printouts, financial records, faxes,
and electronic information (such as e-mails).
You list things that you want produced, and you can propound these
requests against any party. There is
also no limit to your requests for production.
These requests are easy to propound but expensive and difficult to
comply with. The tendency is to ask
broadly – to define the largest possible universe of potential documents with
the hope of being able to score the best possible documents. To request documents against a non-party, you
must use a subpoena duces tecum
(“show up and bring stuff with you”) under Rule 45. You can combine this with a request to take a
deposition.
This is a lawyer-driven
device. There is a tendency to interpret
requests very literally and narrowly.
Unless you ask exactly the right question, you won’t get exactly the
right documents. So the plaintiff’s
lawyer starts by propounding requests that will be very broad. Then the opposing counsel objects, saying
that the requests are overly broad and unduly burdensome. A negotiation begins between the
lawyers. They try to winnow down the
scope of the production by negotiation.
Let’s go back to the Albert
and Barbara car accident. Say we want
some documents from a mechanic. No
problem! You use a subpoena. Let’s say we want to have a medical exam of
Barbara because she’s counterclaiming. Is
a court likely to grant a Rule 35 request for a medical exam when the other
party is claiming physical injuries? If
courts will ever do this, this is the situation where they will. Courts are generally reluctant to upset
parties’ privacy by ordering such examinations.
If you get a medical exam ordered by the court and they request a copy
of it, disclosure of other medical reports both before and after that one may
follow. You can’t hide behind privilege
once you’ve turned over these documents.
Requests for
admissions – Rule 36
You ask the other party to
admit stuff. Admissions aren’t very
useful because they are drafted by lawyers and answered by lawyers. But watch out! Failure to answer is harmful both in Rule 37
compliance, and even worse, if you forget to answer then the matter is deemed
admitted within 30 days. Don’t forget
about these things!
The intersection between Rules 37 and 26
These are both tools that may
be used in certain contexts depending on whether the facts of the situation make
each Rule applicable. Rule 26(g) is kind
of like a mini version of Rule 11. There
are sanctions imposed for an attorney having signed discovery requests that are
“bad” for whatever reason (e.g. timeliness).
But note that Rule 11 doesn’t apply to discovery. The typical sanction under Rule 26(g) will be
the fees associated with having to respond to the request. What if we wait until after the discovery
conference, and then you think it’s still too soon? You can use Rule 26(c) to get a protective
order to try to prevent the use of the deposition because you think it’s
premature. You use Rule 37 when the
other side fails to disclose something and they try to introduce it at
trial. Rule 37 says that if they failed
to disclose, then they don’t get to use the person or fact in the trial. There are more bad things in Rule 37(b)(2): facts can be deemed established, evidence can be
banned, and pleadings may be struck.
We left off discussing
compliance. We could go over a lot of
different problems, but the important stuff is that you need to look at both Rule 37 and Rule 26(c) and
(g). Is it better strategically to seek
protective orders to prevent having to answer discovery, or is it better to
object and wait for the other side to file motions to compel and then raise the
same issues you would raise in a protective order? Yeazell says that it’s better not to rush for
the protective order. You might be able
to defuse a discovery dispute that will be enflamed by filing a protective
order motion. (But to
whose advantage is such strategy?
The client?
The attorney?
“Justice?”)
Discovery and privacy
Stalnaker v. Kmart Corp. – This is a “fair employment practices” case. But it wasn’t reported in the Federal
Supplement. It’s a run-of-the-mill
case. What has Ms. Stalnaker
done? She has sued
Under this order, what
questions can be asked? How can you
phrase a question about sexual activity with
Can the magistrate judge’s
order be appealed? The discovery order
isn’t dispositive of anything except what’s before you. So generally, there will be no appellate
review of this kind of discovery dispute.
But the statute that creates the magistrate judge’s jurisdiction does
have an out for interlocutory review of matters that are “clearly erroneous”. If the magistrate makes a really bad mistake,
you can ask the district court to review and reverse that mistake.
With left
off in discovery talking about basic cases. Let’s try to
deal with the major Supreme Court cases
that relate to discovery.
Schlagenhauf v. Holder – There was an injury where a Greyhound bus collided
with a tractor-trailer. One of the bus
passengers was hurt and sued Greyhound, the bus driver, and the owner of the
tractor-trailer. The bus
company and trailer company have cross-claims. The carrier company put in a request for a
series of examinations of the bus driver.
The trial court allowed all of the medical exams! Is this an appropriate use of Rule 35? We know that we can obtain these sorts of
exams when the condition of a party is in controversy. There is no question that the driver is a
party to the lawsuit. The driver is a
defendant to the original lawsuit. Does
it make a difference that the discovery request is coming from another
defendant on a cross-claim? Is the
physical condition of the party in controversy?
Usually when we think of this, we think of the condition of the
plaintiff who got hurt. Did the driver
put his condition at issue? The driver
admitted in a deposition that he saw the truck’s brake lights go on, but he hit
it anyway.
The Supreme Court eventually
vacates the ruling. If anything is at
issue, it’s sight. There isn’t any
justification for other kinds of exams.
Why doesn’t the court allow an ophthalmologic exam? They granted an order vacating all the exams,
and an eye exam may be possible, but
the evidentiary link must be established in order for this exam to be ordered.
This case isn’t exactly a
landmark case: it doesn’t establish a new rule particularly, but it shows that
Rule 35 is broader than just a plaintiff’s rule. Also, it shows that Rule 35 is not a carte
blanche to provide any conceivable kind of exam.
Hickman v.
Are these documents really
privileged? We’re told that these memos
fall outside of attorney-client privilege.
If it’s not privileged, is it relevant?
Yes. These are the statements of
people who would know best what happened.
If it’s not privileged and it’s relevant, you usually get it. But at the end of the day, they don’t get this. Why not?
The Court says that it’s not protected from discovery. But what makes this material special and
allows it to be treated specially? It’s
attorney work product. The information
would otherwise be discoverable.
There are two types of
information: first, witness statements in some form. Why aren’t these discoverable? As to these witnesses, the Court tells us
that there may be some way to get
this information, but not on these facts.
There was no effort on the part of the requestors to get this
information themselves. They could have
just gone out and done these interviews themselves. They must show some reason why the other
attorney’s work should be available to them.
What about the mental impressions of the lawyer as a result of the other
witness investigation? The Court says
there is no legitimate purpose served by having this information discoverable.
Rule 26(b)(3)
talks about trial preparation and what may or may not be discoverable. A party may obtain discovery of documents and
tangible things otherwise discoverable prepared in the preparation of
litigation only upon a showing of substantial need. If the material is otherwise discoverable and
doesn’t relate to experts, and was prepared in anticipation of litigation, then
you can’t get discovery of that information unless
the discoverer can show some substantial need and there is no reasonably
available substitute. Even then, the
court will protect the lawyer’s mental impressions in constructing an order of
discovery. Who does this Rule apply
to? It applies not just to the party’s
attorney, but also the party’s consultant or other representative. If you find great eyewitnesses, you must give
up the name of who you found, but you don’t have to give up exactly what they
said. Just because you spent a lot of
money finding a witness, you still have to cough up their name.
If someone isn’t a party to a
lawsuit, they can obtain a statement that they made previously. A party might not be able to get this
statement, but a non-party can get it for you.
Upjohn Co. v.
There are two kinds of
experts: testifying and consulting. You
decide whether to have an expert testify at trial depending on what he or she
will say and whether he or she will be an effective witness. The consulting witnesses can only be
discovered in exceptional circumstances.
You can get anything you want out of the testifying expert.
How do the Rules play
out? Let’s say the plaintiffs have two
experts. They will both testify at
trial. What do we have to disclose? We have to give up the names of both experts
and the expert report. We must freely
give it up without any request under Rule 26(a)(1). What about their depositions? Can the defendant depose these people? Let’s say the second doctor isn’t going to testify
and we have no intention of using his report at trial. Is our disclosure burden different? Now that he’s no longer a testifying witness,
we don’t have to disclose anything about him!
That means you can get experts to figure out a case without the fear of
whatever they find out being disgorged as long as you keep them from being a
testifying expert.
Thompson v. The Haskell Co. – The plaintiff was fired by the defendant, and it
was claimed that she suffered depression as a result. The claim is that the firing was due to
sexual harassment. The plaintiff saw a
doctor and that doctor made a report.
The defendant wants a copy of the report. What role does Dr. Lucas play in this
litigation? Is he a consulting witness
or a testifying witness? He is a
consulting witness. But you can get
discovery from consulting witnesses under exceptional circumstances. So are these exceptional circumstances? The defendant wants Dr. Lucas’s exam because
it was very timely. If her emotional
state is the result of having been fired, then you would think it would show up
in this report because she files her complaint way, way later. So the defendant’s lawyer wants to argue that
this report will have evidence related to being fired. If the report doesn’t mention being fired,
then she probably was depressed for some other reason. The court finds the report discoverable and
orders it produced.
Chiquita International Ltd. v. M/V Bolero Reefer – What happened?
Chiquita wanted to ship their bananas from
*** (1) What
is discoverable? (2) What tools do you
use to get those things that are discoverable?
(3) What about disputes?
We start with the question of
relevance. If it’s relevant, you’ll
basically usually be able to get the information, even if it wouldn’t be
admissible evidence. Let’s say it’s not relevant. Then you have to ask whether it’s nonetheless
discoverable because of an explicit Rule, for example, insurance policies under
the disclosure requirement. You’re required
to disclose insurance policies no matter what.
There aren’t very many exceptions like that, but you must note
them. But most things that are
discoverable are relevant. Say something
is relevant. Is it privileged? If yes, it is privileged, then you have to consider whether the privileged has
been waived. That’s a matter of the law
of evidence. But the easiest example as
to waiver is attorney-client privilege, where there mustn’t be third parties
present for the communication to be confidential. The privilege must be waived if there are
other people around. If the privilege hasn’t been waived, then you can’t get
the info. If the privilege has been waived, then we rejoin the
“main stream”.
If the information is not privileged, we must ask if it’s work product. And that’s the same question you must ask
when you’re dealing with a waived
privilege. What’s the difference
between the stuff protected by attorney-client privilege as opposed to what’s
protected as work product? If it’s not
work product, then you can get it. If it
is work product, then you have to ask
the Hickman questions about whether
you can overcome that protection. You
use the Rule on trial preparation that defines the different burdens that must
be met. If you can’t overcome the protection,
you can’t get stuff. If you can overcome protection, then we have to
ask whether the information is from a testifying expert. If they’re not a testifying expert, you must
ask the “hardship” question: is there some other relevant need or hardship that
lets you get the information? If they are a testifying expert, then you can
get the report and take a deposition.
Remember that this all starts
with Rule 26. Mark up the Rules where
they relate to the questions that we’ve focused on.
We can get protective orders
that can prevent you from having to disclose information. There are Rule 26(g) sanctions, big
sanctions, motions to compel, and of course the right to appeal. But when will the right to appeal kick
in? It will frequently be way too
late. At the core of discovery is the
fear of abuse. There are three typical
discovery abuse problems.
There may be too little
discovery (or the “stonewall position”).
You’ll encounter a person who doesn’t want to disclose information even
if it is explicit required. People don’t
want to disclose stuff that would be bad for your client, but you have no
choice under the Rules. If a proper
request is made for relevant, non-privileged stuff, you must cough it up. A mandatory discovery conference may be
required under Rule 26(f). Initial
disclosures under Rule 26(a) are designed to solve the problem of too little
discovery. There are certain categories
of information you must give up, period.
Next, there is the problem of
too much discovery. Sometimes millions of pieces of paper are
disclosed. But that may or may not be
responsive. There can be an ethical
question here. There are ways to control
this: under the general Rule 26(b), you can limit the scope of a discovery
request. There are also limitations in
Rules 30 and 33 on depositions and interrogatories. There are compliance
Rules in 26(g), and you can also get a protective order under Rule 26(c) to
prevent having to respond. By Rule
26(g), every document you sign is signed in a “Rule 11” fashion. You certify that what you’ve done is complete
and in good faith. You can also get
motions to compel under Rule 37. It also
provides other specific “tiers” of sanctions under Rule 37(b)(2). These become the “big sanctions”. Facts can be deemed established: even things
that aren’t true! Evidence can be
banned. Pleadings can be stricken. You can be held in contempt. Finally, there may be attorney fees and
expenses awarded regarding the discovery at issue.
The exam will be based on
pending real cases. But there probably
won’t be a pending case that deals solely
with a discovery issue. Fairman has also
used short-answer, problem-type questions to test discovery. There should be old exams on file now.
There are fewer and fewer
actual trials, even though there are many, many more cases! The data that Fairman is showing us is just for
federal trials. Most cases are state
cases, though. And when we look at what
happens in the states, the data is about the same. Lots of cases settle, around 70% of
them. Rule 12 motions dispose of a
certain number of cases. Default
judgments can cause the end of suits.
Summary judgment, dismissals, and ADR are other options.
Here are Paula and
Darlene. Paula sues Darlene for
negligence. Twenty days pass, but
nothing happens. Can you ask for default
judgment? One option is if you are
asking for a sum certain amount. On the other hand, if it’s not a sum certain,
you must go before the court. You’ll
have to prove the damages before the judge so that the judge can enter judgment
for an amount. This isn’t particularly
cumbersome because there’s nobody on the other side. So in this example, it’s a car wreck so we
don’t have a sum certain. You’ll have to
go to the judge. What could Darlene do
about this? Rule 54(c) says you can set
aside a default judgment for good cause.
This Rule uses Rule 60 as a standard for when a court will set aside a
previous ruling.
Peralta v. Heights Medical Center – This is a Supreme Court case generated by the state
of Texas. What happened? Peralta had an employee who got injured, went
to the hospital, and was supposed to pay for the employee’s injuries. Peralta was served, but under Texas law, he
claimed invalid service. Peralta chooses
not to show up. Don’t take a default
judgment when you have property in the jurisdiction of the court! His stuff gets sold! He goes to court in an attempt to argue for a
bill of review. You need three things: (1) a meritorious
defense, (2) being prevented from raising the defense by the wrongful act of
another party, and (3) the defaulting party had no fault. The courts reject the bill of review because
there is no meritorious defense. That
leads to the federal review that gets to the Supreme Court.
Justice White says that to
have due process, you need notice that is reasonably designed to tell parties
what’s up. But if Peralta has no
meritorious defense, why isn’t that just the end? The difficult thing is the question of
whether there was notice. Peralta had
every opportunity to respond to the suit outside of court. But he chose not to. This is a hard-line notice view! The reality is that Peralta had actual
notice. But the Court doesn’t care! What can the hospital do now? Can they still get Peralta?
If your suit gets
involuntarily dismissed under Rule 41, you win.
They can’t file the lawsuit again.
It’s a determination on the merits.
Voluntary dismissal, on the other hand, is governed by Rule 41(a), and
it provides for voluntary dismissals either by answer or agreement.
There are lots of factors
that go into determining settlement values and what makes cases ripe for
settlement. Discovery causes
reevaluation of the value of a suit.
Most tort plaintiffs lose, so settlement for them is attractive. Even if you win, verdicts may be low, and
trials are expensive. So both sides have
pressure to settle if possible. Most
settlements are based on negotiations between the attorneys.
Jane Smart is a botanist
employed by a botany company genetically modifying crops. There are harassment allegations that lead to
a discharge. There are multiple stories
of what may have happened. But Jane
thinks she may have both unlawful discharge claims under state law and federal
Title VII claims. The company tries to
give her money to not sue, a “walkaway”
settlement. This is the easiest way to
make sure you get sued for malpractice.
If you pay someone not to sue but then they turn around and sue anyway,
then you yourself will turn around and sue the lawyer who recommended the “walkaway” settlement.
So you want to do this in the form of a release. This has its problems, too. The release is only as good as its language. If the release is “in full settlement of
civil rights claims against defendants”, then you haven’t necessarily released
the unlawful discharge claim. What about
“in full settlement of any and all claims, known and unknown, whether based on
federal, state, or other applicable law, arising out of my employment”? That’ll do.
Voluntary dismissals are one
way to execute a settlement agreement, but the problem is that this dismissal
is without prejudice, meaning that they can file the lawsuit later. Maybe you could get Rule 41(b) involuntary
dismissal which would be with
prejudice. Claim preclusion will then
kick in and preclude whatever such a judgment on the merits would have
covered. If you want more action on the part of the courts,
you can ask for a consent decree, which is, in essence, a court order.
All four settlement scenarios
described above have their advantages and disadvantages. Some will be quicker than others. For example, if you have to deal with a
consent decree, you’ll have to invoke the jurisdiction of the court. Some will be more confidential than
others. And some will be more
enforceable than others. But usually no
one type of settlement will have all the answers.
Matsushita Elec. Industrial Co. v. Epstein – There’s a California federal court case based on a
breach of federal securities law.
There’s a Delaware state claim based on the fiduciary duties of the
directors under Delaware state law. Both
claims are class actions. There is
exclusive jurisdiction for the type of claims in the California suit in the federal
courts. The rule is that the state court
can settle claims that it could not have tried because of the full faith and
credit statute, 28 U.S.C. § 1738. We
could change the result of this case by statute.
Confidentiality
in settlements
Let’s say there is a
plaintiff who is suing for unlawful discharge.
The plaintiff is concerned about how long the case will take. She doesn’t want to wait a long time. She is also concerned about having her rights
be redressed. We can craft a
confidentiality agreement that will work.
Kalinauskas v. Wong – This is a suit against Caesars Palace for sexual
discrimination. They take a deposition
of a Ms. Thomas. At the time of the
case, there was a settlement and settlement agreement between Ms. Thomas and
Caesars Palace. There is a
confidentiality agreement in the settlement agreement. This case punctuates confidentiality
agreements. If they come into conflict
with other, broader principles, then even a duly bargained for confidentiality
agreement might give way.
What about ADR? When there is negotiation, the parties
themselves come to resolution. When
there is mediation, negotiation is assisted by a third party. There can be arbitration, which is unofficial
adjudication. There can also be early
neutral evaluation.
Wasn’t
paying too much attention.
Here’s another form of
ADR. The distinguishing characteristics
of arbitration are that a decision is made by decision-makers in arbitration,
whereas that action is not the end result of processes such as mediation and
settlement. The arbitrator decides the dispute and issues an oral
or written decision. The main reason
people use arbitration is because the parties can decides the rules of the
game. They can make up their own procedure,
rules, and substantive law. They can be
as similar or dissimilar to “real” law as you want. Many arbitration agreements restrict or
forbid discovery, pre-trial motions, knowing who is arbitrating the dispute,
and the application of the rules of evidence.
Arbitration is also usually faster, cheaper and more confidential than
litigation.
What happens when courts get
involved at looking at arbitration decisions?
There are two places that this happens.
Courts ask at the front end: when is it appropriate for a court to enforce
an arbitration clause? When should they
stop a lawsuit that has started from going forward or compel a party to go to
arbitration? At the back end, when will
a court review and possibly undo an arbitration award?
Floss v. Ryan’s Family Steak Houses, Inc. – There are lots of cases against the
steakhouse! What were the facts
here? Floss is suing under the Fair
Labor Standards Act. Floss didn’t want
arbitration, but wanted to go to court instead.
Ryan’s insisted on going to arbitration.
There’s also an ADA claim by Daniel.
They both signed an arbitration agreement when they agreed to work at
Ryan’s. But did the plaintiffs really
think about this provision when they signed up to work at Ryan’s? They probably just wanted a job. What’s the benefit to Ryan’s? It’s cheaper, faster, and reduces bad
publicity. But this agreement indicates
a specific arbitration forum: EDSI. It
turns out that in the Sixth Circuit, they won’t uphold this arbitration clause,
but in the Eighth Circuit they will.
The Sixth Circuit asks
whether EDSI is suitable for the resolution of statutory claims. What made EDSI suspect to the Sixth
Circuit? How they appoint the
arbitrators is a concern: one of the arbitrators is a manager of a company that
has an arbitration agreement with EDSI!
They’re worried about bias. The
other two arbitrators are an employee and a lawyer, judge or “other
professional”. So the court is worried
about this. The court is also worried
about a bias due to EDSI’s financial relationship
with Ryan’s. Their business depends on
getting and keeping business clients.
Also, the employee had to pay for half of the costs of the
arbitration. In court, the costs would
be based upon who won. But ultimately,
the court decides that the contract is invalid: there’s no consideration
because the terms are “fatally indefinite”.
This is the most important
rule of Civil Procedure! How does the
Rule work? What happens due to Celotex? You’re entitled to summary judgment if there
is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.
So both questions of fact and questions of law can come into play.
Let’s say we have a creditor
and debtor. The creditor holds a
promissory note for the amount owed. The
creditor sues on the note upon default.
All you need are an executed note that’s due and hasn’t been paid. If you can establish those elements, you’re
all good. If the defendant were to file
a Rule 12(b)(6) claim, he would lose because we accept all plead allegations as
true for the purposes of a pre-trial motion like 12(b)(6). The Rule won’t test the sufficiency of the
allegations if they’re made. What if the
defendant denies all these elements, but then at discovery, the defendant
admits that he hasn’t repaid the promissory note. So then do we have a situation where there is
no genuine issue as to any material fact?
That’s right! How can we get the
interrogatory before the court in order to support a motion for summary
judgment? Rule 56(c) tells you that
affidavits and other discovery stuff can be used.
Rule 56(e) says that
affidavits must be made “upon personal knowledge” and give facts that would be
admissible as evidence. Not every
affidavit will be based on personal knowledge or include stuff that could be
admitted as evidence. So you couldn’t
submit an affidavit with evidence that would be hearsay if introduced at
trial. What if the plaintiff submits an
affidavit saying: “I know the
plaintiff signed the note.” But this is
too vague to count as personal knowledge.
If you had information that says the plaintiff watched him sign the
note, but the defendant says that he didn’t do it, then there is an issue of
fact for the jury.
Don’t mix up the “burden of
production” and the “burden of persuasion”.
The burden of production is the obligation to go forward by producing
some evidence on an issue. That may be
the same as who has the ultimate
burden of proof, or rather, the burden of persuasion, which is the obligation
to convince the trier of fact to some level of certainty of the truth of an
issue. Judges can intervene to prevent
something from going forward in a lawsuit if plaintiffs cannot meet a minimal
showing with the production burden. But
if you can make a minimal showing,
you’ll clear Rule 56 and have the chance to get before a jury. If the plaintiff can make a showing, the
burden shifts to the defendant to make some showing that there is an issue of
fact for the jury to decide. Otherwise,
if there’s nothing the defendant can say, the plaintiff will be entitled to judgment
as a matter of law.
Adickes v. S.H. Kress & Co. – At trial, the plaintiff had the burden of
production and persuasion. On summary
judgment, the defendant’s burden was to show that the plaintiff could not
prevail at trial. The defendant, in
essence, had the burden of production and
burden of persuasion. The defendant had
to prove that the plaintiff couldn’t win.
This case more or less moots summary judgment in federal court practice
from the defendant’s standpoint. The
burdens to prove that the plaintiff can’t win would be so heavy that you might
as well try the case.
Celotex Corp. v. Catrett – Here’s a wrongful death claim. When you look at the pleadings, the complaint
alleged that the defendant manufactured asbestos, that the asbestos was
unreasonably dangerous, that Catrett was exposed to
the defendant’s asbestos, and that it caused his death and damages. The defendant responds by admitting they
produced asbestos, but denying basically everything else. Celotex moves for summary
judgment on the issue of exposure. They claim that this plaintiff has proved
that he was exposed to their particular type
of asbestos. The district court grants
summary judgment to the defendant. The
court says that there was no evidence that the plaintiff was exposed to Celotex-brand asbestos.
The case will be dismissed.
That’s because there’s no information that the plaintiff came forward
with that can show exposure to Celotex asbestos. That’s a burden they would have at trial as
to causation, saying basically “if you can’t do it now, what makes you think
you’ll be able to do it at trial?”
The case goes up to the D.C.
Circuit, which reverses, saying that the burden of the moving party (Celotex) required it to support its motion with affidavits
to negate exposure, that is, to prove
that he wasn’t exposed to Celotex asbestos.
The case goes up to the Supreme Court on that issue. They don’t explicitly overrule Adickes. Rehnquist says that after a period of
discovery, you can get summary judgment against a party if they fail to
establish an element that was central to their case and on which they would
have the burden of persuasion at trial.
If after discovery, you can’t come up with any evidence of something you
have to prove at trial, then there’s no reason to try the case. Rehnquist suggests that this Rule operates
much like Rule 50 (judgment as a matter of law). When Celotex files
its motion for summary judgment, it has to say that the plaintiff failed to
produce evidence as to the exposure. As
to that motion, Celotex has the burden of
production. When they do that, the
burden of production then shifts back to the plaintiff. They get their last chance. Now’s the time they must
come up with any evidence.
Judicial
management of litigation
All of the Rules provide ways
in which judges can manage litigation.
Should judges be a neutral arbitrator, or should the judge be more
active? How can judges push their docket
along and actively manage their cases?
Rules 8, 9, 12 and 56 are tools the court has to manage cases. The discovery rules, 26 and 37 are more
tools. Rule 16 is the pretrial
conference rule. The judge can bring the
parties together before trial for whatever they want, basically. There are very specific things that the court
can do that are listed in 16(c). There
are 16 different things listed that can be done! The intention of this Rule was to have the
courts use this Rule to get rid of cases that they perceive have less
merit. If you don’t comply, you get
sanctions under Rule 16(f), which are exactly the sanctions you can get under
Rule 37(b)(2)(B), (C) and (D). You can refuse the right to go forward with
evidence to support specific claims and defenses, you can strike pleadings or
dismiss the action, or you can hold them in contempt for failure to comply with
the pretrial order. The bottom line is
that there are a lot of things the district court can do, and some pretty heavy
sanctions it can use if you fail to do what it wants you to do.
Sanders v. Union Pacific Railroad – Sanders got hurt. Sanders filed suit under FELA against the
railroad. There’s a pretrial
conference. Usually, these pretrial
conferences will set deadlines. Judges
aren’t happy when you miss the deadlines of their pretrial orders. They were even warned about the sanctions
within the actual order itself! The
plaintiff did lots of bad stuff! The
plaintiff bungled lots of deadlines!
They show up at the conference, and the law clerk is there instead of
the judge. The plaintiff isn’t
ready! He has excuses. He proposes that the case be dismissed
without prejudice. But the court instead
dismisses the case with
prejudice! Is this an appropriate
sanction? The panel of the Ninth Circuit
says that it’s not an abuse of
discretion, on a 2-1 split. But then
when it goes en banc (a panel of 11), the court reverses.
McKey v. Fairbairn – It’s a slip ‘n’ fall case! There’s a roof that leaks. A tenant mops it up once, twice, then falls! The
tenant sues the landlord for breach of the lease. The plaintiff agrees at the pretrial
conference that it’s only about the
lease. But later on, the plaintiff wants
to amend the pleadings to bring in a charge under a violation of
statutory/regulatory duty. The court
says: “Too late!” The court issues a
directed verdict for the landlord! The
appellate court found no abuse of discretion on the part of this judge. But think about this: the judge knew that the plaintiff would probably
want to amend the pleadings down the road, but then didn’t allow the plaintiff
to do so. What if the judge had allowed the amendment? Would the appellate court have reversed as
abuse of discretion? Wouldn’t it be unfair
to the defense? Would it constitute
unfair surprise at trial? But shouldn’t
a landlord be responsible for knowing the regulations that govern his industry?
What would the landlord have
done differently during the course of litigation if he had known that the D.C.
regulation could be an issue? This is
before a significant amendment to Rule 16.
The judge here was very traditional: if you come with a theory, you can
go with it, but you’re going to find out soon that you lose.
Litigation is a “system of
managing doubt”. The devices we’re
looking at today stem from this theme.
Judgment as a matter of law – Rule 50
After pleading and joinder of
claims and parties comes discovery, then resolution without trial
(potentially), then trial. The motions
we’ll talk about today are motions that can come during trial. These motions can substitute the judge’s
decision-making for that of the fact-finder.
The judge can also use jury instructions and keeping evidence in or out
to control the jury. There is also directed verdict, judgment notwithstanding the verdict, and the motion for a new trial.
Where do these things take place?
In a trial, there’s the plaintiff’s case, the defendant’s case, a jury
verdict, and then a judgment. After the plaintiff
has finished their case-in-chief (all evidence and witnesses), then it’s
appropriate for a motion for a directed verdict. If that motion is denied or delayed, it can
also be made after the defendant’s case in chief. After the jury verdict, you could make a
motion for a judgment notwithstanding the verdict. So one difference between these two types of
motions is when they can happen. But all of these are now subsumed into Rule
50, which is called judgment as a matter
of law.
So look at the Rule and see
what it does. The standard is very much
like the summary judgment standard. Look
back at Celotex. Rule 56 has pretty much the same standard as
Rule 50.
What’s the difference between
a motion for a directed verdict and a motion for a new trial? Directed verdicts focus on the adequacy of
evidence. They replace the jury’s
verdict with the judge’s judgment. It
results in a final judgment. What about
the motion for a new trial?
There are troubling similarities between Rules 50,
56, and even the Rule 12(b) motions.