Review Procedure. Examination review will take place subject to the following procedure:
Review Policy. Examination review is a good way to learn from your mistakes, and from your successes. I encourage you to review my feedback memo and your exam. I will be happy to sit down and discuss substantive matters with each student. I will first tell each of you what you did right. I will also gladly suggest ways to improve your exam-taking abilities.
Grade Changes. I want to make one thing perfectly clear: barring mathematical errors, your grade is not going to be changed. Grading is a time-consuming and difficult process. The only fair way to do it is to grade in the context of each class. I look for a fair overall grade distribution and follow the rank of each student within the class in awarding the final grade.
General Comments on the Exam. The exam was graded on a 720 point scale, based on the issues in the essay, which produced a total of 360 points and then I assigned that same total to the multiple choice, for a value of 36 points per question.
The multiple choice produced a 69% average, which is slightly higher than my 1997 exam and lower than the 1996 exam. Still, I was very pleased that I saw a very good distribution of grades along the multiple choice alone, and because no one had a disastrously low grade in the multiple choice. In other words, everyone was still in play for a decent grade when I started reading the essays.
Select the best answer to the question presented. In this section, Do not look for "perfect" answers, just the most correct one among those alternatives available to you, in light of the question presented. No explanations are required or allowed. Your answer will either be correct or incorrect, there will be no partial credit for incorrect answers. Circle the letter of your response.
Do not assume any facts not given to you. In this section of the exam, "missing facts" suggest three possibilities: (1) you need to read the question again, i.e., "it's in there somewhere", (2) the fact is not necessary to the resolution of the question, or (3) I made a mistake and you may need to alert me to it (if you are convinced that this is what is going on, do not be afraid to ask the question).
Do not look for issues that are not relevant to answering the question. The question asked determines the issues raised, read it carefully and answer the question I asked, with the best possible alternative response.
Long-arm statutes. In answering these questions, you should assume that the applicable long-arm statutes have extended personal jurisdiction to the maximum extent allowed by the Due Process Clause of the Fourteenth Amendment.
Residence. Assume that residence and citizenship are treated equally.
1. Cosmo Kramer has filed a diversity suit against Seinfeld, Inc., in the U.S. District Court for the Southern District of New York for the tort of assault and battery with weird hair. All relevant acts occurred within this district and personal jurisdiction is not a problem. Kramer claims, exclusive of costs and interest, more than $75,000.00 in damages. Paragraph number 2 in the complaint, reads as follows: "This court has jurisdiction over this case because, at all times hereto pertinent, Plaintiff was a citizen of New York, and defendant Seinfeld, Inc., was a citizen of Connecticut, where it is incorporated, and of Pennsylvania, where its principal place of business is located." The response to this allegation in the answer was: "Paragraph 2 of the complaint is a legal conclusion requiring no response from this party." Three years after the suit was filed, and after repeated orders threatening the imposition of severe sanctions, Seinfeld produced it's certificate of incorporation, which disclosed, for the first time, that it was incorporated in Delaware. The applicable statute of limitations has expired. Seinfeld has just moved for dismissal for lack of subject-matter jurisdiction. What should the Court do?
a. The court should grant this motion.
b. The court should deny this motion, because the answer to this allegation was improper, and the allegation should be deemed admitted.
c. The court should not rule on this motion, because it is untimely.
d. The court should deny this motion.
Answer: D. The court should deny this motion. The plaintiff is a citizen of New York, and Defendant of Pennsylvania, where its PPB is located, and now of Delaware, where it is incorporated (28 USC § 1332(c)(1)). Well, there is diversity subject-matter jurisdiction, so the motion should be denied on the merits. B is not correct. Improper denials do indeed result in matters being admitted, but parties cannot admit subject-matter jurisdiction. The motion is timely since this is the most preferred of all defenses under Rule 12(h)(3), and can be brought to the court's attention at any time. Hence, c is incorrect. A is incorrect because there is no reason to grant this motion on the merits. Discovery sanctions might be appropriate under these circumstances, and Rule 11 sanctions were likely to be imposed in this case even if the court had been forced to dismiss, but on the merits, which are properly before the court, the motion to dismiss should be denied.
2. In 1996, Mr. Benny Hill, a citizen of the United Kingdom, receives a long-term work visa and becomes a Professor of Roman History at George Washington University in Washington, D.C. He lives in Arlington, Virginia, with his wife, Betty Jones, a Citizen of the United States. In 1998, he files suit in the U.S. District Court for the Eastern District of Virginia against World Wide Movers, Inc., for negligently destroying his rare book collection, valued at $700,000.00 at the time of its loss, according to his complaint. WWM is a Delaware Corporation, with its principal place of business in Virginia. Mr. Hill, who is the only Plaintiff in this case, alleges that a substantial part of the events or omissions giving rise to the claim occurred at World Wide's Alexandria, Virginia, warehouse. WWM has moved to dismiss the complaint for lack of subject-matter jurisdiction. Should the court dismiss the case?
a. Yes, because the corporation is a citizen of both Delaware and Virginia.
b. Yes, because Mrs. Jones is an American citizen.
c. No, because the corporation is a citizen of both Delaware and Virginia.
d. No, because there is alienage jurisdiction.
Answer: D. An alien is suing a U.S. citizen and the claim exceeds $75,000.00, hence, there is alienage jurisdiction under 28 USC § 1332(a)(2). A was the red herring here, the last sentence of 1332(a) covers the special case of permanent resident aliens, and would deem him to be a citizen of Virginia in this case, if the provision applied, but it does not, because he is on a VISA and not a Permanent Resident Alien. The corporation is a citizen of both Virginia and Delaware, but that does not deprive the court of jurisdiction. B is incorrect simply because Mrs. Jones is not a party to this case, furthermore, her citizenship does not affect her husband's unless he applies for US citizenship or permanent resident status. C is a stronger answer than many of you thought. It is a correct statement of the citizenship of the Corporation under 1332(c)(1), but an incomplete analysis. The motion should be denied in part because of the citizenship of the corporation does not conflict with the citizenship of the Plaintiff. However, here the important factor is that the Corporation is a US citizen and the plaintiff a foreign citizen, and we may ignore the Plaintiff's US residence to find that there is alienage jurisdiction.
3. A tornado destroyed the home of John Jones, a resident of Knoxville, Tennessee. Aetna Insurance Company provides Mr. Jones' homeowner's policy. Steve Stevens, who was in the house at the time of the incident, suffered severe injuries and kept screaming that he was going to sue. Mr. Jones, disturbed by this, called an Aetna agent, informed him of Stevens' threats, and the agent prepared a written report of the damages and took written statements from Mr. Jones and from Mr. Stevens. Stevens, a citizen of Florida, has sued Aetna Insurance Company and Mr. Jones, claiming more than $75,000.00 in damages, exclusive of costs and interest, and diversity jurisdiction, in the U.S. District Court for the Eastern District of Tennessee. He claims that the house lacked a proper foundation and basement where they could have escaped this relatively-light tornado. Aetna is a Pennsylvania corporation, with its principal place of business in New York. During discovery, Mr. Stevens requested the production of a copy of the his statement taken by the insurance agent. Can the insurance company successfully refuse to produce the document by raising the work-product protection?
a. Yes, because it was prepared in anticipation of litigation.
b. No, because you cannot be sure that Stevens will sue.
c. No, because Stevens is entitled get a copy of his written statement.
d. Yes, because the statement was taken by an insurance adjuster.
Answer: c, because if work-product does not apply, Stevens is entitled to a copy of his statement, and even if the privilege applied, the party is entitled to a copy of his own statement by the express language of FRCP 26(b)(3) paragraph 2. A is incorrect, because even if the privilege applies, which is a reasonable conclusion given these facts, 26(b)(3) paragraph 2, changes the result ( I also added the word "successfully" in anticipation of the argument that any privilege can be raised until the court rules on it). D is incorrect because it is incomplete, although Rule 26(b)(3) expressly applies to persons other than lawyers and his employees, including insurers, it also requires that materials be gathered in anticipation of litigation and that they not be expressly exempted, as the second paragraph does.
4. Bob Jones, a college student, who is a citizen of Georgia, was stopped by the police at the corner NE 13th Street and University Avenue on a Friday night in the Spring of 1998. The officers noticed a ziplock bag with what they believed was cannabis (although it turned out that Bob was a cook and this was his "stash" of oregano). The two Gainesville Police officers who had stopped him, decided that Bob had been rude to them and proceeded to beat him into unconsciousness with their flashlights. They also placed him under arrest. The officers involved live, respectively, in Dade and DeSoto counties in Florida. Mr. Jones, files suit in U.S. District court for the Northern District of Florida against the police officers only. He alleges that the actions of these officers violated his rights under the Constitution of the United States. This claim is both reasonable and substantial. Respectively, what would be the proper basis for subject-matter jurisdiction, personal jurisdiction and venue in this case?
a. 28 USC § 1332(a)(1), residence of the defendants, 28 USC § 1391(a)(2).
b. 28 USC § 1331, residence of the defendants, 28 USC § 1391(b)(2).
c. 28 USC § 1331, residence of the defendants, 28 USC § 1391(b)(1).
d. 28 USC § 1331, residence of the defendants, and either 28 USC § 1391(b)(1) or (b)(2).
Answer: B. There is a federal question to give the court original jurisdiction, the defendants are all residents of Florida, and subject to PJ there, and venue is proper under 1391(b)(2) since a substantial part of the facts giving rise to the claim occurred within the northern district. A is incorrect because the claim that was filed is based on the US constitution and therefore this is a "federal question" case even though there is diversity, therefore, 1332 and 1391(a) do not apply at all. C is incorrect because of the difference between 1391(b)(1) and (b)(2), although they both live in the state of Florida, none of the defendants live in the Northern District of Florida (28 USC § 89, Dade and DeSoto counties, respectively, are located in the Southern and Middle Districts of Florida). D is incorrect for the same reason as C, 1391(b)(1) was not an alternative under these facts.
5. Ms. Ellen Morgan has filed a suit against Dr. John D. Bombay and his employer Humana Hospital, Inc., because he left his Rolex watch inside Ms. Morgan's thoracic cavity during an appendix operation. Ms. Morgan is a citizen of California, Dr. Bombay is a citizen of Oregon and Humana is incorporated in Washington State and has its Principal Place of Business in West Palm Beach, Florida. The case was filed in the Eastern District of Washington because the relevant facts occurred at Doctor's Hospital in Walla Walla, which is owned and operated by Humana. The claim exceeds $75,000.00, exclusive of costs and interest, and only diversity jurisdiction is claimed over this malpractice tort suit. The plaintiff wants to establish that the doctor had been flown in from his home hospital in Oregon to cover for some striking interns and had been working for 72 hrs., with only 4 hours of sleep. She wants access to the records of the hospital where the operation took place. What is the simplest and most correct way to obtain access to these records under the Federal Rules of Civil Procedure?
a. To send a request for production of documents to Humana.
b. To send an interrogatory to Humana.
c. To take the deposition of the custodian of records of the hospital, with the appropriate subpoena requesting that he bring with him the documents.
d. To send a request for production of documents to Doctor Bombay.
Answer: A. Humana is a party to this case, therefore, a request for production of documents under Rule 34 is the most appropriate discovery device to get the records of a hospital that this party owns and operates. A request for production compels a party to produce documents under its control. This would be so even if the Hospital is a separate entity, i.e., a separate corporation, and thus not a party, even though the facts do not say that. In any case, the documents would be under the control of a party. B is incorrect because a request for production of documents is most correct procedural device in this case, even if courts are not always all that neat about the distinction in practice between Rule 34 and Rule 30 Interrogatories (see, e.g., Hickman v. Taylor, cb. p. 349, bottom). C is incorrect because Humana is a party and the records are within its control, even though the one discovery device available against non-parties in this situation is a deposition under Rule 30, and the subpoena duces tecum under Rule 45(a)(1)(C). As to D, you could argue that Dr. Bombay has control over the hospital records, but that is certainly not the easiest way of getting the hospital records produced.
6. Bing Crosby has sued Frank Sinatra in the U.S. District Court for the Northern District of California. Fourteen days after being served with process, Mr. Sinatra filed a motion to dismiss for insufficiency of process. The court denied this motion. Seven days after the notice of the court's order, Mr. Sinatra filed his answer. Fifteen days after filing the answer, Mr. Sinatra files an Amended answer, raising, for the first time, the defense of lack of personal jurisdiction, which was available when the motion mentioned above was filed. Should the Court consider the personal jurisdiction objection?
a. No, because the amendment was untimely.
b. Yes, and the court should dismiss if the defendant lacks minimum contacts with the forum state.
c. Yes, since Mr. Sinatra could amend his answer once as of right, it may be considered.
d. No, because that defense has been waived.
Answer: D, the defense has been waived. Lack of Personal Jurisdiction is a least favored defense under 12(h)(1), and if defendant chooses to file a motion to dismiss, he must include therein the objection to personal jurisdiction pursuant to 12(g), and failure so to do results in waiver under 12(h)(1)(A). Thereafter, this defense could not be raised in the answer, and certainly cannot be raised in an amended answer. A is incorrect because the Amendment is timely, you have 20 days for the amendment as of right, the problem is that this defense had been waived when it was not included in the pre-answer motion. B is incorrect because the defense has been waived; additionally, you are not given any information to evaluate minimum contacts one way or another; the statement that the court would have to dismiss if the defendant lacks minimum contacts is true, but only upon a timely motion. C is incorrect, because the defense has been waived because it was available and not included in the pre-answer motion, the fact that the amendment as of right is timely does not affect the waiver of the defense, because you cannot include in the amended answer a defense that could not have raised in the answer.
7. Jean Paul Belmondo, a citizen of France, who resides in the city of Nantes, in that country, was spending his vacation in Central Florida. He accidentally destroys a rare animation cell, valued at $1.2 Million, at a store at Disney World, an amusement park located completely within Orange County, Florida. Disney World Orlando, Inc., a Florida Corporation, with its Principal Place of Business in Orlando, files suit against Mr. Belmondo in the United States District Court for the Northern District of Florida. It claims jurisdiction based only on section 1332 of Title 28. Mr. Belmondo was personally served with process while he awaited to board his flight back to France. Assuming that personal jurisdiction can properly be based either on the commission of the tortious act in Florida or the personal service of process within the state, is this case properly filed in the United States District Court for the Northern District of Florida?
a. Yes, there is alienage jurisdiction and venue is proper in the Northern District.
b. No, there is alienage jurisdiction but venue is not proper in the Northern District.
c. No, venue is proper in the Northern District but U.S. citizens cannot sue foreigners in the Federal Courts.
d. Yes, based on violation of the federal laws for original jurisdiction and venue is proper in the Northern District.
ANSWER: A. There is proper 1332(a)(2) alienage jurisdiction, with the claim meeting the jurisdictional amount, and personal jurisdiction in Florida is present based on the facts given and extends to all districts within the state under Rule 4(k), and an alien defendant may be sued in any District pursuant to 1391(d), so the Northern District is fine. Note that (a)(3) does not come into play at all because of the application of 1391(d), which provides another district in which the case may be filed. Additionally even if 1391(a) applied, (a)(3) would not come into play because (a)(2) provides an alternative forum (i.e., where the acts occurred, which is the Middle District of Florida). B is incorrect because venue is proper under 1391(d), otherwise, it would probably have to be filed in the Middle District under 1391(a) since the sole defendant does not reside within the district and (a)(3) does not come into play because of the existence of an alternative district. The conclusion in C is simply not true, foreigners can be plaintiffs or defendants in alienage jurisdiction. D is just an incorrect statement of the basis of original jurisdiction.
8. Juan González, a citizen of Arizona, files suit in the U.S. District Court for the Central District of California against John Klesko, a citizen of California who resides in Simi Valley, a suburb of Los Angeles. He claims that jurisdiction over his claims is based exclusively on diversity. Count I of his complaint alleges that Mr. Klesko negligently caused a car accident that occurred in Los Angeles, which left Mr. González with severe permanent injuries. He claims damages in excess of $1 Million. In Count II of the complaint, Mr. González claims that he lent Mr. Klesko $15,000.00 dollars pursuant to a promissory note signed in Los Angeles; the money was delivered to Mr. Klesko in L.A. Mr. Klesko files a motion to dismiss Count II of the complaint. How should the court rule:
a. The court should grant the dismissal of Count II because this claim does not arise out of the same transaction or occurrence as the automobile accident claim.
b. The court should grant the dismissal of Count II, for failure to meet the jurisdictional amount.
c. The court should deny the motion to dismiss Count II, because joinder was proper, and it has subject-matter jurisdiction over that claim, personal jurisdiction over the defendant and venue is proper in this district.
d. The court should deny the motion to dismiss Count II.
Answer: C. The only commonality required by Rule 18 for joinder of claims is that they involve the same two parties. But the rules do not provide the court with jurisdiction over the subject-matter, the person or venue. All three globes are present, however, Subject Matter Jurisdiction is present on the basis of diversity, an Arizona Plaintiff vs. a California Defendant, as to jurisdictional amount, a single plaintiff may aggregate the amount of all claims against a single defendant to meet the jurisdictional amount requirement, therefore, the $15,000.00 may be filed together with the Million-dollar one. The defendant is a resident of California, and thus subject to general jurisdiction there. Venue is proper in the Central District, 28 USC § 84(c)(2) (Los Angeles is in the Central District, where the acts occurred). A is wrong because the transaction or occurrence test for "Compulsory Counterclaims" and res judicata, simply does not apply to permissive joinder of claims either under Rule 18 or by application of the jurisdictional statutes. B is incorrect because of the aggregation rule discussed above. D is the correct result, but not specific enough, therefore, C is better.
9. Ally McBeal, a citizen of Massachusetts, kicks Oren Koolie, a citizen of New York, when he is visiting her law office in Boston. She mistook him for "Mr. Huggy," an imaginary dancing baby. Unfortunately, Mr. Koolie is a very real small person, who happens to be a lawyer. Naturally, Mr. Koolie sues Ms. McBeal in the U.S. District Court for the District of Massachusetts. Mr. Koolie also makes claims against two bystanders, John Cage, a partner in the law offices he was visiting, and Elaine Vassal, a secretary at that same firm, alleging that they had a duty to come to his defense when he was being attacked, pursuant to the Massachusetts "Assistance to Tort Victims Act." He alleges that these two people were "standing nearby" during the assault, and failed to render assistance. Both Mr. Cage and Ms. Vassal are citizens of Massachusetts. The case is set for trial on November 19th, 1998. Cage was served with process on June 2, 1997 and he filed his answer on June 17th, 1997. He filed no motions prior to his answer and did not raise any 12(b) defenses in his answer. On January 27, 1998, Mr. Cage files a motion titled "Motion to Dismiss for Failure to State a Claim Upon Which Relief Can Be Granted." In an attached sworn statement, Cage declares that he was standing more than 52 feet away from the incident when it occurred. He argues in this motion that the highest court in Massachusetts has repeatedly ruled that persons standing more than 50 away from the site of an assault do not have a legal obligation to render assistance under the Assistance to Tort Victims Act. Mr. Koolie, in his reply to the Motion, admits that Mr. Cage was in fact 52 feet away from the scene of the assault. He also admits that the law of Massachusetts is as stated by Mr. Cage. However, he claims that the court should deny the motion because it is untimely. The court should:
a. Grant a dismissal of the claim against Cage, by treating his motion as a timely motion for judgment on the pleadings.
b. Grant a dismissal of the claim against Cage, by treating his motion as a timely motion for summary judgment.
c. Grant a dismissal of the claim against Cage, by granting the timely 12(b)(6) motion.
d. Deny the motion because it is untimely.
Answer: B. The court should dismiss since there is no genuine issue of material fact. Both parties agree about the relevant fact regarding how far away from the action Mr. Cage was and what the legal effect of that distance is. This is not a 12(b)(6) motion, because Cage should have known where he was standing, upon reasonable investigation, and did not file a pre-answer motion. The defense, however, is not waived and can be raised even at trial, as is clearly indicated by Rule 12(h)(2). However, in order to rule, the court must take into consideration the affidavit and the admission in the reply to the motion, which are matters outside the pleadings, thus turning this into a Summary Judgment motion (see the last sentence of Rule 12(c)). A is incorrect because even though the motion should probably be classified as a motion for judgment on the pleadings because the period for 12(b)(6) had lapsed, the court must take into consideration extraneous matter in order to rule. C is incorrect as explained above, the period for 12(b)(6) passed and an answer was filed without the argument being made, moreover, even if it was a 12(b)(6), consideration of matter other than the pleadings was essential to resolving the motion, thus turning it into a Summary Judgment motion. D is incorrect because this defense can be raised under 12(h)(2).
10. In the case described in question no. 9, on February 2, 1998, Ms. Elaine Vassall serves Mr. Koolie with a Motion for Sanctions, arguing that Mr. Koolie's claim against her is legally groundless and that he violated his duty to conduct a reasonable investigation prior to filing. On February 17, 1998, Mr. Koolie files a stipulation of voluntary dismissal of his claim against Ms. Vassall, subscribed by him and by Ms. Vassall. (Assume that this is a proper voluntary dismissal.) The court issued an order to show cause why sanctions should not be imposed because of this claim, on March 10, 1998. Can the court impose Rule 11 sanctions?
a. No, because of the voluntary dismissal of the claim on February 17, 1998.
b. Yes, if Ms. Vassall files her motion before March 10, 1998.
c. Yes, based upon the order to show cause of March 10, 1998.
d. No, sanctions would have to be imposed on his counsel.
Answer: C. This proved to be a very difficult question (fistfights?!) but a careful reading of the rule compelled only one answer. The court can impose non-monetary Rule 11 sanctions based on its show cause order. Money is not the only sanction that a party can suffer, the court can do all kinds of nasty things to parties and their counsel without directly taking their money. Note that the introductory language of 11(c)(2), clearly indicates that there are monetary and non-monetary Rule 11 sanctions, and Koolie is still a party in the case and the court has good reason to be annoyed at him and/or his lawyers. For example, in this case, the court might preclude Koolie from using Ms. Vassall as a witness in his claim against Ms. McBeal. "A" this was the most tempting, and popular, wrong answer because it suggests that the "safe harbor" provision (FRCP 11(c)(1)(A)) precludes all Rule 11 sanctions. While safe harbor has been triggered by the voluntary dismissal, it precludes: (1) all Rule 11 sanctions imposed pursuant to the never-filed Rule 11 motion by Vassall, and (2) monetary Rule 11 sanctions by the court based on its show cause order (11(c)(2)(B)). The "safe harbor" provision has kicked-in because the pleading was voluntarily dismissed before 21 days had passed from the service of the Rule 11 motion, therefore, Vassal's motion can no longer be the basis of any Rule 11 sanctions; in fact, 11(c)(1)(A) clearly indicates that the motion shall not be presented to the court after the dismissal, hence, "b" is incorrect. "D" is incorrect because neither the order to show cause nor the question specify upon whom the sanctions should be imposed, which is an interesting question. Additionally 11(c)(2)(A) again precludes only the imposition of monetary sanctions on a represented party for violation of (b)(2). Red Herrings: alternatives to Rule 11 sanctions, such as section 1927 or its inherent authority, were precluded by the specificity of the question "Can the Court Impose Rule 11 sanctions?"
Do not assume any facts not given to you. In this section of the exam, "missing facts" suggest three possibilities: (1) you need to read the question again, i.e., "it's in there somewhere", (2) I made a mistake and you may need to alert me to it (if you are convinced that this is what is going on, do not be afraid to ask the question), or (3) you need to indicate that you need to establish certain facts in order to provide a complete opinion. In this section of the exam, identifying missing facts that are necessary to a complete resolution of the issue may be precisely what you need to do in order to provide a proper response.
Do not look for issues that are not relevant to answering the question. The question asked determines the issues raised, read it carefully and answer the question I asked. Civil procedure is a broad and complex course, I have crafted the questions narrowly, do not waste your time covering issues that the question does not require you to resolve. No credit will be awarded for discussion of matters not relevant to the resolution of the question.
Citations. Since this is an open-rule exam, citation should be made to the appropriate rule, section of title 28, Constitutional Provision, etc. Case citations will be judged on a "close-enough" basis.
Hugo David and his wife Kristee (hereinafter referred to individually as "Hugo David" and "Kristee David," or collectively as "the Davids"), who lived in Green Bay, Wisconsin, were spending their honeymoon in Mackinac Island in Michigan. Apparently, they were enjoying the idyllic occasion and setting so much that they did not see the out of control horse drawn carriage that ran them down, killing Hugo and severely injuring Kristee. Mrs. David files suit against the owner and operator of the horse-drawn carriage, Carriage Tours, Inc. (hereinafter "Carriage" or "Carriage Tours"), a Corporation incorporated in Michigan, whose only operation is running the horse-drawn carriages on Mackinac Island, Michigan. The suit was filed in the United States District Court for the Western District of Michigan. Mrs. David appears on her own behalf and as the personal representative of the estate of the late Hugo David. Kristee David is a college professor in Green Bay, Wisconsin and Hugo David was a consultant with a national company and worked out of their Milwaukee, Wisconsin, and Grand Rapids, Michigan offices. Kristee David owns a home in DePere, Wisconsin, a suburb of Green Bay, where the couple lived. She still lives there. However, Hugo David also owned a home on lake Pewaukee, Wisconsin, a suburb of Milwaukee. Hugo David, while living, spent about half his time in the Milwaukee office and the other half in the Grand Rapids, Michigan, office. His checks were mailed to Wisconsin, his bank accounts were in Milwaukee and Green Bay and he was registered to vote in Wisconsin.
Carriage counterclaims against the Davids alleging, inter alia, that they jumped in front of the horses and the resulting accident caused damages to their carriage which required it to incur $35,000.00 in repair costs. Carriage Tours also impleads the owner of the horses that were pulling their carriage, arguing, inter alia, that the horses had not been properly fed and trained and this caused them to run out of the control of the driver. Carriage limits the impleader to the minimum claim(s) allowed by this procedural device. The horses were owned and leased out by the Big Horse Leasing Company (hereinafter "Big Horse"), a Delaware corporation with its principal place of business in Madison, Wisconsin. Big Horse has a large operation on Mackinac Island and leases all the carriage horses used in the island's tourism industry.
Big Horse wishes to make claims against the other parties because the two horses involved in the accident had to be put to sleep. The horses were valued at $200,000.00 each at the time of the accident. First, they file a claim against Carriage, alleging that its negligence caused the injuries to the horses that required that they be put to sleep. They then filed a claim against the Davids, alleging that their jumping in front of the horses caused the damages. The Davids respond by filing a claim against Big Horse, alleging that its negligence was the proximate cause of their damages.
Motions to Dismiss have been filed raising the following procedural defenses: (1) improper joinder of claims and parties, (2) lack of subject-matter jurisdiction, (3) lack of personal jurisdiction and (4) lack of venue. Draft a memo to the presiding judge in which you explain, as to each claim by each party, how she should rule on these motions. Organize your memorandum in the order in which the claims were filed. For the sake of simplicity, assume that there are no multiple claims by one party against another party.
Assume that Michigan law applies and that the state subscribes to joint and several tort liability and extends personal jurisdiction to the limits allowed by the Due Process Clause of the Fourteenth Amendment. Assume further that pursuing the merits of their own claims will not waive any party's procedural defenses. The timeliness of the filings is not an issue. When relevant, refer to title 28. As to each claim, identify the relevant Federal Rule of Civil Procedure.
I graded by looking for correct discussion of the relevant issues. Incorrect additions related to the relevant issues resulted in deductions. My discussion below might seem long, but this is because I take the time to discuss errors as well as correct alternative arguments, even though full credit would be given on the basis of any one of the alternatives. Correct additions were simply ignored with the extremely rare exception of the occasionally brilliant observation that earned bonus points. It was also generally important to avoid repetition, therefore, once a matter was discussed, a simple cross-reference was enough and re-discussing it did not get any additional points. There were four parties in this case and each was making claims and had claims made against them. To the extent that no substantial distinction could be drawn between Kristee David and Hugo David, either as plaintiff or as the objects of claims, this was not required. There were some distinctions that were in fact substantial, and I discuss them specifically below. Additionally, you had to address all claims by all parties in your discussion, because, rightly or wrongly, all the claims had been filed and they all had to be addressed in the court's decision. You should also address, as I mentioned during the exam, each and every motion as to each and every claim, even if some might be mooted by one of your results. It was also generally important to understand the difference between assumptions and reasonable conclusions. For example, that Mackinac Island is in Mackinac county as mentioned in 28 USC § 102 is a reasonable conclusion.
(a) Joinder. Deny the motion for improper joinder of parties. The motions for improper joinder or claims and parties required you to find a basis in the Federal Rules of Civil Procedure for the filing of each claim by each party. The basis for the motion would be Rule 21, or one of the more specific provisions, such as 14(a)[8] ([8] ("Any party may move to strike the third-party claim, or for its severance or separate trial"). The joinder issue here was Rule 20 permissive joinder of Plaintiffs. The Davids could properly join as plaintiffs in the same case, by asserting a right to relief arising out of the same transaction, occurrence or series of transactions or occurrences. That their claims against Carriage met this liberal test was not hard to argue. Rule 18(a) permissive joinder of claims was not really an issue, since I instructed you to assume a single claim by each plaintiff against each defendant. Reference to Rule 42(b) was not really appropriate. Rule 42(b) can be used after the motion to dismiss is denied to obtain a severance, i.e., separation of the claims for trial. The remedy allowed by Rule 42(b), therefore, is not dismissal.
(b) Subject-Matter Jurisdiction. Deny the motion to dismiss for lack of subject-matter jurisdiction. This is a case filed in a U.S. District court in which Michigan Law applies and each party is making only one claim against each other party, therefore, the only basis of subject-matter jurisdiction available under these circumstances is diversity. The case may be brought under diversity original subject-matter jurisdiction, provided: (1) it is a 1332(a)(1) suit between citizens of different states and (2) that they can plead more than $75,000.00 in damages, exclusive of costs and interest. Meeting the jurisdictional amount seems easy given the facts of the case. The basis of jurisdiction would be 28 USC § 1332(a)(1), since this is a dispute between citizens of different states. This basis of jurisdiction is consistent with the allowance of Art. III, Section 2 of the US Constitution. However, there may be a "complete diversity" question. Strawbridge v. Curtiss introduces the concept of complete vs. simple diversity. Simple diversity is consistent with the Constitution, but complete diversity is required under the statute. Therefore, distinctions had to be drawn between Mrs. David acting in her personal capacity and in her representative capacity. Mrs. David in her personal capacity would appear clearly to be a citizen of Wisconsin based on her residence there (discuss factors). The differences in the factors supporting the citizenship of Mr. and Mrs. David also effectively eliminated any spousal presumption of citizenship argument. The corporation is a citizen only of Michigan, under application of 1332(c)(1). It is its place of incorporation and its only place of business, let alone its Principal Place of Business. There was a question as to whether Mr. David could be called a citizen of Michigan, which would have destroyed complete diversity. The conclusion is: probably not, given his residence in Wisconsin and most other factors pointing to Wisconsin. This becomes an issue under 1332(c)(2), since a person appearing in a representative capacity is deemed to be a citizen of the state of citizenship of the decedent.
(c) Personal Jurisdiction. Deny the motion to dismiss for lack of personal jurisdiction. The Due Process Clause of the 14th Amendment imposes a requirement that the court have jurisdiction over the person of a defendant. In this case, there was General Personal Jurisdiction over Carriage because it is a domestic corporation, and thus a "resident" of the State of Michigan where it is incorporated and where its only Place of Business of located. Long-arm statutes that are required to acquire jurisdiction over a non-resident do not come into play.
(d) Venue. Deny the motion to dismiss for lack of venue. There are two alternative grounds for denial. Venue could be based on 1391(a)(1) since the only defendant is incorporated in Michigan and its most substantial contacts are with Mackinac county, which is within the Western District of Michigan (28 USC § 102(b)(2)). Thus, the corporation would be subject to personal jurisdiction, as discussed above, within the Western District, if it were a separate district (1391(c), second sentence). Venue could alternatively be based on 1391 (a)(2), since a substantial part of the events and omissions occurred in the Western District. Venue could not be based upon 1391(a)(3), despite the fact that defendant is subject to personal jurisdiction in the Western District, because that provision only comes into play if the action cannot otherwise be brought, and, it can be otherwise brought in the Western District.
(a) Joinder. Deny the improper joinder motion by the Davids. Joinder in this context meant whether the claim was allowed by the Federal Rules of Civil Procedure. Clearly Rule 13 allows the defendant to make counterclaims. Is it compulsory or permissive? As far as the joinder question is concerned, this is irrelevant, since defendant has chosen to make it and it can make it in either case. The distinction might be important for other purposes however. This would be a compulsory counterclaim if it arose out the same transaction or occurrence, the accident, that is the subject matter of the opposing party's claim. This depends on the strict or not-so-strict application of the same transaction or occurrence test. The efficient resolution of as many claims between as many parties in the context of a single trial clearly favors joinder, and a lenient application of the test. In the res judicata context, however, the test might be applied much more strictly. Still, this discussion was not necessary for resolution of the issue at hand. Finally, the counterclaim may be asserted against both the Davids as objects of the claim under Rule 20(a).
(b) Subject-Matter Jurisdiction. Deny the motion to dismiss for lack of Subject-matter jurisdiction made by the Davids. The Rules of Procedure provide for a proper basis to join a claim or party, but they do not supply Subject-Matter Jurisdiction, Personal Jurisdiction or venue. As I indicated in class and in my handouts, you must justify Subject-matter jurisdiction by finding either a source of original or supplemental jurisdiction. In this claim, subject-matter jurisdiction, again only diversity original subject-matter jurisdiction, given that state law applies and there are no multiple claims. As discussed above, there would be complete diversity, with Carriage being a citizen of Michigan and Mrs. David being a citizen of Wisconsin in both her personal and representative capacity. Therefore, there is complete diversity as required for 1332(a)(1) jurisdiction. However, there is one defect, the amount in controversy is probably less than $75,000.00, since the fact pattern tells you that the cost to carriage was $35,000.00. This presented two alternatives. You could argue that there were damages other than the repairs which might rise to $75,000.00 (e.g., loss of business), thus meeting the jurisdictional amount. Alternatively, and preferably, the question then becomes, may we use section 1367 Supplemental Jurisdiction? Well, the court has jurisdiction over the claim discussed in I, which can serve as an anchor claim, thus this is a case over which the district court has original jurisdiction. The next question: is there enough commonality or relatedness between the compulsory counterclaim by Carriage and the original claim by the Davids? The level of relatedness required by 1367(a) is the "same constitutional case," i.e., "the same case or controversy under art. III of the United States Constitution." In applying the test for supplemental jurisdiction, we take a liberal view, as contrasted to the more conservative view taken when we are applying a res judicata test. Easy to argue if you conclude that it is a compulsory counterclaim, a bit harder but still fairly easy if permissive given the facts. Therefore, the better conclusion is that this falls under the court's supplemental jurisdiction. Then you must address whether it is precluded by 1367(b). The answer is no, since it is not a claim by the plaintiff.
(c) Personal Jurisdiction. Deny the motion to dismiss for lack of PJ. Personal Jurisdiction is a defense available to the involuntary party as far a claim is concerned, that is to the object of the claim. Therefore, it would be the plaintiffs who might raise a personal jurisdiction objection here. This brings up the issue of Plaintiff consent. As I mentioned in class, by choosing to file in the Western District of Michigan, the Davids thereby submitted to the personal jurisdiction of this court. This was all that I could fairly expect from you, since I did not spend time on the scope of this consent. The consent is generally limited to claims related to their original claim, which a compulsory counterclaim clearly would fit. However, if it were a permissive and completely unrelated counterclaim, then PJ might be a problem. Alternatively, then, you do Minimum Contacts analysis over the non-resident defendants as required by the Due Process Clause of the 14th Amendment and International Shoe and its progeny. Here you would require single-tort contacts, based on the Michigan long-arm statute, which you were told extends to the limits allowed by the Constitution, and under Hess v. Pawlawski, you could probably get them. You could not really use Mr. David's contacts with Michigan (his work there) to establish PJ specific jurisdiction on a minimum contacts analysis, since there is no relationship between his work and the honeymoon. Imaginative, but no cigar. However, you might argue for General Jurisdiction over Mr. David on this basis, but you still had to get Mrs. David.
(d) Venue. Two correct alternatives: (1) The venue defense is not available because of consent or (2) even if the venue defense is available, there is a proper basis for venue. Plaintiffs would probably be deemed to have consented to venue as they did to PJ or to lack that defense under one of the many exceptions to venue defenses. The result is the denial of the motion. Alternatively, venue is proper under 1391(a)(2). Keep in mind that venue is a disfavored statutory defense. Moreover, the amended 1391(a)(2) is to be liberally applied, including picking a district with proper venue, even if it is not necessarily the best one and the possibility of multiple fact-based venues in a single case (Bates v. C&S, CB-818). Note that (a)(3) is not available, as explained above, because of the availability of (a)(2) as an alternative, even though the Davids might be subject to Personal Jurisdiction in Michigan on minimum contacts grounds, based on their alleged commission of a tortious act there (This one might be close, given that this did not result from operation of an automobile, and to use a long-arm statute in these circumstances might be questioned. Still, single-tort PJ against individuals is pretty common). Clearly 1391(a)(1) is not available, since the Plaintiffs are not residents of Michigan, or if you think that Hugo is, since not all plaintiffs are residents of the same state (although, if Hugo were a resident of Michigan, his contacts are in Grand Rapids, which is in the Western District, 28 USC § 102(b)(1)!).
(a) Joinder. Deny the motion. The joinder issue here was if this was a proper Rule 14 impleader. Under Rule 14(a)[1] the defendant can bring Big Horse in if it has a contribution claim, which is the minimum claim to be made by Defendant, as I instructed. Can you plead a contribution claim in a joint-and-several liability jurisdiction? I certainly hope so. As we saw in Clark v. Associates at page 245, when joint and several liability is the applicable tort law, indemnity claims are liberally allowed by the courts so as to fit within the "is or may be liable to the third-party plaintiff for all or part of the plaintiff's claim against the third-party plaintiff" language of Rule 14. There is also a possible 13(h) argument in which Carriage would make Big Horse a co-party with the Davids to their counterclaim, under 13(h) and Rule 20(a), but as discussed in class, I wanted you to look at impleader under Rule 14 as clearly suggested by the fact-pattern.
BTW, Florida has just voted to change its contribution rules to allow recovery of 100% of the damages only from a co-defendant who is at least 20% culpable.
(b) Subject-Matter Jurisdiction. There is 1332(a)(1) diversity original subject-matter jurisdiction over the claims by Carriage against Big Horse, since Carriage is a citizen of Michigan as already discussed, and under 1332(c)(1), Big Horse is a citizen of Delaware (its state of incorporation) and Wisconsin (where its Principal Place of Business is located). As I carefully explained in the feedback memo to your practical project, absent realignment, you look to the parties to the claim in order to decide on subject-matter jurisdiction. You would also require that the claim exceed $75,000.00 exclusive of costs and interest. Just like the Davids' claim can easily be pleaded to exceed this amount, the contribution claim would be as well.
(c) Personal Jurisdiction. This one was a real judgment call. Big Horse is a foreign corporation, since it is incorporated in Delaware and has its PPB in Wisconsin. The 14th Amendment Due Process Clause and International Shoe and its progeny require that you apply Minimum Contacts analysis. You are told, has pretty significant contacts with Mackinac Island, and thus with Michigan. Are these substantial and pervasive enough for General Personal Jurisdiction? Arguably yes, and arguably no. If they are substantial enough only for Specific Jurisdiction, then you have to argue that there is enough relatedness between their Michigan activities and this claim for specific jurisdiction to be exercised (note that the Supreme Court has taken a very conservative and limited view of related claims, as we saw in the last part of Shaffer v. Heitner). Given the relationship between Carriage and Big Horse, the strongest argument is based upon the leasing arrangement between Carriage and Big Horse. We do not know how substantial that agreement was, since you are told that Big Horse leases all the horses on the Island, but you are not told how big that market is. Additionally, you are not told how big Carriage's operations are. Identifying the questions and/or some reasonable speculation were adequate here.
(d) Venue. Motion was either moot, if you found no PJ, or should be denied. But why? Again, the two alternatives mentioned in II.d. above. Venue could properly be based on 1391(a)(2) since Mackinac is in the Western District, and that is where the horse-leasing operation is run by Big Horse (even if the animals were not necessarily trained on the Island). However, alternatively, the motion is denied because lack of venue is a defense that is not available to an impleaded third-party defendant. Note, as indicated above, to the extent that Big Horse was subject to PJ, 1391(a)(3) arguably comes into play. But keep in mind my discussion above that this only becomes necessary if no other district or venue rationale is available.
(a) Joinder. Rule 14(a)[4] was the starting point in the analysis of this claim. "[4] The person served with the summons and third-party complaint, hereinafter called the third-party defendant, shall make *** any counterclaims against the third-party plaintiff *** as provided in Rule 13." The claim for the loss of the horses is a Rule 13 counterclaim. Is it permissive or compulsory? Again, to the extent that the party has chosen to make it, and the rules permit it, this is irrelevant. It may become relevant below, however. This is not really a 13(g) crossclaim, since Big Horse and Carriage were not joined as defendants by the plaintiffs when they filed their action. It is a question of timing.
(b) Subject-Matter Jurisdiction. There is diversity between Carriage and Big Horse, as explained in part III.b. above, therefore, the court has diversity original jurisdiction over this case if the claim exceeds $75,000.00 exclussive of costs and interest. This would not be difficult to plead, since the horses were valued at $200,000.00 each at the time of their loss.
(c) Personal Jurisdiction. Carriage is subject to General Personal Jurisdiction in Michigan, as explained in I.c. above. The argument of Plaintiff Consent might also be made, but it is not the easiest path to denial of the motion, which is the appropriate result.
(d) Venue. The lack of venue motion should be denied. Venue could properly be claimed under 1391(a)(2). Was a venue objection available however? We really did not address that in class so I did not expect you to discuss it. It would seem odd to deny a venue objection to the impleaded third-party defendant, i.e., an involuntary party twice removed, and give it to the third-party plaintiff. Additionally, to the extent we call this a compulsory counterclaim to the impleader, it would fall under a recognized exception that denies a venue objection. In any case, if the defense is available, deny it because of (a)(2), or deny it because the defense is not available. Two alternatives, same points.
(a) Joinder. Rule 14(a)[6] was the starting point for this claim: "The third-party defendant may also assert any claim against the plaintiff arising out of the transaction or occurrence that is the subject matter of the plaintiff's claim against the third-party plaintiff." Here the argument about same transaction or occurrence and the application of the test could not be avoided. I anticipated the debate in II.a. above. Additionally, both Davids could be joined as objects of the claim pursuant to Rule 20(a). There are some more complicated scenarios, that we did not cover in class, where perhaps the Davids and Carriage might be joined as defendants by Big Horse under Rule 20(a), but that is not really strongly suggested by the facts of the question. 13(h) probably does not apply since the Davids are already parties. 13(g)?
(b) Subject-Matter Jurisdiction. Big Horse is a citizen of Delaware and Wisconsin and the Davids of Wisconsin. If you believed in the alternative that Mr. David was from Michigan, then complete diversity is still a problem since one of the plaintiffs is still from Wisconsin. This deprives the court of original subject-matter jurisdiction under 1332(a)(1). Therefore, we look to 1367(a). See the discussion in part II.b. above for the structure of analysis. If the claim meets the same transaction or occurrence test of Rule 14(a)[6], it will certainly meet the more lenient "constitutional case or controversy" requirement of 1367(a). The question then becomes is it precluded by 1367(b)? As I mentioned in class, it is not precluded by 1367(b). However, given which way you go in part VI.b. below, you might mention that the court should decline to exercise supplemental jurisdiction using 1367(c), in order to avoid an unfair result.
(c) Personal Jurisdiction. As discussed above, personal jurisdiction is a defense available to the involuntary party as far as a claim is concerned, that is to the object of the claim. Therefore, it would be the plaintiffs who might raise a personal jurisdiction objection here. This brings up the issue of Plaintiff consent. As I mentioned in class, by choosing to file in the Western District of Michigan, the Davids thereby submitted or consented to the personal jurisdiction of this court. Again, this was all that I could fairly expect from you, since I did not spend time on the scope of this consent. The consent is generally limited to claims related to their original claim, which a compulsory counterclaim clearly would fit. However, what happens when it is an additional party that seeks to make admittedly related claims? Alternatively to consent, you would do Minimum Contacts analysis over non-resident defendants (objects of claims), as discussed in II.c. above.
(d) Venue. Venue could be based on 1391(a)(2). However, the more difficult alternative is to question if the venue objection was available at all. Again, I spent little time on venue in class, so this was not a big priority. Additionally, the result is the denial of the motion in either case. One of the many venue defense exceptions, basically provides that if Supplemental Jurisdiction is the basis of subject-matter jurisdiction, a strong argument is made that a venue defense should not be available to the objects of such claims (who would be the ones to raise it, naturally). There is also a consent to venue argument as to related claims.
(a) Joinder. Since Big Horse took the initiative in suing the original plaintiffs, the rule basis for this claim(s) is Rule 13 rather than a 14(a)[7] claim. I am inclined to call it a Rule 13(a) compulsory counterclaim. Nevertheless, res judicata notwithstanding, the distinction between compulsory and permissive is not as big of a deal in the age of Supplemental Jurisdiction. You have to justify jurisdiction and find enough constitutional relatedness, which could be found in cases falling beyond the 13(a) compulsory counterclaim test. Since Big Horse was impleaded by the defendant, 14(b) does not come into play either. Both Davids may join in pursuing this claim under Rule 20(a).
(b) Subject-Matter Jurisdiction. There is a lack of complete diversity between the Davids and Big Horse, as discussed above. 1367(a) would allow supplemental jurisdiction to be exercised over this claim since the 1367(a) test is clearly more permissive than the compulsory counterclaim test, and there is enough constitutional relatedness. The problem is that 1367(b) clearly precludes the exercise of Supplemental Jurisdiction over this claim by the original plaintiffs against someone made a party pursuant to Rule 14. Then you could choose one of the three possibilities I mentioned in class: (1) Dismiss the Davids' claim but allow Big Horse's to proceed, under the literal language of 1367(a) and (b); (2) Allow both claims to be filed in this case, by finding a compulsory counter-claim exception to 1367(b); and (3) Dismiss the Davids' claims for lack of Supplemental Jurisdiction and decline jurisdiction over Big Horse's under 1367(c).
(c) Personal Jurisdiction. If you dismiss, then you technically do not reach this one. But you should always reach every issue raised by the question in my exams if you want to get all the points. Personal Jurisdiction would be analyzed similarly to the analysis discussed in III.c above. Additionally, there is an argument of consent, given that Big Horse seeks to make claims, just as there is in the Plaintiff consent scenario.
(d) Venue. Dismissal for lack of venue should be denied. If the defense is available, venue can easily be based on 1391(a)(2). Again, the more interesting alternative solution is whether or not the defense is available, which would also result in a denial if you deem the defense to be unavailable. Again, given my quick coverage of venue, we did not resolve this in class.
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