The University of Florida College of Law

Civil Procedure Spring 1997

Prof. Pedro A. Malavet

EXAM FEEDBACK MEMO

Procedure for Examination Review. I will discuss exams individually with students, by appointment, beginning with the 3rd week of the Fall Semester, i.e., the week starting on September 2, 1997. You must review your exam and my feedback memorandum before scheduling an appointment with me. If you wish to review your exam, please pick it up from my secretary, Ms. Smith. You may make a copy of it and return the original to Ms. Smith.

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.

SECTION I: MULTIPLE-CHOICE (50%; 200 POINTS)

1. Ronald McGoo was illegally arrested by four Philadelphia Police officers; he was released four hours later, upset, but not having suffered any serious physical injury. The actions of these officers can be argued to have violated Mr. McGoo's rights under the Constitution of the United States. Such a claim would be both reasonable and substantial. The facts giving rise to this claim occurred in the city of Philadelphia. All the officers involved live in Philadelphia, Montgomery and Lancaster counties in Pennsylvania, and are citizens of Pennsylvania. Mr. McGoo, files suit in U.S. District court for the Eastern District of Pennsylvania, he claims federal-question jurisdiction. The defendants have timely moved for dismissal for lack of subject-matter jurisdiction, personal jurisdiction and venue. How should the court rule?

a. The court should grant a dismissal, for failure to allege and meet the jurisdictional amount.

b. The court should deny the dismissal, because this district court has personal jurisdiction over the defendants, and original jurisdiction and venue over this case.

c. The court should grant a dismissal, because he suffered no damages.

d. None of the above.

ANSWER: B. There is a properly pleaded federal question matter, therefore, the court has original jurisdiction over the case. The defendants are all citizens of Pennsylvania, and subject to PJ there, and venue is proper under 1391(b)(1) and (2). A is incorrect, there is no jurisdictional amount requirement for federal question cases. C is incorrect, see Carey v. Piphus. D is incorrect because b is correct.

2. Walter Caffey has filed a diversity suit against Central Perk, Inc., in the U.S. District Court for the Southern District of New York. All relevant acts occurred within this district. He claims, exclusive of costs and interest, more than $75,000.00 in damages. Central Perk, Inc. filed an answer 10 days after they were served with process. Paragraph number 1 in the complaint, reads as follows: "This court has jurisdiction over this case pursuant to 28 USC § 1332, because, at all times pertinent hereto, Plaintiff was a citizen of New York, and defendant Central Perk, Inc., was a citizen of Connecticut, where it is incorporated, and of New Jersey, where its principal place of business is located." The response to this allegation in the answer was: "Paragraph 1 of the complaint is a legal conclusion requiring no response from this party." Two years after the suit was filed, and after three orders threatening the imposition of severe sanctions, Central Perk produced it's certificate of incorporation, which disclosed, for the first time, that it was incorporated in New York. The applicable statute of limitations has expired. Central Perk has just moved for dismissal for lack of subject-matter jurisdiction. What should the Court do with this motion?

a. The court should deny this motion, as a sanction for discovery misconduct.

b. The court should refuse to entertain this motion, because it is untimely.

c. The court should grant this motion.

d. The court should deny this motion, because the answer to this allegation was improper, and the allegation should be deemed admitted.

ANSWER: C. The court should grant this motion. Diversity subject-matter jurisdiction is lacking because there is no diversity. Moreover, 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, b is incorrect. A is incorrect as well. Discovery sanctions might have been appropriate under these circumstances in a proper federal case, and Rule 11 sanctions may very well be appropriate in this case even after dismissal, however, the case itself must be dismissed. D is not correct. Improper denials do indeed result in matters being admitted, but parties cannot admit subject-matter jurisdiction.

3. Pieter Franks, a citizen of Holland, who lives in Amsterdam, was visiting Disney World in Orlando, Florida, in the Spring of 1996. He was driving a van rented from RENT-O-RAMA, a corporation incorporated in the State of Florida, with its principal place of business in Orlando, Florida. During the third day of his visit, the van, broke down while he was driving from his hotel to the park. Mr. Franks called RENT-O-RAMA for emergency service, and was promptly picked up by another van driven by an employee of RENT-O-RAMA. The driver negligently got into accident; luckily, no-one was injured, but Mr. Franks' video camera, valued at the time at $20,000.00, was destroyed. Upon his return to Holland, Mr. Franks discovered that on the day he had arrived in Orlando the clerk at the RENT-O-RAMA airport counter had stolen his VISA credit card and used it to charge $19,575.72 worth of gasoline used by RENT-O-RAMA. Five months before the trip to Florida, Mr. Franks had been contracted by RENT-O-RAMA to produce a video commercial. The company had agreed to pay him a fee of $35,000.00 and to reimburse him for expenses incurred in the production. However they have reneged on this contract and refused to pay. Mr. Franks spent $12,575.00 in relation to the commercial production. Applicable law makes RENT-O-RAMA liable for the damages caused by their employees. Franks files a diversity suit in the U.S. District Court for the Middle District of Florida, against RENT-O-RAMA, claiming as follows: (1) I: Negligent Destruction of the camera, at its value at the time it was destroyed; (2)II: Misappropriation of Funds for the credit charges, which, under Dutch law, he was forced to pay in full; (3)III: Breach of Contract, with damages for lack of payment of the fee and accumulated expenses. RENT-O-RAMA has filed a timely motion to dismiss the case for lack of subject-matter jurisdiction. How should the court rule?

a. the court should deny this motion, because the jurisdictional amount does not apply to suits by foreign citizens.

b. the court should grant this motion, because each count does not exceed the jurisdictional amount.

c. the court should grant this motion, because of improper joinder of claims, since they do not arise out of the same transaction or occurrence.

d. None of the above.

ANSWER D. The court should deny the motion. There is proper alienage jurisdiction, pursuant to 1332(a)(2), and the jurisdictional amount is met. The claims, though related only in the identity of the defendant, are properly joined in a single complaint pursuant to Rule 18(a), and we aggregate the amount of all claims by a single plaintiff against a single defendant to exceed the jurisdictional amount. A is incorrect because jurisdictional amount applies to all 1332(a) cases. B is incorrect because counts are aggregated, not treated individually. C is incorrect, any claim may be joined under Rule 18(a).

4. Rachel Mansfield has sued Joseph Big in the U.S. District Court for the Middle District of Florida. All relevant facts occurred within this district and the court has proper jurisdiction over the subject-matter of the complaint. Mr. Big has visited Florida only once in his lifetime, and he is domiciled in North Carolina. Ten days after being served, he filed a motion to dismiss for lack of venue. Five days later he filed an answer in which he raised no additional 12(b) defenses; he also chose not to make any counterclaims. Ninety-three (93) days after filing his answer, Mr. Big sought permission to file an amended answer in which he argued, among other things, that the court lacked personal jurisdiction over him. Ms. Mansfield did not file a reply to the answer. The court, in its very first order related to this case, gave leave to file the amended answer. Should it now consider the personal jurisdiction objection?

a. No, because that defense has been waived.

b. Yes, the court should dismiss because the defendant lacks minimum contacts with the forum state.

c. Yes, since the objection was raised in a properly-filed amended answer, it may be considered.

d. No, because the amendment was untimely.

ANSWER: A. 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 cannot be raised in an amended answer. B is incorrect because the defense has been waived, moreover, minimum contacts is not an issue on this fact-pattern. C and D are incorrect, because the defense has been waived, it cannot be raised in the answer after a motion is filed, and also because 12(h)(1)(B) allows defenses to be raised only in an answer amended as of right (Rule 15 allows three methods of amendment, but only one is proper under rule 12(h)(1)(B)).

Red Herrings: Counterclaim, reply from Plaintiff, and court order: the counterclaim turns a simple answer from a pleading to which no response is required under 7(a), into one to which a response is allowed, therefore, an answer to the counterclaim would shorten the 20-day period for automatic amendment; if we had not had a motion, this might have come into play as to the timeliness of the amendment. Another possibility is to seek permission to amend the Rule 12 motion. This is arguably possible, but the language of Rule 12(h)(1)(B) clearly indicates that the amendment must be to a pleading, and Rule 7(a) does not mention Rule 12 motions.

5. Mr. Pierre Morè, a citizen of France, who is a Permanent Resident Alien in the United States, is an Associate Professor of Romance Languages at Emory University in Atlanta, Georgia, where he lives with his wife, Michelle Brown, an American Citizen, who has lived in the Atlanta area all her life. He has filed suit in the U.S. District Court for the Northern District of Georgia, Atlanta Division, against Georgia Wine Distribution, Inc., for negligently destroying his wine collection, valued at $200,000.00 at the time of its loss, according to his complaint. GWD is a South Carolina Corporation, with its principal place of business in Lawrenceville, Gwinnett County, Georgia. Mr. Morè, 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 GWD's Lawrenceville warehouse. GWD has moved to dismiss the complaint for lack of subject-matter jurisdiction. Should the court dismiss the case?

a. Yes.

b. No, there is alienage jurisdiction and the claim is for more than $75,000.00.

c. No, because the corporation is a citizen of both Georgia and South Carolina.

d. None of the above.

ANSWER: A. The last sentence of 1332(a) covers the special case of permanent resident aliens, and deems them to be citizens of Georgia in this case, and since the corporation is a citizen of both Georgia and SC (1332(c)), there is a lack of complete diversity. B is incorrect, the amended language of 1332(a) precludes alienage and diversity jurisdiction in this situation. C is a correct statement of the citizenship of the Corporation under 1332(c)(1), but an incorrect legal result. D is wrong, because A is correct.

6. Jerry Seinfeld sued Cosmo Cramer for the tort of assault and battery with weird hair. He claims over $75,000.00 in damages exclusive of costs and interest. He has filed the action in the U.S. District Court for the Southern District of New York, where all the relevant acts occurred. He claims diversity of citizenship because he is a citizen of New York, and Cosmo Cramer, is a citizen of Texas. After initially filing motions contesting these, Mr. Cramer has now conceded that the courts in New York have personal jurisdiction over him and venue over the case. During the first day of trial, thirty-nine (39) months after the case was filed, and thirty-seven (37) months after he was served with process, Mr. Cramer makes a motion to dismiss for failure to join an indispensable Rule 19 party, his hair dresser, one George "Scissors" Costanza, a citizen of New York. Can the court consider this motion?

a. Yes, because joinder is not feasible.

b. Yes, because the motion is timely.

c. No, because the motion is not timely.

d. No, because the court would have supplemental jurisdiction.

ANSWER: B. The motion is timely pursuant to 12(h)(2), a motion to dismiss for failure to join a Rule 19 indispensable party may be made at trial. A and B both address the merits of the motion. That is not the question, the question is whether the motion may be considered, not how it should be resolved. Moreover, you are not given the facts needed to resolve the Rule 19 question. C is incorrect for the same reasons that b is the correct answer.

7. A lightning strike burned down the home of John M. Lombardi, President of the University of Florida, and citizen of this state. Nationwide Insurance Company, which provides Mr. Lombardi's homeowner's policy, sent an agent to assess the damage. The agent prepared a written report of the damages and took a written statement from Mr. Lombardi, in order to evaluate the claim and pay him what was covered by the policy. Coach Steve Spurrier, who was in the house at the time of the incident, suffered severe burns as a result of the fire. Coach Spurrier is a citizen of Florida. He has sued Nationwide Insurance Company, claiming more than $75,000.00 in damages, exclusive of costs and interest, and diversity jurisdiction, in the U.S. District Court for the Northern District of Florida. He claims that the house lacked a proper a lighting protection system. Nationwide is a Pennsylvania corporation, with its principal place of business in New York. Spurrier did not join President Lombardi in his suit, but you may assume that applicable Florida law permits him to proceed in this fashion. Nationwide moves to dismiss, for lack of subject-matter jurisdiction. The court should:

a. Deny the dismissal, since there is diversity of citizenship, and the claim exceeds the jurisdictional amount.

b. Grant the dismissal for failure to join an indispensable party, President Lombardi.

c. Grant the Dismissal.

d. None of the above.

ANSWER: C. The court should grant the dismissal, 28 USC § 1332(c)(1). This would be a direct action against the insurance company, in which the insured is not joined, and thus the company is deemed to be a citizen of Florida. A is incorrect, as discussed before, were it not for 1332(c)(1)'s direct action provision, "A" would have been the right answer. B is incorrect because C is a better answer, and because you are told that Florida law allows this suit to proceed.

8. John Jones, a citizen of Arizona, wishes to sue the California Grape Company ("CGC"), a California Corporation. CGC has its principal place of business in Fresno, California, where most of its facilities are located. Its only business location outside of Fresno is in Eureka California. Mr. Jones is a long-distance truck driver. He alleges that he was injured while loading a truckload of grapes at CGC's Eureka warehouse, when CGC employees negligently dropped a heavy wood box, used to store grapes, on his shoulder. He suffered serious injuries as a result of this accident. Mr. Jones wishes to file his suit in a United States District Court. He can properly claim only diversity jurisdiction in the Federal Courts. In what District or Districts would venue be appropriate in this case, under the facts supplied herein?

a. In the Northern and Eastern Districts of California.

b. In any District where CGC is subject to Personal Jurisdiction at the time the action is commenced.

c. In any District where CGC could be found.

d. In any District in California, where CGC could be found.

ANSWER: A. 28 USC 1391(b) and (c); 28 USC 84. B requires facts not given herein, and, more importantly, points to the exceptional nature of 1391(a)(3), which is only available when no other district is available. C refers to the difference in language between 1391(a)(3) and (b)(3), the one that applies to this case is (a)(3) because it is only a diversity case. B, C and D go to the difference between Personal Jurisdiction, which is state-wide, and venue, which can have a narrower geographic focus.

9. Paul Carter, a citizen of Ohio, was involved in an auto accident while driving from Ohio to Daytona Beach for Spring Break in 1996. The accident occurred on I-75, in Alachua county, Florida. Mr. Carter has sued the Driver of another vehicle involved in this accident, John Davis, a citizen of Alabama. His claim is founded solely on diversity, and exceeds $75,000.00, exclusive of costs and interest. The case was filed in the U.S. District court for the Northern District of Florida. This was a three-vehicle accident, and Mr. Davis impleads United Parcel Service, the corporation that owned and operated the third vehicle. UPS is a Delaware Corporation, with its Principal Place of Business in Nashville, Tennessee. This impleader is proper under applicable law. Can Mr. Carter make a claim in excess of $75,000.00, exclusive of costs and interest, against UPS in this case?

a. No, because there is no supplemental jurisdiction.

b. Yes, if the claim arises out of the transaction or occurrence that is the subject matter of Carter's claim against Davis.

c. Yes, but only if it is a compulsory counterclaim.

d. Yes, if there is supplemental jurisdiction.

ANSWER B. Once the party is properly impleaded, the plaintiff may file claims arising out of the same transaction or occurrence that is the subject of the original claim. Rule 14(a). There is complete diversity among all parties, and I told you that the claim would be in excess of $75,000.00, so Supplemental Jurisdiction is not needed. This red herring excludes both a and b as incorrect. C is incorrect because UPS has not made any claim for the original plaintiff to counter, so Rule 13(a) is not relevant, even though it also has a same transaction or occurrence test. B is certainly the superior alternative among those given. It is also possible that Mr. Carter could make other claims, pursuant to rules other than Rule 14, but the appropriate starting point is rule 14(a).

10. Paolo Roberto Souza, a citizen of Brazil, who resides in the city of Curitiba in the state of Paraná, in that country, is injured in a fall at Disney World, an amusement park located completely within Orange County, Florida. He files suit against the operator of the park, Disney World Orlando, Inc., a Florida Corporation, with its Principal Place of Business in Orlando. He claims jurisdiction based only on section 1332 of Title 28. The suit is filed in the U.S. District Court for the Northern District of Florida. The claim is well in excess of $75,000.00, exclusive of costs and interest. Assuming the filing of a timely, proper motion, should this case proceed as filed?

a. Yes, on the basis of alienage jurisdiction.

b. Yes, on the basis of diversity jurisdiction.

c. No, because the court lacks subject-matter jurisdiction.

d. None of the above.

ANSWER: D. The Northern District lacks venue over this case. There is proper 1332(a)(2) alienage jurisdiction, with the claim meeting the jurisdictional amount. Thus, b and c are incorrect. However, upon a timely proper motion, the court should dismiss for lack of venue, or perhaps transfer it to the Middle District, but in any case, the case should not proceed as filed.

PART II: ESSAY QUESTIONS

ESSAY QUESTION NO. 1 (30%; 120 POINTS)

HDM Corporation ("HDM") is an Ohio company engaged in the business of designing and manufacturing specialty industrial equipment. In late 1994 and early 1995, over an approximate six month period, HDM designed and manufactured a "horizontal coating machine" for CTW Company ("CTW") for use in coating metal pipes with concrete. This is a major piece of machinery, costing $2,747,625.00. HDM was aware that the machine was destined for CTW's Palatka, Florida, facility, because CTW, a Florida Corporation, with its Principal Place of Business in Palatka, contacted them and asked them to design and construct this machine specifically for this plant. HDM sent its chief designer to Florida on two occasions to study the Palatka plant, these observations were considered when preparing the design. All design and construction took place at HDM's plant. HDM placed the machine on flatbed trucks at their plant and CTW shipped the machine to Palatka, Florida. HDM then sent its chief designer, two engineers and two other employees to Palatka to supervise the final installation of the machine.

Plaintiff Robert Jones, was employed by CTW in its Palatka plant. He allegedly sustained injuries when one module of the horizontal coating machine unexpectedly rolled over on his lower extremities, which required amputation of both limbs. He and his wife, Kate, brought an action in negligence and strict liability against HDM in U.S. District for the Middle District of Florida.

Jurisdiction is properly based on diversity, the claim exceeding $75,000.00, exclusive of costs and interest, and there being diversity between the Jones' who are citizens of Florida, and HDM, an Ohio corporation with its only place of business in Ohio.

HDM has moved to dismiss the complaint for lack of personal jurisdiction, contending that it lacked sufficient minimum contacts with the state of Florida to subject it to jurisdiction in this state. Affidavits and depositions submitted in support of the motion show that HDM is an Ohio corporation with its sole office and only place of business in HDM, Ohio. The company is not authorized to do business in Florida, does not solicit business in Florida and has no office or agent for service of process in this state. HDM also owns no real or personal property located in the State of Florida.

Florida Statute Section 48.193 provides, in relevant part:

(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself and, if he is a natural person, his personal representative, to the jurisdiction of the courts of this state from any cause of action arising from the doing of any of the following acts: * * *

(b) Committing a tortious act within this state.

* * *

You are a law clerk for the District judge who presides over this case. She has instructed you to draft an opinion denying HDM's motion to dismiss for lack of personal jurisdiction. Draft this opinion.

ANSWER:

I designed this question by adapting the facts of GILLINS v. TROTWOOD CORPORATION, 682 So. 2d 693; 1996 Fla. App. LEXIS 11745 (COURT OF APPEAL OF FLORIDA, FIFTH DISTRICT).

It is always good to start an opinion by explaining why we are here. First, we have "Absent Defendants", i.e., non-residents. The Due Process Clause of the 14th Amendment precludes states from exercising jurisdiction over such people if they lack certain minimum contacts with the forum. International Shoe, Pennoyer v. Neff . The federal system follows rules similar to those of the that would apply in state court when they decide on minimum contacts. FRCP 4(k)(1)(A).

The starting point is always the State Long-Arm Statute. First, the corporation is a "Person" for purposes of the statute. The statute uses the wording committing a tortious act "within" the state. I thought that students could take, and you indeed did take different tacks in this area. The list of possibilities, generally speaking: 1) Negligence in a) Observation and/or b) Installation and/or c) Design and Construction of the machine, which occurred in different places; 2) Strict Liability or 3) Gray , such as it is, after World-Wide, Asahi, Burger King, Calder, Keeton v. Hustler.

After finding the acts of the corporation fell within the coverage of the statute, you then had to determine if the application of the statute was constitutional. The test: Minimum contacts + Traditional Notions of Fair Play and Substantial justice. You had to show that there was Purposeful Availment and that the Nature and Quality of the contacts justified the exercise of personal jurisdiction. You could take a few different tacks: 1) Single Sale of a Specialty Product. Gray, World-Wide, Asahi (two cases at page 746, control of distribution, special design) or 2) Complex Relationship, Burger King. Next, comes balancing of the different factors: Opening Courts to Citizens, Regulating where damage occurs in-state, individual vs. corporation, burden on defendant, the location of witnesses and evidence, etc.

Finally, the jurisdiction we are exercising is Specific Jurisdiction. First, the contacts are not such as to expose HDM to any type of suit, but only to one related to its activities within the forum state. Helicol. Second: what do we have here an "Ultimate Consumer" or "User"? See Burger King at page 732.

ESSAY QUESTION NO. 2 (20%; 80 POINTS)

Explain, in a short essay, why we distinguish "Procedure" from "Substance".

ANSWER:

In this answer, I was looking for content much more than structure. The content I wanted was a discussion that showed a grasp of the policy issues raised by the distinction between substance and procedure, in the context of the entire course. I would categorize the reasons for the distinction as Theoretical, Practical and Compulsory. This is also, basically, the order in which we covered them throughout the course.

A good answer started with a discussion of the definitions and of the theory, the ideas behind those definitions. The discussion should incorporate reference to concepts like "Procedure", "Substance", "Fairness", "Substantive Justice" and "Procedural Justice", "Rights vs. Remedies", which should be familiar from the notes of our very first class session. We started with a theoretical discussion of what is procedure, what is substance, what it substantive justice and what is procedural justice. In other words, why do we have this course and these rules?

Practical Reasons. Remember Rule 1, the "just, speedy, and inexpensive" resolution of disputes. Concepts such as uniformity, flexibility and efficiency came into the discussion. The judicial enforcement of rights would simply be impossible without some rules.

Compulsory. Basically, by compulsory, I mean constitutional and, perhaps, pseudo-constitutional. Initially, Fuentes v. Shevin and its progeny, which explains the idea that the Due Process clause limits the power of government when enacting and enforcing civil procedure rules. Fuentes also really illustrates the need for procedural justice in theory, in practice and as a matter of constitutional law. Pseudo-Constitutional? Erie. The competing constitutional interests of sovereignty and federalism, of horizontal or vertical uniformity of rules.

Fuentes and Erie, but especially Erie, and its progeny, point to the problems of classification. However, in spite of those problems, we keep trying to make the distinction. Why? My "necessary evil" statement of the final days of class.