Class 7 - 12-19-06
- questions and answers - http://nersp.nerdc.ufl.edu/~malavet/civpro/cpexfb99.htm
Question 1 -
Essay QUESTION 1 (30%) (360 Points)
On May 1, 1998, Mr. John Smith entered the Nirvana Hospital in Milwaukee, Wisconsin. The Nirvana Hospital is operated by the Nirvana Life Sciences Corporation (hereinafter "Nirvana"). Mr. Smith was subjected to an operation on May 2, 1998. The original purpose of the operation was to remove his left leg, which, because of complications from diabetes had become gangrenous and had to be amputated. The operation was performed by Dr. Mary Cross. Unfortunately, Mr. Smith had his right leg --which until that date had been perfectly healthy-- amputated on that day. He, as the sole plaintiff, filed a medical malpractice action against Dr. Cross in the United States District Court for the Eastern District of Wisconsin. He claimed damages for assault, for pain and suffering, for continuing physical problems, for continuing medical expenses, for loss of income, and other damages claims that add up to over $2,500,000.00, exclusive of costs and interest. Dr. Cross answered the complaint by defending that she had been called to the hospital from her usual practice in Chicago, because the Nirvana surgeon who was scheduled to operate on Mr. Smith, had to handle an emergency operation. She further alleged that the patient's chart indicated that it was his right leg which was to be amputated, not the left. She attributed this error to Nirvana's employees, since they were the only ones with access to the patient's records. Therefore, she filed a third-party complaint against Nirvana, alleging that they had to compensate her for any damages that might be awarded to Smith. She further alleged that she had not been paid her $85,000.00 fee for this operation, and asked that the court award judgment therefor plus interest and costs. Nirvana was not amused. It made claims against everyone already in the case. First it sued the doctor; then it initiated claims against Mr. Smith, alleging that he was the proximate cause of his damages, because he changed the chart, in order to be able to sue and to recover a substantial judgment. Nirvana alleges that Mr. Smith is suicidal, because of his long and debilitating illness, and is looking for way to leave some money to his ex-wife and their three children. Mr. Smith is outraged and responds by filing claims against Nirvana, alleging that its employees contributed to his damages by making an error on his chart.
Assume that Wisconsin law applies to all claims, that Wisconsin is a joint and several tort liability state, and the parties have pleaded accordingly. The only basis of original jurisdiction that has been pleaded is Diversity of Citizenship. Nirvana is incorporated under the laws of California and has its Principal Place of Business in Milwaukee, Wisconsin. For Diversity purposes, Mr. John Smith is a citizen of Wisconsin. Dr. Mary Cross is a citizen of Illinois.
As to the facts described above, answer the following questions only:
1. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by Mary Cross against Nirvana.
2. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by Nirvana against John Smith.
3. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by the John Smith against Nirvana.
4. Identify and explain the source(s) of subject-matter jurisdiction for claims by Mary Cross against Nirvana.
5. Identify and explain the source(s) of subject-matter jurisdiction for claims by Nirvana against John Smith.
6. Identify and explain the source(s) of subject-matter jurisdiction for claims by John Smith against Nirvana.
Answer to Question 1:
1. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by Mary Cross against Nirvana.
Initially, you should have identified this as a rule 14(a)1 situation, which I have used in almost every one of my exams, and which was the subject of your practical project, and many class sessions, including the sessions on Joinder of claims and parties, and the special Joinder/Jurisdiction exercises that I handed out in class. The answers for these exercises are a blueprint of the applicable rules for this question, so I will not repeat myself too much.
This fact-pattern requires the pleading of a contribution claim by Dr. Cross. You should have explained how such a claim would have been drafted in this case. You had a multiple claim situation pursuant to Rule 18(a) --those pesky plurals were very important. Dr. Cross wanted to get paid for her work. You should also explain the joinder of other claims. Here, there was a choice to describe the claims as arising from the same transaction or occurrence or unrelated (path of least resistance). As explained in Clark v Associates, Joint and several Liability gives the pleading party a great deal of leeway. But, you had the contract claim for services rendered and the contribution claim for the tort claim by the original plaintiffs.
2. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by Nirvana against John Smith.
As explained in your project feedback memo, this was a 14(a)6 situation. Then Rule 18(a) was available for joinder of multiple claims. Again, I also wanted an explanation of the multiple claim joinder, as it related to these facts. Articulating the claims was also important. Finally, explaining the transaction and occurrence test, as it related to the original claims was necessary to complete this answer.
3. Identify and explain the Federal Rule(s) of Civil Procedure that provide the basis for the claims made by John Smith against Nirvana.
This is a 13(a) Compulsory Counterclaim(s). It is interesting to note the lack of cross-reference in 14(a)6 to rule 13, but this is covered by the "opposing party" language in that Rule. Then, again, an explanation of the joinder of new claims standard, and tying it to the facts of the case was expected from everyone. The the joinder of multiple claims also had to be addressed, and you had to discuss Rules 13(b) and 18(a). Then an explanation of the transaction and occurrence standard and how it related to these claims.
4. Identify and explain the source(s) of subject-matter jurisdiction for claims by Mary Cross against Nirvana.
Remember my often-repeated warning that each claim must be subjected to jurisdictional analysis these days and that finding a basis for joinder in the Rules does not provide you with Subject-Matter jurisdiction. Therefore, a proper basis of Original or Supplemental subject matter jurisdiction must be found. Here, you have been told that diversity is the only basis of original SMJ, therefore, you have to find diversity or then go to supplemental. Here, Dr. Cross is from Illinois, and Nirvana from California and Wisconsin. Therefore, there IS original diversity jurisdiction under section 1332. (1332(a)(1) and 1332(c)(1) ). As to each claim, this raised the issue of jurisdictional amount, which you had to discuss individually, and then discuss aggregation of multiple claim amounts.
5. Identify and explain the source(s) of subject-matter jurisdiction for claims by Nirvana against John Smith.
Again, each claim had to be analyzed. Because Nirvana is a Citizen of California and Wisconsin, pursuant to section 1332(c)(1), we have a problem, since diversity is the only basis of original subject matter jurisdiction. Therefore, Smith, being a citizen of Wisconsin (1332(a)(1)) we have a jurisdictional defect, even though the claims can exceed the jurisdictional amount. Which brings us to Supplemental Original Jurisdiction. Here, I insisted on proper analysis, as I taught it: is there 1367(a) jurisdiction, based on the presence of Anchor Claim(s) and does the supplemental claim arise from the same constitutional case. If so, then, was this a claim(s) precluded by section 1367(b). The answer was no, since these are not claims by the original plaintiff, but rather by the defendant.
6. Identify and explain the source(s) of subject-matter jurisdiction for claims by John Smith against Nirvana.
Again, the mantra, analyze each claim for a proper basis of original or supplemental subject matter jurisdiction. The basis of original subject-matter jurisdiction was diversity only, but there was a defect in this situation, as discussed above. Cross referencing was therefore good, but assuming that the same applied was not, i.e., you have to express your cross-reference, not assume it in your mind. Here again, you had to discuss section 1367(a) and identify an anchor claim and the constitutional same case relationship. Finally, this is when things got interesting on 1367(b), because it precludes such claims. A good discussion might have included the unfairness of allowing the claims discussed in part 5 to proceed but not these, but you had to reach a result based on 1367(b). That brings up the issue of 1367(c), which some of the best answers anticipated in discussing part 5 above, or even addressed it completely.
Same constitutional case and compulsory vs. permissive counterclaims: Some circuits have ruled that only compulsory counterclaims fall under Supplemental Jurisdiction. See, e.g., Iglesias v. Mutual life, 156 F3d 237 (1st Cir. 1998). But others have disagreed. See, e.g. "[The language of 1367(a) now permits district courts to maintain supplemental jurisdiction over counterclaims whether compulsory or permissive, so long as the counterclaims 'are so related to' the original claims that they form part of the same case or controversy". Rothman v. Emory University, 123 F.3d 446, 454 (7th Cir. 1997). Channell v. Citicorp, 89 F.3d 379 (7th cir. 1996). This note, which I have included in the feedback memos, was put to good use in some of the best answers.
QUESTION 2:
Vera wishes to sue (malpractice) the attorney she hired for representation in earlier litigation, which took place in New Jersey. Vera is a citizen of Rhode Island, and the attorney lives and is licensed to practice law in New Jersey. Vera hired the attorney in the first place because her close friend, a physician who lives and practices in New Jersey, recommended the attorney to her. Vera contacted the attorney at the attorney's office in New Jersey. The attorney visited Rhode Island in the course of the litigation to conduct pre-trial discovery of witnesses. Inevitably, the attorney also spoke with Vera by telephone, and mailed a number of documents to her in the course of the prior litigation. The attorney also billed Vera in Rhode Island, and received payment checks drawn on a Rhode Island bank. The checks were deposited in the attorney's New Jersey account. Can Vera sustain personal jurisdiction over the attorney in Rhode Island? Assume there are no issues of notice. The Rhode Island long-arm statute is at page 293 of your supplement.
Answer to Question 2
A question many students addressed was the consideration that the defendant had not initiated the relationship with Rhode Island -- the plaintiff had initiated the contact with the defendant. Two cases often cited on this point were Hanson v. Denckla and/or Kulko v. Superior Court. Many students, however, did not develop counterarguments that might have considered the fact that, unlike Hanson and Kulko this defendant freely entered Rhode Island at the beginning of the relationship (whereas in Hanson and Kulko the relationships were already long established when the plaintiffs moved to the respective states). Most students did well in identifying the contacts defendant had with Rhode Island--although a significant number of papers talked about plaintiff's check, drawn on a Rhode Island bank, as a "contact" by defendant with Rhode Island because defendant cashed the check in New Jersey. This would seem to contradict the clear precedent in Helicopteros (students who read this particular assignment got a small reward!). As to how systematic and continuous the Rhode Island contacts were, many students successfully pointed out that they were systematic and continuous within the single piece of litigation, but that the litigation itself constituted (from another point of view) only a single transaction. This was a good distinction to make from a case like International Shoe where the contacts were systematic and continuous in a qualitatively different way. Whether the contacts were related to the cause of action was something that confused a fair number of students. Most noted that defendant we. being sued for malpractice arising out of litigation, part of which had been activity by the defendant lawyer in Rhode Island. Only some considered the counterargument that perhaps the malpractice had more to do with events in New Jersey. After all, the original case was going to be won or lost (officially) in New Jersey, so wouldn't that be the state where the last event (financial loss) occurred giving rise to the tort of negligence? Please note that in this problem and others there was no need to cite any case by name, although a number of students did so. Citations sometimes helped some students express their views concisely, but the key remained the ability to make distinctions among various precedents and to develop issues (from more than one point of view) fully.
QUESTION 3:
Patrick, a lawyer and citizen of Nebraska, wants to sue Don, a New Mexico citizen, in a Nebraska state court for breach of contract. The amount in controversy is over a million dollars. As a means of ensuring that Don does not remove the action to federal court in Nebraska, Patrick assigns one percent of the cause of action, as a charitable donation, to a corporation that provides food to homeless people in Santa Fe, New Mexico. The charitable corporation is incorporated under the laws of New Mexico, and does all its business in New Mexico. The New Mexico corporation and Patrick then joined as co-plaintiffs on the suit in a Nebraska state trial court. Patrick took a charitable deduction on his federal income tax returns. At all times, Patrick openly acknowledged that his primary purpose in making the gift to the New Mexico charity was to frustrate diversity jurisdiction in the breach of contract suit. When Don files a removal petition and the case goes to federal district court, should the court remand the case to state court, or should it retain the case? Explain your position.
Answer to Question 3
This was a classic case of an attempt to destroy diversity jurisdiction through assignment of a portion of the claim. It was surprising how many people believed the assignment might be fraudulent, in the absence of evidence to support such an assumption. In fact, Patrick took a charitable deduction on his federal income tax. Is there any suggestion he committed criminal fraud? Many students correctly noted that 28 U.S.C. § 1359 prohibits inappropriate invocation of diversity jurisdiction, and is silent on inappropriate destruction of diversity. Particularly eager students noted the limitations contained in 28 U.S.C. § 1332(c)(2), but generally failed to note that by its term. that provision is limited to suits on behalf of deceased people (which Patrick is not). Many felt that the policy underlying § 1359 should, in fairness, be extended to cover collusive destruction of diversity. That would have been fair enough, except that it opens the arguments that: (1) federalism values are concerned in this area about inappropriate intrusion of federal courts into state matters, not the reverse (diversity, after all, rests on a state cause of action); and (2) while fairness may not be antithetical to policies underlying federal subject matter jurisdiction, it is not the primary concern. Moreover, students who argued a policy in favor of prohibiting Patrick from doing what he did might have considered both § 1359 and §1332(C)(2) for this -- they both indicate that when Congress wants to stop game playing by lawyers in this are, it knows how to do so. That Congress has not acted may suggest it does not disapprove of what Patrick did.
QUESTION 4:
Several years ago, Vladimir, an American citizen previously domiciled in Texas, returned to Poland to help that country moved toward democracy. Vlad himself had previously never been to Poland, but both his parents were Polish immigrants. He felt a strong emotional tie to his ancestral homeland, as well as a duty to help democratizing countries throw off vestiges of nondemocratic rule. When he believed his work was done in Poland, he moved on to the more unsettled situation in Armenia, where he continued to support what he believed were the forces of democracy. By now he no longer considered himself a Texan, but a citizen of the world. Through all this Vlad was the owner of record of twelve acres of valuable land in Texas. Technically it was all his, although he and his sister, Stephanie, had always understood that each of them owned half the land. Only his name appeared on the records of ownership. After he left Texas, Vlad forgot about the land --but the county in which the land was found did not. Every year the county tried to bill Vlad at his last home address for the taxes due on the land. The letters were never forwarded because unsettled times in Poland and Armenia also disrupted the Polish and Armenian postal services. After five years of this, the county filed suit in the appropriate state court to collect the taxes. Notice was sent by registered mail to Vlad's last address in Texas, and was physically posted on the twelve acres. The posting we" done by a deputy sheriff, who tacked a copy of the summons and complaint to every twentieth tree on the property. The result was that the deputy posted about twenty copies of the process on the property. This was all done pursuant to Texas law, which included contemplation that persons have a duty to be aware of what happens on their own real estate. On the day the deputy was posting notices, the wind was blowing in gusts up to 30 mph (i.e., it we. windy that day). The next day was a day of drenching rain, which pulled down most of the notices. They were never reported. Stephanie never knew of the suit. The Texas court entered default judgment in favor of the county. Will the default be sustained on appeal? Explain.
Answer to Question 4
III. Students could first get a few points by discussing jurisdiction. Except for notice problems, quasi in rem looked the easiest route to me, but it was okay if students preferred to try for in personam -- provided they made good arguments. on this point, it is worth noting that few students did well with the question of Vlad's domiciliary status. Remember: you keep your old domicile (in this case, Texas) until you acquire a knew one. With that in mind, can you name a point at which Vlad had both the intention and the physical presence necessary to make Poland or Armenia his domicile? Remember, he never showed an intent to reside permanently in either of those states --instead, he intended to be a citizen of the world. If you think that "the world" qualifies as a suitable description of a person's domicile, please lie down and take two aspirin. Notice was a bigger issue in this problem. Generally, the class did okay in recognizing that the plaintiff did a good job of conforming to state requirements. Most students also recognized the need to satisfy federal constitutional requirements. Given that Vlad was absent from Texas, in hand service was clearly unrealistic. Hail service was more plausible, but also ultimately unsuccessful, because foreign mail, which the plaintiff could not control, was unreliable. Perhaps the only other things the plaintiff could do was publish in a newspaper, but a Texas paper wouldn't reach him (it might or might not reach Stephanie, but nothing in the facts suggest that the plaintiff knew of her existence, let alone her interest); or the plaintiff could post notices on trees, which was done. Certainly it was foreseeable that posting would be vulnerable to rain and/or wind, as posting was vulnerable to children in Greene v. Lindsey. But in Greene there were alternative means of service (mail, or visit the home later in the day) which were not available in Vlad's case. Many who raised Greene did not consider these distinctions. Students who discussed federal Rule 4, in the context of a proceeding in Texas state court with its own rule for notice, should have there wrists slapped severely.
QUESTION 5:
National Services, a Delaware corporation with its principal place of business in Delaware, wanted to atop a competitor, Defense Products (a New York corporation with its principal place of business in New York), from taking certain steps that would have created a competitive disadvantage for National. The issues involved amounts in controversy considerably in excess of $50,000. National therefore instructed its lawyers to go to federal court in Delaware and seek a temporary restraining order (like a temporary injunction) ordering Defense not to take those actions. The cause of action was based on Delaware state law. In support of National's motion for the temporary restraining order, National provided a sworn affidavit from its president attesting to certain "facts." Indeed, both the motion and the affidavit contained allegations of "facts" which were not true. It is not presently clear whether the misstatements were deliberate falsehoods or simply careless errors.
Later, while the case was still continuing, the truth came to light. Defense then asked the court to impose sanctions on National consistent with Rule 11 of the Federal Rules of Civil Procedure. The lawsuit between National and Defense is continuing, but right now the court must rule on Defense's motions for sanctions under Rule 11.
Rule 11 may be found in your supplement. It says, in essence, that if a party or its attorney files documents in bad faith, or after failing to make a reasonable inquiry to determine if the information in the documents is true, both the party and/or the attorney may be forced to pay the opposing side's expenses accrued in opposing the documents. Rule 11 expenses may include legal fees. In an earlier unrelated case, based on federal question jurisdiction, the United States Supreme Court held that under Rule 11, an aggrieved party could also receive punitive damages.
Should Defense's motion for sanctions be granted? Explain your answer.`
In addition to the preceding facts, you may (or may not) want to consider the following information.
1. The court will apply Delaware substantive law in the case.
2. In Delaware, you may assume there is a tort called "malicious prosecution." The elements of the tort are:
(a) previous lawsuit against victim brought by the other party;
(b) the claims in the suit are known to the other party to be false;
(c) previous lawsuit is won by the victim;
(d) victim was damaged by the previous lawsuit.
3. However, Delaware has no procedural rule like Rule 11. The policy of the Delaware courts has been not to sanction persons or lawyers for documents carelessly filed, but to impose punishment only for knowlingly filing documents containing falsehoods. Even then, Delaware does not permit the awarding of attorney's fees to the aggrieved party.
GENERAL COMMENTS: This was not an examination requiring a great deal of facility in spotting issues. It was necessary, however, to develop issues with skill. It was particularly necessary to identify potential arguments on both sides of various points.
The class as a whole did well on the examination. To the extent that weaknesses showed up, it was primarily on the point of considering fully arguments which might contradict the positions students reached. This is obviously a matter to which all lawyers must devote attention.
To the extent that issue spotting was a problem, it showed up in question three -- but such matters were not a major feature of the test, and the weaknesses displayed were generally much less than glaring.
Answer to Question 5
This is obviously an Erie problem. A disappointingly large number of students asssumed that because Rule 11 was promulgated by the Supreme Court, it automatically satisfied the Rules Enabling Act. Such is not the first step in the Hannah analysis, and some facts in the problem lent encouragement to those who looked more closely at this problem. Could punitive damages be arguably substantive? How about comparisons to the substantive Delaware law of malicious prosecution? You didn't need to conclude that Rule 11 is unlawful to recognize that there are arguments to be made. As to the second element of Hannah, the direct collision, the class did pretty well in being cautious about this and raising good analogies both to Walker v. Armco Steel and to Hannah itself. Thoughtful arguments were made by many students reaching conclusions of either a collision or a non-collision. Points of collision that should have been considered were: (1) different standard of wrongdoing (knowing falsehood versus merely stupid carelessness); (2) ability to collect attorney's fee-; and (3) punitive damages or not. An acceptable fourth was a distinction between recovery while the case continued (federal Rule 11) or being made to wait until the case ended (state malicious prosecution). It was a mistake to conclude that because the state had no formal rule on point, that it had no procedure. Recall that in Byrd v. Blue Ridge the state procedure we. simply a traditional practice of letting the judge (not the Jury) decide a particular issue. Some students struggled with the application of Justice Harlan's concurrence in Hannah, which I found surprising. Do you think the plaintiff, who in this case chose the federal forum, would choose a federal court so that more pro-defendant Rule 11 would apply? There were some counterarguments to that point, but it was surprising how many students, in the course of otherwise solid answers, slipped by that. But on the whole, the class did well with this problem.
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