Class 8 - 1-09-07
Class 8 - 1-09-07 Class
link - http://home.att.net/~slomansonb/examscivproI.html
Essay Question 1 of 2: Bill's mother dies. He thus flies from his domicile in San Diego, California to the funeral in Pittsburgh, Pennsylvania. He rents a car at the airport and has an automobile accident while driving to a relative's house in Pittsburgh. After the funeral, Bill returns to his desk job in San Diego.
Bill retains a Pittsburgh lawyer who sues Debbie, the Pittsburgh resident who was driving an unusual sports car at the time of the accident. Lawyer files Bill's suit in a Pennsylvania state court, based on Debbie's alleged negligence. In addition to property damages for the car in which he was driving, Bill's complaint seeks compensation for a temporary injury to his arm which bothered him only on the day of the accident.
Bill's complaint further alleges that Debbie was operating her vehicle in violation of the Federal Highway Safety Act (FHSA). That Act prohibits the operation of cars–designed exclusively for racing in competitive events–on any public highway in the United States. Debbie was driving a prohibited racing car to the airport, when she collided with Bill.
Debbie's lawyer answers the complaint and timely removes this case to the federal court in Pittsburgh.
Does the federal court have subject matter jurisdiction to hear this case?
Answer to Question 1
I. SMJ
Subject matter jurisdiction is the power of the court to hear and determine a particular controversy. A court exercises SMJ when there is a Federal Question or Diversity between parties.
II. Federal Question
A court exercised Federal Question jurisdiction when the cause of action arises from a Federal Statute, Treatise, Constitution, or construction matter. Here, Bill alleges that Debbie operated her vehicle in violation of the Federal Highway Safety Act. The act prohibits the operation of cars designed exclusively for racing in competitive events. Because Debbie was driving a prohibited racing car when she collided with Bill, Debbie's actions appear to fall under the Federal Law.
III. Diversity
A court exercises Diversity jurisdiction when no plaintiff and defendant are domiciled in the same state and the amount in controversy exceeds $75K. Domicile is presence in a state and intent to remain.
Bill is domiciled in California. If residence is equal to domicile, then the domicile requirement is met.
The amount in controversy must exceed $75K. It must appear to a legal certainty that this amount will not be met to justify dismissal. Bill was hit by Debbie while he was in a rental car. Because the type of car is unknown it is hard to determine the value of damages to the car. However, Bill seeks compensation only for a temporary injury which only bothered him the day of the accident. Id doesn't appear the injuries sustained will come close to the jurisdictional minimum unless the car he was driving was very expensive.
IV. Removal
A defendant may remove a case from state to federal court as long as there is concurrent subject matter jurisdiction. The Federal courts have jurisdiction over the FHSA claim because it arises under a Federal Law–the Federal Highway Safety Act. State courts are presumed to have jurisdiction over matter within their state, therefore, concurrent jurisdiction exists.
A non-resident defendant may only be removed from state to Federal court if the case is not based on diversity. Because diversity SMJ is being alleged fro the new claim, and because a Federal Question has been alleged, the defendant can properly remove the Federal Question case from state to Federal Court.
However, the cause of action for negligence will not be removable because this cause of action would be based on diversity SMJ, unless the court can gain supplemental SMJ over the negligence claim.
V. Supplemental Jurisdiction
The power of the court to preside over matters for which it otherwise would not have SMJ. A court may exercise supplemental jurisdiction over claims when there is a common nucleus of operative fact. Suit for negligence based on the auto accident, a state claim, and Debbie's operation of her vehicle against the FHSA. Because both claims stem from the same accident, it would be judicially economic to try both claims together, as the same witnesses and testimony will be needed for both claims.
Therefore, although the court would not otherwise have SMJ over the state negligence claim, it can piggy back on the Federal Question.
Conclusion
The Federal court does have SMJ over both claims. It has original SMJ over the Federal Question claim and supplemental SMJ over the negligence (state) claim.
Question #2
Essay Question 2 of 2: Pam and Donna are sisters who are domiciled in New York. Their aunt Audrey is also domiciled in New York. Audrey dies. Her will appoints Central Hanover Trust (CHT), a New York corporation, as the executor of Audrey's estate. Pam and Donna then decide to retire and move to Dade County, Florida. They keep in touch with CHT, who is paid for administering Audrey's estate.
Audrey's will provides CHT with the discretion to make an early distribution of money from the estate, to any beneficiary who can demonstrate financial hardship. A year after the sisters move to Florida, and long before the estate is finalized, Donna files a hardship claim. CHT thus makes an early distribution of money to which Donna would be entitled under the will. Pam sues CHT in the appropriate federal district in Florida, alleging that CHT failed to properly substantiate Donna's claimed hardship. CHT moves to dismiss this claim, on the basis that the court lacks personal jurisdiction over the defendant.
Assume that a Florida statute authorizes a plaintiff to sue in various places, including the county wherein the plaintiff resides. Pam's lawyer thus filed this suit in the federal district containing the county wherein Pam resides. CHT's lawyer timely attacks the complaint, on two additional grounds: Florida's statute may not be applied to this case, because a plaintiff may not lay venue in the federal district where the plaintiff resides (do not argue jurisdiction in this portion of the defendant's attack). CHT also contends that this case cannot proceed without Donna.
How should the court rule on the defendant's motions?
Answer to Question #2
CHTs First Motion 12b2–No IPJ
Substantive due process under the 5th and 14th Amendments must be analyzed under Shoe and its progeny. In determining if a non-resident may be amendable to suit in a distant forum you must look at two factors: 1) Is there an applicable long-arm that grants the state power to bring in a non-resident defendant, and 2) would it comport with constitutional notions of due process?
Nothing under these facts suggests the existence of a long-arm. States generally need statutory authority to make non-resident defendants amenable to suit. Assuming that there is an applicable long arm: either a 2 step that is statutorily on point or a 1 arm that allows service out to due process limits, then the next issue is due process.
Since the 1945 Shoe decision, courts have required that minimum contacts between the non-resident defendant and forum state be present. A subsequent line of case has added additional elements courts will balance in determining whether bringing the non-resident defendant into the forum would conform with traditional notions of fair play and substantial justice.
The factors that courts look at are:
1. Minimum contacts (Shoe)
2. Purposeful availment (Denckla)
3. Reasonable anticipation (WWVW)
Under a minimum contacts analysis, courts examined the quantity and quality of contacts with the forum state and the connection of the contacts with the cause of action. Here, the facts don't allude to many minimum contacts. The corporation is incorporated in NY. Nothing about offices or branches in Florida. However, it is not a very far stretch to assume that many retired customers live in Florida. Moreover, the fact that Pam and Donna live in Florida and that the case of action is related to the Florida contact (distribution of money to Donna) makes a fairly strong case for at least some minimum contacts.
The courts will also examine whether CHT purposefully availed itself to the forum state's laws, services or other benefits. Not a lot of facts here, but again, it is no great stretch to assume that CHT benefits from the forum state's laws with respect to any customers in Florida (there are at least two). CHT will no doubt argue that the purposeful availment argument is weak in that Pam and Donna moved, on their own volition, to the forum state. Thus, hardly evidencing any purposeful availment on the part of the CHT. A court will have to balance both sides of the argument. However, assuming that CHT was more than just Donna and Pam as customers, a court will likely find that CHT had, at some level, purposefully availed itself to benefits of Florida.
A third factor courts examine is whether CHT could reasonably anticipate being hailed into the distant forum. Since Pam and Donna are customers, and have kept in touch with CHT while in Florida, CHT had at least some notice that Florida may be a forum state. Moreover, assuming existence of many retired customers in Florida, perhaps this argument becomes stronger.
Obviously CHT will argue strongly against the reasonable anticipation factor. The fact that Pam and Donna reside (not clear if they are) in Florida does not make CHT amenable to suit there! This argument carries even greater weight when one considers the fact that the original contact/executorship was executed in NY!
This issue of constitutional fairness and substantial justice is a close call. However, given a totality of the factor, a court would likely conclude that CHT is amenable to suit in Florida. That is, requiring CHT to defend in Florida wold not violate contemporary constitutional notions of due process, fair play and substantial justice under international Shoe and its progeny.
CHTs 12(b3) Motion
Under 28 USC Section 1391, a corporation may be amenable to suit in any venue where in personam jurisdiction is acquired. That is, venue is proper if IPJ can be established over the defendant corporation. (Different if an individual. Under Section 1391, a venue is proper where: 1) all defendants reside (not domicile), and 2) substantial part of cause of action arose.
If CHT lawyer is attacking on grounds that Pam's choice of venue under Florida statute is inconsistent with Federal Procedural Law, then this is an Erie doctrine choice of law issue.
Under Erie, Federal courts will apply the state's substantive law, that is, the forum state's sub-statute law will govern (actually state's conflict of law under Klaxxon).
In issues of procedural law, the first step is to see if there is a FRCP that is on point. That is, one that does not meet any extrapolation to fit circumstance (Hanna). Here, FRCP does not establish any venue requirements.
The next step is to determine if the choice of state/Federal procedural law would be outcome determinative (York). Here the choice is between Section 1391 and Florida statute. Section 1391 would allow venue with respect to a corporation (but not with an individual). Florida statute would also allow venue. Thus, there does not appear to be an outcome determinative type of difference. However, a court might conclude otherwise.
Assuming that the competing procedural laws are outcome determinative that the Federal court will balance the competing state and Federal interests with respect to the procedural laws (Byrd).
Under a Byrd balancing test, the Florida statute would be given some weight since Florida has at least some interest in how venue is applied within the state borders. However, it appears that since Congress has enacted a statute under title 28 of the code (Section 1391), the Federal interest is overwhelming and likely to crush any competing state interest.
While it is not clear whether the 12(b3) motion will succeed, since Section 1391 allows this venue with respect to a corporation (CHT is a NY corporation), it is apparent that if a choice of law problem is balanced by the court (via York, Byrd) the strong Federal interest in the applicable procedural law will prevail.
CHT's 12b7 Motion to Dismiss–Failure to Join Necessary Party
CHT's 12b7 motion will compel the court to examine whether Donna is a necessary party under FRCP 19(a). Under FRCP 19(a) a court will require Pam to join Donna if she is necessary for complete adjudication or if Donna's rights would be prejudiced in her absence.
Donna's presence is probably required to completely adjudicate the claim. She has evidence as to whether her case was actually one of hardship. Moreover, she probably has some interest as a beneficiary of the will, such that she should be present if feasible.
The next step is to determine if Donna's joinder is feasible. The first thing to look at is whether Donna's joinder would destroy diversity (this is a state claim, so I assume that Pam's case is predicated on Section 1332). If Pam is domiciled in Florida (must be if court has SMJ), diversity would be destroyed if Donna's domicile was NY (same as CHT). The facts suggest that Donna was domiciled in NY. That domicile controls unless Donna shows simultaneous presence and intent to move to another state.
Under the current facts, Donna was retired in Florida, thus implying that she was the simultaneous presence and intent to make Florida her domicile. Thus, Donna's joinder under FRCP 19(a) appears feasible. Since Donna's joinder is feasible, a court will not allow the case to go forward until/unless Pam amends her complaint (under FRCP 15) to include Donna.
If a court found that Donna's joinder was not feasible, then the next step would be to determine whether the case could go forward without her presence.
The courts apply the equity and good conscience test to determine if Pam's suit may proceed (in the face of a 12b7 attack) without Donna. Under FRCP 19(b), the court will examine whether:
1) Can relief be shaped so as to adjudicate the matter at least partially? Here, a court could probably determine CHT's liability for failing to properly substantiate Donna's claimed hardship without Donna's presence. The court could look at outside evidence and just adjudicate the matter on the evidence it has in its possession.
2) Will adjudication prejudice Donna? Under the current facts, a court could probably adjudicate the matter without impacting Donna's rights to the will, trust or other liability. The court could adjudicate the matter in such a way to allow Pam to litigate her case without Donna's presence.
3) Would Pam have adequate relief if Donna was deemed indispensable? Pam would likely have adequate relief otherwise, either through a state action or perhaps by suing Donna directly for (but note that none of these factors are , it is a balancing-"minimum contacts"-type of totality test).
4) Equity and Good Conscience: A court could in equity and good conscience allow the case to go forward without Donna, since she likely would not be prejudiced or severely impacted by the outcome. And relief can be shaped in her absence to adjudicate the matter, at least partially.
In conclusion, a court would likely rule that CHT's 12(b2) motion should be dismissed since minimum contacts under Shoe and its progeny may be established.
CHT's 12(b3) motion should be denied since under the Section 1391 general venue statute, the chosen venue is proper with respect to a corporate defendant (so long as IPJ is established).
CHT's 12(b7) motion to dismiss should be granted with leave to amend. That is, if Pam amends the complaint under FRCP (15a) to include Donna, then case may go forward.
Question # 3
Pat and Dan are students at a California law school. After graduation, they both take and pass the California Bar Examination. Dan returns to his home State of Texas, where he decides to become an investment counselor in Dallas. Pat remains in her home State of California. Years later, Pat calls Dan to let him know that she is coming to Texas to visit relatives. She goes to Dallas, meets Dan at his office, and learns about his work.
During dinner, Dan convinces Pat to invest in Deftco, a Texas corporation. Dan tells her that he can almost guarantee that Deftco stock was about to double in value, and that he had convinced some of their former classmates in California to purchase Deftco stock. After Pat returns home, she buys 50,000 shares of Deftco stock at $2.00 per share. The stock becomes worthless, but not before Dan sells all of his shares at a profit. Pat learns that Dan was Deftco's primary shareholder.
Pat files a diversity-based fraud suit against Dan in a California federal court. Dan timely attacks Pat's complaint for lack of personal jurisdiction, and an insufficient amount in controversy. His motion further asserts that this case should be tried in a Texas federal court. How should the court rule on Dan's motion?
Answer to Question # 3
LACK OF PERSONAL JURISDICTION
In personam jurisdiction is the power of a court to enter a judgment personally binding on the defendant.
There are no facts about a long arm statutes, so jurisdiction must be analyzed to see if it doesn't violate doe process.
Because Dan is a non-resident defendant from Texas, he must have certain minimum contacts with the CA forum to be amendable to IPL in that forum.
The minimum contact test looks to purposeful availment of benefits and protection of CA forum by Dan.
Pat will argue that because Dan has gone to law School and had passed the Bar exam in CA, he had minimum contacts.
However, the cause of action occurred partly in Texas because that is where Dan convinced Pat to purchase DEFTCO stock. If that is the case that the claim is not related to the CA forum, the court would need general jurisdiction over him, requiring substantially more contacts with CA.
However, Pat will claim that the cause of action occurred in CA because that is where she purchased the shares, after she returned home.
Dan will claim he could not reasonably anticipate being holed in CA just because of the unilateral act of Pat coming to Texas and then return to CA. He never sought to serve the CA market.
Pat will claim that he did try to sell stocks in the "stream of commerce" in CA because he convinced other classmates in CA to purchase the stocks.
Dan will claim that he could not anticipate that would make him amenable to jurisdiction in CA because it was Pat who cam to Dallas, called him up, and learned about his work.
______ Burger King arguments such that there could be a strong local interest in providing a forum for the plaintiff in CA and that recounting to traditional notions of fair play and substantial justice, he should litigate in CA.
Pat probably has a better argument, ________ minimum contact should be established. The court should read the motion.
INSUFFICIENT AMOUNT OF CONTROVERSY
Subject matter jurisdiction is the power of a court to hear a particular controversy.
Because federal courts have limited jurisdiction, the party seeking its jurisdiction must prove jurisdiction through a federal question or diversity of citizenship.
Federal question jurisdiction results from a case arising under a federal statute. No amount in controversy is needed to FO. However, no FO is alleged.
Diversity of citizenship requires that no plaintiff or defendant be domiciled in same state and that there be a minimum amount of controversy exceeding $75,000.
The minimum amount must be made in good faith and it cannot be dismissed unless it appears to a legal certainty that it cannot be met.
Pat will claim that the difference between the price at which she bought the shares (5,000 x $2) ($100,000) and that at which she sold them at a profit before they became worthless should meet the legal certainty test because the price diminished so much that her loss could easily be $75,000.
Dan will claim that Pat sold at a profit before the shares became worthless, so she probably did not lose as much as $75,000 if she sold them in time.
Additionally, Pat will claim that he loss is really lower because the fraud was that Dan had almost guaranteed that they would double in value. So that, this would make a difference of $200,000 if when the shares became worthless. The fact that Pat sold at a profit would not make-up for a difference of $200,000 to a legal certainty. Fraud should be pleaded with particularity as well.
Dan will maintain that he did not guarantee but rather "almost" guaranteed they would double in value.
Regardless, Dan probably could not prove to a legal certainty that Pat could not recover $75,000.
MOTION TO TRANSFER
Motion to transfer must be in a judicial district where it might have been brought and for the convenience parties and witnesses.
Venue is proper in any district where any defendant resides, if all in some state, or where a substantial portion of the events or omission giving rise to cause of action occurred.
Dan resides in Texas as he works and lives there since he returned there often passing the Bar Exam. To venue would be proper in Texas.
Pat will claim that a substantial part of the events occurred in CA because that is where she bought the shares and probably sold them.
Dan will claim that a substantial part of the events occurred in Texas because that is where he convinced her to buy the stocks, and the stocks were of a Texas corporation.
The plaintiff's choice of venue is strongly favored by the court. To Dan must show good evidence not the trial would be more convenient in Texas.
Dan will claim that the evidences are in Texas because the corporation is there, his office there, maybe witnesses are there.
Pat will argue that she has witnesses in CA such as the former classmates who allegedly purchased the stock.
Because venue could be proper both in CA or in Texas, and that the plaintiff's choice of venue is favored, the court should probably deny the motion to transfer to Texas federal court.
Comments (0)
You don't have permission to comment on this page.