Class 9 - 1-16-07
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.
Question # 4
Paul works for the Dade Hotel in Miami, Florida. He is a member of a single person's dating service. He occasionally shares information about the dating service with hotel guests. Paul does not get along with his boss, whose name is Bob. Bob never gets any dating information from Paul. Bob terminates Paul's employment, on the basis that Paul is supposedly running a prostitution service at the hotel.
Paul moves to San Diego, California, where he now lives and works. He hires a lawyer, who brings a law suit in Miami. The relevant portion of Paul's complaint is as follows:
[Lawyer's address, etc.]
UNITED STATES FEDERAL DISTRICT COURT
SOUTHERN DISTRICT (MIAMI, FLORIDA)
PAUL PLAINTIFF )
..............................)
.........................................................................................................Civ. No. 654321-JMK
.............................................................................................COMPLAINT for FRAUD and .........................................................................WRONGFUL TERMINATION
...............................)
v. DADE HOTEL ....)
1. Paul Plaintiff, hereinafter "P," is domiciled in California. P brings this diversity action, based on 28 U.S.C. ยง 1332, against the Defendant, Dade Hotel, a Florida hotel doing business only in the Southern District of Florida.
2. Bob fraudulently fired P without just cause. Bob, rather than using his own resources, continuously attempted to obtain dating service information from P. Bob was incapable of obtaining his own dates, and constantly in need of P's assistance in dealing with women. P will now proceed with this case on behalf of himself, and all others similarly situated, against the Dade Hotel.
3. Wherefore, P seeks general and special damages for himself in the amount of $78,000.00, and such further relief which P may prove at the time of trial.
Your client is the Dade Hotel. On what grounds could you reasonably attack Paul's complaint? (Mini-issue: Could you recover your defense costs and fees from Paul's lawyer?)
Answer to Question #4:
LACK OF SUBJECT MATTER JURISDICTION
Paul (P) has filed suit in the federal court an action based on diversity. Paul is with State of California and the Dade Hotel is a Florida business. But the second criteria of amount in controversy in excess of $75,000 may not have been met. True, the plaintiff is requesting judgment of $78,000 and the court will tend to be plaintiff friendly. But because plaintiff combined general and failed to plead special damages specifically the special damages may be voided, it is likely that inn Florida to plead the special damages specifically the amount which plaintiff is seeking may end up being less than $75,000. The burden will be on the defendant to show that the amount cannot be legally met and it is possible that defendant could meet this burden.
FAILURE TO STATE A CLAIM FOR WHICH RELIEF MAY BE GRANTED
The FRCP Rules state that the complaint must contain a Short and Plain statement of relief which is sought while it is a Short and Plain statement it is not stating facts but is simply stating legal conclusions that plaintiff was fraudulently fired without just cause. The complaint does not state any facts as to when, how the events occurred which lead to the discharge of plaintiff. This is clearly not enough to put defendant on notice as to why defendant is being sued.
FAILURE TO JOIN A PARTY NEED FOR ADJUDICATION
Plaintiff's complaint lists activities which Bob did and yet Bob is not named as a defendant which it is clear that Bob is a necessary and probably indispensable party who should be joined in order to have just adjudication of cause it is possible that Bob cannot be joined because presently he cannot be found because the court can't get IPJ over or possible Bob is now a CA resident and diversity would be destroyed. Bob, if that is the case the court may deem that Bob is necessary but not indispensible for just adjudication and allow the case to go forward without the joinder or Bob. [Respondent - superior issues which should be dealt with in employment law might allow for a better answer with this issues.
MOTION FOR A MORE DEFINITE STATEMENT MODEF
The Dade Hotel can definitely move that plaintiff be ordered to provide a more definite statement because this complaint is vague and ambiguous and does not allow for a reasonable opportunity to respond. The complaint as written does not allow defendant to frame a response because for defendant to admit or deny it the court grants the motion and orders plaintiff to produce a more definite statement and he does not comply within ten days or whatever time the court decides to allow. The complaint suit is dismissed.
MOTION TO STRIKE
Plaintiff complaint includes many issues which are irrelevant, redundant, defendant may ask the court to strike portions which refer to Bob's dating surrendering which do not have any relevance to the termination and regarding proceeding in case on behalf of self and others who are similarly situated.
FRAUD
Plaintiff has alleged wrongful termination and fraud but he has stated NO FACTS regarding how frauds occurred. When fraud is alleged it must be plead with particularity a plain and short statement will not suffice. Thus the pleading is improper with regard to the fraud.
SPECIAL DAMAGES
Plaintiff has included for special damages when special damages are requested. They must be pleaded specifically, plaintiff has not plead those same damages specifically and therefore the pleading is improper.
CLASS ACTION SUIT
It appears that plaintiff in his complaint is seeking to sue on behalf of himself and others similarly situated which would constitute a class action lawsuit. If this is the case, plaintiff would have to get certification for their class action suit plaintiff would have to show that plaintiffs where (1) too numerous to be joined, (2) that he was a commonality amongst the claims, (3) that plaintiff was typical of litigants and (4) that plaintiff would provide adequate representation for the class. Facts are insufficient to determine if these were met but it is unlikely that the first and third prerequisites would be met unless Dade Hotel has been discharging employees under circumstances similar to Paul's. Which is highly unlikely. On the basis of how this complaint was written by the attorney it is extremely unlikely that plaintiff and his attorney could provide adequate representation for a class.
ALTERNATIVE DEFENSES
Dade Hotel likely could raise some of affirmative defense that while the plaintiff was discharged. He had unclean hands based on his running a prostitution service out of the hotel. With more facts more affirmative defenses could be raised.
RULE 11
In order to recover defendant costs and fees from plaintiff's attorney a Rule 11 motion would have to be granted granting sanctions against plaintiff's attorney for bringing a frivolous lawsuit which purpose was to harass and which did not have basis and applicable law or even as an attempt to modify current law. The standard which will be used to determine if sanctions would be awarded against plaintiff's attorney is would the reasonable attorney in the forum have filed the claim.
I am not from Miami but don't think I would be going out on a limb if I conjectured that the reasonable attorney in Miami has as much skill or more than a IL at TJSL and the typical IL @ TJSL would not have filed such a complaint (I hope) this student would definitely not have filed the complaint. It is very likely that sanctions would be awarded against plaintiff's attorney.
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