| Civil Procedure Fall 2006 Mid-Term Exam Answer Analysis |
|
|
|
| Friday, 23 February 2007 | |
|
2006 Mid-Term Exam Issues
Essay Question One SUB-QUESTION “A.”: DORY’S REMOVAL OF THE NEVADA STATE COURT ACTION TO FEDERAL COURT IN CALIFORNIA I. Attempted Removal to the WRONG Federal Court First, Dory has made a critical error by trying to remove the case to federal court in California, when the case had been filed in state court in Nevada. Under the removal statute, §1441(a), a defendant must remove the case to the federal court where the state court action has been filed and is pending, here Nevada, not California. So a direct removal to federal court in California is not possible under the statute. The only way to get to federal court in California from state court in Nevada would be a two-step process: Dory would first have to remove to federal court in Nevada, and once there (if removal is even possible), then request a transfer of venue under §1404 from federal court in Nevada to federal court in California, and then make sure to specify which of the four US judicial districts in California. That transfer of venue would only be allowed if the judge, in her discretion, allowed the transfer, applying the private and public factors, as set forth in Piper v. Reyno. Even if a direct removal from state court in Nevada to federal court in California were allowable, there would be a possible home state prohibition issue, under §1441(b), since we are told Dory is a “permanent resident alien” of California. If her home state, for domicile purposes, is California, then she should not be able to remove to federal court in CA. If it were otherwise, she effectively would be violating the home state prohibition. However, Dory could argue that she is not really removing from her own home state of CA, but only that on NV (which is not her home state) so there would be no home state prohibition, not to mention the fact that she may not really be a permanent resident alien of CA since she only did that for tax purposes and still really lives in Japan – but this only points up the fact that she is attempting to remove to the wrong federal court in the first place. A judge would likely rule that the removal request is improper because it clearly violates the language of the statute – removal is only possible to the federal court in the same state as the pending state court action, here, Nevada, not California. The home state prohibition argument is not much of an issue in light of the argument that she is attempting to remove to the wrong federal court in California anyway. Removal also would not be possible because the case could NOT have been filed in federal court originally (there is no “concurrent jurisdiction,” only state court subject matter jurisdiction). There would be no §1331 federal question or §1332 diversity jurisdiction, see below – and if there were no federal subject matter jurisdiction, then removal from state court to federal court would be impossible. A. No §1331 Federal Question Jurisdiction A judge would clearly find that there would be no federal question jurisdiction here because the well-pleaded complaint rule is obviously not satisfied, so removal would not be possible on that basis. B. No §1332 Diversity Jurisdiction 1. Citizenship/Domicile Players is a corporation, and therefore it has two domiciles for diversity purposes: (1) where it is incorporated – California – and (2) where its principle place of business (PPB) is located – it could only be Nevada based on the facts given. Players Hotel & Casino is located in Nevada and essentially does all of its business out of that Nevada location. So Players is domiciled in both California and Nevada. Thus, if either DD or Dory is domiciled in either California or Nevada, then diversity of citizenship would be lacking. There is clearly no diversity of citizenship between Players and DD, as we are told that DD is a Nevada corporation and, like Players, probably has its PPB in NV. There are no arguments that can be made showing that there would be diversity of citizenship between Players and DD because they share Nevada as a domicile. A judge would have no choice but to find that there would be no diversity of citizenship between the two Las Vegas’ Hotels, Players and DD, because they both have their PPBs in Nevada. There may or may not be diversity between Players and Dory. Although Dory is not domiciled in NV, we are told that Dory is a permanent resident alien of CA. Even though she is a permanent resident alien in California “for tax purposes only” (see above), she is probably still considered a California domiciliary; thereby making her not diverse with Players, as Players is incorporated in California. However, even if Dory is deemed to be domiciled in Japan rather than California because we are told Dory’s residence is actually in Japan, and she seems as though she has no current plans to move from Japan, the entire matter would still lack diversity because although players and Dory might be diverse, Players and DD are still both from Nevada. So it could not be removed to federal court as it is currently configured with DD still in the lawsuit. 2. Amount in Controversy Might Not Be Satisfied Diversity may also be lacking based on either a partial or total lack of the necessary amount in controversy. Players has sued both defendants for a total of $100,000. Because we have two different defendants, Dory and DD, they would argue that the amount cannot be aggregated and should be split between them -- $50,000 a piece and therefore neither would be more than $75,000. Even if one claim is over $75,000 then the other would have to be less than $25,000 and thus no diversity, unless Players dropped the defendant assessed with less than $25,000 at stake against them. Aggregation would have to be allowed to satisfy the amount in controversy requirement for both of them. Players would argue that there is joint and several liability between the two defendants due to the tort conspiracy between them and therefore aggregation would be possible, satisfying the amount in controversy. It would depend on the applicable substantive tort conspiracy to interfere law, but joint and several liability appears to be appropriate for this very related tort – as it takes two to have a conspiracy to interfere. Thus, a judge would likely have to allow aggregation. III. Timing of the Attempted Removal Improper Players has a very good argument that Dory waited too long to attempt to remove the case to federal court. We are told that she waited 2 months after the case was filed in state court but the federal removal statute – 1441(b) – only gives a defendant 30 days to remove from the date the lawsuit is originally filed and served on defendant in state court. A. But a Possible Difference Due to Timing, Case Becomes “Removable.” Assuming that Dory is diverse from Players and the amount in controversy is satisfied, it might be possible for her to remove the case to federal court “2 months” later, despite the 30 day requirement discussed above, because the case was not removable as long as DD was still in it. If diversity would be possible once DD is no longer a party in the case, then the case would become legally “removable.” So once DD settled with Players (assuming no cross-claims between Dory and DD) the case became removable. That means that Dory had 30 days from the date it became removable to remove the case to federal court. Accordingly, as long as the removal “2 months” after the case was originally filed equals no more than 60 days (30 days after being served when DD settled making it removable at that point and then Dory removed within 30 days after that for a total of 60 days “2 months”), a judge would rule that removal would be possible. Therefore Player’s settlement with DD would make a difference because it would now be possible for Dory to remove when she did as it would still be considered timely under the rule, because she removed it 30 days after it became removable. So February, with only 28 days, would have to be one of the months as there are no two consecutive months with 30 days or less – except either January-February or February-March. B. But No Difference (Removal Still Not Possible) if Dory Is Considered to Be Domiciled in CA. Of course, if Dory is still considered to be a domiciliary of California, then DD’s settlement with Players would possibly solve the removal timing problem but still does not solve the overall diversity problem. Although there would no longer be a Nevada v. Nevada problem if DD is out of the case, there still would be a California v. California problem between Players and Dory. It also would not make a difference if the amount in controversy dipped from $100,000 to below $75,000 after settling with DD -- so it would be critical to see how much, if at all, the amount in controversy would change now that DD is out of the case. The remaining claim against Dory would have to exceed $75,000. I. Dory Should Have Sued First if She Wanted To Have the Lawsuit Heard In Federal Court in California Instead of State Court in Nevada Dory could have sued Players in federal court in California (meeting the ‘three rings,” see below). If so, she would have thereby successfully avoided the “biased” Nevada State Court judge of whom she complains. Strategically, however, although she would be in federal court in California, Dory would have been subjecting herself to Players’ tort conspiracy claim (as a sure counterclaim). This would be a bad decision if Players did not plan to sue her or was concerned that there may not be jurisdiction over Dory in the US. However, if Dory were sure she was going to be facing a lawsuit by Players anyway in Nevada State court (or federal court, if the removal were successful), then she may want to preempt it and have it heard in federal court in California. Either way, a lawsuit by Players was probably coming anyway so her filing in federal court first would be a way to preempt that Nevada lawsuit and get it heard in federal court in California if this is important to her. It also would have had the strategic benefit of putting Dory in a more sympathetic light strategically, as the wronged plaintiff, and put Players more on the defensive, at least in the eyes of the jury – the advantage of being a plaintiff. A. Personal Jurisdiction over Player’s Satisfied Personal jurisdiction could have been easily satisfied over Players because Players is domiciled in California – it is incorporated there and therefore general jurisdiction would be possible. The long-arm statute also would be clearly satisfied (it is common for state long-arm statutes to include corporations that are incorporated in their state). B. Subject-Matter Jurisdiction Satisfied 1. §1331 Federal Question Dory could invoke a federal question jurisdiction against Players for her Civil Rights Act claim for discrimination. This clearly is a federal question satisfying the well-pleaded complaint rule because if Dory were to recover it would be because Players violated the federal Civil Rights law. For this reason, she would be able to avoid all of the issues and uncertainty surrounding whether there would be diversity. 2. §1367 Supplemental Jurisdiction for the State Law Claim Satisfied Dory could then tie her breach of contract claim (a state claim for which there is no federal question jurisdiction) to her federal discrimination claim because it obviously arises out of the same case or controversy. Dory is alleging that the breach of contract (state claim) was done because of the discrimination against her as a an Asian, female foreigner (federal claim). So the state claim arises out of the same case or controversy as the federal claim. Players could argue that they are different claims, the breach had nothing to do with the hotel clerk’s foul language. However, Dory could argue the clerk simply verbalized what the hotel was improperly doing, and why. A judge would likely rule that the two claims – the breach of contract and the discrimination -- would constitute the same case or controversy as the discrimination and the breach all involve this same incident. Players, incidentally, could counterclaim for its tort conspiracy and instead of having possible diversity of citizenship and amount in controversy problems, Players could invoke §1367 supplemental jurisdiction. However, Dory could argue that Players’ tort conspiracy was something that must have occurred AFTER the discrimination and breach she suffered. A judge would likely rule that they are still part of the same case or controversy because it shows the motivation for the tort conspiracy. C. §1391 Venue Satisfied Dory could easily base venue on the fact that DD is domiciled in California (incorporated), and therefore corporate residence under 1391 would be there because DD is obviously subject to personal jurisdiction wherever it is domiciled (it is true that its PPB is in Nevada, but as a corporation, it is also domiciled in California because it is incorporated there. Although we are not told which particular US judicial district she would be filing in, DD’s residence would be in one of them (wherever the incorporation is deemed to be most closely related – perhaps the Eastern District/Sacramento, where the California State Attorney General’s Office is located and where a corporation must file its California State Articles of Incorporation).
Essay Question Two IS THE NEVADA STATE COURT A PROPER COURT TO HEAR PLAYERS’ LAWSUIT AGAINST DORY AND DD? I. Subject-Matter Jurisdiction Exists in Nevada State Court There is subject-matter jurisdiction in the Nevada State Court over this action because, recall, state subject-matter jurisdiction is extremely broad, unlike the very limited federal subject-matter jurisdiction in federal courts. There is no exclusive federal subject-matter jurisdiction here over any these claims (none involve bankruptcy, copyright, maritime, etc.) which are the only claims for which there is NOT state subject-matter jurisdiction. Note that although Players had to eventually claim bankruptcy due to Dory’s and DD’s alleged tort conspiracy, the claim in this case against DD and Dory is still for a straight tort of conspiracy, we are not adjudicating Players’ debts to its creditors in bankruptcy, so it is not a bankruptcy case. II. Personal Jurisdiction in Nevada State Court A. DD DD is definitely subject to personal jurisdiction in Nevada based on DD’s significant contacts to Nevada – DD is a Nevada corporation and has its PPB in Nevada, so it is clearly domiciled there (twice). As a result, DD meets the Nevada long-arm statute (it obviously does a substantial amount of business in Nevada) and there is general jurisdiction over DD in Nevada based on the traditional basis of domicile general jurisdiction – DD has substantial and pervasive contacts. In fact, it probably would be a Rule 11 violation for DD even to attempt to fight personal jurisdiction in Nevada. B. Dory However, there is a big question as to whether there is personal jurisdiction over Dory in Nevada state court (this was where the bulk of the points/analysis was in this essay). 1. Possible Waiver by Dory of Her Defense of a Lack of Personal Jurisdiction Players might argue from the outset that Dory has waived any challenge to personal jurisdiction at this point in the lawsuit. Remember that Dory has already answered the complaint denying liability and she has filed a discrimination counterclaim, as well as the breach of contract counterclaim discussed above. So her answer appears to be her first responsive pleading (or even her second responsive pleading if she filed a pre-answer motion, but we are not told of any pre-answer motions filed). In any event, this means that she did not file any kind of challenge to personal jurisdiction in her first responsive pleading or ever make a “special appearance” to contest personal jurisdiction. Although we are in Nevada state court, so Federal Rule 12 does not apply, recall that in the federal model, a challenge to personal jurisdiction under Rule 12(b)(2) is a waivable defense. That means that a failure to raise personal jurisdiction as a defense in the first responsive pleading is deemed to be a waiver of that defense. In other words, defendant has consented to the court’s personal jurisdiction by failing to raise a lack of personal jurisdiction as a defense in its first responsive pleading. We would have to look to Nevada procedural law of course to see if it is similar to federal law, but if it is, then Dory definitely would be subject to personal jurisdiction in Nevada because she would have waived her defense (thereby consenting to personal jurisdiction in Nevada by her failure to act). 2. Nevada Long-Arm Statute Possibly Not Satisfied a. “Anyone Who Conducts Business in the State of Nevada.” Players would argue that she meets the statute because she conducts business in Nevada by writing articles for travel and leisure magazines that sell those magazines (with her articles in them) in every state in the US – obviously including Nevada. It is indirect in that Dory does not sell directly to magazine readers in Nevada. Instead, she sells to magazines that purchase her articles and then end up selling them, at least partially, to consumers/readers in the State of Nevada. Dory would argue that the act of writing and then selling articles to magazines that, in turn, sell some of their magazines in Nevada, and other states, is not actually “conducting” business in the State of Nevada as contemplated by the statute because she was never actually in Nevada whenever she “conducted” business – selling articles to magazines, say, based in New York, that later sell to readers in Nevada. But she still sells to magazines, some of which may be based in Nevada, and if so, then some of her sales might be direct sales to magazines based in Nevada. We are not told, but her sales may not all be indirect because some might be made directly in Nevada to Nevada magazines. We do not know how Nevada state courts actually interpret the long-arm statute, broadly or narrowly, so we cannot say how a judge would likely rule. However, because Dory benefits from the market of readers who buy magazines, a court probably would find that such is enough to qualify for “conducts business in the state.” Some of it would depend on the volume of sales in Nevada and the number of articles in magazines that sell in Nevada. She certainly is closer to qualifying for conducting business in the state, than some other potential defendant who makes no such sales of articles to magazines that sell in all fifty sates, including Nevada. Dory might also argue that even if her sale of articles to magazines that sell some magazines in Nevada constitutes “conducting” business “in” NV,” that is not what Players’ lawsuit against her is based on so perhaps that makes it a weak argument to fit within the statute, coupled with the fact that any sale of an article to a magazine that sells the magazine in Nevada was very indirect. Dory could argue as a policy matter finding that she fits within the statute would be an overly broad interpretation of long-arm statutes in general and therefore would make Dory subject to such long-arm statutes in all fifty states in the US and that seems too expansive. Perhaps that critique of over breadth may be true, but we are not to the constitutional fairness test yet, so if this situation technically satisfies the text of the statute, and the statute does not say anything about limiting it where the business conducted relates to the lawsuit or whether the statute is unfair for someone in Dory’s situation, a judge would likely rule that it has been satisfied. b. “Anyone Who Causes Injury in the State of Nevada.” Next, Dory could argue that any conspiracy for tortuous interference with potential foreign customers (Players’ claim against Dory) took place in the foreign countries of the past, present or potential foreign customers who chose not to stay at Players. So those decisions not to give their travel business to Players were decisions made by those potential customers in their own home countries, not “in” Nevada. If potential foreign customers made their decisions not to stay at Players while they were in their home countries and not in Nevada, then the “injury” to Players was really Dory’s influence in those foreign countries over those individuals who made those decisions. Players could argue, similar to the “effects” test in the minimum contacts context, that Dory’s actions – e-mailing all of the potential customers – was something that economically hurt a Nevada corporation, in Nevada – it was “felt” in Nevada (Players is now in bankruptcy due to the loss in foreign customer revenue) so the completed “injury” was in Nevada, and thus it does not matter if, technically, the “harm” was outside of Nevada. The trajectory may have started outside of Nevada, but it eventually “landed” with Players in Nevada. It would depend if the court would follow the Gray v. American Radiators analysis (tort injury is the completed injury) or the Feathers case (tort is where the tortfeasor committed the tort, not where the tort was ultimately felt by the plaintiff). More courts follow the Gray analysis. It is a close call but even if the court rejected this argument by Players, it still would likely find that Dory “conducts business in the State of Nevada,” and, at least find the statute is satisfied that way. 3. The Constitutional Test: Fairness (Minimum Contacts)
i. Presence (“Tag”) Jurisdiction. Dory was served with process while she was physically located within the State of Nevada (she was at the Reno airport during a layover when served). Under Penoyer v. Neff, defendant’s physical presence in the forum state while being served with a copy of the summons and complaint is a valid, traditional way to establish personal jurisdiction over the defendant. It has always satisfied the due process requirement of fairness. (a). Bypass the Minimum Contacts Test? Players would use the argument by Justice Scalia as set forth in his concurrence in the Burnham case to say that presence jurisdiction gets us, and has always gotten us, directly to fairness and therefore it is not even necessary to do a minimum contacts analysis. Minimum contacts may be necessary for an out-of-state defendant, but because Dory was served in-state, the minimum contacts test does not even apply. Just like in the Burnham case, looking at the defendant’s minimum contacts was not necessary, according to Scalia. So based on this act of service of her in the Nevada airport alone, 4 of 9 US Supreme Court justices would find personal jurisdiction over Dory. (b). Satisfy the Minimum Contacts Test? Dory would counter that although she was served with process while physically in Nevada and thereby satisfied the presence test as set forth by Justice Scalia in Burnham, her presence in Nevada, for a mere 45 minute layover in the Reno airport on her way to New York, was not enough to satisfy the minimum contacts test. The minimum contacts test is necessary according to Justice Brennan’s concurrence in the Burnham case. Although there were minimum contacts found in Burnham, the defendant was in the state for 3 days, not just 45 minutes in an airport in transit to another state. Players has a difficult argument here because it has to argue that Dory should be subject to general jurisdiction simply because she got served while she was in the state for a mere 45 minutes. However, it is a difficult to argue that there were minimum contacts in the Burnham case itself. But if there were minimum contacts in that case based on service while physically present in the state, then perhaps there is no meaningful difference between being present for three days and being present for 45 minutes – the key is the physical presence during the act of service, not the amount of time in the state just before or just after the act of service is executed.
Even if Dory’s brief airport presence in Nevada constitutes minimum contacts, Dory still can argue that due process/fairness is not satisfied in this case because of her reason for being in the Reno Nevada airport in the first place. She was testifying in another case, if she was subpoenaed to testify in NY, such would mean that was being forced to make this trip. If a defendant is being compelled by law to be someplace (or is tricked or lured there, as in the Wyman v. Newhouse case), then it does not comport with due process/fairness. Therefore, if she was being forced to make this trip she was forced the entire way, including the stop over in Nevada. Moreover, there might be a purposeful availment issue here, to what extent did she know the stop over was going to happen and did she have any choice in the matter. It seems unfair to subject her to personal jurisdiction in Nevada if she really did not have a meaningful choice in the matter (but how many flight options did she have that did not have the stop over in Nevada?). A court may not care, however, if she were fully aware of what she was doing and was not subpoenaed to testify in the New York case but was voluntarily testifying. ii. Consent. Another possible basis for personal jurisdiction over Dory would be based on Dory’s alleged consent given the language on Players’ website. Dory is counterclaiming for breach of contract, meaning that she is alleging that Players breached her contract pursuant to the Internet offer. What this means is that she is acknowledging that she made a contract/deal pursuant to the Internet offer, and if so, the language of that deal/offer suggests that she may have consented to personal jurisdiction in Nevada, meaning we do not even need to do a minimum contact analysis to get to fairness, as the fairness would be inherent in the voluntary assent. Carnival Cruise. (a). But Did Dory Really Accept the Offer? Dory might argue that she did not sign or assent to any agreement/Internet offer, as she did not make a reservation through web offer. Instead, it was really only after she had visited Players’ website that Players’ sales agents called her a few days later and at that time she made the deal to stay at Players Hotel. She could therefore argue that her reservation was never subject to that Internet offer and her contract with Players was pursuant to a different, non-website, offer the sales agents made to her. But if she makes this argument, it may unwittingly be the bases for Players to successfully dismiss her breach of contract counterclaim (for failure to state a claim), after all, if she is saying there was no deal to give her $500 in gambling chips and if that was not part of her deal, then there can be no breach. So she is in a bit of a quandary here; she may need to give up her breach of contract counterclaim to successfully resist personal jurisdiction based on consent or she may need to give up her challenge to personal jurisdiction based on consent if she wants to keep the breach counterclaim. (b). Agreement to the Application of Nevada Substantive Law Only? Rather than having to choose between challenging personal jurisdiction or pressing the breach of contract counterclaim, Dory might try to avoid that quandary altogether by arguing that even if she did agree to the Internet offer (keeping her breach of contract counterclaim alive), the language of Player’s website offer refers only to Nevada law applying to “govern any legal dispute between the parties,” and therefore such does not mean that she was agreeing to personal jurisdiction over the parties in a Nevada state court. Thus, the clause in the website contract was NOT a forum selection clause regarding the parties’ consent to personal jurisdiction in Nevada; rather, it was merely an agreement as to which substantive law would be the applicable substantive law to govern any legal dispute that should arise between the parties (and that would be the substantive law of Nevada). Players would respond, however, that the language says, and is even emphasized/underlined, that Nevada law should apply “in all respects,” meaning personal jurisdiction and substantive law. Players would say this means that procedural personal jurisdiction law applies as well as substantive contract law. Dory would recognize that the provision applies, but ONLY goes to substantive law topics – so the application of law “in all respects” still has nothing to do with the selection of a forum for personal jurisdiction purposes. Most courts require that forum selection clauses be clear as to what the parties are agreeing to, and here it appears the language applies only to substantive law, not personal jurisdiction. As set forth so far, a judge would likely rule that there is no consent to jurisdiction, even if there was consent to the application of Nevada substantive law. If Dory agreed to the language in the Internet offer, even if it were only to the application of Nevada substantive law (and not an agreement to Nevada as a forum), in the last part of the Internet language, Dory still agreed that “Nevada shall not be the ONLY place where the lawsuit can be heard.” By agreeing that different places may have personal jurisdiction in addition to Nevada, Players has a very strong argument that Dory actually agreed that Nevada would at least be one of those possible places with personal jurisdiction over her. In other words, by agreeing that Nevada would not be the “only” place that has personal jurisdiction over her, Dory agreed that Nevada at least would be “a” place that has personal jurisdiction over her. A judge would likely find jurisdiction based on consent given this language because that is the only plain meaning a judge could give to the language. Still, Dory has the argument that she did not agree to the Internet offer, but that is not the “contract” she is saying that was breached, it was the later offer made by sales agents. The problem with that argument, however, is that we do not know what the terms of that agreement were and if they included or excluded the Internet language and the $500 in gambling chips. b. Case-By-Case Analysis of Minimum Contacts. i. General Jurisdiction. We are not told of the full extent of business Dory does in Nevada, but from the facts given, it does not appear to be substantial or pervasive, systematic or continuous enough to make it fair for her to be sued on any unrelated claim at all in Nevada. Usually for general jurisdiction to apply, the contacts must be much more significant and direct than these contacts appear to be. Dory’s contacts are more dispersed and not substantial enough to rise to the very high level of general jurisdiction. Recall that in order for there to be general jurisdiction, it would have to be fair to be able to sue Dory in Nevada on any claim at all, no matter how UNRELATED to Nevada and Dory’s contacts to Nevada the claim(s) may be. Why? Because she is so connected to Nevada it would not matter if she gets sued there on a completely unrelated claim. But that would require a LOT of contacts which do not appear to be the case here. Although Dory’s contacts are not enough to support a finding of general jurisdiction, there are some specific and highly related contacts to the lawsuit that might support specific jurisdiction over her in this case for these claims against her. 1. Stream of Commerce Players might try to make a “stream of commerce” argument based on Dory’s sales of a “component part” – her articles – that make it into a “finished product” – the magazines – that are purchased by Nevada consumers/readers. The problem with this argument is that those particular contacts –her ultimate articles sales -- are simply not related to what this lawsuit is about. The suit has nothing to do with anything she wrote in any of her articles, rather it was what she allegedly did when she got back to Japan. That is when she e-mailed past, present and potential foreign customers in an effort to dissuade them from ever staying at Players Hotel. Thus, all arguments regarding the “stream of commerce” are essentially misplaced. As a result, there was no need to get into Justice O’Connor’s concurring opinion in Asahi versus Brennan’s concurring opinion in Ashai . 2. Dory’s Stay at Players Hotel in Nevada Players might also try to argue that Dory’s two week stay at Player’s subjected her to personal jurisdiction in Nevada, but again, those particular contacts are not related to the lawsuit either. The suit has nothing to do with what she did while she was staying at Players Hotel for 2 weeks, rather it was what she did when she got back to Japan (e-mail customers), so specific jurisdiction based on her stay would not be proper either. Still, they represent some contact to Nevada that is partially related to the suit, but not all that close when one considers the actual claims. Players’ best argument for specific jurisdiction over Dory would be Dory’s alleged actions regarding Players’ private network files containing the contact information of all potential and present and past foreign customers of Players. It is as though Dory “broke into” the Player’s offices in Nevada and stole proprietary information. Just because her burglary tool was the Internet and she did it from Japan, and not Nevada, does not mean the act was not completed in Nevada (see discussion on Long-arm statute arguments above). She only was able to get the private e-mails of all of those potential foreign customers by breaking into (virtually) Players’ private network files. Not only that, but the defamation she did against Players to all of those customers was ultimately “felt” by Players in Nevada – so much so that this foreign customer base dried up and Players was forced to declare bankruptcy. iii. Purposeful Availment. Dory clearly knew what she was doing when she illegally hacked into Players’ private computer network, and she knew Players was located in Las Vegas, Nevada, and she had to realize that by illegally downloading proprietary information and then e-mailing a very troubling message about Players would likely end up in a lawsuit by Players in Nevada. Dory’s voluntary act to connect with Nevada and the forseeability of being sued there are strong. iv. Other Considerations. Dory could try to argue that it would be “unreasonable” to exercise jurisdiction over her because she is a foreigner -- like in the Asahi case -- but the facts are different in this situation: (1) there is a Nevada plaintiff still in the lawsuit, (2) this is not a side indemnification suit between two foreigners and (3) Nevada clearly still has an interest in the suit. As a result, this was a weak argument, as was an argument for “inconvenience” because Dory clearly comes to the US often, she is a permanent resident alien of California, a neighboring state, even if only for “tax purposes” and she certainly has the means to defend a lawsuit here. Given all of the contacts of Dory, a judge would likely find specific personal jurisdiction over her and not be persuaded by any “other considerations” of fairness. It would also be a bad precedent if personal jurisdiction were not found over Dory, because then many defendants could engage in this kind of alleged behavior and be able to escape jurisdiction which would seem very unfair. Because we are told that the Nevada state venue statute is the same “in all respects as the federal statue” – §1391 – we can apply the federal venue statute to determine state venue. This is a diversity case so §1391(a) would apply (not §1391(b)). Note that we are not told what venue in the state Players has sued in. In the federal model, Nevada has no US judicial district sub-divisions (like California or Texas or New York with more than one US Judicial District, where in Nevada, there is simply the “District of Nevada”). That would probably not be true for Nevada state court venue, that is, there would be subdivisions in the state based on groupings of certain counties, but we are not told of them, and therefore we need not speculate. Instead, we would just apply the venue statute as it is set forth and note what might be missing. §1391(a)(1) would be inapplicable because Dory (who is a resident of either Japan and/or CA, but probably just Japan because that is where we are told she actually lives) and DD (who would be a resident of Nevada because all of its connections – PPB and incorporation, etc. – are in Nevada) obviously do not reside in the same state, so venue based on residence is unavailable. Because DD is a resident only of Nevada, and Nevada is not Dory’s residence, regardless of whether she is deemed to be domiciled in Japan or California, this provision based on the residence of the defendants is unavailable as it requires all of the defendants to reside in the same state and they do not. B. §1391(a)(2) “Substantial Portion of the Events” in Nevada. The next provision that may be used to satisfy the venue requirement is based on whether a substantial portion of the events or omissions giving rise to the lawsuit occurred someplace in Nevada. If they occurred somewhere in Nevada, then venue would be proper. But if they occurred outside of Nevada, then venue would not be proper. Dory would argue that a substantial amount of the events did not occur in Nevada as they actually occurred in cyberspace/on the Internet and in foreign countries. Note that this is similar but not really the same question as personal jurisdiction because fairness allows the “effects test” felt there – but these are events “giving rise to the lawsuit” – the things that led to a lawsuit and they may not have “occurred” in Nevada. Players would use the same types of argument for personal jurisdiction here – such as the hacking took place in Nevada (Dory broke into Players private network files and the effects of the e-mails were felt/manifested in Nevada). These are the substantial events giving rise to the lawsuit. A judge would likely find venue based on these events assuming they occurred in Nevada. Dory would counter that they did not occur in Nevada. It is a close call, but a judge would probably find venue based on this. C. §1391(d) “Any District” for an “Alien”. Players has a strong argument, however, at least against Dory based on §1391(d) which provides that any district is a valid district for venue purposes if the defendant is an alien. Thus, venue may be perfectly fine if Dory is deemed to be an “alien” because under §1391(d) any US judicial district would be acceptable. If so, then Dory could use residence for DD, because DD, as a Nevada corporation with its PPB in Nevada, clearly resides in Nevada and under 1391(c) is subject to personal jurisdiction. Dory would argue that she is not an alien but is a resident of California because she is a permanent resident alien of California, and as such §1391(d) is not applicable. Players would argue that she is a permanent resident alien “only” for tax purposes and still lives in Japan, and is still an alien for venue purposes even if she is a permanent resident alien for subject matter jurisdiction/diversity purposes. Players would also focus on the title of her status, so even if she is a permanent resident alien, she is still an “alien” for venues purposes. D. §(a)(3) “Subject to Personal Jurisdiction”. In the event that a court did not find venue in Nevada over both defendants, Players could try to resort to §1391(a)(3). However, this subsection can apply only if venue would be unavailable anywhere in the US. Residence would be impossible anywhere in the US because even if we get DD in Nevada, Dory is not a resident of Nevada. If §1391(a)(2) does not work in Nevada then Players might say we can now go to (a)(3). The problem is that venue might be possible somewhere other than Nevada and that would be in California, where Dory is a permanent resident alien and DD may be subject to personal jurisdiction. If DD is not subject to personal jurisdiction there, then and only then could players resort to (a)(3). So if (a)(1) and (a)(2) are unavailable, then and only then could we look to (a)(3). DD clearly would be subject to personal jurisdiction in Nevada, and depending upon how that issue is resolved regarding Dory, it would be available against her too. Basically, if (a)(1) and (a)(2) are unavailable, venue would be proper in Nevada under (a)(3), if the court finds personal jurisdiction over Dory (see above) as well. IV. Forum Non Conveniens Motion (to Japan) Dory and DD might try to get the case moved out of the US and over to Asia based on convenience factors. However, it is unlikely that DD would agree to such a move. Even if DD would agree it would be a hard argument to make that a lawsuit between two Las Vegas Nevada hotel casinos would be more convenient in Asia than in Nevada. But Dory might be able to convince the court that not only is she in Asia but most of the witnesses are outside the US and half are in Asia. Players could argue that although it is true that most of the witnesses and evidence exist outside the US, most witnesses are going to have to engage in international travel regardless of where the trial is held. European and Latin American witnesses would find it just as inconvenient and perhaps even more so to travel somewhere in Asia as opposed to the US. Even Asian witnesses will have a major international trip on their hands either way – Asia is a big continent. Simply because the witnesses have to travel to the US does not mean that it would be all that more inconvenient anywhere else in the world. This fact, coupled with the fact that at least two of the parties are residents of Nevada and the plaintiff travels extensively in the US and is even a permanent resident alien of a neighboring state means that Nevada is probably the most convenient state to have the law suit once all of the Public and private factors are taken into account. V. Failure to State a Claim upon which Relief Can Be Granted – Rule 12(b)(6) Finally, DD could file a Rule 12(b)(6) motion to dismiss for failure to state a claim upon which relief can be granted (demur in state courts) because DD did not do anything according to the pleadings which states a tort. The complaint merely states (and we are told in the facts) that DD gave some money to Dory. That money was given AFTER she did what she allegedly did and DD had nothing to do with it – simply cheering that something bad has happened to Players is not a tort. However, Players’ allegations obviously go further than that, Players is alleging that there must have been a deal, and the $50,000 “payment” is circumstantial evidence that DD paid Dory to try to harm DD’s rival, Players. At this early stage a court would allow Players to amend its complaint to allege the full extent of the conspiracy between Dory and DD. Players eventually has to be able to produce evidence to support the claim or it will be dismissed during summary judgment. Also, there is a Rule 11 duty for Players to at least have some evidentiary support for the allegation. Without more allegations other than the implication that there must have been a deal, a court would likely dismiss the case against DD. NOTE: many students wasted time on such things as collateral attack, ADR and various other non-issues. This may be a “shot-gun” approach to simply hit everything you can think of and hope you get points. Such is bad exam advice as you need to be more discerning than that. Part of what is being tested is judgment and focusing on what is important, not simply how many possible issues you can throw into the mix no matter how unrelated.
Essay Question Three SUB-QUESTION “A.”: APPLICATION OF STATE LAW REQUIRING APPROVAL BY THE SPECIAL NEVADA HOTEL GRIEVANCE BOARD BEFORE INSTITUTING A LAWSUIT This is a “Choice of Law” issue where we must determine in a diversity case which law applies, federal or state. I. Erie Analysis: Does State Law or Federal Law Apply in this Diversity Case? Players is arguing that the Nevada rule requiring a plaintiff hotel casino to first go to the special review board to obtain authorization before suing a former guest in any court is a state procedural issue – because it deals with what a plaintiff must do procedurally before filing a complaint against a former hotel guest. Dory is arguing that it is substantive because it deals with a special situation dealing with a certain type of plaintiff (hotel casinos) and a certain type of defendant (former hotel guest) in a certain type of case like this – so it is substantive connected to a certain situation. Of course, if this case were a federal question case, this would not be an issue, because we would not be applying state substantive law, the law would be all federal, federal procedural and federal substantive. But diversity cases are different because although the procedural law is federal, the substantive law is state. A. Clearly Substantive or Procedural? It is interesting to point out the strategic mistake Dory would be making here in the first instance. Instead of removing the case to federal court, she should have just kept it in state court and simply filed a motion to dismiss based on Players’ failure to follow the state law that clearly would apply because she would be in state court on a state substantive issue. Whether the grievance board notice law is substantive or procedural would not matter because the case is in state court in Nevada on a state law tort claim. Thus, both the procedural and substantive law of Nevada would apply, so either way, the Nevada law in question would apply and Players clearly failed to comply. So by removing to federal court, Dory has made a big mistake by throwing into question whether the law that would otherwise have helped her cause would now even be applicable. If this area is “procedural,” then the Nevada law would not apply in the federal court action because there is no federal procedural requirement to file with the Nevada grievance board before filing the complaint in federal court. A court would not rule that matter is either clearly substantive or procedural because it has aspects of being both – it appears at first simply to address a procedural aspect as to what procedural steps the plaintiff must take before filing, but it also appears substantive because the requirement is not for every case but has to do only with a very specific substantive law situation – hotel casino suing a former guest. It also seems substantive because it is so outcome determinative at this point, as it yields one result in state court (dismissal) and the opposite in federal court (the lawsuit goes on). Therefore, more analysis needs to be done. B. Harmonize the Conflict? Dory may try to “harmonize” the conflict in an effort to get the court to apply the state law. The way to do this is to argue that the laws are actually not in conflict because there is no law which specifically prohibits the plaintiff from being required to go to the special grievance board first. For example, whenever a plaintiff sues in federal court for federal civil rights discrimination the substantive federal civil rights law requires the plaintiff to go to the EEOC (Equal Employment Opportunity Commission) first to get a notice of a right to sue. This federal substantive law requirement does not conflict with any federal procedural law (if it did it would not be allowed). Since the substantive law to be applied is state law when a hotel sues a former guest, Dory could argue the law should apply the same way – and not even be considered a “conflict” with any federal procedures the way substantive federal law requirements (EEOC) does not “conflict” with federal procedural rules. A judge might be persuaded by this logic; however, a judge might also fear that this proves too much and would allow state law filing procedures to control in all situations in federal court because there would be no conflict. A judge more likely would rule that there is an irreconcilable conflict because federal procedure does NOT require going to a special board before being allowed to sue and therefore, to the extent the state law requires this, and federal law does not, there is a conflict that cannot be harmonized. Because a judge is not likely to harmonize the conflict as that would be giving too much power to state laws that could mandate extra pleading requirements in any and all federal diversity actions, a court would likely consider this an unavoidable conflict between state and federal law. State law requires two actions (state grievance board first, then regular filing in a regular court), while federal law requires a single less stringent action (mere filing with the court), and as such it is not able to be harmonized. Therefore, the judge would check the source of the federal law in conflict with state law in order to resolve the conflict and pick between the two conflicting laws. If the source of the federal law in conflict with the state law is a U.S. Constitutional provision, then the federal law would control under the Supremacy clause in the constitution. Players would argue that the constitution allows access to the federal court system and allows jury trials without setting up extra roadblocks to exercise the right to a federal jury trial. Dory would argue that the 7th Amendment right to a jury trial is not being denied nor any constitutional right to due process, because Players can get to a jury trial, if Players simply follows state substantive law which requires going to the grievance board in these special kind of cases. So there is no conflict with the US constitution. A court would likely rule that because this is not a complete denial of the right to a jury trial, the conflict is not with the US constitution. If the state law at issue were that there was no right to a jury trial in these kinds of cases at all, then Players would have a much stronger argument that the law was conflicting with a federal US constitutional provision. 2. Federal Statute or Federal Rule of Civil Procedure? Players might then try to argue that the source of federal law is a federal statute that is even “arguably procedural.” It is difficult to see what federal statute may be at issue here. However, there may be two Federal Rules of Civil Procedure here Rule 38 – the right to a jury trial -- and Rule 8 – the requirements for drafting and filing a complaint, which has no special pleading requirement or procedure for a plaintiff to go through other than merely filing the complaint. Dory would argue that neither rule conflicts with the state law. Rule 38 does not conflict for the same reason it does not conflict with the 7th amendment (see above). Dory might have a little more trouble with Rule 8, however. Rule 8 sets out the requirements to file a complaint in federal court and it says nothing about any special grievance board. Players could say that not only does Rule 8 say nothing about any additional filing procedures, but it does not specifically allow for additional procedures and since it is silent, it conflicts with the state law. Players would need to further argue that Rule 8 does not violate the REA (because it does not “abridge, enlarge or modify” a state substantive right) and therefore the federal statute controls. Congress has spoken by having a rule that deals with what is required to file and therefore it is by definition “procedural” because a Rule of Civil Procedure addresses already all pleading requirements (“Guided” Erie). Dory would argue that this does violate a state substantive right because she should be protected from this kind of suit under state substantive law, but she is not if Rule 8 applies over her state rights. Of course, Players would argue that it is OK if a federal procedural rule applies over a state procedural rule, as this is procedural. A judge very well might rule that the source of federal law in conflict is Federal Rule 8, but that would be a narrow interpretation of Rule 8. Dory could argue that nothing in Rule 8 explicitly prohibits the grievance procedure either and so the conflict is not direct or acute enough to apply the Hanna v.Plumer rule. This is a tough argument because, again, there is federal substantive law requiring these kind of special filing procedures (like having to go to the EEOC to get a notice of a right to sue) and that has never been determined to conflict with Rule 8. As a result, the court probably would determine that Rule 8 is not in conflict with the state law. But if it did rule that it conflicts with Rule 8, the federal rule would apply and Players’ suit would be allowed to go forward. 3. Federal Practice/Common Law? Dory’s best hope here might be to argue that the source of federal law in conflict is federal practice or common law, then do an “Unguided” Erie, York, Byrd outcome determinative/bound-up balancing test. Dory would say that the only conflict is with the general federal common law practice that in federal court, litigants can simply file their complaint without having to go the grievance board. Because there is no guidance as to whether this is substantive or procedural (Congress has not specifically said through a federal rule of civil procedure that it is procedural), we must do a modified outcome determinative test, under Erie, York, Byrd. In the first instance, Dory would argue that it is outcome determinative and she would be correct simply because, at this point, application of state law and federal practice would yield very different results. In state court, this case would be barred because Players failed to take the case to the grievance board first before filing in “any court.” In federal court, however, application of federal practice law would mean Players’ lawsuit would NOT be dismissed and be allowed to continue like any other lawsuit. This is exactly what the York case said would be a substantive matter – because it is outcome determinative and it obviously would violate the twin aims of Erie: (1) it promotes forum shopping (Players wants the federal court, not state) and (2) it represents an inequitable administration of the law (Players is getting a different result simply by virtue of this being a diversity case, that is Players gets to go to federal court and perhaps get a different result simply because there is diversity – and we are assuming diversity for this question). Players’ only argument here is that although it is obviously outcome determinative, under the Byrd modified test, perhaps the state rule is not “bound up” enough with underlying state rights and responsibilities and/or the bound up amount is simply outweighed by stronger federal interests in allowing litigants to sue unobstructed by additional pleading obstacles, like the Nevada grievance board. Players could try to argue that federal interests outweigh the state interest but that would be difficult to do given the very heavy state interest involved here, and it is “heavy” because the rule is so bound up with underlying state policy. So Dory’s best argument (if there is an unavoidable conflict that cannot be harmonized) is to argue that the source of federal law in conflict is merely federal practice and the federal interest in the federal practice to file without doing the extra step of going to the grievance board is not outweighed by the more heavy, bound up state law interest in protecting former guests from these kind of lawsuits by hotel casinos in an effort to protect the Nevada economy. So the final result really turns one how the judge categorizes the source of the federal law in conflict with the state law: if it is either constitutional, statutory or a federal rule of civil procedure, the federal law wins, if it is mere federal general practice law, the state law probably wins. 4. Gasperini Balancing/Compromise? A final argument that either side could make to soften the blow of a loss on the source of federal law, would be to appeal to a Gasperini type compromise. For example, if the judge decides the matter is federal procedural because Rule 8 is controlling, Dory might try to get the court to do some sort of compromise and balancing to recognize the importance of state law interests here. But this is difficult to fashion a compromise because it either is going to apply or it is not, there is no middle ground and we are not talking about one law applying on the trial court level and another on the appellate court level as was the case in the confused situation in Gasperini.
This is a “Conflict of Law” issue where we must determine in a diversity case which SUBSTANTIVE law applies -- Nevada contract law, or Japanese contract/consumer protection law. I. Apply the Substantive Law of the State in which the Federal Court Sits: Of course, we know that the federal court applies federal procedural law and state substantive law. We also know that the substantive law to be applied is that of the state in which the federal court sits. So immediately Players could argue that Nevada state contract law applies as the substantive law because we are in Nevada federal court and in federal court the substantive law to be applied is that of the state in which the federal court sits, Nevada, and therefore Japanese substantive law does not apply. If this were all there were to the analysis, then Players would be right and we would never apply the substantive law of a foreign country in any circumstance because a federal court will always be located in a state of the United States (and not in any foreign country). However, we know that Lex Fori (apply the substantive law of forum) is not the only possibility here so that easy argument cannot be right in all circumstances, but it is the starting point. A. Dory’s Inconsistent Position Before jumping off from that starting point, however, it is important to note as a strategic matter that Dory is taking a very inconsistent position here. She is appealing to Nevada contract law in her breach of contract law counterclaim against Players, but she simultaneously is saying that Japanese substantive law should apply instead of Nevada contract law – note that Nevada contract law has no treble damages provision. Players would argue that she is trying to argue both ways and it is inconsistent. Dory would respond that she is not inconsistent and that she is applying Japanese contract law in its entirety, which presumably includes damages for a straight breach of contract, and it also provides treble damages in this kind of circumstances. Thus, she is not inconsistent and although it may seem like it, she is not arguing a patchwork of Nevada law and Japanese law, but simply Japanese law. That is OK, but it is important to note that a court is really being asked to look to Japanese substantive law in its entirety (contract law and damages), not that Nevada contract law applies, except the part about treble damages where we then just import the Japanese law provision. B. Klaxon Although the federal court is supposed to apply the substantive law of the state in which it sits, that does not mean we immediately go to Nevada substantive contract law and simply apply it and that is the end of the story. Instead, there is a critical step, under the Klaxon case we are instructed that the state’s conflict of laws principles are themselves considered substantive law. That means that although we must look to Nevada substantive law, we first look to Nevada conflict of law principles, which might either direct us to Nevada contract law or Japanese contract law or some other substantive contract law. C. Apply the State Conflicts of Law Principles We were not given the Nevada state conflict of law provisions so we simply do not know how to go about making that determination. However, we learned several theories that might be applicable by Nevada or any other state conflict of laws provisions. So it was important to acknowledge that we are applying Nevada conflict of law provisions, and since we do not have them specifically, we are going to have to choose among the options typically given the applicable conflicts of law statutes for the state in question. II. Conflict of Law Principles A. Lex Fori? This concept is the oldest and easiest to apply – you simply apply the substantive law of the forum. Because it is Nevada federal court, we would apply the substantive contract law of Nevada. It is easy but the case is reduced to a race to the courthouse that sits in a state or place where you want that substantive law to apply. It is the ultimate in forum shopping and most states and countries have rejected it as unfair or not a very highly developed or principled way to make a substantive law determination. A Nevada court would likely reject this theory as it does not go to the merits of the case but merely rewards the plaintiff for choosing the forum in order to get applicable substantive law. Nevada law should not apply simply because the case was filed in Nevada. B. Lex Loci/Multilateralism? A more modern possibility is a “place of the wrong” analysis. This allows courts to defer to other courts that have a higher claim to the dispute in the sense that it occurred there and therefore the substantive law of that location should apply to govern the dispute. Dory would argue that the wrong she is complaining of took place in Japan in that she was solicited there over the internet and this is exactly the thing the Japanese government had in kind when it wrote the contract consumer protection law. Using theories of “comity” the Nevada federal court should defer to Japanese law as a legal/diplomatic thing to do and hope that Japanese courts would do the same if the situation were revered. Also, Dory could argue that legally Japan has “vested rights” in the dispute and its resolution because it involved a Japanese consumer and the wrong it is trying to protect its citizens from – internet offers from foreign companies that later sue -- occurred in Japan. Thus, the court should move away from a lex loci approach and apply a place of the wrong approach which points toward the application of the Japanese law. Players would argue that Dory’s counterclaim is not the only legal issue in the case. Player’s claims deal with what Dory did and the effect it had in Nevada to a Nevada casino. Nevada also has some vested rights and interests here such as Nevada tort law and Nevada contract law and protecting Nevadan citizens from the actions of others, domestic or foreign. So although Nevada may even follow lex loci/multilateralism, there are plenty of reasons why the place of the wrong is actually more connected to Nevada -- (see also the personal jurisdiction arguments regarding the contacts to Nevada, above in Essay Question Two). A court might apply Nevada substantive law to Players’ claims and Japanese law to Dory’s counterclaim, but that complicates the case, although courts can and have done this in the past. This is a close call so it was important simply to raise the theory. Perhaps the court would “compromise” this way so that it is simultaneously respecting both Nevada and Japanese law. C. Most Significant Relationship Test/Unilateralism? A very similar test is the most significant relationship test or unilateralism. Like lex loci, it takes into account the place of the wrong and focuses on geography and location, but that is one factor to be taken into account. Other factors include the relationship of the litigants to the forum and the interests of the sovereigns in the dispute. Dory appears to be more connected to Nevada (she travels extensively throughout the US and is a permanent resident alien of a neighboring a state, California) than Players is connected to Japan (Dory was the first to contact Players on the internet). But Japan has a very strong interest in protecting is citizens from internet offers from foreigners. Again, perhaps the best way to do this since it is a close call is to apply Nevada tort law to players’ claims and Japanese law to Dory’s counterclaim and put Players on notice that if the do make internet offers to foreigners they may be subjecting themselves to local consumer protection law. D. Harmonization? The final point is harmonization, not in the sense of compromising 9as stated above), but checking to see if there is any treaty or compact between the two countries. The best way, perhaps, for sovereigns to solve these substantive law conflicts is to enter a treaty or compact so that the courts of both countries follow a standard protocol for determining which substantive law should apply. We have no facts on this but it would be something an international lawyer would at least research before making an argument to the court.
1. Assume that Players filed suit in federal court and sent to Dory in Japan a Rule 4(d) waiver of service form along with a copy of the complaint. Assume that after 30 days, Dory still had not signed and returned the waiver. Players should do the following: (C) – “C” is the best answer because Players, must wait another 30 days, for a total of 60 days, before it can expect any response from Dory on the signature of the waiver (that is “a reasonable time” when the defendant is outside the US). If Dory signs the waiver within the 60 day period, then she would have up until a total of 90 days within in which to respond to the complaint. She gets a total of 90 days to answer from the date the waiver is sent (if she signs the waiver) because she is outside the US. “A” is wrong because she has not yet defaulted, we are simply waiting for the “reasonable period” to run its course, so default would be premature at this point. “B” is wrong because Dory needs a total of at least 60 days to decide if she will sign the waiver so it is premature to personally serve her. “D” and “E” are wrong because Players has already elected to serve using the Rule 4(d) waiver method so Players needs to allow the process to run its course before Players attempt to serve through another allowable method 2. In federal court, Dory must do the following at or within 14 days of the Rule 26(f) meeting: (C) – “C” is the best answer because under the Rule, , the parties must submit their Rule 26(a)(1)(A) – (D) mandatory disclosures “at or within 14 days of the Rule 26(f) meeting.” “A” is wrong because discovery requests are not due at this early date, those are to be determined in accordance with the discovery plan to be made at the Rule 26(f) meeting. “B” is wrong because there are no requests even made at this early point that even could be answered. “D” is wrong because the Rule 16(b) conference takes place at least 21 days after the Rule 26(f) meeting so it cannot take place 14 days before the Rule 26(f) conference. “E” is wrong because it is an incomplete answer – it is only the Rule 26(a)(1)(A) mandatory disclosure, but not the other Rule 26(a)(1) mandatory disclosures. (B) – “B” is the best answer because the motion to dismiss is proper as it is contained within Dory’s first responsive pleading – which is her answer because she did not file a pre-answer motion or any other responsive motion. Answers can include admissions and denials, affirmative defenses (including motions to dismiss, such as Rule 12(b)(3) motions) and counterclaims. “A” is wrong because pre-answer motions are merely options, but they are not required –o a defendant may file a pre-answer motion, before answering, or they can answer and simply include the motion as an affirmative defense (because the answer is the first responsive pleading). “C” is wrong because filing a Reply is merely to answer the allegations of defendant’s counterclaims (if filed) and has nothing to do with the defendant’s affirmative defenses (such as a Rule 12(b)(3) motion). “D” is wrong because a Rule 11 motion is NOT a counterclaim and in any event Rule 11 would be improper because defendant did nothing wrong by including a Rule 12(b)(3) motion as an affirmative defense in the answer and electing not to file it by itself earlier is a pre-answer motion. “E” is wrong because both “A” and “D” are wrong. 4. In federal court, assume instead of answering the complaint DD immediately files a Rule 56 motion for summary judgment because DD did nothing wrong by merely giving Dory money (the check for $50,000) for standing up for herself, DD argues in its motion that the act of supporting Dory was merely a form of advertising in order to buy good will among potential foreign customers who would find out about it. Players should: (A) Argue that a Rule 56 summary judgment motion is improper at this point 5. In the federal court action, assume Players served DD with process by leaving a copy of the summons and complaint at DD’s corporate headquarters. This form of service of process would be: B – “B” is correct because Rule 4(h), which controls service of a corporation, allows for substituted service, as long as the persona served is sufficiently high up enough in the corporation – would have to service the president or executive, not simply leave it with a receptionist for example. “A” is wrong because it is an incorrect statement of law, there is nothing in Rule 4(h) to suggest that corporations cannot be served using substituted service. “C” is wrong because although many states require a corporation to appoint a person to accept service of process in exchange for being allowed to do business in the state, and serving an agent is an acceptable way to serve it is not the ONLY way to serve a corporation. “D” is wrong because although serving according to state service law may be allowed, there are more ways to serve than according to state law so service is not that limited. “E” is wrong because again, although the Rule 4(d) waiver service method CAN be used, it is not the exclusive means of service of a corporation.
C – “C” is the best available answer because there is still no clear Nevada state law on the subject, it is unclear and ambiguous and therefore the court’s best bet appears to be to abstain until the issue is cleared up once and for all. “A” is wrong because the Nevada case law of lower courts is obviously in question now that the Nevada Supreme Court has spoken and thrown into question truth as a defense in a simple name-calling situation as we have here. “B” is incorrect because although the Nevada Supreme Court has “questioned” the law, it is a definitive statement of the law, it is not a holding of the Supreme Court. “D” is wrong because even though certification would be a good thing for the federal court to do, the Nevada State Supreme Court does not allow for this procedure, so if the federal court sent the question over , the Nevada Supreme Court would simply ignore it. “E” is tempting but wrong because the court would just be guessing at that point and would not be getting Nevada law, but just what other courts think Nevada law is/should be. 7. In federal court in California, §1391 venue would be proper against DD:
D – “D” is the best answer because 1391 venue would not be possible in any of the stated alternatives. 1391 (a)(1) residence would not be available because there is nothing in the facts to suggest DD has any contacts to any judicial district in California, so it would not reside there, besides Dory is not a resident of California so (a)(1) would not be possible in any event. 1391(a)(2) would not be available in California because none of the events or omissions giving rise to the lawsuit to place in California, and certainly not a “substantial” portion. 1391(a)(3) is NOT available because although venue is not available in California, it is available in Nevada (based on (a)(2) because many events happened in NV giving rise to the lawsuit). So venue is not possible in any judicial district in CA. “A” is wrong because (a)(3) is not available. “B” is wrong because there is no jurisdiction over DD is California, so again (a)(3) would not work. “C” is wrong because this is a diversity case, not a non-diversity case so (b)(3) may be found would not even be available. “E” is wrong because “D” is correct.
|
|
| Last Updated ( Friday, 23 February 2007 ) |
| < Prev | Next > |
|---|