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| Civil Procedure Fall 1995 Mid-Term Exam Answer |
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| Sunday, 03 December 2006 | |
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1995 MID-TERM EXAM ANSWER/ANALYSIS
MEANING OF NUMERICAL GRADES You have received many numerical scores/grades written across the top of your exam. The CIRCLED score/grade at the far right is your final overall score/grade for the exam. Your overall score has been ADJUSTED from the "RAW" scores/points you received for each portion of the exam. Note that, from left to right, the first four numbers correspond to your "RAW" scores for the Four Subparts ("A" - "D") of Part I of the exam. Of the 75 "RAW" points possible for Part I, they broke down as follows: "A" = 30 pts.; "B" = 13 pts.; "C" = 26 pts.; and "D" = 6 pts. Next is your raw score/points for Part I (75 possible points), added to your raw score/points for Part Two (25 possible points). You then have a total raw score for the exam (100 possible points). Accordingly, Part I (Essay) is worth 75% of the overall score/grade while Part II (short answers) is worth 25% of the overall score/grade. That total raw score is then followed by your final adjusted score which is circled. I have ADJUSTED your overall raw scores to a McGeorge numerical score and letter grade equivalent. In order to convert your adjusted McGeorge numerical scores/grades to an approximate letter grade equivalent for your overall mid-term score/grade, you need to consult the conversion tables that follow. The reason the letter grade equivalents are "approximate" for this mid-term exam is because you will receive an official letter grade only at the end of the year, not for this mid-term. Your overall adjusted mid-term score/grade will remain in numerical form so that it can be averaged mathematically with your final exam score/grade at the end of the year. The average of the mid-term and final exams will then determine your final letter grade for this course (with a possible half-letter adjustment for class participation/attendance and written work -- see Course Description at beginning of "Overview and Intro"). Recall that the mid-term exam is worth 40% of the final grade while the final exam at the end of this semester is worth 60%. For each portion of the mid-term exam, I have set forth below the highest, lowest, and average raw points received. I also have set forth the highest, lowest, and average adjusted overall scores/grades for the mid-term. This should provide enough relative information so you can get a sense of how you did in comparison to the rest of your classmates. If you have any questions not answered by this analysis, please see me. APPROXIMATE McGEORGE LETTER GRADE EQUIVALENTS OF ADJUSTED NUMERICAL SCORES NUMERICAL GRADE LETTER GRADE EQUIVALENT 91-100 A+ 90 A 88-89 A- 84-87 B+ 80-83 B 78-79 B- 74-77 C+ 70-73 C 68-69 C- 64-67 D+ 60-63 D 58-59 D- 0-57 F PART I -- ESSAY -- 75 "RAW" PTS. POSSIBLE HIGHEST GRADE LOWEST GRADE AVERAGE GRADE SUBPART "A" 28/30 12/30 20.9/30 SUBPART "B" 11/13 4/13 6.8/13 SUBPART "C" 22.5/26 0/26 12.6/26 SUBPART "D" 6/6 0/6 2.4/6 PART I OVERALL SCORE 57/75 30/75 42.8/75 PART II (SHORT ANSWERS) -- 25 "RAW" PTS. POSSIBLE HIGHEST GRADE LOWEST GRADE AVERAGE GRADE 20/25 8/25 15.2/25 MID-TERM OVERALL "RAW" SCORES -- 100 PTS. POSSIBLE HIGHEST GRADE LOWEST GRADE AVERAGE GRADE 77/100 37/100 63.8/100 MID-TERM OVERALL "ADJUSTED" SCORES HIGHEST GRADE LOWEST GRADE AVERAGE GRADE 96 59 77 THE TABLE ON THE FOLLOWING PAGES REFLECTS THE "ADJUSTED" SCORES -- WHAT YOU ACTUALLY RECEIVED AS YOUR SCORE/GRADE FOR THE MID-TERM. OVERALL SCORE NO. OF STUDENTS APPROXIMATE LETTER GRADE EQUIVALENT 97-100 0 A+ 96 1 94 1 A 92 4 91 2 90 1 88 1 A- 86 5 B+ 85 4 84 5 83 5 B 82 3 81 7 80 4 79 10 B- 78 4 77 2 C+ 76 4 75 4 74 4 73 3 C 72 4 71 7 70 5 69 3 C- FINAL SCORE NO. OF STUDENTS APPROXIMATE LETTER GRADE EQUIVALENT 68 3 C- 67 4 D+ 66 1 65 1 63 1 D 62 1 61 1 60 1 59 1 D- 58 OR BELOW 0 NOTE: Please keep in mind that this mid-term grade is worth only 40% of the grade (the final is worth 60%). Typically final examination scores/grades move as students make necessary adjustments or become overconfident. Also, because I will draw a curve for the final letter grade it is quite possible, for example, that students receiving a 61 numerical score would still receive a C- (rather than a D) and students receiving a 78 numerical score may receive a B (instead of B-). So much can change between now and the final. The main point to remember is that you can make a dramatic move in your grades if you are unsatisfied with your mid-term score. Also, if you are satisfied, remember that many students will be making adjustments this semester and as a result will be improving their exam performance as they become more acclimated to law school and the study of law, so keep focussed. Finally, remember classroom participation/attendance can help (or hurt) you grade by one half-letter. MODEL ANSWERS AND EXAM ISSUES The following answers/analyses are much more involved and detailed than I expected your answers to be, given the time you had to complete the exam. Moreover, many non-issues, "red-herring" arguments, and general legal observations, are addressed even though you were not expected to address them in your answer. Also, this was a very challenging exam, especially Part I, Subpart "C." PART I -- ESSAY The best way to begin organizing this long hypothetical is to follow the four-subpart questions ("A" - "D"). Because there were so many issues to address, it was not a good idea to attempt to answer the subparts simultaneously as such led to poorly organized, jumbled responses. The most efficient way to organize your exam was to answer each subpart separately by general issue and then provide an analysis of each issue with respect to each defendant. For issues that applied to both defendants, no separate analysis for each defendant was warranted. SUBPART A -- CALIFORNIA SUPERIOR COURT PROPER? I. DEMON RECORDS A. SERVICE The facts tell us that "California's service statute is exactly the same as Federal Rule 4." We are also told that "Punk's lawyer served Demon properly under Federal Rule 4." Thus, Demon has been properly served in the California court by satisfying (1) the statutory test as well as (2) the constitutional test since Rule 4 clearly is "reasonably calculated to notify the defendant" under Mullane. B. PERSONAL JURISDICTION Demon and DDD have the option of doing nothing, of course, which would result in a default judgment. Demon and DDD could then engage in a collateral attack should Punk ever try to enforce the California default judgment in New York or Germany. This may never happen, however, if Punk's parents decide it would not be economically feasible to attempt to enforce the judgment. However, if Punk's parents decide to enforce the default judgment, Demon and DDD could not argue on the merits; the only issue would be whether the California court had personal jurisdiction. 1. JURISDICTIONAL STATUTE According to California's jurisdictional statute, the statutory test simply has been collapsed into the constitutional test. Thus, if the minimum contacts test can be satisfied, this will automatically satisfy the jurisdictional statute. 2. MINIMUM CONTACTS There are several arguments regarding Demon's minimum contacts with the State of California that would make California's exercise of jurisdiction over Demon constitutional under the International Shoe minimum contacts test. a. Traditional Bases Demon would argue that none of the traditional bases for in personam jurisdiction under Pennoyer -- presence, domicile or consent -- are available here to demonstrate minimum contacts. First, presence cannot serve as a basis of minimum contacts for a corporation because a corporation does not have a corporeal body to be within the state's borders when served. Moreover, no service of Demon even purportedly took place within the State of California. Second, Demon is not domiciled in California. Demon is a corporation domiciled only in New York since it is incorporated there and its principle place of business is there, not California. Next, there is no indication that Demon has ever explicitly consented to jurisdiction in California (by way of contract, for example). Also, because Demon is now resisting jurisdiction, Demon has in no way waived this defense under Rule 12(h)(1), and will certainly be filing a Rule 12(b)(2) motion to dismiss for lack or personal jurisdiction. Finally, we know that under Shaffer v. Heitner, in-rem and quasi-in-rem jurisdiction over property are no longer means of obtaining jurisdiction as they have been absorbed into the minimum contacts test. Still, it is possible to base personal jurisdiction over a defendant based on a defendant's ownership of property within a state as the ownership of property itself can serve as the minimum contacts for in personam jurisdiction. But there is no indication that Demon owns any property in California which could serve as these minimum contacts. Thus, if there are any minimum contacts, the analysis must take place on a case specific basis. b. General Jurisdiction Punk should argue that personal jurisdiction over Demon is proper in California because Demon's contacts with the State of California are frequent, substantial and pervasive. Demon distributes CDs (not just for DDD, but also for many other unspecified heavy metal bands "across the U.S.," which, presumably, would include distribution in California. Demon would argue that "across the U.S." does not necessarily include California. Moreover, Demon would argue that at the time of the accident most of DDD's CDs had been sold in New York. The facts do not reveal enough information to determine whether Demon has frequent, pervasive and substantial contacts with the State of California. We simply do not know the extent of Demon's actual sales in the State of California. Because Punk would have the burden of proof, it would be up to him to discover more jurisdictional related facts in order to demonstrate Demon's alleged substantial and pervasive contacts. Still, the fact that Demon has distributed over 1 million CDs of DDD, not to mention the untold amount of all the other Heavy Metal CDs, suggests that there probably would be substantial and pervasive contacts in California in order to sue Demon on any claim in California, but again, there are not enough specific facts to make that argument definitively. c. Specific Jurisdiction Punk probably would have a better chance of demonstrating Demon's minimum contacts if he argued for specific jurisdiction. In the World-Wide case, although jurisdiction ultimately was not found, it was determined that jurisdiction can be based on a very slight contact, as long as it is highly related to the lawsuit. Here, Punk can say that Demon sold at least one CD in California -- the DDD CD sold to Punk -- and the lawsuit is highly related to that one contact (song lyrics caused accident). Demon would argue that the 1 million CDs sold were different from the "Driving to Your Destiny -- Do It" CD that Punk was listening to when he drove off of the cliff. But Punk would argue that although it is a different album, the sale of 1 million CDs sold still goes toward general jurisdiction, not the specific jurisdiction being argued here (there is no dispute the one CD was sold in California to Punk). The fact that this one CD was sold to Punk is enough. Demon may argue that the CD is not really related to the lawsuit because it is ridiculous to argue that the song on the CD caused Punk to attempt suicide. Punk merely had an accident and is now blaming it on Demon and DDD in an attempt to get money (by settlement or trial). Punk would argue that he does not have to prove the substance and underlying theory of his case. He need only allege enough to get jurisdiction. d. Purposeful Availment The sale of the one CD is comparable to driving in a state only one time and getting into an accident there, and therefore qualifies as specific jurisdiction. Demon, however, would have a decent lack of purposeful availment argument. Demon would argue that it was not foreseeable that it would get sued in California. At most, Demon might expect to get sued for copyright infringement, or a defective CD giving off a powerful electrical shock, etc., for example, but not something so attenuated as the unforeseeable self-destructive psychological reactions to song lyrics. Demon would also argue that it did nothing to avail itself of the benefits and protections of the State of California -- the Postal Service is federal not state. Demon also would point out that Punk sought out Demon, wrote to them and requested the CD. Demon would emphasize that it did not solicit Punk nor advertize in California. Like the World-Wide case, Demon would argue that it simply sold a CD and the fact that Punk listened to it in California was a unilateral act of Punk and had nothing to do with Demon's operations. Punk would argue that there is sufficient purposeful availment because Demon, unlike Seaway and World-Wide VW in the World-Wide case, knew it was selling to a California resident and should have assumed it would be used (listened to) in California (whereas Seaway and World-Wide VW sold in New York to New York residents who later -- on their own and unbeknownst to Seaway and World-Wide VW -- decided to move to Arizona and on the way got into an accident in Oklahoma). This case would be the same as World-Wide only if Punk unilaterally took the CD to, say Oregon, listened to it there, had his accident there, and then tried to sue in Oregon state court. In this case, there is much more of a purposeful direction of the product (the CD) into California to be used by a Californian. It was therefore foreseeable that Demon would get sued in California. Also, Demon was benefitting from the California heavy metal listening market (which includes Punk), even though the customer, Punk, initiated the contact. The key point is that Demon still took advantage of the contact and ultimately followed through with the sale. Punk would also argue that although Demon did not purchase any direct-advertising in California, its statements in "Heavy Metal Today" was a form of free advertising designed to reach a national heavy metal market audience (part of which includes California). Because Demon is well-known across the country, the fact that it conducts its mail-order business by responding to orders probably does not insulate it from suits in the states where it sells. Thus, although Punk initiated the contact, Demon still responded. Punk would ague he was merely asking a question, whereas Demon "made the first move" by offering to sell it to Punk and shipping it off to him with an invoice. This specific, highly related contact is probably enough, especially given the additional sales of the many other CDs by Demon, many presumably in California, to allow personal jurisdiction. e. Other Considerations Demon might argue that it would be unreasonable (under Asahi) and/or unfair to exercise jurisdiction over Demon in California because it would unfairly burden Demon (under World-Wide, and Burger King). Demon would have to travel to California and defend itself. Moreover, Demon would argue that although California may have an interest in protecting its citizens, it does not have an interest in allowing a plaintiff to recover twice (an argument taken up infra.) Punk would argue that unlike Asahi, Demon is a domestic corporation and Punk, a California plaintiff, is still involved in the lawsuit which has a direct claim against it, not a third-party impleader Rule 14 claim between two foreign corporations. Although Demon may argue for Forum Non Conveniens to move the case to New York, Demon could not successfully argue for a lack of jurisdiction based solely on other considerations. Finally, Punk would argue that California has no interest in allowing tortfeasor wrongdoers, such as Demon, to get off the hook simply because a plaintiff took the precautionary step of obtaining insurance, see infra). C. SUBJECT-MATTER JURISDICTION/VENUE 1. SUBJECT-MATTER JURISDICTION Subject-matter jurisdiction arguments generally were non-issues at this point because we are in STATE court, NOT FEDERAL COURT. Subject-matter jurisdiction in state court is general, not limited. The state statute clearly provides subject-matter jurisdiction. So this tort lawsuit along with most other lawsuits (except for those few exclusive federal jurisdiction cases -- patent, bankruptcy, etc,) is proper in state court. Demon and DDD would have an argument, however, that if this California songwriter liability statute is "preempted" by the federal songwriter immunity statute, as one federal appeals court (9th Cir.) has held, then of course subject matter jurisdiction would not be proper in state court. Demon and DDD would argue that the statute and the case is preempted by federal law and therefore should be in federal court. Because we are unaware of the specific basis for the possible federal preemption of this case, no further analysis is possible. But if the federal immunity statute would preempt the California liability statute, as the federal liability statute preempted the similar Oregon liability statute, then the California state court would lack subject-matter jurisdiction. 2. VENUE Venue in state court is simply a question of applying STATE venue rules -- NOT §1391, which determines venue for FEDERAL court actions, not state. Many students made this mistake and applied §1391 -- the FEDERAL VENUE STATUTE. Again, there was no state venue statute to apply in order to send you to the right COUNTY in California (remember, in federal court §1391 sends you to a proper FEDERAL judicial district, but in state court, proper venue is a proper COUNTY in the state court system in which to sue). II. DDD Simply because California state court may or may not be a proper court in which to sue Demon, we still must determine whether it would a proper court in which to sue DDD. A. SERVICE Whether service was affected properly against DDD is really a two part analysis since it was done differently with respect to the lead singer, Courtney Uzi, and the rest of the DDD bandmembers. 1. COURTNEY UZI Ms. Uzi was personally served within the borders of the State of California. Punk will argue, therefore, that under Rule 4(e)(2), Ms. Uzi was properly served (notified) under the applicable statutory test "by delivering a copy of the summons and of the complaint to the individual personally . . . " and that such notification was "reasonably calculated to give her notice under the circumstances," thus satisfying the constitutional test under Mullane. Ms. Uzi might argue that because she was in California "at the time answering a criminal charge for trashing a Beverly Hills hotel room" the service should not count. Several cases have held that jurisdiction by personal service is not fair (violates due process) when the defendant is tricked into the jurisdiction or is there against her will. Compelled physical presence -- like having to answer a criminal charge in another case -- is not the same kind of physical presence as being in the jurisdiction of one's own free will. Punk would respond that whether this personal service provides sufficient NOTICE to Ms. Uzi under Federal Rule 4 is a very DIFFERENT question than whether personal service can serve as a basis for personal jurisdiction based on presence (would violate due process for personal jurisdiction, see below). As such, Punk could argue that the statutory test has been met and the Mullane constitutional test for notice has been met. Still, Ms. Uzi would argue that due process applies to ALL procedures (including the giving of notice) and that there should be no distinction between coerced service, regardless of whether it is intended to serve as a basis of personal jurisdiction or merely as a way to notify the defendant (where the personal jurisdiction is based on completely different minimum contacts). 2. THE FOUR OTHER DDD BANDMEMBERS a. Demon/DDD Contract Punk will argue that in any event DDD was properly served under Rule 4(e)(2) ". . . by delivering a copy of the summons and complaint to an agent authorized by appointment or by law to receive service of process." Punk would point out that under the DDD-Demon contract, "DDD agreed to appoint the husband of an executive of Demon as an agent to accept service on behalf of DDD." Punk merely served DDD accordingly (assuming the husband of the executive was the same husband specified in the contract). DDD would argue that this is not like the National Equipment v. Szukhent case (where the Michigan farmers agreed to appoint an agent to accept service on their behalf) because DDD's contract was merely a way of consenting to jurisdiction in the event it was sued by Demon, not any and all potential plaintiffs. Moreover, DDD was consenting in the contract to personal jurisdiction in NEW YORK, NOT CALIFORNIA. In any event, DDD would say that this involves only personal jurisdiction, not notice. Thus, this is an improper form of service. Punk would counter that he is not trying to base personal jurisdiction on the service, only service to accomplish notice. Punk would argue that the language of Rule 4(e)(2) is technically satisfied -- because DDD "appointed an agent to accept service" -- and the constitutional Mullane test has been met as it was "reasonably calculated to notify the defendants under the circumstances." b. Substituted Service Punk would also argue that he has satisfied "substituted service" by leaving copies of the summons and complaint at the homes of the DDD bandmembers. DDD would argue, however, that Punk failed to satisfy substituted service because although substituted service is accomplished ". . . by leaving copies thereof at the individual's dwelling house or usual place of abode . . ." -- which was done, the rule further requires that service be left ". . . with some person of suitable age and discretion then residing therein." This was not done as the copies were simply left at their homes in Germany (there is no indication that it was left with someone satisfying the requisite conditions). Given this problem and the fact that they probably travel/tour quite a bit given their rock band lifestyles, leaving copies at their homes (on their doorsteps?) was not "reasonably calculated to notify the defendants under the circumstances." c. Service Outside the U.S. DDD also would argue that Punk is applying the wrong section of Rule 4 in any event because the service was not WITHIN the U.S. but was left at the homes of the DDD IN GERMANY making Rule 4(e) -- individuals in the U.S. -- inapplicable and Rule 4(f) -- individuals outside of the U.S. -- applicable. However, there is not enough information to determine whether Rule 4(f) was complied with as the laws of Germany were not provided. As a result, Punk's best argument would be found at Rule 4(f)(2)(A): "in the manner prescribed by the law of the foreign country in an action in any of its courts of general jurisdiction . . " and hope that leaving it at their homes would suffice. B. PERSONAL JURISDICTION 1. JURISDICTIONAL STATUTE Again, according to California's jurisdictional statute, the statutory test simply has been collapsed into the constitutional "minimum contacts" test, so by satisfying one we satisfy both. 2. MINIMUM CONTACTS a. Traditional Basis (Courtney Uzi) There is no indication that DDD was personally served in California, that DDD is domiciled in California, that DDD consented to jurisdiction in California or that DDD owns any property in California, so none of the traditional bases would be available. But Punk would argue that personal jurisdiction over Courtney Uzi at least can be based on one of the traditional bases -- presence -- as she was served while physically present in the State of California. Using Scalia's concurrence in Burnham, Punk would say that minimum contacts are not necessary as Pennoyer technically is still good law and International Shoe and Shaffer only dealt with OUT-OF-STATE DEFENDANTS, not IN-STATE DEFENDANTS, like Courtney Uzi. Punk might also argue that even under Brennan's concurrence in Burnham, Courtney has minimum contacts with the State of California since she was there for a few days, appeared on a talk show a couple of months earlier, and was taking advantage of California's roadways, police and fire protection, its market, etc., if even only for a few days (like Mr. Burnham). Courtney could argue that she has no minimum contacts with the State of California (see below) so Brennan's concurrence in Burnham is inapplicable. And even under Scalia's concurrence in Burnham, exercising jurisdiction over her would violate due process as she was in California against her will (subpoenaed to appear for a criminal action). Remember we are not talking about mere notice here (see above), but whether this is a constitutionally fair way to impose personal jurisdiction. Courtney could argue that historically such coerced presence does not automatically satisfy due process (even Scalia would have to agree). Remember, Courtney was NOT served when voluntarily in California to do the "Jerry Springer" talk show (that was earlier), she was there to answer a criminal charge in court -- trashing the hotel room while doing the talk show (many students failed to make this distinction). Had she been served while doing the talk show, the analysis would be completely different as she would not have this coerced presence argument. b. General Jurisdiction Punk would argue that DDD has substantial and pervasive contacts with the State of California based on its large sales of CDs within the state. Although we are not told specifically how many CDs were sold in California, we know that 1000 CDs were sold of the first CD and over 1 million CDs of the second CD in the U.S. Assuming only 1/50th were sold in California, we are still talking about 20,000 CDs which were sold in California (and probably more since California is such a populous state). DDD would argue that they provided music for Demon in New York and that was it. They should not be responsible for Demon's commission-based sales across the U.S. This would seem a bit disingenuous on the part of DDD since the intent of hiring a U.S. distributer is to distribute in the U.S. Punk would also demonstrate that this is not a very good argument because DDD itself placed the music in the "stream of commerce." Under Asahi, however, DDD would argue that under O'Connor's concurrence, DDD would have to have more contacts with California than simply Brennan's World-Wide dissent and Asahi concurrence stream of commerce argument. But unlike Cheng-Shin in Asahi, the music was not simply a component part of a whole manufactured product, but it was essentially the whole product. Demon merely distributed it and took a commission. However, DDD would argue that it is a foreign defendant, like Asahi; but Punk would point out that the plaintiff is still involved in the case, and this is not a third-party claim. c. Specific Jurisdiction Punk could also argue that since DDD's one contact of producing the first CD which was sold to a Californian, Punk, is so highly related to the lawsuit, that even if there is no general jurisdiction, there is specific jurisdiction. (see I.B.2.c. above). d. Purposeful Availment DDD's best argument against specific and general jurisdiction would be a complete lack of purposeful availment. DDD would point out, as the facts state, that it had "no idea who specifically is buying their CDs in the U.S., or even what states they are from, as DDD has left all of the marketing and distributing of its CDs completely up to Demon." Thus it was unforeseeable that they would get sued in California. Punk would argue that although DDD was unaware of the actual sales and the fact that some of the CDs were getting to California, DDD (or any supplier for that matter) should not be able to insulate itself from a lawsuit by simply turning over the marketing operations to an agent, thereby defeating the purposeful availment requirement. Moreover, it is unreasonable for DDD to expect to sell its CDs in the U.S. through a distribution company/agent (Demon) and not be aware that many of its CDs are going to be sold in the most populous state in the U.S. -- California. After all, although Demon received 20% of the revenues as a marketing commission, DDD still received 80% of the sales revenues. e. Other Considerations DDD would argue that like Cheng-Shin in Asahi, they are foreigners, and it would be unreasonable to exercise jurisdiction over them even if there are technically minimum contacts. DDD would also argue that the fact no Rule 14 impleader claim is asserted is immaterial. The only reason this is not a third-party derivative claim is because Punk sued both Demon AND DDD, rather than suing Demon first who would then impleaded DDD. Only then would this case be like Asahi. Punk's best distinguishing argument would be that Punk, as the California plaintiff, is STILL IN THE LAWSUIT (unlike Zurcher in Asahi). So the State of California and Punk have a very strong interest in adjudicating the suit in California and providing a forum for one of its citizens. The burden on DDD may be high, which might support a forum non conveniens argument, but it would not be enough to violate due process. In the end, Punk would emphasize that DDD certainly did not mind taking money from California citizens who paid for their CDs, especially Punk. C. SUBJECT-MATTER JURISDICTION/ VENUE Again, these were non-issues at the state court level, although there might be federal question based on a preemption argument (see I.C. above). SUBPART B -- REMOVAL TO FEDERAL COURT PROPER? I. REMOVAL, PERSONAL JURISDICTION, SERVICE Under §1441 (the relevant portion of which was included in the "Rule Packet") and the Willy case, a defendant can remove a case to federal court provided "the district courts of the United States have original jurisdiction." A defendant has 30 days for the time they discover the case can be removed to file a petition for removal. Thus, it must be determined whether this case could have originally been properly filed in federal court. Here, that would be the U.S. District Court for the Southern District of California because the state court action was filed in Los Angeles County Superior Court. The issues of Personal Jurisdiction and Rule 4 Service (notice) must be satisfied in federal court. However, since those two issues were addressed above in Subpart A, they need not be repeated here. However, to the extent that subject matter jurisdiction can be based on §1331 federal question jurisdiction (see below), Punk could make an argument that even if Demon and DDD do not have minimum contacts with the State of California, because both Demon and DDD have minimum contacts with the U.S. as a whole, there is personal jurisdiction under Federal Rule 4(k)(2). Demon and DDD could respond, however, by arguing that Rule 4(k)(2) is applicable only when ". . . any defendant . . . is not subject to the jurisdiction of the courts of general jurisdiction of any state." Since Demon and DDD would be subject to jurisdiction in New York, Rule 4(k)(2) is not applicable to justify personal jurisdiction in California. Also note that if it is based on diversity jurisdiction, the defendants must agree to remove and they cannot be from the forum state -- neither of which apply here. Accordingly, the remaining rings -- Subject Matter Jurisdiction and Venue -- must be satisfied. II. SUBJECT MATTER JURISDICTION A. FEDERAL QUESTION There generally is no basis to argue that there could be §1331 federal question subject-matter jurisdiction based on this tort because tort actions are state law actions. Many students fell for the U.S. v. Motley "well-pleaded complaint rule" trap. Simply because there is a federal statute (and the 1st Amendment to the U.S. Constitution) which provide a DEFENSE to an action brought by someone suing a record artist, does not make the action a federal question. Punk's claim is not based on a right or responsibility found in federal law which the defendants violated. However, that was not the only way to try to use federal question jurisdiction. To the extent this state song writer liability action may be PREEMPTED by the federal statute, as the Federal Court of appeals held the "similar" Oregon statute was, then Demon and DDD could argue that the california statute and this whole area has been preempted by the federal statute. As a result, the action belongs in federal court. Moreover, Punk could argue that the federal immunity statute actually does provide a right that was violated by defendants. It is important to remember that although the federal statute provides immunity for songwriters and record companies, it does not do so if there is actual malice and intent on the part of the artists or record company. Therefore, Punk could argue this is a federal question because he is alleging, or will allege, malice and intent, which is supported by his request for punitive damages. Demon and DDD would have to argue that the Federal Court of Appeals opinion is wrong, or the case is distinguishable, or is inapplicable in any event given the possible Erie challenge (see below, Subpart-C). Simply because the "similar" Oregon statute was preempted does not mean the california statute should be preempted -- for one thing we do not know how "similar" the two state statutes are. B. DIVERSITY - CITIZENSHIP 1. DEMON RECORDS Section 1332 diversity of citizenship would not be a problem for Demon because we know that Demon is domiciled in New York because both its principle place of business is there and it is incorporated there. Punk is a California domiciliary according to the facts so Demon would clearly have diverse citizenship. 2. DDD Punk would argue that the members of DDD are domiciled either in New Jersey, where they were born, or Germany, where they now live, and therefore have changed their domiciles to Germany as German citizens, but in either event they are not California domiciliaries and are therefore diverse. Thus, either under §1332(a)(1) -- "citizens of different states" -- or §1332(a)(2) -- "citizens of a state and citizens and subjects of a foreign state" -- as interpreted by Gordon v. Steele and Mas v. Perry, diversity jurisdiction is proper. DDD might argue that since they gave up their domiciles in the U.S. (no longer New Jersey domiciliaries), but they are not technically German citizens, their domiciles are "undefined" and it is therefore not possible to sue them in federal court under §1332. This is the argument that would have worked in the Mas v. Perry case if Mrs. Mas were deemed a domiciliary of France (because of her husband's french citizenship), but she herself was not a citizen of France. Punk would have to argue that the members of DDD never changed their New Jersey domiciles as they are simply on an extended journey, or they are now indeed full-fledged German "citizens" -- or at least "subjects" of Germany (as resident aliens there). C. DIVERSITY - AMOUNT IN CONTROVERSY 1. PUNITIVE DAMAGES Demon and DDD could argue that the actual amount in controversy is only $40,000 since that is the only amount of COMPENSATORY DAMAGES being sought by Punk, which is below the §1332(a) $50,000 amount in controversy requirement. Demon and DDD would argue that since punitive damages are not compensatory, but merely designed to deter, they should not be allowed in the amount in controversy computation. Punk would argue that whether the damages sought are compensatory or punitive makes no difference; together they make up the total amount in controversy. Moreover, under the legal certainty test, all Punk has to make is a good faith allegation that the amount exceeds $50,000. Demon and DDD would have to be able to show that punitive damages cannot, as a matter of law, be recovered. In that event, then it would be a legal certainty that Punk could only recover $40,000. Since this is a tort action punitive damages are POSSIBLE. Punk has a sticky problem, however, in order to meet the legal certainty test, as well as Rule 11 for even alleging punitive damages, he had to allege malice or intent, not mere negligence. Although this provides the potential for a very large recovery, it may make the federal immunity statute controlling as the federal statute specifically deals with malice cases. If Punk want to stay out of federal court, he may try to amend the complaint and merely allege $40,000 so that Demon and DDD could not remove based on diversity. Also, Demon and DDD have an argument that there was no malice or intent, not only because they did not intend for teenagers to commit suicide after hearing the song, but because they ceased to sell the "Driving to Your Destiny" CD immediately after the accident. Punk would argue that they ceased to sell the CD only because they realized their exposure was great and they were simply running for cover. 2. $ IN CONTROVERSY Demon and DDD could argue that the amount in controversy has not been met in any event -- and even perhaps that the case should be dismissed pursuant to 12(b)(6) -- because the plaintiffs have admitted that "the car insurance paid for everything anyway." Demon and DDD could argue that Punk should not be allowed to recover twice. In short, since Punk has recovered all of the damages already -- according to their own words -- from the insurance company, there is no amount in controversy. This may force Punk to allege punitive damages, but then that would mean that Demon and DDD could remove either under diversity (amount in controversy now met) or federal question (more likely that federal preemption applies because malice and intent involved, invoking the federal statute). Punk also can argue the tort doctrine of the "collateral source rule:" that simply because a tort victim insures themselves should not mean the tortfeasor should be the beneficiary of that windfall. Punk would argue that at most, Demon and DDD could request a Rule 17 substitution of parties so that the real party in interest -- Punk's auto insurance company -- be substituted as the plaintiff. In any event, such does not mean Demon and DDD are off the liability hook. Most importantly, the insurance company did not pay for the large punitive damages being requested. III. VENUE Punk would argue that the Southern District of California is a proper venue in which to sue both of these defendants because under §1391(a)(2) (or (b)(2)), this is a diversity (or non-diversity) action in which a "substantial part of the events or omissions giving rise to the claim occurred." The CD was purchased in California by a Los Angeles resident and the accident occurred in Los Angeles. Venue under (a)(1) would not be possible because the defendants do not all reside in California, so an analysis of Demon's corporate residence under §1391(c) was of no consequence. Similarly, because venue is possible under (a)(2) it is not possible to use (a)(3) (which, recall, has recently been amended substituting "defendantS" (plural) to "any defendant" (singular)) or (b)(3), where "any defendant may be found.". DDD and Demon could perhaps argue that a substantial part of the events actually took place in New York or perhaps Germany where the CD was written, produced and sold. But even if Demon and DDD could argue that MORE events took place outside of Southern California, it is clear that a "substantial part" still took place in Southern California (the statute does not say a "MAJORITY of the events," ONLY a "SUBSTANTIAL" part). Also, Punk would argue that if the members of DDD are "aliens," (German citizens, not mere New Jersey domiciliaries), then under §1391(c), venue as against them would be proper in "any judicial district." SUBPART C -- CHOICE OF LAW ERIE ISSUE I. RED HERRING ISSUE -- WHAT LAWS ARE ACTUALLY IN CONFLICT? There is a very important distinction which must be made here, and that is which state and which federal laws are in possible conflict demanding an Erie choice of law analysis. The California songwriter liability statute and the federal songwriter immunity statute are in conflict, but they are BOTH substantive law. Many students made the mistake of trying to argue that the federal immunity state could be categorized either as substantive or procedural. But how can a statute directly providing a substantive cause of action be considered procedural, especially when students were trying to argue that the state statute covering the same issue was SIMULTANEOUSLY substantive? Accordingly, whether or not the federal law or state statute will apply is exclusively a substantive law analysis. This does NOT require an Erie analysis to determine which of them applies. The key conflict and choice of law issue demanding an Erie analysis then, is whether or not the federal appeals court decision can be used in a California state court and whether it can be used in a federal diversity case. A. FEDERAL PRE-EMPTION; FIRST AMENDMENT VIOLATION Demon and DDD will first argue that the Federal Court of Appeals was right to preempt the similar Oregon statute and suggest it was a violation of the First Amendment. But Demon and DDD would make this SUBSTANTIVE LAW argument whether they are in state court or federal court. They would argue that as a matter of substantive law, the federal songwriter immunity statute applies because it PREEMPTS the California songwriter liability statute. They will also argue that the California songwriter liability statute violates the First Amendment to the U.S. Constitution and therefore should be deemed unconstitutional. Punk, of course, would argue that the California songwriter liability statute is not preempted by the federal statute and is not an unconstitutional First Amendment violation. The federal and state statutes are both substantive but as a matter of substantive law, the state statute is controlling and valid as the Oregon statute is different and\or the Federal Appeals court was just wrong. The substantive analysis has to end there as I did not expect you to analyze whether Congress has actually preempted the state statute or whether the California statute violates the First Amendment. In fact, it is impossible for you to go any further with this analysis as no additional necessary facts and law were presented -- such as the Federal songwriter immunity statute's legislative history -- which would allow you to do so. Moreover, I am cognizant of the fact that you will not take constitutional law until next year when you will read many, many cases on the First Amendment. You therefore needed to recognize only that it would be better for Demon and DDD if the California statute were preempted by the federal songwriter immunity statute, or if not preempted, deemed unconstitutional as a violation of the First Amendment. Conversely, you needed to realize that Punk would want the California liability statute to apply because it is not unconstitutional or preempted, and therefore, just like the Erie case, an un-preempted, constitutional substantive state statute applies in diversity cases under the Rules of Decision Act. Strategically, Punk wants the state statute to apply, just like the plaintiff in Erie did, because all Punk has to prove under the California statute is negligence, while under the federal statute Punk would have to demonstrate "that a record company or artist PURPOSEFULLY AND WITH MALICE placed suggestive song lyrics in the songs. But remember that Punk is suing for punitive damages so even in state court he would also try to demonstrate malice and intent. B. APPLYING STATE RULE/PRACTICE IN FEDERAL COURT Again, you could not argue the merits of whether the California statute, similar to the Oregon statute, should be preempted or is unconstitutional. The key procedural and strategic argument, therefore, is determining whether the Federal Court of Appeals' decision striking down the Oregon statute is a good precedent and should be followed with respect to the similar California statute in the present case, or whether the Federal Court of Appeals' decision should not be followed given the fact that it was merely an oral decision from the bench and not a written opinion published in any official reporter. If we are in state court, then there is no question that the Federal Court of Appeals' decision would not apply as it is not a written, published opinion as is required by the state Supreme Court and California legislature. In federal court, however, it would be available to cite as authority because the Southern District of California is in the Ninth Circuit and is bound by the decisions/precedents in that Circuit. This is where the strategic use of an Erie analysis comes into play. Punk would argue that since this is a federal diversity case, the substantive outcome should be no different in federal court as in state court. If it were otherwise such would violate the twin aims of Erie: (1) to avoid the incentive to "forum-shop" and (2) the inequitable administration of the law (i.e., one result in federal court, and another in state court). Demon and DDD would once again argue strenuously that this is a preempted federal question case (see above) in order to avoid this possible Erie issue and bypass any state substantive law altogether. Punk would have to convince the court that this is a diversity and not a federal question case so that state substantive law should be applied, Erie. This would be helpful because state substantive law does not allow the unwritten, unpublished Ninth Circuit decision to be considered. The rest of the analysis proceeds assuming Punk is correct and this is not a preempted federal question case, but merely a diversity case. II. HARMONIZATION Demon and DDD would first argue for harmonization, but of course they would do so to further their strategic objectives. Demon and DDD would argue that there is no conflict between California law -- which disallows using un-written, non-reported California cases -- and the federal practice of following previous Court of Appeals' rulings. The argument would be based on the fact that because the Federal Court of Appeals' ruling from the bench is NOT an unwritten "California court opinion" ("California Courts will no longer recognize or follow any CALIFORNIA court opinion which is not published. . ."). Since the Federal Court of appeals' ruling from the bench is NOT a CALIFORNIA opinion, the state law directive is inapplicable and the Federal Court of Appeals' decision can be consulted and followed as a precedent -- no conflict. Punk would counter by focussing on the second sentence of the directive -- "Thus, only written, published opinions are to be given any weight in California Courts." Punk would argue that the directive is NOT limited to California Court opinions, but ANY unwritten, unpublished opinion. Punk would argue the spirit of the California directive was not to follow unwritten opinions of any sort, be they other state court opinions from different states or federal court opinions. As a result, there is a conflict. Demon and DDD might counter that the directive was worded so that any BINDING court precedents cited and used in a California court -- a California state case -- has to be published. However, any PERSUASIVE authority -- a federal court case or other non California state case -- need not be written and published. III. SOURCE OF FEDERAL LAW Assuming, however, that the laws cannot be harmonized, then there is an unavoidable conflict between the California directive not to apply unwritten, unpublished court opinions in California state courts and the federal practice of using federal Court of Appeals' decisions as precedents, even in diversity cases. Given that conflict, it must be decided which law must apply -- the California directive or the federal practice. In order to determine what test to apply, we must determine the source of the federal law in conflict with the state law. The source of the state law is unimportant. Many students mistakenly analyzed the choice of law issue by focusing on the source of the state law -- was it state common law, or a state statute since the California state legislature proclaimed it, was it tantamount to a state rule of civil procedure since the California Supreme Court also proclaimed the directive? These were all "red herrings" because the focus on the source of law must be on the source of the FEDERAL LAW. A. FEDERAL COMMON LAW -- THE ERIE, YORK, BYRD MODIFIED "OUTCOME DETERMINATIVE" ANALYSIS Although Demon and DDD would have the best chance of winning if they could categorize the source of the federal law allowing a court to follow the precedent of a previous Court of Appeals decision as either a U.S. Constitutional provision, federal statute or federal Rule of Civil Procedure (see below), they probably will have to concede that the federal law of following precedent is instead simply a federal common law practice of the federal courts. This is true because there is no constitutional provision, federal statute or federal rule of civil procedure mandating that federal courts can consult previous federal court decisions for guidance. Consulting precedents is merely a federal common law practice. Because the source of federal law then is a federal common law practice, we must apply the "outcome determinative test" as set forth originally in York and modified in Byrd. At first glance, it is not clearly outcome determinative because whether or not the Ninth Circuit opinion can be cited does not necessarily mean it would be controlling (maybe the Oregon statute is different that the California statute). In any event, we have to apply the modified test to see if it is outcome determinative. 1. BOUND UP TEST First, we must determine whether the California directive not to use unwritten, unpublished opinions is "bound up" with the underlying rights and responsibilities of the parties at issue -- the California songwriter liability statute. The California directive not to use unwritten, unpublished opinions is NOT limited to cases involving the California songwriter liability statute. In fact, the California directive is a global command and it does not matter what kind of case it is, so there is nothing special (i.e., substantive) about the directive. It appears to be generally procedural because it is not tied (bound up) with any substantive rights or responsibilities of the parties. Punk would have a hard time arguing the state directive not to use unwritten unpublished court decisions is "bound up" with the rights and responsibilities of the parties under the California songwriter immunity statute. Punk would try to argue that the directive is so important that it is bound up with each and every California statute and law on the books. 2. BALANCING TEST Demon and DDD, in addition to having a strong argument that the California directive is not bound up with the California songwriter liability statute, would have a strong argument that the federal practice of applying previous decisions, whether written or unwritten, of the Federal Courts of appeals is a longstanding federal practice in federal courts. Again, much like the jury issue in the Byrd case, Demon and DDD could argue that using previous federal Court decisions as authority (precedent) is "an essential character" of a federal court that outweighs the slight (not bound up) interest of the State of California of prohibiting litigants to use unwritten, unpublished California opinions. Once again, Punk would have a very difficult time arguing otherwise. Indeed, Punk might have to concede the federal interest outweighs the state interest if he even got this far in the analysis. B. RULE OF CIVIL PROCEDURE, FEDERAL STATUTE Demon and DDD would similarly benefit if the federal practice of using unwritten, unpublished decisions as court precedents could be categorized as a federal statute or federal Rule of Civil Procedure, but it appears there is no such rule or statute that would support such a finding. These were non-issues. C. DUE PROCESS ARGUMENT Demon and DDD also have a general due process argument against the California directive. They could argue that if they are denied the right to cite to a Federal Court of Appeals decision that would help their position in litigation, such would be a denial of fair play and substantial justice and should be deemed unconstitutional. IV. CONCLUSION The question asks, "would your clients be better off strategically removing to federal court rather than remaining in state court?" The answer is YES, but a few clarifications need to be made. First, in both state court and federal court, Demon and DDD can make the argument that the federal songwriter immunity statute preempts the California songwriter liability statute and that the California is unconstitutional under the First Amendment. Those are both simple substantive law arguments. One might suspect however that a federal judge might be more willing to find that a California statute is preempted by a similar federal statute and/or that the California statute is invalid as it violates the First Amendment. This is true because a federal judge is more politically insulated than a California state judge and therefore is more apt to strike down a California statute. Federal judges are appointed by the President not the Governor of the State of California. Federal judges are appointed for life so they cannot be fired (only impeached) whereas a state judge is not appointed for life and may lose at election time. Federal judge's salaries cannot be lowered so as to insulate them from political pressure. Second, in state court, there is a very good chance that a state judge would be more likely than a federal judge to uphold the California state directive from the California state legislature and State Supreme Court not to apply unwritten, unpublished cases. A state judge is more likely to rule with the state legislature and Supreme Court. Moreover, in a federal diversity case, there is a very good chance a federal judge applying an Erie analysis (see above) would determine that the California law is not outcome determinative under the York - Byrd test and therefore would allow Demon and DDD to cite to the unwritten, unpublished federal court of appeals' decision preempting the California songwriter liability statute. For these legal and practical reasons then, Demon and DDD would maximize their chances of prevailing in federal court rather than in state court and therefore should attempt to remove the case. SUBPART D -- ATTORNEY'S FEES STRATEGY (CONTINGENCY BASIS) I. DILATORY TACTICS If Demon and DDD's attorney found out that Punk's attorney was being paid on a contingency fee basis instead of at an hourly rate, this would affect the economic incentives of Punk vis. a vis. his attorney which might benefit Demon and DDD. Punk's lawyer has an economic incentive to do as little work as possible because presumably she will receive 1/3 of any settlement or recovery. If Demon and DDD begin filing various motions, such as a transfer or forum non conveniens motion, and begin making extensive discovery demands, Punk's lawyer will have to begin working very hard all the while knowing she is not getting paid until the end of the case and even then she may not recover. This would be no problem, and might even be welcomed, if she were being paid by the hour, although Punk himself certainly would not like having to pay these attorneys' fees. If Punk's lawyer is being paid on a contingency fee, however, Punk would not care, but his attorney may begin to worry about payment as time-billing increases with no payout in sight. As a result, Demon and DDD's attorney might take a more litigation intensive tact if they learn Punk's lawyer is being paid on a contingency fee basis. II. SETTLEMENT POSTURE This tact is very related to the settlement posture that Demon and DDD's attorney might take if she finds out about the contingency fee arrangement. If an hourly fee, Demon and DDD would not try to settle early so they do not appear weak. However, if opposing counsel is being paid on a contingency fee basis, perhaps she could be "tempted" with a fast cash settlement. That way Punk's attorney would make a fairly large sum of money for simply filing the complaint. Demon and DDD similarly would benefit as they would not have to pay their attorneys much money and could get rid of a potentially damaging lawsuit quickly and for a relatively small sum (this is important to them as they "want the lawsuit to go away"). But if Demon and DDD settle too quickly and the press finds out about it, this may provide an economic incentive for other heavy metal listeners to file similar lawsuits in the hope of obtaining similar quick settlements. So it might be in Demon's and DDD's interest to settle with Punk early, but they should not settle too quickly. The point is that Demon and DDD's attorney might try to create and exploit any "wedge" they could between Punk and Punk's lawyer given these economic incentives. On the other hand, the fact that Punk's lawyer is willing to take the case on a contingency fee basis might suggest how strongly Punk's lawyer believes in the merits of Punk's claims -- not to mention the fact that Punk's lawyer may actually be ethical, have a professional concern that justice is done, and not be willing to sellout Punk at the first sign of being able to make a quick buck (imagine that). III. ETHICAL CONCERNS Of course, it is exactly this kind of manipulative economic thinking and clever posturing that gives lawyers a bad public image. This type of lawyering suggests that such lawyers conceive of our justice system merely as a profitable business venture and not the pursuit of truth or justice. Litigants soon come to mistrust the motives and ethics of opposing attorneys, and unfortunately, their faith in the legal system also becomes a casualty of the adversarial process. Perhaps even more bedeviling with this kind of lawyer behavior is that litigants come to mistrust their own attorneys -- wondering if they will "Sell Them Out" as described above. It is important not to let your concept of what it means to be a lawyer degenerate into this portrait of unfortunate gamesmanship. The practice of law and the pursuit of justice should be a higher endeavor than merely engaging in underhanded economically-motivated schemes which are tantamount to winning at any cost. If that is too naive or an out of touch, vague benevolent yearning, then realize that often such gamesmanship backfires. Consider this: perhaps Punk's lawyer is actually getting paid by the hour, but just coyly has let it "slip out" in casual conversation that she working on a contingency fee. If that is the case, you will fall into her trap because you will be making the wrong assumptions about her economic incentives. Closer to home, perhaps once your own clients see how devious your mind works with respect to driving an economic wedge between opposing counsel and her clients, they will begin to mistrust your every move. That is to say, your clients may think that if you are so sure Punk's lawyer will sell out her client given the economic incentives, then you too might be motivated by the same low-grade brand of ethics and client loyalties. NOTE: we will consider these issues in much more detail when we take up Discovery and Pre-Trial Litigation. These general ethical issues are critical issues to address, not only to receive additional points on a law school exam, but much more importantly, so when you are actually practicing law, you are the type of lawyer that constantly considers these professional responsibility issues and ethical concerns. Not only will you be able to avoid malpractice suits, but you will be able to sleep at night because you'll be a decent human being with a strong sense of personal ethics and morals. Don't allow the arduous study of law, the competitive struggle of "winning," or the macho adversarial approach to litigation, to destroy your spirit of justice or suffocate the reasons why you were attracted to the law in the first place. PART II -- SHORT ANSWERS 1. SUBJECT MATTER JURISDICTION ESSAY The essay should have included an analysis of the policy purposes for diversity jurisdiction: to avoid in-state prejudice against out-of-state defendants. It also should have discussed whether this is still valid in today's modern economy (where travel, communication, technology, etc., have made the country much smaller and much more integrated than 200 years ago). Also, it should have challenged whether diversity was ever valid because discrimination against out-of-staters, even if it were prevalent, would have occurred in any event. Out-of-state prejudice would not magically be obliterated simply because the courthouse door says "federal" rather than the courthouse door across the street that says "state." Jurors and judges still live and work in the state whether or not they serve in a state or federal court in their home state. However, a good argument can be made that the life appointment of federal judges, rather than election or retention (like for most state judges), helps insulate federal judge's from prejudice, more so than state judges (assuming the state electorate really pays attention). A good critique also included a discussion of the heavy doctrinal burden on federal courts caused by diversity jurisdiction. First, all Erie issues - choice of law, forum shopping, inequitable administration of laws -- would be immediately solved as federal courts would never have to apply state substantive law in a diversity case (most students would love it for that reason alone). Such would allow federal court judges to confine their expertise to federal and U.S Constitutional law. Accordingly, they would not have to become experts of the substantive law of the state in which they sit (or other states if the conflict rules of their state say that they must apply the law of another state in a certain case). Another important critique was to note the implicit class bias in the diversity $50,000 amount in controversy requirement. It is as though only rich citizens, or at least citizens who have disputes with more than $50,000 at stake, are deserving of protection from out-of-state discrimination (the justification for diversity), but poor people or citizens with a lesser amount at stake are not so deserving. Also, the very fact that Congress sees fit to limit diversity by adding an amount in controversy requirement is an implicit admission by Congress that not all diversity cases should be in federal court. Similarly, the fact that family law cases do not qualify for diversity jurisdiction, even when the parties are from different states and the amount in controversy is over $50,000, demonstrates Congress' elitist attitude when it comes to diversity jurisdiction. The flipside is that state courts would be burdened with many more cases, so simply switching the burden of cases does not eliminate it with respect to the court system as a whole. Also, to the extent out-of-state discrimination still exists, there would be no possible way to avoid it. In addition, although we have progressed, such out of state discrimination may still exist, not because Southerners may dislike Northerners or New Yorkers might think they are sophisticated and think Californians are too "laid back," but because of possible and very real economic discrimination. For example, if local companies are sued they may have to lay off workers which would hurt the local economy. Similarly, if a local litigant wins big against an out-of-state defendant, then it would help the local economy. This economic incentive still exists, so out-of-state discrimination cannot be completely relegated to the dustbins of history. Finally, federal judges usually are very-well versed in state law anyway before they get appointed to the federal bench -- so why lose the benefit of that knowledge and expertise? 2. §1406 AND FORUM NON CONVENIENS This was the easiest question on the exam and everyone got it right. The two are similar in that a defendant (not plaintiff since plaintiff filed in the present court) is asking the court in its discretion (not demanding under the law) that the case be transferred/moved to another more appropriate or more convenient court. The defendant's request is based on similar factors: convenience, not only of the parties but of the witnesses and the court systems and the court systems' interests in providing a forum for the plaintiff in the present court. They are different insofar as a §1406 transfer is a request to go from one FEDERAL court lacking venue to another FEDERAL court with proper venue. A forum non conveniens motion does not involve a federal court to federal court transfer but a transfer from one sovereign system to another (state to state or federal to foreign for example). The §1406 transfer (or in the court's discretion, a dismissal) is based on the fact that the current court lacks venue and not so much on the convenience factors (which would be more of a §1404 transfer, where there is no venue [or jurisdictional] deficiency but is based PURELY ON DISCRETIONARY CONVENIENCE). 3. DISCOVERY ISSUE Neither option provided is fully correct -- so it was a false dichotomy that you needed to recognize and then provide the correct information. Under Rule 26(a)(1)(A), you had a duty to disclose the name, address, and telephone number (if known) of "each individual likely to have discoverable information relevant to disputed facts," which conceivably might include expert witnesses. The expert witness may not be known at this time, however (we are not told). In any event, under 26(a)(2)(A), you had a duty to disclose this expert witness information because this is an expert witness who will testify at trial, and note that under 26(a)(2)(B), even more information is required, e.g., expert report, data, exhibits, and qualifications and publications of expert witnesses. This is to be made, under 26(a)(2)(C), 90 days before trial (not 30, 60 days too late) or 30 days after the opposing party makes their expert information available (whichever is SOONER). 4. PEREMPTORY CHALLENGE VS. CHALLENGE FOR CAUSE During and after the voir dire jury selection process, attorneys can eliminate potential jurors in one of two ways: (1) make a challenge for cause based on a potential juror's inability to be serve as a fair and impartial juror (e.g., knows one of the lawyers, refuses to apply compensatory damages, has a religious conviction against the death penalty in a criminal case, etc.); or (2) a peremptory challenge where the attorney, based on her "gut feeling" excuses a juror because she thinks the juror may not like her client, or would be hard to convince of the rightness of her case, etc. NOTE: a peremptory challenge based on race or gender is invalid. 5. RULE 11 QUESTION Although D's lawyer has notified P's lawyer of the discrepancy between the statements in the letter and the allegations in the complaint, P's lawyer can argue that the 21-day "safe harbor" period that must run before D's lawyer can file the Rule 11 motion with the court has not started running yet because D's lawyer never served any Rule 11 motion on P in compliance with Rule 11(c)(1)(A) (requiring Rule 5 service of the motion). Technically, P's lawyer can do nothing because D can never file the Rule 11 motion in court until 21 days after it is served under Rule 5. In the meantime, however, P had better investigate the letter and question her client. the complaint may still be valid despite the earlier letter as things may have changed since the letter has been written. However, if the statements in the letter are STILL true, the lawyer should amend the complaint (but note that if it is only for $50,000, the diversity amount in controversy requirement will not be met). NOTE: you cannot simply drop your client and run in order to avoid the problem, you instead would have to ask the court if you can withdraw for good cause. 6. §1367 ("RED HERRING") Because this is a FEDERAL QUESTION case, diversity of citizenship and the amount in controversy are immaterial. If D impleads a Rule 14 third-party defendant (derivative liability) that derivative claim obviously would "arise out of the same case or controversy" as the main antitrust claim and therefore would satisfy §1367(a). §1367(b) would be inapplicable (because a non-diversity case), thus subject-matter jurisdiction is not destroyed. NOTE: If this were a diversity case (which was the trap), diversity would not be destroyed by the Rule 14 impleader claim. However, if plaintiff thereafter amended its complaint and made a direct claim against the third-party defendant, then under §1367(b) -- ". . . district courts shall NOT have supplemental jurisdiction under subsection (a) over claims BY PLAINTIFFS against persons made parties under Rule 14 . . ." -- supplemental jurisdiction for that claim would not be allowed because it would destroy diversity (recall the Kroger note case). |
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