November 2, 1998

Palmer v. Hoffman 318 v. 109

Erie review: apply state law of the state in which the federal court is sitting for substantive (including choice of law rules) issues in diversity cases

Trial by jury guaranteed by 7^th amendment of US Constitution

Problem is whether to use jury or judge trial.

Review of Hanna v. Plumer

• court here decides to follow the federal law

issue in Ragan: what tolls a state statute of limitations on a state created law?

Palmer v. Hoffman 318 U.S. 109

Has Hanna overruled Ragan? NO – court thinks decision was right

Sabatino v National Bank of Cuba

Appeared to possibly overturn Erie. Shows Erie was possibly just to protect interests.

Would the result in Erie be the same today, given the way the US has interpreted the commerce clause of the US Constitution?

- since Erie has developed based on considerations

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November 4, 1998

Apply what we have learned to reach a decision on exams.

1331, 1332, 1367 – review these rules!

Can Erie be said to apply to any state claim which is in federal court irrespective of the federal basis?

• some saw this as overruling Erie – because the application of Federal law was used which would materially change the outcome. Federal common law was used.
• does Sabatino overrule Erie?
• Sabatino does not overrule Erie, but goes a long way to clarify it
• It is an "interests analysis" – federal v. state interests need to be balanced. The balance of power etc…

All law is implementation of policy.

Want to discourage forum shopping and inequitable administration of law.

- Contract between parties

- Contract includes a choice of forum clause: in any event of a dispute, B shall be place of forum. P decides to sue in A on basis of 1332 (Erie controls).

- Seems as if P has breached contract by choosing forum of A.

• So D wants the case to be transferred to B (1404a – in the interest of justice (because it was contractually agreed)).
• Under A’s law the choice of forum clause was not enforceable
• Since Erie requires federal court to apply law of place in which it sits, it must apply the law of A, with respect to choice of forum clause.
• Should we apply a law if in applying that law the underlying policy will not be served? (that is what seems to have happened in this case)
• Plaintiff in this case choose the federal forum
• Now that we are in federal court, who will benefit from applying federal law? The defendant. So how can we say that the benefits conferred where the reason plaintiff choose federal form? We cannot, because it is the defendant that benefits. The D is the one that benefits.
• Erie means you may not choose federal purpose for reason of obtaining more favorable law.
• Will a change in venue change the outcome? No, simply changing courtrooms. There was no forum shopping and application of federal law will not effect the outcome.
• Why is Scalia so upset in his dissent?? Maybe because in his view Erie stands for much more than forum shopping, etc. What more could it stand for? POSSIBLE EXAM QUESTION
• Here is a state rule of substantive law which has been displaced by federal litigation and transfer provision of the federal judiciary act.
• Erie serves a policy which is not involved in this case. So why was Erie brought into it?

Discussed it

Think about underlying purpose of Erie

• who choose federal forum
• which of the parties will benefit from the federal forum

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November 6, 1998

Gasperini

• direct conflict between state and federal practice
• federal appeals court must be guided by the damage control standard state law supplies.

Lex loci delicti – the law of the place of injury

Was Klaxon constitutionally mandated? Argued it has not been because of…

320 US 228 Meredith v. Winterhaven

• look harder if state law does have a law on point for the federal court to follow

courts ruling on states law is res judicata but not stare decisis.

Collateral estoppel – function of res judicata (matter has been decided). Issues of one litigation may pop up in subsequent (different) littigation

• if there are actions in suit #2 that were present in suit #1, there is collateral estoppel

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November 9, 1998

Should state courts apply federal law in state procedures? REVERSE Erie problem.

Original jurisdiction – which court do you file lawsuit in. Place where law suits begin.

Exclusive jurisdiction – section 1338.

Erie may be involved with 1331, 1332, 1367

Where does federal promulgation stop? It probably will go farther than just interstitial (filling in the gaps) eventually.

REVIEW

Choosing a forum

Original forum may be changed

No forum shopping allowed - outcome in federal court should be the same if the matter had been pursued in state court

Joinder of parties (rule 20a)

Can one defendant be sued on two causes of action – Yes (rule 18a)

Compulsory joinder division – rule 13a

Cause of action must be determined for purposes of res judicata – event that has created reason for coming to court.

Bar and merger doctrine – once cause of action has been reduced to judgement, the cause of action merges into the judgement (disappears). New property right is now judgement, not cause of action.

All related claims against the defendant must be filed at the same time in order not to loose it. Like 13a. This goes both ways; between D and P

Must file all claims, because it precludes claims that were litigated as well as those that should have been litigated

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November 11, 1998

Res judicata

• start with a transactional approach: see if suit number one and two are based on the same event
• exceptions

• cases in which claims have traditionally been dealt with separately
• cases in which causes of action are substantially different

quantum meruit –

how do you raise statute of frauds defense?

• either on a 12(b) or rule 8(c) an affirmative defense

Smith analysis - different rights and wrongs, if action arises out of same wrongs, all actions should be brought under one suit

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November 13, 1998

In respect of D’s claim, P has split cause of action by failing to file state claim with federal,

What if first action is in state court, on state cause of action

Second suit, in federal court under 1338, D moves for dismissal since action is arrising out of same bundle of facts, should now be barred because it was decided in state court.

ANSWER: P gets another chance in federal court, because state court did not have jurisdiction over claim. Federal court has exclusive jurisdiction over claims.

Example:

P sues in a mass tort such as a bus crash. Many of Plaintiffs were injured.

P1 gets a judgement

SUIT 2:

P2 against D. P moves for summary judgement on question of negligence.

D was collaterally estopped from relitigating negligence issue once it was decided for one passenger in the bus.

Checklist for Collateral Estoppel

1. Identify the issue
2. Person against whom the plea of CE in suit 1 is asserted must be identified to have been a party to the litigation in the first suit
3. Final judgement on the merits (if this issue was previously decided)

Distinction

Res judicata – bar all claims which were litigated as well as those that should have been litigated

CE – applies only to issues that were litigated

Many jurisdictions say the issue must have been essential to prior litigation

If party to this action was a party to a prior action or in privity to a prior action,

Privity – a person who has a n interest , a proprietary interest in the judgement, a person who is in control of the litigation

Marriage does not bring about doctrine of privity

Special about California – community property state. So both husband and wife own everything communally

If D won judgement, all future plaintiffs can relitigate and cannot use collateral estoppel. If P won in one case, collateral estoppel can be applied in all future cases for that issue (usually).