October 2, 1998

Need to define four corners of a dispute

Sample demand letter – should be direct, positive and confident

Complaint, service and 12(b) motion –

Complaint - need to set forth basis on which jurisdiction is established

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October 5, 1998

Inspirational talk – don’t treat classmates badly

Review of appendix to ch 1

If defendant does not respond to P’s request for admissions P can request the court order D to respond.

Well pleaded complaint rule – complaint in which P sets forth basis of jurisdiction for federal question cases???????

Louisville and Nashville Railroad v. Mottley, 211 US 149 (1908) p154.

P gave D free passes on its railroad because of an accident that had happened earlier. Later Congress passed an Act banning the gift of free passes on railroads.

Need a cause of action before a lawsuit starts. Ask if either of the parties have a cause of action for coercive relieve. Does case arise under federal law?

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October 7, 1998

Well pleaded complaint rule – the essentials of a cause of action – what the plaintiff need to prove to demonstrate entitlement to recovery

1331 – well pleaded complaint

cause of action breach – allege the existence of the contract, allege that you have performed, then allege breach on part of defendant

MERRELL DOW PHARMACEUTICALS INC. v. THOMPSON, 478 U.S. 804 (1986)

The asserted federal interest in federal review and the novelty of the question whether the FDCA [478 U.S. 804, 805] applies to sales in Canada and Scotland are not sufficient to give a state-based FDCA claim status as a jurisdiction-triggering federal question

Not a case belonging in federal court

Negligence and strict liability arise under state law. Negligence is based on fed regulations. Then that proof is used to create rebuttable presumption under state law. You have to set up a list of applicable state laws and fed laws and how they apply to the case. The majority of the claims pertain to state law.

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October 9, 1998

Can congress create a

Well pleaded complaint rule: Federal question be set forth on face of plaintiff’s complaint

- has to be limited to §1331

Complete diversity of citizenship – is only a construction of 1332.

Diversity jurisdiction has been slowly disappearing. Congress is moving towards eliminating it.

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October 19, 1998

Federal jurisdiction

No question on fraudulent or collusive practice of creating or defeating removal to federal jurisdiction

Personal Jurisdiction - Power of court to render a judgement which is personally binding on defendant

Subject matter jurisdiction – what kind of a case can the court hear? Shall extend to cases between citizens of different states, arising under laws treaties of the USA (1332 – only over suits, not persons, 1331)

Once you decided where you can sue, have to think about whom you can sue. Joinder of parties.

Joinder – two plaintiffs or defendants can join for the same suit. Saves resources.

Have to file all claims at the time of the suit.

Can file a counter claim for claims arrising on completely independent grounds (13b).

13(g) – cross claims. Claims between plaintiffs.

14(a) – d1 says d2 owes d1 money if P is successful in suing d1.

P à D1 à D2

If a second claim came out of first claim, then a court can exercise jurisdiction over that one also, because of the ancillary facts. Even if the second claim was a state claim, and the court was a federal court.

Justification – does serve interests of justice

Now called supplemental jurisdiction (aka pendant jurisdiction)

Claims must be sufficiently related in order to be supplemental jurisdiction. Say CA P sues Nevada D1. Then there is a D2 also from Nevada. D1 wants to sue D2. Can do this in federal court under 1367 under federal law.

Cannot create federal subject matter jurisdiction where it would otherwise not exist. Such as bringing a 3^rd party defendant and then using 1367 to allow P to sue 3^rd party defendant.

1367 does not recognize difference between ancillary jurisdiction and pendant difference.

Ancillary jurisdiction usually is what it is called when D try to join claims

Pendant when it is Ps that try to join claims.

Read 13 h.

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October 21, 1998

When can you object under 12(b)?

Objections can be made by motion or in a pleading 12(b)

12(b)(2) may be waived by pleader

sua sponte (on its own)

P may not file a state claim against a non-diverse third party defendant. Barred – common law rule. But now we have 1367(b)

Abstention

Removal

Caterpillar case:

Res judicata – the matter has been decided

This case was hard to justify. From the beginning.

Erie case:

Federal courts can exercise jurisdiction if diversity. (1332).

Once in federal court, whose law should we apply? Federal or state?

P has chooses Federal litigation because P is of opinion that suing in Federal court, he can change result. P was injured in a way which would not allow for recovery in the state in which the injury occurred. Because he was a trespasser he did not have a right to anything. Sued in federal court, asking court to not permit D to use trespasser doctrine as a defense.

ISSUE: Whose law should the federal court apply?

Since Congress has to find authority for its decisions, then so should the courts. Many people see this case as one in which the court is trying to discourage forum shopping. Federal courts are alternative state courts, and results should be the same.

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October 28, 1998

Erie Railroad v. Tompkins

Start with Swift v. Tyson

• apply law of the state – only statutory law. If no statutory law, then use general federal law (similar to common law)
• problem was people would shop for forums and then try to move the case on purpose
• look for federal courts in which law might be more favorable
• what is wrong with forum shopping? Can discriminate, worried about parties using forum shopping to circumvent the established state law. Should not encourage people to choose federal court just to get out of state law. Want to make sure people choose federal court for the correct purpose.
• Do not want people to choose a different forum for the sole reason of obtaining a more favorable application of law.

Any court using 1332 as a reason to hear a case, is an "Erie case". They are bound by the rules of Erie.

Specifics now of Erie:

• Tompkins wanted to get around a Penn law that said that people injured on a RR right of way are deemed to be trespassers and that the railroad is not liable for injuries to those people.
• So he moved the case to federal court in New York (2 steps from Penn state court) in order to get away from that law.
• The district court in NY ruled for Tompkins and said the RR owed him money.
• Rule of Swift now has been readjusted: state law whether common or not, in a diversity case, the federal courts should interpret all the laws of the state (this includes statutory, common law, etc) – definition of "law" has been redefined.
• Theoretical problem with Swift: now it is deemed unconstitutional. Congress does not have power to make common law, because it is not authorized by the constitution. Law made by legislative branch of government must fall under rules set out by the constitution. If the legislature could not address the issue, then can the courts address it? YES, because they have the power to make common law.
• ISSUE: Tompkins would like the federal court to apply to issue of whether the RR have a duty of care to a trespasser? Do they have a duty of care? If so, what is their duty of care to trespassers?
• Because federal law did not exist in this area, Tompkins was hoping to convince court to make it in his favor
• RULE: no federal general common law in diversity actions. Federal courts must use relative state law to reach decision. Federal law sitting in diversity jurisdiction must apply law of that state, including common law.
• Erie rule extends to choice of law rules, that is the conflict of law rule…

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October 29, 1998

Wrap up of specific performance

• only hold specific performance where the service is so unique where monetary damages will not be adequate
• very occasional will this be awarded

remedies: consequence of breach

1. breach of promise: damages
2. may be excused from your own performance

• depends on material breach or not

A promise independent of other promises. Now courts are finding promises to be dependant on one another.

How to tell the difference between promises and conditions. Cannot use trivial breaches of a condition, as reason for getting out of the contract.

Material breach – when is the breach serious enough to excuse counter performance? This outs a lot of guess work on the party that claimed to be injured. Person has to decide if there really was a condition, and if that breach of the condition was a material breach. This is risky, because if one party guessed wrong, then THEY will be in breach.

Take requirements of the rule and imply them to the facts.

Walker v. Harrison – p693

Restatement 2^nd – apply to neon sign case – Section 241, page 273

1. extent to which the injured party will be deprived of the benefit which he reasonable expected (Walker was deprived slightly, nominally, not much)
2. the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived (pay for the cost of Harrison to hire someone to clean the sign)
3. the extent to which the party failing to perform or offer to perform will suffer forfeiture (not much)
4. the likelihood that the party failing to perform will cure his failure taking into account of all the circumstances including any reasonable assurances (if likelihood of cure is high, not material)
5. the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing (this was not material in this case either)

so all of these conditions were not materially breached.

Rent the space

/-----------à ---------------\

Landlord Tenant

\__________ß ________/

to timely pay, common area charges

• was an incentive for P to try to find a reason to kick D out of lease.
• Have to overcome two obstacles:

1. time of essence – delay is material breach (a clause in contract)
2. statute