San Joaquin College of Law
Civil Procedure–Interim Exam Dec. 2000/Cartier
QUESTION 1
Plaintiffs, Peter (a resident of Pennsylvania) and Paul (a resident of Panama), filed suit against Developer (a French citizen residing in St. Martin--a French protectorate in the Carribean) in the United States District Court for the Eastern District of Pennsylvania. The original complaint alleged that Developer represented to Plaintiffs that he was selling condominium units he built in St. Martin. Each Plaintiff entered into a contract to purchase a condo unit from Developer. While Developer had a lease for the land on which the condos were built, he did not have clear title to the land. Peter and Paul refused to pay any more money to Developer until he obtained and provided evidence of clear title to the land. Developer represented that he was in the process of negotiating clear title. In 1997, Developer mailed Peter and Paul each a copy of a fraudulently created document indicating that Developer had obtained clear title to the land where the condos were situated. The fraudulent document was mailed to each plaintiff at his residence. Upon receipt of this documentation, Peter and Paul each sent the remaining sum owing on his respective condominium unit. Developer still has not obtained clear title to the land. Several lawsuits by the title holders of record are pending in St. Martin, including suits against Developer and against Peter and Paul.
The original complaint filed by Peter and Paul in this federal court action alleged common law fraud claims seeking damages in excess of $50,000 for each plaintiff. After being served in this action, Developer filed a motion to dismiss for 1) lack of subject matter jurisdiction, 2) lack of personal jurisdiction, and 3) forum nonconveniens. Plaintiffs then filed an amended complaint alleging common law fraud against Developer and Racketerring Influenced and Corrupt Organizations Act (RICO) claims against Developer and others allegedly involved in the underlying transaction.. [A RICO claim is a federal question.]
After being served with the amended complaint, Developer filed a motion objecting to the amended complaint as improper and renewing his previous motion to dismiss on the grounds previously stated.
How should the court rule on the following:
1. Developer’s objection to the amended complaint? DISCUSS.
2. Developer’s motion to dismiss for lack of subject matter jurisdiction? DISCUSS.
3. Developer’s motion to dismiss for lack of personal jurisdiction? DISCUSS.
4. Developer’s motion to dismiss for forum nonconveniens? DISCUSS.
Question 2
In 1998, Plaintiff (a resident of Florida) was injured in a motor vehicle accident in Georgia when his vehicle ran off the road and rolled over after being struck by another vehicle. Plaintiff retained a Florida attorney to lead the investigation into the causes of the accident. The investigation suggested the accident was the result of the failure of the Georgia Department of Transportation (Ga DOT) to place a guardrail where plaintiff’s vehicle exited the highway. On the advice of Florida counsel, Plaintiff retained a Georgia attorney (“Dudley”) to effect service on Ga DOT and to serve as co-counsel in the Georgia state court action against Ga DOT. Georgia’s Tort Claim Act requires a written notice of claim to a governmental entity within 12 months of the injury. Dudley failed to comply with the notice of claim rule and, as a result, Plaintiff’s suit against Ga DOT was dismissed with prejudice.
Now plaintiff has filed a professional negligence action against Dudley (a resident of Georgia) in the United States District Court for the Middle District of Florida. Plaintiff is seeking both compensatory and punitive damages. Dudley contends the court lacks personal jurisdiction over him.
The pertinent Florida long-arm statute provides:
1. Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself . . . to the jurisdiction of the courts of this State for any cause of action arising from the doing of any of the following acts:
a) operating, conducting, engaging in, carrying on a business or business venture in this state or having an office in this state
b) committing a tortious act within this state.
Florida courts are “deeply divided” on the issue of whether a tortious act committed outside the state resulting in injury in the state produces personal jurisdiction under 1.b).
Florida law requires that claims for professional negligence seeking punitive damages be pleaded with particularity. Dudley contends that Plaintiff’s complaint, which sets forth merely a short, plain statement of his claim, alleging negligence generally, fails to state a claim upon which relief can be granted. In lieu of filing an answer, Dudley raised his objections in a motion that is presently before the court.
How should the court rule on the following:
1. Dudley’s motion to dismiss for lack of personal jurisdiction [12(b)2]? DISCUSS.
2. Dudley’s motion to dismiss for failure to state a claim [12(b)6]? DISCUSS.
San Joaquin College of Law
Civil Procedure Sketch Answers Dec 2000/Cartier
QUESTION 1
Plaintiffs, Peter and Paul, originally filed a complaint in United States District Court alleging common law fraud. After being served, Defendant (Developer), filed a motion to dismiss for want of personal jurisdiction, lack of subject matter jurisdiction, and forum nonconveniens. Thereafter, Plaintiffs filed an amended complaint alleging a RICO claim. Defendant then filed a motion objecting to the amended complaint and renewing his previous motion to dismiss on the grounds stated.
1. How should the court rule on Developer’s objection to the amended complaint?
Pursuant to FRCP 15 a plaintiff may amend his pleading once as a matter of course before a responsive pleading is filed. While an answer would be a responsive pleading, a motion to dismiss for defects of subject matter and/or personal jurisdiction is not considered a responsive pleading. Developer’s original filing also included a request to dismiss based on forum nonconveniens, which similarly does not address the merits of the case, will not be viewed as a responsive pleading. Since this action is filed in federal court, the Federal Rules of Civil Procedure apply. Plaintiff’s amended complaint is proper.
2. How should the court rule on Developer’s motion to dismiss for lack of subject matter jurisdiction? Federal court have limited jurisdiction. Since the original complaint alleging common law fraud does not arise under federal law (Constitution, treaties or acts of Congress), there is no federal question. The court would be empowered to hear this case only if the requirements for diversity jurisdiction (complete diversity and amount in controversy) were satisfied. Complete diversity requires that no plaintiff come from the same state as any defendant. Plaintiffs are from Pennsylvania and Panama; Defendant is from St. Martin. Since Panama and St. Martin are neither states nor territories of the United States, the parties from these jurisdictions are considered aliens. Ordinarily an alien cannot sue an alien in federal court. Here, however, a citizen of the United States is a party and the addition of an alien to the suit will not destroy diversity. The amount in controversy poses a more serious problem. Each plaintiff must assert a claim for more than $75K. Here plaintiffs are seeking damages in excess of $50K. This allegation does not satisfy the amount in controversy requirement. Plaintiffs cannot aggregate their claims to meet the amount in controversy. The federal court does not have original jurisdiction over the common law fraud claims.
The facts tell us that the amended complaint raised a RICO claim, which is a federal question. At this pont, the court may exercise supplemental jurisdiction over state law claims (the common law fraud claims) so long as those claims are part of the same constitutional case and controversy. Since both the RICO and fraud claims arise from the same real estate transactions, the court may exercise its original jurisdiction over the RICO claim and supplemental jurisdiction over the common law fraud claims. While the court has discretion not to exercise supplemental jurisdiction, it should deny the motion to dismiss for want of subject matter jurisdiction.
3. How should the court rule on Developer’s motion to dismiss for lack of personal jurisdiction?
Personal jurisdiction is obtained by giving notice to the defendant within the grasp of the state’s long-arm statute. Assuming the long-arm statue applicable to this case is coextensive with the U.S. Constitution, personal jurisdiction will be proper if Developer has minimum contacts with Pennsylvania so that the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice. Nothing in the facts suggests that Developer has any continuing and systematic contacts (offices, employees, etc) with the forum. It is clear, however, that Developer mailed fraudulent documents to the Plaintiffs in Panama and Pennsylvania. This lawsuit arise from and is related to the fraudulent document mailed to Plaintiff in Pennsylvania. Developer purposefully directed his activity to Pennsylvania and it was foreseeable that he could be hailed into court there. There is nothing unfair about holding him to answer in the jurisdiction where he directed his fraudulent activity. The benefit to the Plaintiffs and the forum state’s interest in protecting its citizens from fraud outweigh any burden imposed on the defendant by having to defend in Pennsylvania. The court should deny the motion to dismiss for want of personal jurisdiction.
4. How should the court rule on Developer’s motion to dismiss for forum nonconveniens?
Under forum nonconveniens, a court that otherwise is a proper court may decline to exercise jurisdiction where there is an alternate forum that is better suited to decide the case. Here several related lawsuits are currently pending in St. Martin, which appears to be a proper alternate forum. The land is in St. Martin. The ownership of the land will be determined based on French law. There is nothing to suggest the title holders of record are subject to jurisdiction in the United States. Certainly St. Martin has a greater interest than Pennsylvania in resolving this dispute. The United States District Court has the discretion to dismiss (or possibly to stay) this action so that the dispute can be resolved in St. Martin, where the land and witnesses are readily available.
QUESTION 2
1. Dudley’s motion to dismiss for lack of personal jurisdiction.
Personal jurisdiction is obtained by giving notice within the grasp of the state’s long-arm statute.
While Dudley contests personal jurisdiction, he has not attacked either the method or manner of service. The question then is whether his conduct is within the grasp of the Florida long-arm statute by 1) conducting business in the state or 2) by engaging in tortious activity. Clearly he contracted with a Florida attorney to become co-counsel in a case by a Florida plaintiff. His co-counsel role will suffice to establish that he has engaged in business within Florida. The question of whether he has engaged in tortious activity is more difficult since the state courts are deeply divided on whether an act outside the state causing an injury in the state satisfies the statute. Because this action is filed in federal court, the court will apply federal procedural rules and state substantive law. The meaning of the states long-arm statute raises a substantive question that the federal court will have to resolve. Although the state courts are divided , the federal court will have to ascertain what it thinks the state Supreme court would hold. Assuming the federal court determines the state supreme court would uphold jurisdiction where an act outside the state causes a tortious injury in the state , jurisdiction under this prong of the state long-arm statute would be appropriate. Even if the federal court holds the second prong is not satisfied, jurisdiction would be appropriate under the first prong–doing business in the state. Here the Rule 12 objection to personal jurisdiction is timely filed since it was raised in Dudley’s first filing.
Even though it appears Dudley’s activity brought him within the Florida long-arm statute, it is still necessary to determine whether he has minimum contacts with the state so that the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice. While it does not appear that Dudley has continuous and systematic contacts with Florida, he did contact with Florida counsel to become co-counsel. This isolated, related activity is sufficient to make it foreseeable that he could be hailed into a Florida court for activity arising from or related to that contact. While there is clearly some burden on the defendant in having to defend in Florida, the benefit to plaintiff and the interest of Florida in protecting its citizens argue heavily in favor of jurisdiction in Florida. On the whole it is not unfair to exercise jurisdiction over Dudley in Florida. The court should deny the motion to dismiss for want of personal jurisdiction.
2. Failure to State a Claim
A complaint is sufficient if it alleges a valid cause of action. While state law requires a complaint seeking punitive damages to be pleaded with particularity, the federal rules permit notice pleading (a short plain statement of the facts showing the pleader is entitled to relief). Pleading is governed by the Federal Rules of Civil Procedure (R. 8). Where there is a conflict between a state procedural rule and an FRCP, in federal court, the FRCP prevails. It appears plaintiff’s complaint is sufficient to withstand a motion to dismiss. Even if the complaint were defective, plaintiff would be given the right to amend his pleading to cure the defect. The court should deny the motion to dismiss for failure to state a claim.