San Joaquin College of Law

Civil Procedure – Interim Exam 1203 / Cartier

Time: 2 hours 10 minutes

Question 1

Plaintiff, a flight attendant, and her companion, Pal, were injured in a “slip and fall” accident at a hotel in Michigan where they were staying as paying guests while Plaintiff was on a layover between flights. Plaintiff is a resident of Illinois; Pal is a resident of Michigan. The hotel is operated by Delightful Inns, a Georgia corporation that operates three hotels in the southern part of Illinois and twenty hotels in Michigan. Plaintiff and Pal claim that hotel negligently maintained its egress and outdoor lighting and that, as a result, Plaintiff claims personal injuries in excess of $50,000 and Pal claims only minor injuries in an amount less than $5,000. Plaintiff and Pal seeks monetary damages and an injunctive order requiring the hotel to upgrade its walkways and lighting, at a cost of approximately $30,000. This diversity action was filed against Delightful Inns in the United States District Court for the Northern District of Illinois. Delightful Inns has filed a motion to dismiss the action based on 1) a want of subject matter jurisdiction and 2) improper venue. In the alternative, Delightful Inns requests the court to transfer the case to the Eastern District of Michigan where the cause of action arose.

Considering all relevant matters, how should the court rule? DISCUSS.

Question 2

Peter Pawless, a resident of Pennsylvania, suffered the amputation of his left hand when a piece of industrial machinery malfunctioned. This machine was manufactured by Delta, Inc., “Delta,” ( a Delaware corporation with its principal place of business in North Carolina) and was sold to Peter’s employer, a Nigerian corporation. The injury was sustained in Nigeria in October 2001. In November 2003, Peter filed suit against Delta in the United States District Court for the Eastern District of Pennsylvania seeking recovery for his personal injury. Delta maintains a regional sales office and eight service centers in Pennsylvania and regularly sells its industrial products in all fifty states and internationally. While the statute of limitations in Nigeria for this action is three years, the statute of limitations for personal injury suits in Pennsylvania is two years from the date of the injury unless the statute of limitations where the injury occurred applies a different period. The rule that calls for application of the other jurisdiction’s statute of limitations is referred to as a “borrowing statute.” Federal courts in Pennsylvania traditionally have applied the borrowing statute in favor of plaintiffs. A recent Pennsylvania Supreme Court decision, however, holds that Pennsylvania applies another jurisdiction’s statute of limitations only when no party resides in Pennsylvania. In applying the borrowing statute, a corporation is a resident of its state of incorporation. Upon proper service of the summons and complaint, Delta filed a motion alleging: 1) the court lacks personal jurisdiction; 2) the complaint should be dismissed for failure to state a claim since the complaint fails to satisfy the state’s code pleading requirements; 3) the action is barred by the statute of limitations; and 4) the action should be dismissed under the doctrine of forum non conveniens.

Considering all relevant matters, how should the court rule? DISCUSS.

San Joaquin College of Law

Civil Procedure – Interim Exam Dec 03 / Cartier

Question 1: Draft answer.

Plaintiff and Pal filed a lawsuit against Delightful Inns to recover for injuries sustained in a slip and fall accident in Illinois. The action was filed in the federal court in the Northern District of Illinois. Delightful Inns filed a motion to dismiss 1) for want of subject mater jurisdiction and 2) improper venue. In the alternative, Delightful Inns wants the case transferred to the Eastern District of Michigan where the cause of action arose.

SUBJECT MATTER JURISDICTION – is the power of the court to decide a particular type of case. Since federal courts are courts of limited jurisdiction, a federal court can only decide cases permitted by Constitution and by statute. The facts specify that this is a diversity action. A federal court can exercise diversity jurisdiction if there is COMPLETE DIVERISTY (meaning no plaintiff comes from the same state as any defendant) and if the AMOUNT IN CONTROVERSY exceeds $75,000.

COMPLETE DIVERISTY – Plaintiff, although injured in Michigan on a layover between flights, is a resident of Illinois and Pal is a resident of Michigan. Citizenship for individuals is actually premised on domicile – where a person maintains his or her permanent abode – rather than residence. Nothing in the facts suggests that either Plaintiff or Pal has a domicile distinct from residence. As a corporation, Delightful Inns has dual citizenship – 1) in its state of incorporation (Georgia) and 2) in its principal place of business. The facts do not specify where Delightful Inns has its principal place of business. If the principal place of business is in Illinois (which is improbable since only 3 hotels there), diversity with Plaintiff would be destroyed. If the principal place of business is in Michigan (based on operation of 20 hotels), diversity with Pal would be destroyed.
AMOUNT IN CONTROVERSY – Diversity jurisdiction requires the amount in controversy exceed $75,000. Here Plaintiff seeks $50,000 for her injuries AND an injunction. A party can aggregate claims against the defendant to meet the amount in controversy. An injunction can be valued as the benefit to plaintiff (this amount is not stated) or as the cost to the defendant ($30,000). Here plaintiff’s $50,000 damage claim and the $30,000 injunction exceed $75,000. Pal only seeks $5,000 in damages. Multiple plaintiff’s are not permitted to aggregate their damage claims to meet the amount in controversy. While Pal’s claim might have destroyed diversity, it clearly cannot meet the amount in controversy requirement. Based on Pal’s failure to meet the requirements for diversity jurisdiction, the court could dismiss this action OR, more likely, could simply dismiss Pal’s claim. In the alternative, the court may decide Pal’s claim under supplemental jurisdiction.

SUPPLEMENTAL JURISDICTION – Since the court has jurisdiction over Plaintiff’s claim against Delightful Inns, the court may exercise supplemental jurisdiction over any other claim that forms part of the same case and controversy (i.e. arises from the same nucleus of operative facts). Since Plaintiff and Pal were injured in the same slip and fall, it appears the federal court would be able to decide this claim. Traditionally, plaintiffs were not afforded the benefit of supplemental jurisdiction in cases resting solely in diversity. A literal reading of § 1367(a) and (b) suggests that plaintiffs are only denied supplemental jurisdiction in claims against parties joined under Rule 14, 19, 20 or 24. Since Delightful Inns was not made a party under any of these rules, supplemental jurisdiction may be available.

VENUE – specifies rules where a case should be tried. In diversity cases, venue is appropriate 1) where the defendant resides or 2) where a substantial amount of the events giving rise to the cause of action occurred. As a corporation, Delightful Inns resides in any judicial district where it would be subject to personal jurisdiction if that district were a state. Clearly, the Eastern district of Michigan (where the cause of action occurred) would be a good venue. Additionally, since Delightful Inns operates 3 hotels in the Southern part of Illinois, it is likely that venue would be appropriate there. Nothing in the facts, however, suggests any contact between Delightful Inns and the Northern District of Illinois, where the action was filed. If the cause of action did not take place there or if Delightful Inns was not subject to personal jurisdiction in the Northern District when the action was filed, venue is improper.

TRANSFER – If an action in filed in a district that lacks venue, the court may dismiss the action OR, if it is in the interest of justice, may transfer the case to a district where it could have been brought. The Eastern District of Michigan appears to be a place where the action could have properly been brought. Delightful Inns is clearly subject to personal jurisdiction there since it was operating the hotel where the injury occurred. (Where there is continuous and systematic contact and a lawsuit related to that contact, jurisdiction has never been doubted). Venue would be appropriate there on two bases: 1) Delightful Inns is subject to personal jurisdiction in that district and is thus a resident OR 2) this is the place where the cause of action arose.

Question 2 – Law and Reflections: This is NOT a sample answer.

Personal jurisdiction is the power of a court to make a binding order against a defendant. Typically one gets personal jurisdiction over an out of state defendant by giving notice within the grasp of the state’s long arm statute IF the defendant has minimum contacts with the forum so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. D clearly has continuous and systematic contact with Pennsylvania. Is the lawsuit is related to those contacts? [NOTE: This is not a stream of commerce case].

ERIE – A state law claim in federal court gives rise to a potential Erie problem. In such a case, federal courts, while generally applying federal procedural rules, should apply state substantive law to the state law claims. Here, two “conflicts” are presented.

Notice v. Code Pleading – FRCP 8 permits notice pleading. Hanna: FRCP’s are procedural.

Statute of Limitations – A federal court cannot give a state law cause of action longer life that it would have in state court. The statute of limitations, in this sense, is treated as substantive. If the federal practice (not based on Constitution or statute) conflicts with state law, York gave us an outcome determinative test. In the larger sense, we don’t want to violate the twin aims of ERIE:

1) to discourage forum shopping AND 2) to avoid inequitable administration of the laws. What is the meaning of the State Supreme Court’s recent ruling regarding the borrowing statute?

Forum Nonconveniens – A court may dismiss (or stay) a proceeding if 1) it is a proper court BUT 2) there is another proper court where the action should be heard taking into account PUBLIC FACTORS and PRIVATE FACTORS. Notice that Plaintiff is a resident of the state.