San Joaquin College of Law

Civil Procedure – Interim Exam Dec 2004 / Cartier

TIME: 2 hours 20 minutes.

Question 1:

Plaintiffs, Husband and Wife, both citizens of Alabama, filed suit in state court in Alabama against Driver, a citizen of Georgia, for injuries sustained in a vehicle collision in Alabama. The couple contend Driver’s negligent and wanton behavior caused his vehicle to collide with Wife’s. Driver was driving a commercial vehicle in interstate transport at the time of the collision. The complaint alleges Driver was operating his truck in violation of federal Department of Transportation regulations concerning the hours of driving permitted by a driver in a 24-hour period and that Driver, who may have been under the influence of a controlled substance, fell asleep at the wheel resulting in the collision. Wife seeks compensatory damages in an amount in excess of $50,000 for medical bills, pain and suffering, etc. She also seeks punitive damages in an unspecified amount. Husband seeks $25,000 damages for loss of consortium. Upon being properly served with this state court action, Driver removed the action to the United States District Court for the Middle District of Alabama. After answering the complaint, Driver filed a third-party complaint (under Rule 14) against his employer, Dixie Transport, Inc., a Georgia corporation with its principal place of business in Alabama. Now before the court are 1) Plaintiffs’ motion to remand AND 2) Dixie Transport’s motion to dismiss for want of subject matter jurisdiction.

Considering all relevant facts, how should the court rule on the motion to remand? DISCUSS.

Considering all relevant facts, how should the court rule on the motion to dismiss? DISCUSS.

Question 2:

While vacationing in California in 2003, Ed, a citizen of Pennsylvania, picked up a copy of the local paper advertising a management job in California with DMI (Deluxe Media, Inc.). After returning to Pennsylvania, Ed applied for the job. Over several weeks, Ed contacted representatives of DMI and the negotiated terms of an employment contract. The finalized agreement was prepared by DMI attorneys in California. The contract recited that Ed was hired to work for DMI in California and that the agreement would be governed by California law. Ed moved to California and began his employment with DMI. At the end of his probationary period, he was terminated. Ed returned to Pennsylvania and filed a complaint for breach of an employment contract against DMI, a Nevada Corporation with its principal business operations in California. The action was filed in Pennsylvania state court. Upon proper service of the summons and complaint, DMI removed the action to the United States District Court for the Western District of Pennsylvania. DMI now moves 1) to dismiss the action A) for want of personal jurisdiction, B) improper venue, and C) failure to state a claim since Ed’s complaint fails to satisfy Pennsylvania’s code pleading requirements OR 2) to transfer the action to the Central District of California where Ed was employed. DMI maintains no offices or employees in Pennsylvania. Pennsylvania’s long-arm-statute requires that an out-of-state defendant be subject to general or specific jurisdiction

Considering all relevant facts, was the case properly removed? DISCUSS.

Considering all relevant facts, how should the court rule on the motion to dismiss or transfer? DISCUSS.

San Joaquin College of Law

Civil Procedure – Sketch Answer Dec 2004 / Cartier

Question 1:

             After plaintiffs, Husband and Wife, filed suit against defendant, Driver, in state court for injuries resulting from a vehicle collision in which Wife was seriously injured, Driver removed the action to federal court. Plaintiffs now seek to have the case remanded (sent back to state court). Since federal courts have limited jurisdiction, the initial inquiry is whether the federal court has subject matter jurisdiction ( the power to decide this case).

             Federal courts have original jurisdiction over cases that arise under federal law. A defendant may remove a federal question case from state to federal court. While the facts allege Driver violated DOT regulations, it is doubtful that these regulations create a private right of action.

             A defendant may also remove a diversity case if the action is not filed in the defendant’s home state. Diversity jurisdiction requires both complete diversity of citizenship (no plaintiff comes from the same state as any defendant) AND an amount in controversy in excess of $75,000. Since plaintiffs are citizens of Alabama and defendant is a citizen of Georgia, complete diversity exists. Wife seeks an amount in excess of $50,000 plus punitive damages. While punitive damages are not usually available in a negligence action, here Wife alleges Driver’s conduct was wanton. Assuming state law permits punitive damages in this type of case, Wife has likely met the amount in controversy since the actual damages and punitive damages can be aggregated to meet the amount in controversy. . [One might assume her prayer for damages in excess of $50,000 was likely intended to meet the jurisdictional limits of the state court where the action was originally filed.] Husband only seeks $25,000, an amount far less than the amount required for diversity jurisdiction.

              Because the court has original jurisdiction over Wife’s claim, can the court exercise supplemental jurisdiction over Husband’s claim that fails to meet the requirements for diversity jurisdiction? Once a federal court has original jurisdiction over a claim, the court may be able to exercise supplemental jurisdiction over other claims that arise from the same constitutional case or controversy. Here, Husbands claim arises from the same transaction or occurrence (the vehicle collision) as Wife’s claim. While plaintiffs traditionally did not get he benefit of supplemental jurisdiction (pendent jurisdiction) in a diversity action, a modern trend permits supplemental jurisdiction to plaintiffs pursuant to 28 U.S.C. § 1367. This section provides that whenever a federal court has original jurisdiction over a claim, the court has supplemental jurisdiction over all other transactionally related claims that form part of the same constitutional case and controversy EXCEPT that plaintiffs do not get the benefit of supplemental jurisdiction over claims against parties joined under Rules 14, 19, 20 or 24. Driver, as the original defendant, was not joined under any of these rules. Some courts will exercise supplemental jurisdiction over Husband’s claim against Driver based on a literal interpretation of the statute.

             If the court has subject matter jurisdiction based on diversity (Wife’s claim) and supplemental jurisdiction (Husband’s claim), this case could have been brought in federal court. Since the action was filed in Alabama and not Georgia (Driver’s home state), the action was properly removed to the Middle District of Alabama assuming the state court where the action was originally filed is within that jurisdiction.

             After filing his answer in this action, Driver filed a third-party complaint (under Rule 14) against Dixie Transport, his employer, seeking contribution or indemnity. Dixie Transport objects to subject matter jurisdiction. As a corporation, Dixie Transport has dual citizenship – Alabama (its principal place of business) AND Georgia ( it state of incorporation). Complete diversity is defeated. Here the court can clearly exercise supplemental jurisdiction (ancillary jurisdiction) based on § 1367. Note the exception regarding plaintiffs dos not apply since Driver, the defendant, is joining his employer.

             While it appears that the court has the power to decide all claims presented in this question, the court retains jurisdiction to decline to exercise supplemental jurisdiction in appropriate circumstances

(§ 1367(c)).

Question 2

             REMOVAL: This case was properly removed if it could have been filed in federal court initially. The action alleges a breach of an employment contract. Federal courts have limited jurisdiction. While a federal court can decide federal question cases (cases arising under federal law) No federal question is presented by the facts. The court can also decide diversity cases if the is complete diversity of citizenship AND the amount in controversy exceeds $75,000. Here, Ed, a citizen of Pennsylvania, filed suit against his former employer, DMI, which is a citizen of both Nevada, its state of corporation, AND California, its principal place of business. Complete diversity of citizenship is established since plaintiff and defendant are citizens of different states If the amount in controversy exceeds $75,000, the action filed in state court in Pennsylvania could be removed to federal court since the action was not filed in defendant’s home state.

             PERSONAL JURISDICTION: DMI asserts a want of personal jurisdiction. Personal jurisdiction is the power to make a binding order against a party. Personal jurisdiction is obtained by giving notice within the grasp of the state’s long-arm statute. The facts recite that DMI was property served and that the state’s long arm statute requires general or specific jurisdiction. The U.S. Constitution requires that an out of state defendant have ceratin minimum contacts with the forum state so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice.

             General jurisdiction is based on continuous and systematic activity within the forum. Here DMI has no offices or employees in Pennsylvania. There appears to be no basis for general jurisdiction.

             Specific jurisdiction is based on an action by the defendant directed to the forum that is related to the suit. The action must arise out of or be related to the forum contact. If the defendant purposefully directs its activity to the forum or otherwise takes the benefits and protections of the forum, both specific jurisdiction AND the minimum contacts requirement would be met since it would be foreseeable to the defendant that he could be haled into court in that jurisdiction. Here DMI responded to Ed’s request for employment. While Ed’s contacts were from Pennsylvania, DMI did not select Pennsylvania as a forum. Ed got ht job ad in California. He contacted DMI in California. The contract was prepared in California and the contract provided it would be governed by California law. Sending the contract to Ed in Pennsylvania is random and fortuitous since the document would have been sent to Ed wherever he was. Sometimes, on a lesser showing of minimum contacts than might otherwise be required, the court will exercise jurisdiction by invoking the fairness factors (benefit to the plaintiff, the forum state’s interest, the burden on the defendant, fundamental social policies and the shared interest of the several states). It appears that DMI does not satisfy the requirements for specific jurisdiction. Neither the long-arm statute nor the constitutional requirements of minimum contacts have been met. There is no basis for an exercise of personal jurisdiction over DMI in Pennsylvania.

             VENUE: Venue rules define the appropriate place for a case to be heard. Venue is generally appropriate where the defendant resides OR where a substantial amount of the events giving rise to the cause of action occurred. When a case is removed from state court to federal court, however, venue is appropriate in the district court servicing the area where the state court is located. If Ed’s state court action was filed in a state court within the Western Distric tof Pennsylvania, venue is proper.

             MOTION TO DISMISS (ERIE): DMI also seeks a dismissal of the complaint for failure to set forth a valid cause of action since the complaint failed to satisfy the state’s code pleading requirement. Code pleading requires that the complaint set forth facts constituting a cause of action. Federal court’s allow the use of notice pleading, a short plain statement of the claim showing the pleader is entitle to relief. Under the ERIE DOCTRINE, a federal court, when deciding a state law claim, uses state substantive law and federal procedural rules. Since notice pleading is authorized by FRCP 8 and the federal rules are procedural, notice pleading is permitted, and code pleading is not required, in the federal court.

             TRANSFER: A case may be transferred from one federal district to another under 1404, if venue was correct in the first case, for the convenience of witnesses or parties or in the interest of justice. If the first court lacks jurisdiction, the court may be able to use 1631 to transfer the case to a place where it could have been brought. On these facts, the court could dismiss for want of personal jurisdiction or could transfer the case to California, where it could have been brought . . . .