Instructions
1. Please begin each answer on a separate page clearly indicating the
number and sub-part you are answering.
2. Please limit your answer to two or three paragraphs for each sub-part.
(No more than two sides of a page.)
3. Cite Rules, Statutes or Cases where appropriate to show me that
you understand how a court would reason through the question presented.
4. If you see ambiguities, or you need additional facts to reach a
conclusion, tell me what you need to know to answer the question.
QUESTION 1.
Williams, a resident of Iowa sued Prairie Computer Corporation (a corporation
organized under the laws of South Dakota, with a manufacturing plant in
North Dakota, a repair facility in Iowa and senior executive offices in
San Diego, CA) and Dexter a student from Alaska who is attending college
in Vermillion, Iowa. Dexter owns an apartment building in Minnesota. Williams
sued Prairie and Dexter in the State Court in Minnesota for damages arising
from the tortious conduct of Dexter which aided Prairie's fraudulent failure
to deliver goods under a sales contract negotiated in Minnesota. Minnesota
Rules of Civil Procedure mirror the Federal Rules.
The contract was negotiated by Prairie's president during a meeting
held at Dexter's office building. The goods were to be delivered to Williams
at a storage facility in Minnesota. Prairie has never conducted any other
business in Minnesota, with the exception of a three month used computer
salvage operation which refurbished used computers at no cost for non-profit
computer users. Service of process was made on Prairie by delivery of the
complaint and summons to its president personally in California and on
Dexter by delivery to his estranged wife living in Minnesota. Before Prairie
filed its answer, Prairie filed a federal "reverse discrimination" counterclaim
against Williams and a Petition for Removal. Williams filed a Motion to
Remand.
A. Discuss whether the case may properly be brought in State Court.
B. Assuming the case can be heard in State Court, citing Rules and statute(s), discuss whether (1)Dexter and (2)Prairie are properly before the court.
C. Assuming that the case and all parties are properly before the court, what is the likely outcome of the other Rule 12 issue(s) that can result in dismissal must Defendants raise before filing their answer? Explain.
D. Discuss the proper procedure for the Removal and Remand. What is the likely outcome? Explain.
E. If the Remand fails, what is the likely outcome
of Prairie's Motion for a Change of Venue to California, the site of all
corporate records?
Question 2.
Assume that the case is not remanded. In a phone call to the judge,
Williams' attorney requested a one month TRO requiring that Prairie be
foreclosed from shipping additional products until the case is resolved
because of his fear that the computers he ordered will be sold before the
case is resolved. The TRO was granted. He also moves for class certification
on behalf of other customers of Prairie who may also have not received
the product they ordered. Prairie and Dexter both file answers to the complaint
which deny the substantive allegations in the complaint and they assert
affirmative defenses that are available under the Common Law of Iowa.
The Common Law of Minnesota does not recognize any affirmative defenses
and Minnesota Statutes provide for a mandatory mediation of all such claims,
at the request of the Plaintiff. Minnesota has established the outcome
of 75% of all cases is determined at this stage. Defendants refused to
attend the mediation, which they deemed "worthless", and Plaintiff moves
for sanctions against Defendants, requesting that they pay Williams' attorneys
fees, which was granted. Defendants appeal both rulings.
A. What is the likely outcome on appeal of Defendants' Due Process argument regarding the ex parte procedure and the 30 day TRO? Explain.
B. What is the likely outcome on appeal of Plaintiffs argument on appeal that the appeals court has no jurisdiction because of the "final decision rule"? Explain.
C. Assuming the TRO is not upheld, what is the likely outcome of Williams' Motion for a Preliminary Injunction? Explain.
D. Will the Defendants be allowed to assert affirmative defenses before the jury? Explain.
E. Was the trial court correct in imposing sanctions
for violation of the Minnesota Mandatory Mediation Statute? Explain.
QUESTION 3
Prairie stockholder, Bob, a resident of Iowa, learned of the suit filed
against Prairie and is concerned that the outcome of the case could have
an impact on the value of his investment. The court granted his request
to enter the case as a defendant despite Dexter's Motion to Dismiss under
Rule 12(b) 1. The court also denied Prairie's Motion to dismiss because
of Williams' failure to name Insurance Company, an Iowa corporation with
its principle place of business in California, as a defendant. Insurance
Company is the liability carrier for Prairie that provides bonding for
Prairie executives.
After Bob entered the case, Prairie filed a claim against Bob for repayment
of debts totaling $50,000 incurred while Prairie was refurbishing computers
in Minnesota, The court granted Bob's motion to dismiss the claim pursuant
to rule 12(b) 1. Insurance Company filed a claim against Prairie alleging
that it had been defrauded because Prairie withheld information about the
president's criminal record. The court denied Prairie's 12(b) 1 Motion.
During discovery Williams learns that Prairie has also defrauded approximately
50 Iowans and failed to deliver goods in each case.
A. Was the court correct in allowing Bob to enter the case as a defendant? Explain.
B. Which Rule(s) applies to Prairie's motion to dismiss? Explain the court's ruling.
C. What is the likely outcome of Williams motion to certify a class?
D. Was the court correct in granting Bob's motion to dismiss Prairie's claim? Explain.
E. Was the court correct in denying Prairie's motion
to dismiss Insurance Company's claim? Explain.
Question 4.
In a previous proceeding in Minnesota, Insurance Company had prevailed
in a case against another insured, under the same insurance contract as
Prairie's, in which the court held that, Insurance Company was not liable
for intentional wrongful acts of employees. Insurance Company made a motion
to dismiss asserting both collateral estoppel and res judicata. If Insurance
Company is not successful in this effort, it wants to limit its litigation
costs by paying the $5,000 policy limit amount into court to distribute
as the court sees fit, thus eliminating the cost of defending Prairie.
Pursuant to a Minnesota Statute which provides that jury trials are
not available to defendants accused of intentional wrong doing, Defendants
filed a motion opposing the Williams' request for a jury trial.
A. May all 50 defrauded Iowans (mentioned in preceding question) be joined as parties? Explain.
B. How should the court rule on the collateral estoppel issues? Explain.
C. How should the court rule on the res judicata issues? Explain.
D. What is the likely outcome of Defendants' motion opposing the request for a jury trial? Explain.
E. Will Insurance Company be able to limit its litigation
costs by making use of Federal Rules or Statutes in the manner suggested?
Explain.
543.19. Personal jurisdiction over nonresidents
Subdivision 1. As to a cause of action arising from any acts enumerated in this subdivision, a court of this state with jurisdiction of the subject matter may exercise personal jurisdiction over any foreign corporation or any nonresident individual, or the individual's personal representative, in the same manner as if it were a domestic corporation or the individual were a resident of this state. This section applies if, in person or through an agent, the foreign corporation or nonresident individual:
(a) Owns, uses, or possesses any real or personal property situated in this state, or
(b) Transacts any business within the state, or
(c) Commits any act in Minnesota causing injury or property damage, or
(d) Commits any act outside Minnesota causing injury or property damage
in Minnesota, subject to the following exceptions when no jurisdiction
shall be found:
(1) Minnesota has no substantial interest in providing a forum; or
(2) the burden placed on the defendant by being brought under the state's jurisdiction would violate fairness and substantial justice; or
(3) the cause of action lies in defamation or privacy.
Subd. 2. The service of process on any person who is subject to the
jurisdiction of the courts of this state, as provided in this section,
may be made by personally serving the summons upon the defendant outside
this state with the same effect as though the summons had been personally
served within this state.
Subd. 3. Only causes of action arising from acts enumerated in subdivision
1 may be asserted against a defendant in an action in which jurisdiction
over the defendant is based upon this section.
Subd. 4. Nothing contained in this section shall limit or affect the
right to serve any process in any other manner now or hereafter provided
by law or the Minnesota Rules of Civil Procedure.
Subd. 5. Nonresident individual, as used in this section, means any
individual, or the individual's personal representative, who is not domiciled
or residing in the state when suit is commenced.
QUESTION 1, A
To determine if this case can properly be brought in Minnesota one must
first turn inquire whether Minnesota can assert personal jurisdiction over
the defendants. (Because Minnesota State Courts are courts of general jurisdiction,
subject matter jurisdiction can be assumed.) Thus to decide if personal
jurisdiction allows these defendant's to brought into Minnesota Court,
we must look at the following criteria;
(i) Does Minnesota's long arm statute purport to
apply to these defendants?
Answer: Clearly, yes (point (b) of the statute says anyone conducting
business in Minnesota is subject to personal jurisdiction). The transactions
which occurred were business in nature, thus it applies.
(ii) Determine whether it is "fair" for defendants
to be brought within personal jurisdiction of this state court?
Answer: This might be problematic--there are two categories to consider general jurisdiction
and specific. General stems from examining the criteria whether there
have been systematic and continuous (as laid out in Helicopteros de Columbia)
interaction between the defendants and state. Here both defendants would
be difficult to say having had systematic and continuous interaction--thus,
we must turn to specific jurisdictions. Under specific jurisdiction the
Intl' Shoe minimum contacts test is applied. This test examines volume,
length, acquired benefits from forum--the defendants may have had in their
interactions with state. Moreover, it looks at such things as property
owned within the forum. Here it is clear Dexter owns a building, and under
in rem principles (as laid out in Schaffer v. Heitner any suit which stems
from that property ownership specifically--falls within specific jurisdiction.
Here, this works. The suit stems from an event which occurred in the building:
Dexter has minimum contacts and can be sued for this cause. P.C.C. has
engaged in business with Dexter, and apply the Ashai test of foreseeability
and the Worldwide Volkswagen test of fairness and foreseeability, it is
easy to argue that P.C.C., having engaged in business with Dexter (a Minnesota
property owner) as "agent" and interacting in Minnesota, and with ultimate
delivery in Minnesota--all these factors meet the foreseeability and fairness
criteria laid out (by the U.S. Supreme Court) in Ashai and WorldWide VW.
Thus, this case is properly in Minnesota state court.
QUESTION 1, B
Again, as noted, in previous answer--the common law established a "system" to determine if
defendants are properly in the court's jurisdiction. Here the tests applied agree with the determination these defendants are properly in the Minnesota state court. The only question which remains--is this the proper venue--can be determined by examining U.S.C. §1391. Three aspects are examined to assign venue (n.b. jurisdiction is proper, venue may vary--i.e. there may not be, just one proper venue--but rather--the "best" venue).
(1) Where defendants resides, or if they are in different venues;
(2) Where events occurred;
(3) The "escape hatch" provision--which we do not
need to invoke). The second part of 1391 applies. The events occurred in
Dexter's building in Minnesota--hence the venue is proper, and both defendants
are in proper court.
QUESTION 1, C
Rule 12 lays out that any objections to:
must be made before answer or are deemed waived. (12(b) 1 --subject matter jurisdiction is, never-waived). Thus, defendants would want to raise as soon as possible all Rule 12b motions which are applicable. Based on the foregoing and the facts: the personal jurisdiction and venue objections--would fail. They are in proper jurisdiction and venue. The 12(b)4 and 12(b)5 motions for insufficiency of process and service would be the defendant's best hope. Because the facts seem to indicate Dexter's ex-wife received his service--this would most likely fail any test of 12(b)4 and 12(b)5. [See Mullane v. Hannover--where test of notice was determined to be: Was it fair and did it occur?] In Dexter's case these all fail. Pertaining to P.C.C. service--Fed. Rules (Rule 4(e) allows for service to a corporation to be done in handing notice to a corporate officer-
here the president was served, but in California. Again applying personal
jurisdiction rules--the office in California appears to be the nerve center,
thus arguably service for P.C.C. was proper. Thus, Dexter's 12b4&5
motions prevail, and P.C.C. fail.
QUESTION 1, D
Removal is "performed" under the auspices of U.S.C. §1441. It must
be initiated (petitioned) for 30 days of the initial summons per U.S.C.
§1447. It is exclusively within the right of the defendants to exercise
it. Plaintiff, since he chose the initial forum, cannot petition for removal.
Here, because this is clearly a case which might fall under the federal
courts subject matter jurisdiction (assuming there is complete diversity
between plaintiffs and defendants, and claims are in excess of $75,000
per §1332) then this might be properly removed to federal court. The
test applied by the federal court is: Could this claim have been properly
brought in federal court? Here the answer is yes, based on the foregoing.
The only sticking point would be to make sure there is complete diversity--thus,
plaintiff is an Iowa resident. P.C.C.=defendant, is a resident of state
of incorporation and principal business center--neither are Iowa, and Dexter's
citizenship is decided applying the Mas v. Perry test--where is his permanent
residency and where does he intend to remain. It would arguably be either
Minnesota or Alaska (he is from Alaska, perhaps at time he had intent to
remain somewhere, and he owns a building in Minnesota). At any rate, as
long as he is not an Iowa resident--we have complete diversity; and courts
ultimate discretion-remember court has ultimate discretion in removal matters
per §1447-this would be in all likelihood a good candidate to be removed
to federal court--if petition is filed within 30 days and diversity is
established and claim is over $75,000.
QUESTION 1, E
Change of venue motions fall under the purview of §1391. The standard
again as mentioned above looks at where defendant resides, where events
occurred, and where any defendant has jurisdiction (the so-call escape
hatch). Here since there are two defendants--it will have to be in venue
applying the second prong--i.e. where the event of suit/dispute occurred.
That is Minnesota. Bear in mind, venue may be changed by court for issues
of convenience (as here the bulk of evidence may be in California) or for
discretionary reasons as justice requires. The defendants might file a
forum non conviens motion under §1404--to move venue to California--it
may or may not succeed based on courts discretion [See Piper v. Reyno].
At any rate, should forum non conviens be applied and venue changed
to California--Minnesota state law (applied under Erie) would "follow"
and be used in the California venue--despite change. §1391.
QUESTION 2, A
TRO are commonly granted, it would seem in spite on due process, without notice nor hearing. The reasoning is that the immediacy of the potential harm and inability of the plaintiff to "survive" this harm intact and long enough to wait out a trial--supercedes constitutional issues. Thus, a judge may grant a TRO virtually unchallenged. Rule 65(b) discusses T.R.O. N.B. that T.R.O. can be appealed; one of the "rare" occasions when an appeal can be cast without final judgment. But based on the irreparable nature of the harm, the plaintiff's immediate "need" for protection, and compelling public policy issues--Also note, some courts apply a "Plaintiff likely to win?" test in T.R.O. decisions. See Inglis Baking--it is more than likely the defendants objection to the T.R.O. will not win under a due process objection. Due process is accepted as
being--in favor of the greater need of immediate relief as applied in
a T.R.O.
QUESTION 2, B
Again as noted above T.R.O. are one exception instance where an interlocutory appeal may be heard foregoing a final decision. For obvious reasons--the immediacy of the T.R.O. is reflexive in a sense. It is immediately granted (or denied) without full hearing, thence its "appealability" should be quicker than awaiting a final decision. Thus, any argument on "appeal" regarding a T.R.O.-need not apply the "final decision rule"--the "normative" rule (See F.R.A.P.4) and prerequisite for appeals. The T.R.O. may be immediately appealed--no "final decision rule" applies in relevancy. Again, the immediacy of the granting allows for a circumvention of (F.R.A.P.4) the "finality of decision" requirement. T.R.O. is governed by Rule 65(b).
QUESTION 2, C
If an appeal the T.R.O. is not upheld, the court may invoke a preliminary
injunction. What is the difference? The preliminary injunction requires
a hearing, notice, and often applies a four-part test [See Inglis Bakery].
(1) Will plaintiff suffer irreparable harm without injunctive relief: (2)
Will plaintiff probably prevail on merits at trial? (n.b. this prong is
sometimes modified). (3) In balancing equities, will defendant be harmed
less than plaintiff is helped in injunctive relief? (4) Is public interest
served?
Under this test, the preliminary injunction should prevail because plaintiff
is suffering irreparable harm; plaintiffs are primarily a "big" corporation
and plaintiff a "small" individual; plaintiff is likely to prevail on merits,
and public policy would be served. Hence a motion for preliminary injunction
should succeed. Also, according to Rule 65(a) which governs, a hearing
would be held in lieu of this motion whereby plaintiff and defendants would
get to argue the merits of their respective positions. It would seem the
overwhelming scope of harm to plaintiff (without injunctive relief) would
prevail over the relatively hard to define "harm" to the large corporation--thus
the plaintiff would in all likelihood prevail in his preliminary injunction
motion.
QUESTION 2, D
Under the Erie doctrine the substantive law which will be applied in
federal courts "comes" from the state in which it sits. Here, thus, Minnesota
substantive law will be applied. Regarding procedural law--the Erie doctrine
is not as clear--in fact a number of cases have laid this out and tried
to define just how "far" the federal court must go in applying state law
under Erie. Here, this would seem to be a procedural matter-since it will
determine whether case goes to trial. In Hanna v. Plummer
the U.S. supreme court held that the federal courts must look at U.S. constitutional
factors within the rubric of applying this Erie "doctrine", thus, here,
this may be decided to be a 7th amendment or 14 amendment issue and therefore
state law avoided and federal law applied on those grounds.
More likely, however, the court might use two tests to determine whether
Minnesota law should be strictly applied in this instance:
1) The "balancing" test per Hannah v. Plummer looks to balance
the interest of the state law as applied, against the constitutional ramifications
of the countervailing federal procedural component. Here the balance would
be significant enough to favor applying the federal rules and disregard
the Minnesota "ban" on affirmative defenses (n.b. F.R.C.P. allowed affirmative
defense in Rule 8(c)).
2) The second possible test would be the outcome determinative test
as laid out in Byrd v. Blue Ridge --here if the federal rule
applies changes the outcome differently than the state rule--it violates
the doctrine of Erie. Under this test, I fear, the Minnesota rule would
remain disallowing an affirmative defense.
However, the supreme court has subsequently moved "away" from this outcome
determinative test, and has allowed wider leeway for the application and
precedence of the federal rules over state civil procedural rules, this
coupled with the constitutional aspect, would mean CLEARLY--Rule 8(c) would
dominate and affirmative defense would be allowed, despite Minnesota law
and despite Erie.
QUESTION 2, E
Again, this is an Erie doctrine question [SEE ABOVE DISCUSSION OF ERIE] Erie would demand Minnesota substantive law must be applied. Our question then turns to is this a substantive legal issue or procedural--i.e. mandatory mediation--is it procedural or substantive? I would argue, when looking at its underlying nature, that it is procedural. Principally because it involved "how" the case "works", not "what" is at its "core". Legally, hence, repeating my argument from Question 2D regarding the differing applications of Erie and its strict adherence depending upon whether there is determinative substantive law or procedural-- I would have to say that the court, would applying the outcome determinative or balancing test, have no problem utilizing this facet of Minnesota procedural law. Although, it directly clashes with the F.R.C.P.--it does not contradict, nor would it necessarily violate any constitutional considerations as laid out in Hannah v. Plummer (this is assuming--that a jury trial would still be available--if mediation fails). In other words, the court here could in good legal conscious apply the F.R.C.P. over Minnesota law in this instance (based upon foregoing and previous answer) and disregard Erie without any serious legal "wrongness". However, why would they? I would argue, that thus, they would apply this mediation device--it seems useful (if 75% of cases are eliminated) in streamlining the courts docket--a concern and goal federal courts are as "attracted" to as Minnesota state courts. Thus, although they could disregard this mediationary device, they would not, and thus the sanctions would stand. (Poor defendants--they are not fairing well in this essay!)
QUESTION 3, A
Two questions must be explored to decide if Bob was properly allowed
to enter: Rule 24 and the jurisdictional ramifications.
Rule 24 lays out two types of interveners in actions: an intervener
of right and a permissive intervener. Here it would be hard to determine
from the limited facts of which Bob is--but applying the test in Rule 24
for intervener of right: (a) does intervener have an interest in the subject
of suit? (b) will his interest be impaired without his presence, (c) is
her inadequately represented by the parties now in the suit? I would argue
Bob meets all of this criteria and thus per Rule 24(a) he is an intervener
of right. As opposed to a permissive intervener who only interviews out
of common question of law and facts interest Rule 24b.
Now the second facet of this question involves what jurisdiction issues
flow from this intervention the court must still find personal and subject
matter jurisdiction for Bob. He is, assumably, entering of his own will--therefore
this is a consent to the court of Minnesota or the Minnesota federal courts
personal jurisdiction one may consent--through presence (see Burnham
case) or express consent to a court's personal jurisdiction the second
aspect of jurisdiction is then subject matter. Here, supplemental jurisdiction
would not apply--see §1367(b) which disallows supplemental jurisdiction
for Rule 24 intervention. Thus, diversity would have to be preserved. Bob
is a resident of Iowa, and Williams the plaintiff is a resident of Iowa.
This destroys diversity. Thus, if Bob enters as of right intervener this
may upset the whole suit. He was not correct to allow Bob to enter. If
you make the argument that his interest in intervening was permission,
Rule 24(b) you get the same result--loss of diversity--because permissive
intervention does not fall under §1367 supplemental jurisdiction.
The court here was wrong to permit Bob to enter.
QUESTION 3, B
Probably also Rule 12(b)(7) failure to join party--motion to dismiss
and here Prairie is invoking Rule 19--the compulsory joinder of party's.
Rule 19 looks at whether a party is either necessary (incomplete relief
without it) under Rule 14(a), or whether it is an indispensable party to
be joined--that is without its presence the claim must be dismissed.
However, Rule 19 does not fall within the confine of supplementary jurisdiction
under §1367(c) -thus to compulsory join insurance company, whose principal
place of business in California--might have been a strategic move on defendant's
part to upset diverse jurisdiction. This seems unlikely, however, given
the facts and the real reason the court did not uphold defendant's motion
to dismiss was because it determined that William's failure to name insurance
company was not fatal to its claim and WAS NOT fatal under 12(b)(7). Thus
not grounds to dismiss.
The 12(b)(7) motion by defendant here clearly failed because court determined
under Rule 19--this party was not indispensable, compulsory or necessary
to action. Action could proceed without this party. 12(b)7 and Rule 19--were
not grounds to dismiss.
QUESTION 3, C
William's motion to certify a class will be examined under the scrutiny
of Rule 23. There are essentially two "hurdles."
One--23(a) four prerequisites to "create" a class. They are:
Numerosity, commonality, typicality, and adequacy (i.e. fair representation
by the representative of the class).
To surmount this hurdle would not be difficult given the limited facts.
The numerosity test technically is met. There are more than 25 in the class
and this is a large enough number to "overburden" a courtroom. They have
common claims, i.e. fraudulent behavior of this company, the class would
be represented presumably by Williams whose claim is typical of all of
the claims, and (assuming William's wife isn't the attorney) Williams should
be able to provide adequate and fair representation of the whole class.
Now we move to the next hurdle--deciding which type of class this would be. Here is where the court steps in and certifies one of three classes per Rule 23b. B-1 class is generally a class where all members can be identified, where inconsistency and impairment might be the repercussions of each class member suing individually, and resembles essentially a large Rule 19 (Joinder of plaintiffs) class. Thus, a 23b(1) would most likely be the outcome of William's motion to certify a class. 23(a) criterias are not (assuming on our limited facts) and 23(b)1 would be the "best" type of class and most likely that the court would certify.
QUESTION 3, D
Bob moved to have Prairie's claim dismissed under 12(b)(1) theoretically
and TECHNICALLY was correct because this is a motion which is not waived
and can be invoked throughout the process. Whether there was grounds for
the granting of the essence of the motion, however, is questionable. The
motion calls for dismissing Prairie's claim based upon lack of subject
matter jurisdiction--here the apparent answer would be this was correct
because the $50,000 amount fails to satisfy diversity jurisdiction requirements
per§1332. However, supplemental jurisdiction would apply here and
hence per §1367--cross claims fall under the scope of supplement jurisdiction
since cross claims are Rule 13--and thus supplemental jurisdiction would
"absorb" Prairie's claim despite its lack of the $75,000 threshold per
§1332. This was not correct.
QUESTION 3, E
The question here involves was the court correct in denying Prairie's
motion to dismiss Insurance Company's claim, because the Insurance Company
filed a claim against Prairie, and Prairie sought to have the claim dismissed
under 12(b)1 for lack of subject matter jurisdiction.
Two issues arise--but the facts are unclear here, did the Insurance
Company successfully join in on suit? The facts in first paragraph indicate
Williams failed to join them but then the Prairie is moving to having their
claim dismissed, thus, assuming they filed a separate claim and Williams
did not join them--this is an intervention question arising under Rule
24. [See above discussion of Rule 24]. Clearly the question would be whether
they are interveners of right or permissive by Rule 24(a) or (b) [again
see above answer for elaborations].
Thus, we need to then consider whether Prairie's 12(b)(1) motion pertaining
to Insurance Company's claim should not have been dismissed. In other words,
there was no lack of subject matter, or to put it succinctly--the court
determined that proper subject matter existed. This was because, in all
likelihood, because the claim fell under the diversity qualification of
§2443--there was an excess of 75,000 damages (undeterminable from
facts), and there was complete diversity. Here in order for these to be
complete diversity--the Insurance Co. and Prairie must not be residents
of the same state. This fails, however, Prairie's corporate nerve center
is California thus qualifying them as citizens of California, and Insurance
Co., is a California resident--its principle place of business. Thus, the
court was wrong in granting this motion--there was no diversity, apparently
no federal question, and hence 12b (1) motion should have prevailed. Is
there supplemental jurisdiction, however, under §1367, this also fails
because Insurance Company is a permissive joinder or an intervener--both
which fall outside of the scope of supplemental jurisdiction. See §1367(c)
which specifies Rule 19, 20, and 24 are outside its "realm"--thus the court
erred.
QUESTION 4, A
Under Rules 19 and 20 Joinder of Parties is permitted. Parties may "liberally"
join as plaintiffs or defendants as need and as convenient. There are two
preliminary criteria: (1) they must seek a right to relief relating to
the same transaction and (2) it must involve the same question of facts
and law. There are two types, thus, of joinder--permission (Rule 20) and
compulsory (Rule 19) Compulsory entail necessary parties and indispensable
parties; the latter's absence will lead to the case's dismissal. These
50 Iowans, however, are not compulsory based on the facts--they would not
seem indispensable to the action, nor would they be impaired in interest
should they be precluded. Moreover, it is unlikely they will suffer any
detrimental res judicata consequences barring their joinder (another "test").
Thus, they are permissive. As permissive joinders, they would not hurt
subject matter jurisdiction based upon diversity, assuming each had a claim
exceeding $75,000 because plaintiff Williams is himself an Iowan and defendants
are not. Thus, they might be allowed to join under the permissive joinder
Rule 20, but because of their large number and the class action items and
criteria discussed in last answer--it would be more likely that they would
look to Rule 23 (class action) for relief instead of Rule 19 or 20--joinder,
QUESTION 4, B
Collateral estoppel is generally known by its other name too--issue
preclusion. The basic idea is that once the court has litigated issues
of fact or law--it should not have to relitigate already determined issues
in other proceedings. There is, however, a fundamental test to see if collateral
estoppel can be employed defensively (or offensively since Park Lane Hosiery).
Three elements must be met. (1) It must be the same issue, (2) it must
have been litigated fully and been a judgment on merits; (3) issue must
have been decisive in outcome.
Moreover it is generally only used between actual partners--though this
has been relaxed since Parklane case.
One common law consideration, however, is that collateral estoppel can
never be used by a defendant to prevent a "true" stranger from bringing
a claim, i.e. it is unfair to estop a "stranger" to previous litigation,
from bringing a claim through this doctrine.
Since this is the apparent situation here, Insurance Company will not
be allowed to collaterally estop the plaintiff(s) from bringing their claim--by
asserting previously determined issues but to which plaintiff's were "strangers".
QUESTION 4, C
Res judicata is claim preclusion and is pendant upon several factors:
(1) after final judgment, (2) same parties, (3) its application standard
varies throughout jurisdictions regarding how closely the care of operative
facts will preclude later claims--once a claim has been litigated.
Once litigated claims are merged or barred from relitigation. Again
jurisdictions vary in deciding the extent of how for the operative facts
at core are understood. Nonetheless, here the answer seems simple applying
even a looser application of "same transaction" criteria--because res judicata
specifically applies only when the same parties are involved first litigation
and subsequent litigation. Here there are differing parties and res judicata
does not pertain.
QUESTION 4, D
Again, this would seem to be an Erie question--can a Minnesota provision
be applied which would prevent jury trial. Reapplying the Hanna v. Plummer
test which looks at Erie through the lens of constitutionality and in consideration
of the 7th amendment--it would seem most certain that the federal court
applying Minnesota law per Erie would nonetheless apply the F.R.C.P. Rule
38 per the 7th amendment and allow a jury trial. Thus, overruling motion
to not allow a jury trial. Again see above answer where Erie is discussed
in length--this is essentially a question of the struggle between substantive
law applied per Erie vs. procedural law (Rule 38) which the F.R.C.P. would
explicitly prevent or stand against applying Minnesota procedural approach--all
of this coupled with constitutionality per Hanna v. Plummer and Byrd v.
Blue Ridge and bypassing the outcome determinative test because of the
7th amendment conflict; it is clear defendant's motion fails.
QUESTION 4, E
This falls under the interpleader doctrine (a most tricky issue to end an exam on, I must say). When a party has a "pot" of something to divide the courts turn to either Rule 22 or §1335 to figure it out. A party will bring something to the court and say "sort it out," I don't want to go through nonstop litigation." Hence the interpleader solution. There are advantages and disadvantages to both statutory and Rule 22 interpleader methods--but here I would the statutory under §1335 interpleader solution would probably work best. There is minimal subject matter jurisdiction (because there is limited diversity requirements--one stakeholder and one party). Moreover the minimum amount is lower--only $500. Under Rule 22--the minimum amount is $50,000--thus clearly ruling out its use in this fact situation. Thus, statutory interpleader with its NATIONWIDE Service and lenient venue requirements and under §1335--WOULD BE the only way to go--and interpleading will work in this matter.
QUESTION 1, A
To determine whether this case may properly be brought in State Court,
subject matter jurisdiction must be examined.
Since most state courts are courts of general jurisdiction, based on
a statutory grant of power. State court can hear cases of all types and
nature. State court will have subject matter jurisdiction.
Compare state court general jurisdiction to federal jurisdiction, which
is based on either diversity, 28 U.S.C. §1332, or federal questions,
28 U.S.C. §1331.
QUESTION 1, B
Defendants may only be brought properly before a court if the court
has personal jurisdiction over them, so the personal jurisdiction of the
Minnesota State over Dexter and Prairie must be examined.
Personal jurisdiction is analyzed by whether the forum state's long-arm
statute purports to reach the defendant(s), if it is constitutionally fair
for the defendant to answer in the forum state, whether the state's rules
of notice are theoretically fair, and whether the plaintiff actually complied
with the fair notice rules.
(1) Dexter. The Minnesota long-arm statute purports to reach a person
who owns real property in the state may be subject to personal jurisdiction
(1), but only for causes of action arising from the land (3) (sub. 3).
Assuming that Dexter's tortious conduct is unrelated to his office building
in Minnesota, the Minnesota long-arm statute does not purport to reach
him and he is not subject to personal jurisdiction in Minnesota. See also
Shaffer v. Hatner, which holds that the minimum contacts requirement
for fairness applies to quasi-inrem actions.
(2) Prairie. The Minnesota long-arm statute purports to reach a corporation
who does business in Minnesota, (b), but only for causes of action arising
out of the business. Since Prairie did business in Minnesota by negotiating
the contract there, the long arm statute purports to reach it for claims
arising out of that transaction.
In determining whether it is fair for Prairie to answer in Minnesota,
we must look to the International Shoe v. Washington threshold standard
that the defendant have minimum contacts in the forum state. Comparing
Prairie to Int'l Shoe, Burger King v. Rudzewicz, World-Wide
Volkswagen, and Hanson v. Denla, we see that although Prairie's
contacts with Minnesota were not systematic and continuous, by transacting
in Minnesota, Prairie could foresee that it could be brought into Minnesota
court and should be held accountable in Minnesota for its actions there.
The Minnesota rules of service, which require personal service in accordance
with FRCP4(a), is theoretically fair according to due process under the
14th amendment. Prairie complied with the rule by serving Prairie's president,
so Prairie is properly before the Minnesota court.
QUESTION 1, C
Since the case and parties are assumed to be properly before the court,
the Defendant's motions of 12(b)(1) and 12(b)(2) - lack of jurisdiction
over subject matter and person, motions thereunder will be denied. Dexter
may have a claim for insufficiency of service - 12(b)(5) because his summons
was not served to him personally, as required by FRCP 4(e).
There is no evidence that there was insufficiency of process, 12(b)(4),
or failure to state a claim, 12(b)(6), or failure to join a party, 12(b)(7),
so these motions should fail.
Since we do not know about Minnesota's venue provisions, we cannot determine
if this case was brought in the proper venue of Minnesota, 12(b)(3).
QUESTION 1, D
If an action could have been field by a plaintiff in federal court initially,
a defendant has an absolute right to remove it to federal court. 28 U.S.C.
§1441. The defendant must meet the technical requirements of §1446,
filing in U.S. District Court a short statement of removal grounds, with
a copy of all pertinent documents and give prompt notice to other parties
and state court. Note: Only a non-resident defendant can remove in a diversity
case. §1441 (b). Once removed, the federal court has discretion whether
to remand the case if it contains novel issues of state law (Williams v.
Huron Valley School District), or if it lack subject matter jurisdiction
(Powell v. Zoning Bd of Chicago).
Federal jurisdiction here is likely to be based on diversity, which
requires $75K in controversy, and complete diversity between plaintiff
and all defendants. 28 U.S.C. §1332. We don't know how much the claim
is for but assuming it meets the $75K requirement, it can be removed because
Williams is domiciled in Iowa (Mas v. Perry), Prairie is a citizen of South
Dakota and California (28 U.S.C. §1332(a)), and Dexter is probably
domiciled in Alaska, if he doesn't plan on staying in Iowa (Mas v. Perry).
It appears that the case can be removed to federal court, and that a
remand motion for lack of subject matter jurisdiction will fail.
QUESTION 1, E
According to 28 U.S.C. §1391 (a), Defendant can remove the case
to where all defendants reside, but since Prairie and Dexter are not both
in California, that won't work.
Since a substantial portion of the events didn't occur in California
(28 U.S.C. §1391(a)), it probably can't go there.
But, under 28 U.S.C. §1391 (a)(3), Prairie may be able to change
the venue to where one of the defendants-Prairie-resides.
QUESTION 2, A
A temporary restraining order may not be granted without notice unless
facts show there will be immediate and irreparable damage, and the attorney
certifies in writing what efforts have been made to notify the other party
and giving reasons supporting the claim that no notice should be required.
FRCP 65(b). These are strict rules because, according to Fuentes,
individuals must have notice before a deprivation of property. See also,
14th amendment.
Defendants should prevail on their due process claim because Williams
clearly did not meet the strict requirements of R.65(b), necessary for
the rare TRO without notice or chance to be heard.
QUESTION 2. B
According to 28 U.S.C. §1291 provides that the appellate has jurisdiction
only over final decisions. Temporary restraining orders are provisional
in nature, and do not fall under the injunction exception to the final
judgment rule at §1292(a)(1).
Plaintiff's argument that the appellate court doesn't have jurisdiction
over the TRO will be successful.
QUESTION 2, C
According to rule 65(a), and William Englis & Sons Baking v.
ITT Continental Baking, a preliminary injunction should only be granted
if the party can show either a combination of probable success on the merits
and the possibility of irreparable harm, or that the threatened harm is
very serious and there is a fair chance of success on the merits.
Although William's possibility of success is unknown, the possibility
that he won't get the computers does not constitute irreparable harm. He
can probably get the computers elsewhere, and even if he can't, his lost
revenues can be compensated. The preliminary injunction will probably not
be granted.
QUESTION 2, D
When a case is removed to federal court, it is removed to the district
that covers the original state. 28 U.S.C. §1441. It embraces the laws
of that state according to the Erie doctrine, the federal court must apply
the state substantial law and can apply the federal procedural.
Since this case is in the district for the State of Minnesota, Erie
and §1441 provide that the federal court will apply Minnesota substantive
law. Since an affirmative defense is a state created substantive law, this
court should look at Minnesota for its terms. Since Minnesota doesn't recognize
any affirmative defenses, the defendants are not allowed to assert them.
QUESTION 2, E
The Erie doctrine case law provides that if the applicable law is outcome
determinative in nature, [Guaranty Trust v. York] it will be considered
substantive, but that if the rule is contrary to an essential characteristic
and function of the federal courts, it will not be allowed. Byrd v. Blue
Ridge Elec. Corp.
The Minnesota mediation statute has a record of establishing the outcome
of 75% of its cases. Since a significant number of the mediation cases
do not come to jury trial, the federal court could determine that the mandatory
mediation altered the essential federal court function of jury trial. If
so, the mediation is not required for federal cases and the defendants
really didn't have to submit to it. If they were not required to submit
to it, sanctions were not proper for their failure to participate.
QUESTION 3, A
Under FRCP 24(a), a non-party may join of right if he has an interest
in the action. The federal court may exercise supplemental jurisdiction
over the intervener, 28 U.S.C. §1367(a). Therefore, the addition of
Bob, an Iowa resident, does not destroy subject matter jurisdiction, because
the court exercises supplementary jurisdiction over him, and he was properly
allowed to join.
QUESTION 3, B
Rule 14 impleader allows a defendant to implead a 3rd party who will
be liable to the defendant if the defendant is liable to the plaintiff.
Since the insurance company is liable to Prairie, and not to Williams,
it is not an indispensable party, as defined by rule 19, and the case can
go on without it. If Prairie wants the insurance company, it should implead
it.
QUESTION 3, C
According to rule 23, the prerequisites for a class action are the existence
of a class which meets the criteria for numerosity, commonality, typicality,
and adequacy of representation. See also, In Re Also Int'l Group Securities.
Williams probably seeks to certify it under 23(b)(1). Since we don't know
much about the class, we don't know if it is so numerous that a class action
is really necessary and the motion to certify should not be granted.
Note also that there is some ambiguity in the law of diversity subject
matter jurisdiction for classes.
QUESTION 3, D
According to Rule 13(g), parties may cross-claim against co-parties
if the claim arises out of the same transaction or occurrence as the original
claim. There must be a "logical relationship" between the claims. Since
Prairie's claim against Bob didn't arise out of the same transaction, Prairie
can't bring it, and anyway, federal court would not grant supplemental
jurisdiction over it because it doesn't arise out of the same transaction.
§1367. The court properly dismissed it.
QUESTION 3, E
Assuming that the insurance company had been impleaded by Prairie, the
insurance company's claim doesn't arise out of the same transaction as
the original claim, R. 13(g), and should not be allowed. The same jurisdictional
analysis applies as for question D. The claim should have been dismissed.
QUESTION 4, A
The defrauded Iowans cannot be joined because they are not indispensable
to the litigation of the rights between William and Prairie and Dexter,
and they cannot be permissibly joined under R.20 because the situations
of the fifty individuals did not arise out of the same transaction as the
Williams/Prairie occurrence. Therefore they can't be joined notwithstanding
the common questions of law or fact.
QUESTION 4, B
According to Blonder-Tongue collateral estoppel can only be used
defensively by a non-party to the original action in response to a claim
asserted by a party to the first action. A party cannot invoke collateral
estoppel against a party who hasn't yet had a chance to litigate the issue.
Therefore, the insurance company will not be able to assert the prior determination
against Prairie.
QUESTION 4, C
Res judicata applies only to the same claim, between the same parties,
that has been determined by a final judgment on the merits. The insurance
company cannot use the prior judgment as res judicata to Prairie's claim
because Prairie was not a party to the first action, and the prerequisites
for res judicata aren't met.
QUESTION 4, D
Noting the aforementioned Erie doctrine and Byrd v. Blue Ridge Elec.
Corp., the application of the Minnesota statute that prevents a jury
trial would alter an essential characteristic of and function of federal
courts. This could have 7th amendment repercussions. Defendant's motion
should be granted.
QUESTION 4, E
According to 28 U.S.C. §2361 and FRCP 22, the insurance company may be able to use interpleader defensively to deposit the contested res (the money) into court and join competing claimants to determine the claimants rights with respect thereto. However, the purpose of interpleader is to avoid the stakeholder's multiple liability or multiple suits. Since the insurance company is only potentially liable to Prairie, these are not risks, and interpleader probably isn't appropriate. Also, adverse claimants are required for interpleader, and Prairie is the only claimant here.