MBE Civ Pro

Question 1

A teacher, a citizen of State A, brought suit against a librarian, a citizen of State B, in a state court in State A. The teacher seeks $100,000 as compensation for
tortious injuries allegedly caused by the librarian’s negligent acts in State A. The librarian files a notice of removal in the federal district court of State B. The teacher files a timely motion to remand.
How should the federal judge rule on the motion to remand?

A: Remand because the court does not have personal jurisdiction.
B: Deny because the federal court has diversity jurisdiction over the parties and the original lawsuit was not filed in State B.
C: Remand because the original lawsuit was filed in State A.
D: Deny because the original lawsuit was filed in the state in which the teacher was a citizen and the librarian was not.

Answer 1

C: Remand because the original lawsuit was filed in State A.

The removal statute allows for removal only to the district embracing where the original action is pending.
Since the original lawsuit was filed in State A, the lawsuit could only be removed to State A federal court, not State B federal court.

Question 2

A park ranger filed suit against a scout, a rancher, and researcher, in state court, asserting claims under federal law. The scout was properly served with the summons and complaint on February 1, 2014. The rancher was properly served with the summons and complaint on March 5, 2014. The researcher was properly served with the summons and complaint on April 7, 2014. On April 17, the researcher filed a timely notice of removal with the proper local federal district court. The scout then immediately thereafter filed his own notice of removal. Two weeks after April 17, the rancher then filed with the court a letter stating his consent to the removal of the case. The park ranger then moved for remand to state court.
Should the federal district court grant the park ranger’s motion to remand?

A: No, because the federal district court has jurisdiction over the case and there were no defects in the
removal procedure.
B: Yes, because the scout and the rancher each waived their right to remove or consent to removal by failing
to file a removal notice within 30 days after service with the summons and complaint.
C: Yes, because the scout, the rancher, and the researcher were all required to simultaneously join in a single, timely,
notice of removal.
D: Yes, because the rancher’s filing with the federal district court of a letter of consent to removal of a case was
improper.

Answer 2

A: No, because the federal district court has jurisdiction over the case and there were no defects in the removal procedure.

The federal district court should deny the park ranger’s motion to remand because there were no defects
in the removal process, and the court has subject-matter jurisdiction over the case. The case arises under federal law, so the court has federal question jurisdiction. Notice of removal is valid within 30 days
of service of the complaint on the defendant. If multiple defendants are served at different times and a later served defendant initiates removal, the earlier served defendants may join in the removal, even if their original 30-day window has closed. In this question, all defendants consented to removal within 30 days of the notice of removal initiated by the researcher.

Question 3

The rules of the courts of State X prohibit personal injury plaintiffs from alleging, in their complaints, the amount of damages they seek. A janitor from State X brought suit in state court in State X against a mechanic from State A for negligence. As alleged in the complaint, the janitor suffered multiple broken bones which required extensive surgeries
and suffered from brain damage. The janitor sought compensation for those injuries for pain and suffering and reimbursement of medical expenses. The parties sought and received discovery from one another for over a year. A year after the janitor filed his action, the mechanic received timely answers to interrogatories that, for the first time, expressly indicated that the janitor sought $1 million in damages. The mechanic promptly filed with the local federal district court a notice of removal citing that the janitor’s interrogatory answer stated that the janitor sought $1 million in
damages. The janitor moved to remand the action.
Should the court grant the motion to remand?

A: No. The court should deny the motion to remand because the federal court has diversity jurisdiction and the removal was timely because the mechanic filed its notice of removal promptly after ascertaining from the janitor’s interrogatory answers that the janitor sought $1 million in damages.
B: Yes. The court should grant the motion to remand because the mechanic’s removal was untimely.
C: No. The court should deny the motion to remand because even though the removal was effected more than a year after the commencement of the action, the janitor deliberately failed to disclose the amount in
controversy to prevent the mechanic from removing the case to federal court.
D: Yes. The court should grant the motion to remand because the mechanic failed to prove by a preponderance of the evidence that the amount in controversy exceeds $75,000, exclusive of interest and costs.

Answer 3

B: Yes. The court should grant the motion to remand because the mechanic’s removal was untimely.

Generally, a defendant must file a notice of removal within 30 days after service on the defendant of the initial pleading. However, if the case was not initially removable, the defendant has 30 days after the case becomes removable to file a notice of removal. There is an additional time limit on removal for diversity cases. Cases may not be removed on the basis of diversity jurisdiction more than one year after the case was commenced in state court. In this question, by the time the defendant files for removal, it has been over one year since the case was commenced. Therefore, removal is not proper.

Question 4

A lumberjack properly brought a single-count complaint alleging medical malpractice against a doctor in the federal district court of State A under diversity jurisdiction. The jury found for the lumberjack and awarded him $2.5 million in damages. Federal law permits a judge to set aside a jury’s verdict and order a new trial if the jury’s award is so high that it “shocks the conscience.” Whereas, State A’s tort reform statute authorizes a judge to order a new trial only upon a finding of “excessive damages.”
May the federal district court order a new trial?

A: Yes, after a finding that the jury’s award shocks the conscience.
B: Yes, after a finding that the jury awarded excessive damages.
C: No, because doing so would violate the Seventh Amendment.
D: No, because doing so would be federal additur.

Answer 4

B: Yes, after a finding that the jury awarded excessive damages.

The FRCP do not explicitly enumerate the “shocks the conscience” rule, so the appropriate analysis is Erie’s constitutional test which evaluates if the potentially applicable state law is substantive or procedural. This question refers to a matter of substantive law. Therefore, the court must follow State A’s tort reform statute and apply the state standard of “excessive damages.”

Question 5

A retailer from State A filed a diversity action against a manufacturer in federal court in State A, pursuant to a contract
dispute in which the retailer sought $195,000 in damages. At trial, after four days of testimony, the jury returned a
verdict in favor of the retailer but found compensatory damages of only $2.25. Under federal law, a judge who
believes compensatory damages are so excessive as to “shock the conscience” can offer plaintiffs the choice
between a new trial or remittitur of the excessive damages. Under State A law, judges can offer plaintiffs the choice
between a new trial or remittitur if the court thinks damages are “excessive,” and offer defendants a choice between a
new trial or additur if the court thinks damages are “inadequate.”
Which of the following is true?

A: The retailer can make a motion seeking a new trial or additur on the ground that the jury’s damage award shocks
the conscience.
B: The retailer can make a motion seeking a new trial or additur on the ground that the jury’s damage award is
inadequate.
C: The retailer should make a motion for remittitur on the ground that the jury’s damage award shocks the conscience.
D: The retailer’s only option is to make a motion for new trial on the ground that the verdict is inadequate.

Answer 5

D: The retailer’s only option is to make a motion for new trial on the ground that the verdict is inadequate.

Here, the retailer’s only option is to file a motion for a new trial on the ground that the verdict is
inadequate. Since the court is sitting in diversity, the state standard would apply, per the Erie doctrine. The state standard reads as follows: Under State A law, judges can offer plaintiffs the choice of a new trial or remittitur if the
court thinks damages are “excessive,” and offer defendants a choice between a new trial or additur if the court thinks
damages are “inadequate.” In this case, the damage award is inadequate. Therefore, remittitur would not apply.
Because this is a federal case, additur is also not applicable, even though state substantive laws apply. This is
because additur has been found to violate the Seventh Amendment as applied in federal court. Therefore, the only
option would be to make a motion for a new trial on the grounds that the damages are inadequate.

Question 6

A dancer filed a lawsuit against her employer, a ballet company, in federal court in State A, claiming that the ballet
company violated the dancer’s rights under Title VII’s employment laws. The ballet company is a small business, and
the dancer is concerned that the ballet company might not have sufficient assets to pay the judgment that the dancer
hopes to win. State A law provides a method for attaching property at the start of a lawsuit to secure satisfaction of
potential judgments. The Federal Rules provide that “every remedy is available that, under the law of the state where
the court is located, provides for seizing a person or property to secure satisfaction of the potential judgment.”
Which of the following is true?

A: The dancer cannot make use of State A’s attachment law in this case because this is not a diversity action.
B: The dancer can make use of State A’s attachment law in this case, even though the federal court is
exercising only federal question jurisdiction.
C: The dancer can make use of State A’s attachment law in this case, but only if she adds a state law claim to the
lawsuit.
D: The dancer can make use of State A’s attachment law in this case, but (1) only if she adds a state law claim to the
lawsuit, and with the added condition that (2) she can attach property only up to the expected value of her state law
claim.

Answer 6

B: The dancer can make use of State A’s attachment law in this case, even though the federal court is
exercising only federal question jurisdiction.

Federal Rule of Civil Procedure 64 incorporates state law, providing that every remedy is available that,
under the law of the state where the federal court is located, provides for seizing property to secure satisfaction of a
potential judgment.

Question 7

A teacher brought a successful single-count lawsuit against a charter school in State A federal court. The judge found
that the charter school had violated federal employment laws and awarded money damages to the teacher in the
amount of $182,000. The charter school appealed and lost. The Federal Rules of Appellate Procedure permit an
appellate court to punish frivolous appeals by assessing extra costs. Under State A law, there is an automatic 15%
penalty to an unsuccessful appeal of an award of money damages.
Which of the following is true?

A: The appellate court must assess a 15% penalty to the charter school’s unsuccessful appeal since the federal court
is situated in State A.
B: The appellate court must apply Federal Rules of Appellate Procedure, not the State A statute, because the statute
clashes with the federal rule, and federal law prevails over inconsistent state law.
C: The appellate court must assess a 15% penalty to the charter school’s unsuccessful appeal, but only if the
court determines that the State A statute is substantive rather than procedural.
D: The appellate court must apply Federal Rules of Appellate Procedure, not the State A statute, because only
the federal rule applies in this circumstance.

Answer 7

D: The appellate court must apply Federal Rules of Appellate Procedure, not the State A statute, because only
the federal rule applies in this circumstance.

This is a federal question case as it arises under federal employment laws. Because this is not a diversity
lawsuit, no Erie issues are raised. Therefore, only federal law applies.

Question 8

A truck driver from State A filed a proper diversity suit against a manufacturer from State B in federal court. Before
answering the truck driver’s complaint, the manufacturer timely filed a motion to dismiss for lack of personal
jurisdiction. The truck driver then filed a response to the manufacturer’s pre-answer motion, detailing the
manufacturer’s minimum contacts in State A due to the manufacturer’s selling of goods in State A. The manufacturer
then made a second pre-answer motion claiming improper venue.
Should the court consider the manufacturer’s defense for improper venue?

A: Yes. A party may raise the defense of improper venue at any time.
B: No. The truck driver’s answer establishes that the manufacturer has minimum contacts in State A and, as such, the
court may presume that venue is proper.
C: No. The manufacturer waived this defense by not raising it in its initial pre-answer motion.
D: Yes. Because a party does not need to raise the defense of improper venue in their initial pre-answer
motion.

Answer 8

C: No. The manufacturer waived this defense by not raising it in its initial pre-answer motion.

The FRCP govern pre-answer motions. The defendant must raise certain defenses at the time he files a
pre-answer motion or his answer, whichever is first, or the defense is waived. These defenses include lack of personal
jurisdiction, improper venue, insufficient process, and insufficient service of process. Therefore, the defense of
improper venue is waived if not raised in the first motion made to the court. The manufacturer should have raised this
defense in its initial pre-answer motion. Because the manufacturer failed to raise this defense in its initial pre-answer
motion, it has been waived.

Question 9

A plaintiff domiciled in State A has brought a federal diversity action in State A against a defendant domiciled in State
B, seeking damages for injuries the defendant allegedly caused the plaintiff in State B. The defendant has never been
to State A and has no connections there. The defendant’s attorney knows that the defendant was properly served but
does not believe that the State A court has personal jurisdiction over her.
What is the best way for the attorney to raise the argument that the court lacks personal jurisdiction over the
defendant?

A: Move to dismiss the action for lack of personal jurisdiction based on the complaint allegations and an
affidavit from the defendant about her lack of connection to State A.
B: Move for judgment on the pleadings, seeking dismissal of the action for lack of personal jurisdiction.
C: Move for sanctions against the plaintiff and his attorney for filing the action in a court that has no personal
jurisdiction over the defendant.
D: Move for discovery on the issue of personal jurisdiction.

Answer 9

A: Move to dismiss the action for lack of personal jurisdiction based on the complaint allegations and an
affidavit from the defendant about her lack of connection to State A.

Some defenses must be raised by the defendant the first time he files a motion or in his answer,
whichever is first, or else the defenses are waived. Lack of personal jurisdiction is one of these defenses that must be
filed at the defendant’s first motion or answer or else it will be waived. In this question, the attorney should raise a
motion to dismiss for lack of personal jurisdiction first before any other filings with the court.

Question 10

An electrician from State A filed a diversity action in State A federal court against an actress from State B. The
electrician alleged that the actress failed to pay the electrician $150,000 due on a valid service contract to install a
kitchen in the actress’ home. The actress disputed the contract’s validity, testifying before the jury that the electrician
installed the kitchen as a gift and that exchanged emails referring to a “contract” had been in jest. During trial, the
electrician’s attorney became increasingly concerned that the jury did not like his client.
What, if anything, should the electrician’s attorney do after the close of evidence?

A: File a motion for judgment as a matter of law.
B: File a motion for new trial on the ground of juror misconduct.
C: There is nothing that the electrician’s attorney can do at this point.
D: File a motion for summary judgment.

Answer 10

A: File a motion for judgment as a matter of law.

The electrician’s attorney should file a motion for judgment as a matter of law because it is the most likely
avenue for getting relief at this point in the proceedings. By filing a motion for judgment as a matter of law, the
attorney could argue that a reasonable jury would not have a legally sufficient basis to determine that there had been
no legal contract between the parties. The jury already heard evidence on the issue, and because the attorney believes the jury does not like his client, the best action would be to take the case away from the jury and submit it for
the court’s determination under FRCP 50(a).

Question 11

A tennis player from State A filed a diversity action in State B federal court against a reporter from State B. The tennis
player alleged that the reporter failed to pay a debt due on a valid contract. The reporter filed a motion to dismiss for
improper venue, which the court denied. The reporter then filed an answer and argued in defense that the court is
without personal jurisdiction and that the action is barred by the statute of limitations.
What should the tennis player’s attorneys do?

A: File a motion to strike both the reporter’s lack of personal jurisdiction and the statute of limitations
affirmative defenses on the ground that they were waived.
B: File a motion to strike only the reporter’s affirmative defense for lack of personal jurisdiction on the ground
that it has been waived.
C: File a motion to strike only the statute of limitations affirmative defense on the ground that it has been waived.
D: Continue with the case without filing a motion to strike any of the reporter’s affirmative defenses.

Answer 11

B: File a motion to strike only the reporter’s affirmative defense for lack of personal jurisdiction on the ground
that it has been waived.

By filing a motion to dismiss without raising the lack of personal jurisdiction defense, the reporter waived
the defense and consented to the jurisdiction. In contrast, a statute of limitations defense is not among the defenses
listed in Federal Rule of Civil Procedure (FRCP) 12 that are waived if not made in a pre-answer motion.

Question 12

A retailer brought a federal diversity action against a wholesaler, alleging breach of contract and fraudulent
misrepresentation. After the parties presented their evidence at trial, the court instructed the jury on the law. Neither
party filed a motion for judgment as a matter of law before the case went to the jury.
The jury found for the retailer on both claims. After the court entered judgment on the verdict, the wholesaler moved
for a new trial and for judgment as a matter of law, arguing that the evidence was insufficient to support the jury
verdict on either claim. The court acknowledged that there had been problems with some of the evidence, but it
denied the motions. The wholesaler appealed, challenging the sufficiency of the evidence.
Should the appellate court consider the wholesaler’s challenge?

A: No, because a determination of the sufficiency of the evidence is solely within the jury’s province.
B: No, because the wholesaler did not raise the sufficiency-of-the-evidence issue in a motion for judgment as
a matter of law before the case went to the jury.
C: Yes, because the challenge was raised and ruled on by the trial court before the wholesaler filed the appeal.
D: Yes, because, as the trial court acknowledged, the wholesaler has strong arguments on the challenge.

Answer 12

B: No, because the wholesaler did not raise the sufficiency-of-the-evidence issue in a motion for judgment as
a matter of law before the case went to the jury.

The appellate court should not consider the wholesaler’s challenge because, for the issue to be properly
heard on appeal, the wholesaler had to have preserved the error during trial. But the wholesaler failed to do so.
Therefore, the wholesaler was not able to move for a renewed motion of judgment of law after the verdict. The
argument concerning the sufficiency of the evidence is a legal argument, which must be made to the trial court. After
the trial court rules on the issue, it is subject to appellate review. Because the issue was never ruled on in the trial
court, the appellate court cannot consider the challenge.

Question 13

A stockbroker was convicted in federal court of criminal fraud in the sale of certain securities. A former client then
sued the stockbroker in a federal civil action, alleging fraud in the sale of the same securities for which the stockbroker
had been criminally convicted. The client’s attorney moved to preclude the stockbroker from relitigating the liability
issues that were common to the criminal and civil actions. The court granted the motion and, after a bench trial on
damages, entered judgment against the stockbroker for $100,000.
On appeal from the stockbroker’s criminal conviction, the appellate court reversed and vacated the conviction. The
stockbroker promptly moved for relief from the final judgment in the civil action. The motion was filed 15 months after
entry of the final judgment in the civil action.
Should the court grant the motion?
A: No, because it is untimely.
B: No, because the stockbroker did not appeal the civil judgment.
C: Yes, because the court in the civil action should not have based the civil judgment on the criminal judgment before
it had been reviewed on appeal.
D: Yes, because the criminal judgment on which the civil judgment was based has been reversed and
vacated.

Answer 13

D: Yes, because the criminal judgment on which the civil judgment was based has been reversed and
vacated.

The stockbroker’s motion is made under Federal Rule of Civil Procedure 60(b)(5), which allows the court
to grant relief from the final judgment in the civil action because the criminal judgment on which the civil judgment was
based has been reversed and vacated.

Question 14

A buyer of goods brought suit in federal court against a seller in the only federal district court in State A, where the
seller resides. The buyer’s suit was based on a state law claim arising in State B, the buyer’s home state. The buyer
bought the goods in State A and brought them back to State B. The seller moved to dismiss the buyer’s complaint,
claiming that the buyer failed to join a manufacturer, an indispensable party from State C. The court ordered that the
manufacturer be joined, and the buyer then amended his complaint to add the manufacturer. In its answer to the
buyer’s amended complaint, the seller asserted lack of personal jurisdiction and improper venue as defenses. The
buyer filed a motion to strike the seller’s defenses, claiming that the seller waived them.
Should the court grant the buyer’s motion to strike?
A: The court should strike both of the seller’s defenses for lack of personal jurisdiction and improper venue
because the seller waived these defenses.
B: The court should not grant the motion to strike because the seller did not waive either defense.
C: The court should strike only the defense of improper venue as it was waived by the seller.
D: The court should strike only the defense of lack of personal jurisdiction as it was waived by the seller.

Answer 14

D: The court should strike only the defense of lack of personal jurisdiction as it was waived by the seller.

The court should strike only the defense of lack of personal jurisdiction, which the seller waived. When
the seller moved to dismiss the buyer’s complaint based on the failure to join the manufacturer as an indispensable
party, he did not raise the defense of lack of personal jurisdiction, which amounted to a waiver.

Question 15

Two days before his home was to be sold at a foreclosure sale, a homeowner obtained a temporary restraining order
(TRO) in federal court that prevented his lender from proceeding with the sale for 14 days or until a preliminary
injunction hearing could take place, whichever was sooner. When a preliminary injunction hearing could not be
scheduled within the original 14-day period, the court extended the TRO for another 30 days.
The lender appealed the court’s order extending the TRO. The homeowner has moved to dismiss the appeal.
Is the appellate court likely to dismiss the appeal?

A: No, because a TRO is immediately appealable.
B: No, because the 30-day extension makes the TRO equivalent to a preliminary injunction and therefore
appealable.
C: Yes, because a TRO is not appealable under the interlocutory appeals statute.
D: Yes, because there is no final judgment from which an appeal may be taken.

Answer 15

B: No, because the 30-day extension makes the TRO equivalent to a preliminary injunction and therefore
appealable.

A TRO is a short-term pre-trial temporary injunction to protect from an irreparable injury. These orders are
intended to be stop-gap measures, and only last until the court holds a hearing on whether or not to grant a
preliminary injunction. Judges’ decisions on whether or not to issue a TRO, generally, may not be appealed. Here, the
court extended the TRO for an additional 30 days, giving it the effect of a preliminary injunction. Therefore, it is
appealable and the court is not likely to dismiss the appeal.

Question 16

An art collector living in State A recently had a painting from his home appraised for $50,000.00. The art collector
believes he is the rightful owner of the painting. However, each of his two cousins, a historian living in State B, and a
teacher living in State C, also claim rightful ownership of the painting. The art collector would like to resolve, once and
for all, who is the true owner of the painting. Neither the historian nor the teacher has ever traveled outside the state
where each presently live.
Which of the following is true regarding the art collector’s ability to bring suit against the historian and teacher in
federal court under the federal interpleader statute?

A: The art collector can bring an interpleader action against the historian living in State B only, and that court’s
decision will also be binding on the teacher.
B: The art collector can bring an interpleader action against both the historian and teacher in State A federal
court, even if State A’s state court would not have personal jurisdiction over the historian or the teacher
under State A’s long-arm statute.
C: The art collector would have been able to bring an interpleader action in State A federal court against the historian
or teacher if the painting had been appraised at more than $75,000.
D: The art collector can bring an interpleader action against the historian and the teacher in federal court in
State A, but only if a State A state court would have had personal jurisdiction over the historian and teacher
under State A’s long-arm statute.

Answer 16

B: The art collector can bring an interpleader action against both the historian and teacher in State A federal
court, even if State A’s state court would not have personal jurisdiction over the historian or the teacher
under State A’s long-arm statute.

Interpleader permits a person in the position of a stakeholder to require two or more claimants to litigate
among themselves to determine which, if any, has the valid claim where separate actions might result in double
liability on a single obligation. Interpleader is the appropriate way for the art collector to bring his suit against both
cousins at the same time. Additionally, interpleader is available under the Federal Rules of Civil Procedure, or under
the federal interpleader statute. Under the FRCP, complete diversity is required. However, under the statute, only
minimal diversity is required: an amount in controversy of $500 or more and diversity between any two contending
claimants.

Question 17

A man was sued by his neighbor in state court, who claimed the implied easement on the neighbor’s property was
invalid. The state court found for the man, holding that the easement was valid on grounds of longstanding use.
Thereafter, the neighbor sold the property to a buyer. The buyer refused to recognize the easement. The man then
sued the buyer in state court seeking a declaration that the implied easement on the buyer’s property was valid. The
man’s attorney filed a motion for summary judgment.
How should the court rule?

A: Grant the motion and dismiss the lawsuit on the ground of claim preclusion.
B: Dismiss the motion and retain the lawsuit because the buyer was not a party in the prior lawsuit.
C: Grant the motion and dismiss the lawsuit on the ground of issue preclusion.
D: Dismiss the motion and retain the lawsuit because the buyer waived the defense of res judicata by failing to file a
motion to dismiss.

Answer 17

C: Grant the motion and dismiss the lawsuit on the ground of issue preclusion.

For an issue to be subject to issue preclusion, the issue must be the same as the one that was fully and
fairly litigated in the first action. The issue must have been actually decided by the first court, and the first court’s
decision must have been necessary to the outcome of the first suit. The principles of issue preclusion apply when
BOTH of the parties in the second lawsuit were present in the first lawsuit, or when there is privity between a party in
the first lawsuit and a party in the second lawsuit.
In this question, the neighbor and buyer are in privity because they were successive owners of the same property.
Thus, the buyer can be bound by the final judgment on the issue of the validity of the easement in the prior case.

Question 18

An accounting firm brought a federal diversity action against a former client for failing to pay for the firm’s audit of the
client’s financial statements. After the client answered, the parties settled, and the court dismissed the action with
prejudice. The client subsequently sued the firm for negligently performing the audit. The firm moved to dismiss the
negligence action on the basis of res judicata (claim preclusion).
Is the court likely to grant the motion?
A: No, because the firm’s negligence was never raised or decided in the first action.
B: No, because the first action was resolved by settlement.
C: Yes, because the court dismissed the first action with prejudice.
D: Yes, because the negligence claim was transactionally related to the claim in the first action and should
have been asserted as a counterclaim.

Answer 18

D: Yes, because the negligence claim was transactionally related to the claim in the first action and should
have been asserted as a counterclaim.

The negligence claim arose out of the same audit that was the subject of the dispute in the first action.
The parties in the second action were adversaries in the first action, and that action was resolved through a settlement
and dismissal with prejudice. Therefore, the first action precludes the client from asserting any claims arising out of the
transaction that was the subject of the first action, which would include the negligence claim. The client should have
asserted the negligence claim in the first action as a compulsory counterclaim, and its failure to do so means that the
court is likely to grant the motion to dismiss.

Question 19

A driver filed a lawsuit against a car manufacturer in State A federal court on the theory that the car manufacturer
violated federal laws by having misleading advertising on its vehicles. A jury found, pursuant to a special verdict, that
the car manufacturer’s advertisements violated the law and awarded the driver damages. A delivery man
subsequently filed a lawsuit against the car manufacturer in State B federal court, seeking damages on the same
theory put forward in the driver’s lawsuit. Federal common law and State A permit non-mutual offensive collateral
estoppel in these circumstances, while State B does not.
Which of the following is true?

A: The car manufacturer will be precluded from relitigating the question of whether it violated the law, because State A
law permits non-mutual offensive collateral estoppel in these circumstances.
B: The car manufacturer will not be precluded from relitigating the question of whether it violated the law,
because State B law does not permit non-mutual offensive collateral estoppel in these circumstances.
C: The car manufacturer will be precluded from relitigating the question of whether it violated the law,
because federal common law permits non-mutual offensive collateral estoppel in these circumstances.
D: The car manufacturer will not be precluded from relitigating the question of whether it violated the law because the
delivery man was not a party to the first lawsuit.

Answer 19

C: The car manufacturer will be precluded from relitigating the question of whether it violated the law,
because federal common law permits non-mutual offensive collateral estoppel in these circumstances.

Federal law (more specifically, federal common law since there is no applicable statute) governs the
preclusionary effect of the judgment of a federal court that exercised federal question jurisdiction. Therefore, federal
law, not State A law, governs here. Thus, the car manufacturer will be precluded from relitigating the question of
whether it violated the law.