MEE High Priority Statements Flashcards
Creation of Agency Relationship
— An agent is a person or entity that acts on behalf of another – the principal. Agency is a fiduciary relationship, and exists if there is: (1) assent (a formal or informal agreement between the principal and the agent); (2) benefit (the agent’s conduct on behalf of the principal primarily benefits the principal); AND (3) control (the principal has the right to control the agent by being able to supervise the agent’s performance – the degree of control does not need to be significant).
— Whether an agency relationship exists depends upon the existence of the required elements above (the characterization of the relationship by the parties is irrelevant). The parties realizing that a principal-agent relationship is formed or the agent receiving compensation is NOT REQUIRED to create an agency relationship. A writing is NOT required to form an agency relationship (even if the transaction the agent enters into requires a writing under the Statute of Frauds).
Actual Authority
— A principal is bound to contracts entered into by its agent if the agent has actual or apparent authority. Actual authority may be express or implied. Express authority occurs when the principal has explicitly told the agent (either orally or in writing) that he is entitled to act. Impliedauthority occurs when either: (a) the agent believes he is entitled to act because the action is necessary to carry out his express authorized duties; (b) the agent has acted similarly in prior dealings between the principal and agent; OR (c) it is customary for agents in that position to act in that way.
— An agent has actual authority to act in accordance with his reasonable understanding of his authority, even if the principal later establishes that the agent was mistaken. Silence or prior acquiescence by the principal may give rise to the agent’s reasonable belief that he has authority to perform similar acts in the future.
— If an agent acts within his scope of authority, the principal will be liable to a third-party on the contract, even if the principal is undisclosed, partially disclosed, or unidentified.
Apparent Authority
— A principal is bound to contracts entered into by its agent if the agent has actual or apparent authority. Apparent authority exists when: (1) a third-party reasonably believes that the person/entity has authority to act on behalf of the principal;
AND (2) that belief is traceable to the principal’s manifestations (the principal holds the agent out as having authority).
o A principal holds an agent out as having authority when he: (a) gives the agent a position or title indicating certain authority; (b) has previously held the agent out as having authority and has not published a revocation of said authority; OR (c)
has cloaked the agent with the appearance of such authority.
— A principal will be bound to a contract even if the agent acted on his own behalf or in violation of specific instructions UNLESS (a) the third party had notice the agent was exceeding his authority, or (b) the contract/transaction was not within the ordinary usages of business (ordinary usage includes purchase of goods at a reasonable price). Apparent authority is NOT APPLICABLE if the third-party has actual knowledge that the agent didnot have authority. Additionally, a third-party has a duty to make further inquiry when the situation suggests that it may be unreasonable to believe that the agent has authority.
— Unidentified/Partially DisclosedPrincipal: Apparent authority MAY exist when the principal is partially disclosed or unidentified (when the third-party knows the agent is acting on behalf of a principal but does not know the identity of the principal).
— Undisclosed Principal: Apparent authority CANNOT exist when there is an undisclosed principal (when the third-party does not know an agent is acting on behalf of a principal).
Ratification of Agent’s Contracts
— A principal’s ratification of an agent’s conduct will make the principal liable for those contracts entered into by an agent without authority. Ratification occurs when the principal: (1) has knowledge of all material facts or contract terms; AND (2) thereafter manifests assent (approves) of the same through words or conduct.
o Despite ratification by the principal, an agent also remains liable for any acts or contracts entered into if the principal was not disclosed to the third party.
— Under the Restatement(Second)ofAgency, an undisclosed principal generally CANNOT ratify an agent’s unauthorized act because ratification requires that the agent purported to act on the principal’s behalf. However, under the Restatement (Third) ofAgency, an undisclosed principal MAY ratify an agent’s unauthorized act.
Agent’s Contractual Liability
— Generally, an agent has NO contractual liability to a third- party for a contract entered into with that party if he: (1) fully discloses the principal he is acting on behalf of (he provides the name of the principal to the third-party); AND (2) the agent had
(a) actual authority or (b) apparent authority (even if no actual authority present). Conversely, an agent will be liable on the contract if both elements above are not met.
— An authorized agent will be liable to the third-party on a contract when the principal is undisclosed (when the third-party does not know the agent is acting on behalf of a principal). Moreover, an undisclosed principal’s ratification DOES NOT eliminate the agent’s liability to the third-party on the contract.
— Unless otherwise agreed, an authorized agent will be liable to the third-party on a contract when the principal is partially disclosed or unidentified (when the third-party knows the agent is acting on behalf of a principal but does not know the identity of the principal).
— Where an agent is liable on a contract AND his conduct was authorized, he may seek indemnification from the principal on any payments he made to the third-party.
Employee vs. Independent Contractor
— An employer is vicariously liable for an employee’s negligent acts if the employee was acting within the scope of employment. However, a principal/employer is generally NOT vicariously liable for the torts of an independent contractor.
o An employee is an agent whom the employer controls (or has the right to control) the manner and means of the agent’s performance of work.
o An independentcontractor is a person who contracts with another to do something for him, but who is not controlled nor subject to the other’s right to control with respect to his performance. The contractor may or may not be an agent.
— The determination of whether a person is an employee or an independent contractor centers on whether the principal had the righttocontrol the manner and method in which the job is performed.
o Generally, if the principal has substantial control in dictating the manner and method in which the job is performed, then the person is deemed to be an employee of the principal. In contrast, a person subject to less extensive control is considered an independent contractor.
o Whether an employer-employee relationship exists is a factual determination (the characterization of the relationship by the parties is not determinative).
— The factorsusedtodeterminewhetheranagentisan employee are: (1) the extent of control the principal may exercise over the details of the work; (2) if the agent is engaged in a distinct occupation or business; (3) the type of work; (4) how the agent is paid (hourly or per project); (5) who supplied the equipment or tools; (6) the degree of supervision; (7) the degree of skill required; (8) whether the job was part of the principal’s regular business; (9) the length of time the agent is engaged by the principal; (10) whether the principal and the agent believe that they are creating an employment relationship; and (11) whether the person was hired for a business purpose.
Vicarious Liability of Employer: Doctrine of Respondeat Superior
— Under the doctrine of respondeat superior, an employer is vicariously liable for an employee’s negligent acts if the employee was acting within the scope of employment.
— An employee acts withinthescopeofemployment when: (a) performing work assigned by the employer; OR (b) engaging in a course of conduct subject to the employer’s control. Factors to determine if conduct is within the scope of employment include whether: (i) it’s the kind the employee is employed to perform; (ii) it occurs substantially within the authorized time and space limits; and (iii) it is motivated (in whole or part) by a purpose to serve the employer. Additionally, conduct is within the scope of employment if it’s of the same general nature (or incidental) as the conduct authorized. Conduct is NOT outside the scope of employment merely because an employee disregards the employer’s instructions.
— An employee’s act is NOTwithinthescopeofemployment when: (1) it occurs within an independent course of conduct; AND (2) it is not intended by the employee to serve any purpose of the employer.
— An employee’s intentionaltorts are generally NOT within the scope of employment UNLESS the act: (a) was specifically authorized by the employer; (b) was driven by a desire to serve the employer; OR (c) was the result of naturally occurring friction from the type of employment.
Vicarious Liability for Acts of Independent Contractors
— Generally, a principal is NOT vicariously liable for the torts of an independent contractor.
— However, several exceptions exist, and a principal will be liable for torts committed by an independent contractor if: (a) the independent contractor is engaged in an inherently hazardous activity; (b) the duty owed by the principal is non- delegable (i.e. the duty of care owed to an invitee); OR (c) through the doctrine of estoppel when (i) the principal holds the independent contractor out as his agent to a third-party, (ii) the third-party reasonably relied on the care and skill of the agent, and (iii) the third-party suffered harm as a result of the agent’s lack of care or skill.
Fiduciary Duties Owed by the Agent to the Principal
— An agent owes the principal the following fiduciary duties concerning matters within the scope of agency: (1) Duty of Care – to use reasonable care when performing the agent’s duties; (2) Duty of Loyalty – to act solely and loyally for the principal’s benefit; AND (3) Duty of Obedience – to obey all reasonable directions given by the principal and to act in accordance with the express or implied terms of the relationship.
— The principal has a claim against the agent when an agent breaches any fiduciary duty owed. For example, an agent will be liable to the principal for any payments the principal made to a third-party when the agent breached his duty to follow directions or acted outside the scope of his authority. Additionally, the agent will be liable and must account for any profit made in violation of the duty of loyalty.
— Conversely, an agent has NO liability to the principal when the agent fulfills his fiduciary obligations and he acts within the scope of his authority.
Creation of a General Partnership
— A General Partnership is created when (1) two or more persons, (2) as co-owners, (3) carry on a business for profit. No written agreement or formalities are required. A person’s intent to form a partnership or be partners is NOT required.
— Part ownership or common ownership of property alone is NOT enough to create a partnership. Likewise, a joint venture DOES NOT automatically create a partnership.
— A personwhoreceivesashareoftheprofits of the partnership business is presumed to be a partner of the business UNLESS the profits were received in payment: (a) of a debt; (b) for wages as an employee or independent contractor; (c) of rent;
(d) of an annuity or other retirement benefit; (e) of interest/loan charges; OR (f) for the sale of the goodwill of a business.
— Individuals may inadvertently create a general partnership despite their expressed subjective intent not to do so (i.e. when the required formalities to form a Limited Partnership or Limited Liability Partnership are not followed).
Authority to Bind the Partnership
— Each partner is an agent of the partnership, and generally has authority to bind the partnership for the purpose of its business (including entering into contracts).
— A partner has expressactualauthority to bind the partnership upon receiving said authority from the partners. Differences among the partners as to acts within the ordinary course of the partnership business need only be approved by a majority of the partners. Acts outside the ordinary course of business must be approved unanimously. If the partnership agreement is silent on the scope of the partner’s authority, a partner has authority to bind the partnership to usual and customary matters, UNLESS the partner knows that: (a) other partners might disagree; OR (b) for some other reason consultation with fellow partners is appropriate. Hiring an employee is normally within the ordinary course of partnership business, unless the partnership agreement states otherwise.
— A partner has impliedactualauthority (also known as incidental authority) to take actions that are reasonably incidental or necessary to achieve the partner’s authorized duties.
— A partner has apparentauthority to bind the partnership for all acts apparently conducted within the ordinary course of the partnership business OR the kind carried on by the partnership. However, a partner’s act will NOT bind the partnership if:
(1) the partner lacked authority; AND (2) the third-party knew (actual knowledge) or had notice that the partner lacked authority. For acts outside the scope of business, there must be a manifestation by the partnership that the partner had authority to bind the partnership.
— An act or transaction is withintheordinarycourseofbusiness if it is normal and necessary for managing the business – a person would reasonably conclude the act is directly and necessarily embraced within the partnership business.
Personal Liability of General Partners & Judgment Enforcement
— PersonalLiability: General Partners are personallyliable for ALL obligations of the partnership UNLESS otherwise agreed by the claimant or provided by law.
o Under the UniformPartnershipAct(1997), general partners are jointly and severally liable for partnership obligations, which means that a claimant can collect the full amount of the debt from any one of the partners. However, a partner may seek contribution from the other partners if he pays more than his proportionate share of the partnership obligation.
o Under the UniformPartnershipAct(1914), general partners are only jointly liable (not jointly and severally liable), which means that a plaintiff must join all partners in an action.
— IncomingPartners: Incoming partners admitted into an existing partnership are NOT liable for obligations incurred prior to their admission, even if the incoming partner has notice of a claim. Even though that partner is not personally liable for the debts of the partnership, he is still at risk of losing any capital contributions he made to the partnership that are used to satisfy partnership obligations.
— JudgmentEnforcementAgainstaPartner’sPersonalAssets: Generally, a judgment creditor CANNOT levy execution of the judgment against a partner’s personal assets for a partnership debt UNLESS: (1) a judgment has been rendered against the partner; AND (2) the partnership assets have been exhausted or are insufficient.
o Under the Uniform Partnership Act, a judgment against the partnership is NOT by itself a judgment against the individual partners. However, a judgment may be sought against the partnership and the individual partners in the same action.
Duty of Care Owed by Partners
— A partner owes the fiduciary duty of care to the partnership and the other partners, but this duty is limited. Under the RUPA, a partner is only in breach of the duty of care when he engages in: (a) grossly negligent or reckless conduct; (b) intentional misconduct; OR (c) a knowing violation of law. If a partner breaches this duty, he may be held personally liable to the partnership for any losses suffered as a result. Partners in a Limited Partnership have similar duties as partners in a General Partnership.
— A partner has been found to breach the duty of care in the following situations: (i) violating an agreement or policy of the partnership; (ii) failing to thoroughly investigate facts before entering into a contract, if it rises to the level of gross negligence; and (iii) acting outside the scope of the partnership business without the consent of the other partners.
— Limited liability rules for Limited Liability Partnerships and Limited Partners are NOT applicable to claims against partners for breach of their duties owed to the partnership.
Duty of Loyalty Owed by Partners
— Partners owe the fiduciary duty of loyalty to the partnership and the other partners, which requires partners to act in the best interests of the partnership.
— Under RUPA, a partner must: (1) account for any property, profit, or benefit derived by the partner from the partnership property or business (this includes the obligation to refrain from appropriating partnership opportunities or assets for personal use); (2) not have an interest adverse (conflict of interest) to the partnership (i.e. partners cannot engage in unfair transactions with the partnership); AND (3)not compete with the partnership (unless the partnership agreement allows the partner to do so). The above duties still apply after dissolution during the winding up process (except for the duty not to compete). Partners in a Limited Partnership have similar duties as partners in a General Partnership.
o A partnership opportunity is one that is (1) closely related to the entity’s existing or prospective line of business, (2) that would competitively advantage the partnership, AND (3) that the partnership has the financial ability, knowledge, and experience to pursue.
— HOWEVER, a partner is NOT liable for conduct that would otherwise violate the duty of loyalty if: (1) the partner fully discloses the information; AND (2) either (a) the Partnership Agreement is amended or (b) all partners consent to the transaction. Unless agreed otherwise, the Partnership Agreement may be amended at any time with a unanimous vote of the partners. An interested partner should abstain from voting to amend the Partnership Agreement to allow for conduct that would otherwise violate the duty of loyalty.
— If a partner breaches his duty of loyalty, he may be held personally liable to the partnership for any losses suffered as a result. If reasonable, a partnership agreement may eliminate or alter a partner’s duty of loyalty.
Dissociation (Withdrawal of a Partner)
— A partner becomesdissociatedfromthepartnershipupon:
(1) notice of the partner’s express will to withdraw; (2) occurrence of an agreed upon event in the partnership agreement; (3) expulsion pursuant to the partnership agreement; (4) expulsion by the unanimous vote of the other partners if it’s (a) unlawful to carry on the partnership business with that partner, or (b) there has been a transfer of all or substantially all of that partner’s transferable interest in the partnership (other than a transfer for security purposes); (5) judicial expulsion; (6) bankruptcy; (7) incapacity or death; (8) appointment of a personal representative or receiver; OR (9) termination of an entity partner (who is not an individual, partnership, corporation, trust, or estate).
— A partner may dissociate (withdraw) from the partnership at any time by providing notice to the other partners. However, a dissociation will be deemedwrongful if: (a) it is in breach of an express provision of the partnership agreement; OR
(b) if the partnership is for a definite term or particular undertaking, AND the partner (i) withdraws, (ii) is expelled by judicial determination, or (iii) is dissociated by becoming a debtor in bankruptcy.
— A partner who wrongfully dissociates CANNOT participate in management or the winding up process. Additionally, that partner is liable to the other partners and the partnership for any damages caused by his dissociation.
Dissolution of a General Partnership
Unless there is an agreement to the contrary, dissolutionoccursupon: (a) notice of the partner’s express will to withdraw; (b) an event agreed to in the partnership agreement; (c) an event that makes it unlawful for all or substantially all of the business to continue; (d) judicial dissolution on application of a partner that (i) the economic purpose of the partnership is likely to be unreasonably frustrated, (ii) another partner has engaged in conduct making it not reasonably practicable to carry on the business with that partner, or (iii) it is not reasonably practicable to carry on the business in conformity with the partnership agreement; OR (e) judicial dissolution on application of a transferee (of a partner’s transferable interest) that it is equitable to wind up the business and either (i) it is a partnership at will, or (ii) at the expiration of the term or completion of the undertaking (if the partnership was for a definite term or particular undertaking).
— In addition to the above, dissolution of a Partnershipfor aDefiniteTerm also occurs: (a) within 90 days after a
partner’s dissociation by death or wrongful dissociation, if it is the express will of at least half of the remaining partners to wind up the business (a partner’s rightful dissociation constitutes the expression of that partner’s will to wind up the partnership business); (b) upon the express will of all partners to wind up the business; OR (c) upon the expiration of the term or the completion of the purpose of the partnership.
— A partner may dissociate (withdraw) from the partnership at any time by providing notice to the other partners.
o Under the RevisedUniformPartnershipAct(as amendedin2013), dissolution may be rescinded by the affirmative vote or consent of the remaining partners. In such instance, the business would be continued, and the dissociating partner is entitled to a buyout of their interest. The buyout price is the value of the partnership interest based on the greater of the liquidation or going concern value (plus interest). If the dissociating partner makes a written demand and no agreement for the purchase of the interest is made within 120 days, the partnership shall pay in money the amount it estimates to be the buyout price plus accrued interest.
o Under the RevisedUniformPartnershipAct(1997), the dissociation (withdrawal) of a partner does not necessarily cause a dissolution and winding up of the business of the partnership. A wrongful dissociation allows ALL of the remaining partners (including those who are rightfully dissociated) to waive winding-
up and termination of the partnership, and instead choose to continue the partnership by buying out the dissociated partner’s interest in the partnership. If a partner’s dissociation is NOT wrongful, then he will be allowed to vote on whether to waive winding-up and termination of the partnership. In either case, the partners MAY choose to continue the business for a reasonable amount of time.
o Under the UniformPartnershipAct(1914), a partner’s withdrawal results in dissolution of the partnership, regardless of whether it was rightful or wrongful. However, ALL partners who have not wrongfully caused the dissolution may choose to continue the business in the same name.
Personal Liability & Piercing the Veil
— Generally, shareholders, directors, and officers are NOT personally liable for the liabilities and obligations of the corporation. However, courts may disregard the corporate form and hold individual corporate shareholders, directors, and officers personally liable for actions taken on behalf of the corporate entity. A court will pierce the corporate veil and hold the shareholders personally liable in the following situations: (1) the corporation is acting as the alter ego of the shareholders – where there is little or no separation between the shareholder and the corporation (i.e. where an individual utilizes the corporate form for personal reasons); (2) where the shareholders failed to follow corporate formalities; (3) the corporation was inadequately capitalized at its inception to cover debts and prospective liabilities; OR (4) to prevent fraud.
— A court is more likely to pierce the corporate veil for tort actions rather than contract disputes. Normally, passive investors who do not participate in the business will NOT be held liable, even if the court pierces the veil. The same factors are applied to hold a parent company liable for the acts of its subsidiary.
— Courts will generally applythesamefactors above to pierce the veil of a LimitedLiabilityCompany and hold members or managers personally liable, BUT the failure to follow formalities is not a ground for piercing the LLC veil.
— Even if a court does not pierce the veil, a person is always personally liable for their own torts (i.e. negligence), even while acting as an agent for a corporation or organization.
Shareholder Meetings: Proxy Voting & Revocation of a Proxy
— Under the RMBCA, a shareholder may vote her shares at a shareholders meeting without physically attending the meeting through the use of a proxy. A validproxy must be signed on: (a) an appointment form; OR (b) an electronic transmission. An oral proxy appointment is invalid. A proxy MUST be accepted if on its face there are no reasonable grounds to deny its genuineness and authenticity.
— An individual who is granted the power to vote another’s shares by a proxy MUST act in accordance with any agreement between the parties (if the shareholder directs the proxy holder to vote a certain way, then the proxy holder must do so). A shareholder may also grant a proxy holder the ability to vote shares as the proxy holder deems appropriate. A proxy is only valid for 11 months, unless the proxy provides otherwise.
— Proxy agreements are freely revocable by the shareholder, evenif the proxy states that it is irrevocable (any action inconsistent with the grant of the proxy acts as a revocation). One exception to this rule is a proxy coupled with an interest or legal right, which is irrevocable if the proxy expressly states as such.
— Under the RMBCA, proxyappointmentscoupledwithan interest include: (1) a pledgee (a person who lends money and accepts a pledge for the loan); (2) a person who purchased or agreed to purchase the shares; (3) a creditor of the corporation who extended it credit; (4) an employee of the corporation whose employment contract requires the appointment; or (5) a party to a voting agreement.
Shareholder’s Right to Inspect Books and Records
— Under the RMBCA, a shareholder has an unqualifiedright to inspect and copy the following records of the corporation (during regular business hours at the corporation’s principal office) by providing at least 5-days written notice: (i) Articles of Incorporation; (ii) Bylaws; (iii) Resolutions by the Board of Directors concerning the classification of shares; (iv) Minutes of shareholder meetings for the past 3 years; (v) written communications sent to the shareholders within the last 3 years; (vi) names and business addresses of the current Directors and Officers; and (vii) its most recent Annual Report.
— Additionally, a shareholder has the right to inspect and copy certain accounting records (annual financial statements prepared for the corporation for its last three fiscal years and any audit/other reports with respect to such financial statements),
excerpts of the Board of Directors’ meeting minutes, and the record of shareholders ONLY IF: (1) the inspection is made during regular business hours at a reasonable location specified by the corporation; (2) the shareholder provides at least 5-days written notice; (3) the demand is made in good faith and for a proper purpose;
(4) the purpose is described with particularity; AND (5) the records are directly connected with the purpose.
o A properpurpose is a purpose reasonably relevant to the shareholder’s interest as a shareholder. The following have been deemed to be a proper purpose: (a) determination of the value of shares; (b) whether the corporation engaged in illegal conduct; (c) to investigate wrongdoing or mismanagement; and/or (d) to protect the shareholder’s financial interest in the corporation, the interest in voting or selling shares, or bringing a lawsuit to protect those interests.
o To show goodfaith, the shareholder must present some evidence to establish a credible basis to infer possible wrongdoing (a mere suspicion is insufficient). A good faith interest in exposing/ preventing wrongdoing is sufficient.
— The right of inspection CANNOT be abolished or limited by a corporation’s Articles of Incorporation or Bylaws.
Fiduciary Duty of Directors: Duty of Care
— Directors are fiduciaries of a corporation, and as such owe a duty of care to the corporation. This means that they must discharge their duties: (1) in good faith; (2) in a manner the Director reasonably believes to be in the best interests of the corporation; AND (3) with the care that a person in a like position would reasonably believe appropriate under similar circumstances. If this three-part test is satisfied, then a Director will NOT be liable for corporate decisions that resulted in adverse consequences to the corporation. Under the common law, the above test was known as the Business Judgment Rule.
— The duty of care requires that Directors be reasonably informed on the decisions they make. A Director may rely on the reasonable advice of advisors, such as attorneys, accountants, officers, or Committees of the Board when: (1) such reliance was reasonable; AND (2) the advisor or Committee was qualified to provide such advice.
A court will NOT disturb decisions subject to the Business Judgment standard if a rational business purpose exists. Additionally, a party attacking a board decision must normally rebut the presumption that its business judgment was an informed one. However, the Business Judgment Rule DOES NOT apply or protect Directors: (i) financially interested in a transaction (a conflict of interest); (ii) not acting in good faith; OR (iii) who engaged in fraud or illegality.
— If a Director breaches the duty of care, he may be held personally liable to the corporation for any losses suffered as a result.
Fiduciary Duty of Directors: Duty of Loyalty – Conflicting Interest Transaction
— A conflictinginteresttransaction with the corporation is a breach of the duty of loyalty UNLESS the Director shows that: (a) it was approved by a majority of disinterested Directors after full disclosure of all relevant material facts; (b) it was approved by a majority of disinterested Shareholders after full disclosure of all relevant material facts; OR (c) the transaction as a whole was fair to the corporation at the time it was entered into.
o Fairness exists when: (1) the terms/price were comparable to what the corporation would receive in an arm’s length transaction (fair price); (2)the transaction as a whole was beneficial to the corporation (beneficial); AND (3) it was fair in terms of the director’s dealings with the corporation (fair dealing).
Under the MBCA, it’s unclear if fair dealing is required for typical intra-corporate group dealings (not involving a change in control).
o Fulldisclosure occurs when the director discloses all known facts concerning the transaction that a reasonable person would believe necessary to make a decision.
o A quorum must be present to vote on a conflicting interest transaction. This exists when a majority of disinterested directors is present (but there must be at least two disinterested directors to vote).
Shareholders: Direct & Derivative Actions
— A directaction involves an injury or breach of a duty owed to a shareholder of a corporation. A shareholder may bring a direct action against a director or officer, but MUST prove an actual injury that is NOT solely the result of an injury suffered by the corporation (i.e. an action to compel divided). Similarly, a member of an LLC may bring a direct action against another member, a manager, or the LLC, and MUST prove an actual/threatened injury that is not solely the result of an injury suffered by the LLC. The damages awarded in a direct action will be paid directly to the shareholder or member.
— In a derivativeaction, a shareholder is suing to enforce the corporation’s claim, not his own personal claim. The suit must be one in which the corporation could have brought itself, and has harmed the corporation in some way (i.e. loss suffered to corp.’s share value due to misleading statements by directors/officers).
— To commence or maintain a derivative suit under the RMBCA, the plaintiff-shareholder must meet the following requirements: (1) be a shareholder at the time of the act or omission or became a shareholder by operation of law from such a shareholder; (2) be a shareholder through entry of judgment; (3) he must fairly and adequately represent the interests of the corporation; AND (4) he must make a written demand upon the corporation to take suitable action.
— A derivative suit CANNOT be commenced until 90 days after a written demand UNLESS: (a) the corporation rejects the demand; OR (b) the corporation will suffer irreparable harm if forced to wait. Under the RMBCA, there is NO exception to the demand requirement for futility.
— The damages awarded in a derivative action will be paid to the corporation (not the shareholder), but the shareholder may recover the reasonable cost of the litigation.
— To bring a derivativeactiononbehalfofanLLC, the elements are the same (as those above) for a corporation EXCEPT: (1) the action may be brought within a reasonable time after the demand; and (2) the demand requirement may be waived
if the demand is deemed futile. In a member-managed LLC, the demand must be made on the other members. In a manager-managed LLC, the demand must be made upon the managers.
Dissenter’s Appraisal Rights for Fundamental Changes
— A dissenting shareholder is entitled to appraisalrights, and to obtain payment of the fair market value of his shares, for the following fundamental changes: (1) when the shareholder has the right to vote on the merger plan; (2) when he is a shareholder of the subsidiary in a short form merger; (3) when he is a shareholder of a corporation whose shares are being acquired in a share exchange; (4) when the shareholder has the right to vote on the distribution of all or substantially all of the corporate assets; and (5) when an amendment to the Articles of Incorporation materially and adversely affects the shareholder’s rights.
o Appraisal rights are NOT available to shareholders of publicly traded companies.
— Shareholders who DO NOT consent to a fundamental corporate change mayforce the corporation to purchase their shares if: (1) the shareholder gave notice to the corporation of his intent to demand payment if the change was approved; (2) the notice was given before the vote was taken on the fundamental change; (3) the fundamental change is effectuated; AND (4) the shareholder did not vote in favor of the change. If the corporation and the dissenter cannot agree on a fair price, the court will resolve the issue.
Federal Question SMJ
— A federal court can only hear cases where it has subject matter jurisdiction, because it is a court of limited jurisdiction. A federal court has subject matter jurisdiction if: (a) there is a federal question; (b) there is diversity of citizenship among the parties; OR (c) supplemental jurisdiction is present. Subject matter jurisdiction is not waived if a party fails to raise it at trial. It may be raised at any time, even on appeal.
— FederalQuestionJurisdiction exists if a well-pleaded Complaint alleges a claim that arises under: (a) federal law; (b) the U.S. Constitution; OR (c) United States treaties. The plaintiff MUST be enforcing a federal right, and the federal question of law must be present on the face of the Complaint. Raising a defense under a federal law is NOT sufficient to trigger federal question jurisdiction.
Diversity of Citizenship SMJ
— A federal court can only hear cases where it has subject matter jurisdiction, because it is a court of limited jurisdiction. A federal court has subject matter jurisdiction to hear a claim if: (a) there is a federal question; (b) there is diversity of citizenship among the parties; OR (c) supplemental jurisdiction is present. Subject matter jurisdiction is not waived if a party fails to raise it at trial. It may be raised at any time, even on appeal.
— DiversityofCitizenshipJurisdiction exists when: (1) there is complete diversity of citizenship between all plaintiffs and defendants (no plaintiff can be from the same state as any defendant); AND (2) the amount in controversy exceeds
$75,000. Diversity jurisdiction is determined at the time the action is commenced; a post-filing change of citizenship is irrelevant absent bad faith.
o Citizenship: A party’s citizenship is determined by their domicile.
For a naturalperson, domicile is determined by the party’s: (1) residence (physical presence in the state); AND (2) subjective intent to make the state their permanent home. The above test also applies to permanent resident aliens. If a person resides in more than one state for an extended period of time, then the court will review factors, such as the person’s residence, voter registration/records, vehicle registration, location of bank accounts, and place of employment. Domicile continues until changed. Both residence and intent must be established concurrently for a change in domicile; the mere change of one without the other is not sufficient.
A corporation has dual citizenship, and is deemed to be a domiciliary of: (1) the state of its principal place of business (the corporation’s “nerve center” – where officers direct, control, and coordinate the corporation’s activities); AND (2) any state where it is incorporated. Usually, a corporation’s principal place of business is its designated headquarters.
An executororpersonalrepresentative is deemed to have the citizenship of the decedent or person being represented.
A partnership, sole-proprietorship, limitedliabilitycompany(LLC), or unincorporatedassociation is deemed to be a domiciliary of the state of every partner/member/owner.
o AmountinControversy: The amount in controversy is based on the damages alleged in good faith in the Complaint (not the actual award), unless it is legally certain that the plaintiff cannot recover the specified amount. A plaintiff may aggregate his claims against one defendant, or against multiple defendants if all are joint tortfeasors (where the defendants are jointly and severally liable). A claim for injunctive relief is valued by either the benefit to the plaintiff OR the cost of compliance for the defendant (the value of the injunction).
— AlienageDiversityJurisdiction: Diversity jurisdiction may also exist in an action by or against an alien (a citizen or subject of a foreign state). Alienage jurisdiction applies in twoinstances:
o In an action between (1) aliens (on one side), AND (2) citizens of a State (on the other side), PLUS (3) the amount in controversy exceeds $75,000.
However, jurisdiction DOES NOT EXIST IF (1) an alien is a U.S. permanent resident, and (2) the alien is domiciled in the same State as a party on the other side of the action.
o In an action between (1) citizens of different States (U.S. citizens are present on both sides of the action), (2) in which aliens are additional parties; AND (3) the amount in controversy exceeds $75,000. Here, jurisdiction DOES NOT exist for cases among aliens (when both the plaintiff and defendant are aliens), unless U.S. citizens are present on both sides of the action.
— ForeignStateDiversityJurisdiction: Diversity jurisdiction also exists between (1) a Foreign State as plaintiff, AND (2) citizens of a State or of different States, PLUS (3) the amount in controversy exceeds $75,000. A “Foreign State” includes a political subdivision of a foreign state or an agency/instrumentality of a foreign state.
Supplemental Jurisdiction
— A federal court can only hear cases where it has subject matter jurisdiction, because it is a court of limited jurisdiction. A federal court has subject matter jurisdiction to hear a claim if: (a) there is a federal question; (b) there is diversity of citizenship among the parties; OR (c) supplemental jurisdiction is present.
— SupplementalJurisdiction: If a federal court has original jurisdiction (subject matter jurisdiction) over some of the claims in the action, then it may exercise supplemental jurisdiction over additional state court claims when they arise from the same “case or controversy”. Generally, such claims must arise from a common nucleus of operative fact (the same transaction or occurrence). However, severallimitationsexist.
— Supplemental jurisdiction CANNOT be used to overcome a lack of diversity. In a case where jurisdiction is based solely on diversity, a federal court DOES NOT have supplemental jurisdiction to hear claims by or against additional parties if their presence in the case would destroy complete diversity.
o For example, a plaintiff in a diversity case CANNOT assert supplemental jurisdiction if it would violate complete diversity. Additionally, supplemental jurisdiction DOES NOT apply to claims by the original plaintiff against a third-party defendant. It also CANNOT be used for claims by parties proposed to be joined or intervene as plaintiffs under Required Joinder (Rule 19) or Intervention (Rule 24) if adding such party would destroy complete diversity.
— A federal court may decline to exercise supplemental jurisdiction over State claims when: (a) the claim raises a novel or complex issue of State law; (b) the claim substantially predominates over the claim(s) of which the district court had original jurisdiction; (c) the federal district court has dismissed all claims over which it had original jurisdiction; OR (d) in exceptional circumstances where there are other compelling reasons for declining jurisdiction. State claims do not substantially predominate over federal claims when the facts needed to prove each claim are identical or similar.
Removal
— A defendant may remove a case to a federal court sitting in the State where the claim was filed if: (1) the federal court has subject matter jurisdiction (original jurisdiction); (2) all defendants agree; (3) no defendant is a resident of the forum state (only if removal is sought under a Diversity Jurisdiction basis); AND (4) removal is sought within 30 days of either service of the Summons or receiving the initial pleading (whichever period is shorter). A plaintiff CANNOT remove a case to federal court. In addition, a case CANNOT be removed more than one year after commencement in a diversity action.
— Procedurally, to remove an action to federal court the defendant must file a Notice of Removal in the federal court district within the state where the action is pending. The notice MUST: (1) state the basis for federal court jurisdiction; AND (2) include copies of the documents filed in the State court action. The defendant must serve the Notice of Removal upon all parties, and file a copy with the state court. Removal is automatic, and the state court may take no further action in the case once it receives the Notice of Removal.
Personal Jurisdiction
— A federal court MUST have personal jurisdiction over a defendant for its judgment to be binding. A federal court can exercise personal jurisdiction to the same extent as the State courts where the federal district court is located. Jurisdiction over a defendant normally falls into two categories: (1) the traditional bases of jurisdiction; and (2) a State’s long-arm statute.
— TraditionalBasesofJurisdiction: The traditional bases for asserting personal jurisdiction include: (a) domicile; (b)
transient jurisdiction (presence in the State when served); (c) consent; or (d) waiver (appearing in the action without objecting to jurisdiction). The above grounds comport with the Constitutional requirements of due process.
— Long-ArmJurisdiction: To exert personal jurisdiction over a defendant who is not a resident of the forum state: (1)
the forum state must have a long arm statute; AND (2) the Constitutional requirements of due process must be met. Where a state’s long-arm statute allows personal
jurisdiction to the same extent as the Constitution, then the long-arm analysis is the same as the constitutional analysis, which requires: (1) that the defendant have sufficient minimum contacts with the forum state, (2) so as not to offend traditional notions of fair play and substantial justice. Both prongs must be satisfied.
— Prong1–MinimumContacts(Contacts& Relatedness): Sufficient minimum contacts exist when either general jurisdiction OR specific jurisdiction is present.
— Generaljurisdiction exists when the defendant’s contacts with the forum state are so substantial and of such nature that the defendant is essentially at home in the state. Defendant must purposefully avail itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. The claim DOES NOT need to relate to or arise from the defendant’s contacts in the forum state. An individual must be domiciled in the state for general jurisdiction to apply. For a corporation, general jurisdiction applies where the corporation is fairly regarded as “at home” (usually where the corporation is incorporated or headquartered).
— Specificjurisdiction exists when the suit arises out of or relates to the defendant’s contacts with the forum state. A court’s exercise of specific jurisdiction is Constitutional when a defendant: (1) purposefully avails itself of the privilege of conducting activities within the forum state; AND (2) the defendant’s contacts with the forum give rise to (or are related to) the plaintiff’s claims. There MUST be a connection between the forum state and the
underlying controversy (principally, an activity or an occurrence that takes place in the forum state).
When there is no such connection, specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the state.
— Regularly occurring sales of a product in a state DOES NOT justify the exercise of jurisdiction over a claim unrelated to those sales.
— With respect to conduct via the internet, a court will consider how interactive the website is. Generally, the more interactive a website is, the more likely a court will find personal jurisdiction. A passive website (one that contains only information) has been held to be insufficient to subject the owner to jurisdiction. Courts have held jurisdiction to be proper where defendants could reasonably anticipate that defamatory comments posted online would target readers in plaintiff’s home state.
— When a cause of action arises from personal/domestic relations, a temporary visit or brief stopover to a State DOES NOT satisfy the minimum contacts requirement (even if the spouses were married during the visit).
— Courts have held that specific personal jurisdiction can be exercised over an automobile insurer if an accident in a State was within the insurance policy’s territorial scope of coverage.
— Prong2–FairPlayandSubstantialJustice(Fairness):
— Even if the minimum contacts test is met, it MUST be fair and reasonable for the defendant to be sued in the forum state (so that traditional notions of fair play and substantial justice are not offended).
— However, the burden is on the defendant to show that it would be so unreasonable to defend himself in the forum state that it would constitute a violation of Due Process. The court will consider: the burden on the defendant of litigating in the forum state, the state’s interest in providing a forum; the plaintiff’s interest in a convenient forum for obtaining relief; and the interests of the judicial system to efficiently resolve disputes.
— 100-MileofCourthouseRule: Personal jurisdiction over a party is established if: (1) that party is joined to the action under Rule 14 (Third-Party Practice) or Rule 19 (Required Joinder of Parties); (2) is served within the United States; AND (3)
is served within 100 miles of the courthouse where the Summons was issued. Courts have deemed the exercise of personal jurisdiction under this “100-mile bulge” rule to be Constitutional.
Service of Process and Notice
- In federal court, the Summons and Complaint must be served upon the defendant within 90 days of filing the Complaint. Otherwise, the court MUST either: (a) dismiss the action without prejudice against that defendant; OR (b)order that service be made within a specified time. However, if the plaintiff shows good cause for failing to serve within 90 days, the court MUST extend the time for service for an appropriate period.
- Service may be made by any person who: (1) is at least 18 years old; AND (2) not a party to the action.
- The method of service must be consistent with the Due Process Clause, which requires that notice be reasonably calculated to make the parties aware of the action and give them an opportunity to object.
— ServiceuponanIndividual: An individual may be served by delivering the Summons and Complaint: (a) to the individual personally; (b) to someone of suitable age and discretion who resides at the individual’s current dwelling or usual place of abode; (c) to an agent authorized by appointment or by law to receive service of process; OR (d) in
accordance with the state law of the forum state or where service is made.
— ServiceuponaCorporation,Partnership,orAssociation: A corporation, partnership, or unincorporated association may be served: (a) in accordance with state law of the forum state or where service is made; OR (b) by delivering the Summons and Complaint to an officer (i.e. CEO), managing agent, general agent, or authorized agent (by appointment or by law) of the corporation.
— ServiceuponaForeignDefendant: Generally, a foreign defendant may be served by any manner not prohibited by international agreement. However, a foreign corporation, partnership, or association CANNOT be served by personal service. A court CAN authorize service via e-mail if: (1) no international agreement prohibits it; AND (2) it satisfies due process (reasonably calculated to notify the defendant of the action and give him an opportunity to object).
Venue (Proper Venue & Transfer of Venue)
Venue (Proper Venue & Transfer of Venue)
—ProperVenue: For civil actions brought in federal court, venue is proper in any district where: (a) any defendant resides (if all defendants are residents of the forum state); (b) where a substantial portion of the claim occurred; (c)where a substantial part of property is located (where property is the subject of the action); OR (d) if none of the above apply, then venue is proper in any judicial district in which any defendant is subject to the court’s personal jurisdiction. Proper venue is determined at the time the suit is filed; a subsequent move by a party DOES NOT generally warrant a change of venue.
o ResidenceRules: Residence of an individual is determined by their domicile (residence and intent to make the place their permanent home). A business entity’s residence includes ALL districts where it is subject to personal jurisdiction. A non-resident of the U.S. (alien or U.S. citizen living outside the U.S.) may be sued in any judicial district.
o For tortactions, venue is proper where the alleged tortious acts occurred, but venue is NOT proper where the only connection is that medical treatment for injuries was received in the judicial district.
—TransferofVenue: Transfer of venue and the applicable law depends on whether venue was proper when the suit was first filed.
o If venuewasproper when the case was filed, the court MAY transfer venue if: (1) needed for the convenience of parties and witnesses or interests of justice; AND (2) the action could have initially been brought in the receiving court (proper venue, subject matter jurisdiction, and personal jurisdiction). The court has discretion whether or not to transfer the case. Following a transfer, the new court MUST apply the same substantive law as the original transferor court.
o If venuewasimproper when the case was filed, the court MUST either: (a) dismiss the case; OR (b) transfer the case to a proper court if the interests of justice require it. Following a transfer, the law applied is that of the new transferee court.
o Forum-SelectionClause: Generally, a court will enforce a contractual forum-selection clause to transfer venue, UNLESS special factors are present (i.e. significant/unusual hardships or inequality of bargaining power). Additionally, the Supreme Court has held that a forum-selection clause is an important factor favoring a change of venue, even if the forum- selection clause is unenforceable under the applicable state law.
Law Applied by Federal Courts: Erie Doctrine, Substance vs. Procedure, & Supremacy Clause
• The Eriedoctrine applies when a federal case is brought under diversity of citizenship jurisdiction. Under the Erie doctrine, a federal court will apply its own federalprocedurallaws, but must apply statesubstantivelaw. Similarly, for claims heard under Supplemental Jurisdiction, a federal court will apply its own procedural law/rules and the state substantive law.
o Procedurallaws include: civil procedure rules, burden of proof, and rebuttable presumptions.
o Substantivelaws include: elements of a claim or defense, choice of law rules, statute of frauds, irrebuttable presumptions, damages, statute of limitations and tolling rules, statute of limitations where a borrowing statute was enacted (a statute providing the shorter of the two time-periods applies), and preclusion law (e.g. claim preclusion, issue preclusion).
• Since choice of law rules are considered substantive law, a federal court sitting in diversity MUST apply the forum state’s choice of law rules to determine the applicable state substantive law in the action. Once the applicable state law is determined, the federal court must apply that law as the state court would; it CANNOT make its own independent judgment on the construction of a law or statute. When no controlling state case law is available to the federal court for guidance, the court must predict how the state’s highest court would rule on the issue.
• However, federal law will apply for matters governed by the U.S. Constitution, laws passed by Congress, or valid federal law that preempts state law under the Supremacy Clause.
Permissive Joinder of Parties
• MultiplePlaintiffs: Under the Federal Rules of Civil Procedure, multiple plaintiffs MAY join in one action if:
(1) joint and several relief is asserted by them or the claim arises out of the same transaction or occurrence; (2) a common question of law or fact to all plaintiffs exists; AND (3) subject matter jurisdiction exists for each claim.
• MultipleDefendants: Multiple defendants MAY be joined in one action if: (1) joint and several relief is asserted against them or the claim arises out of the same transaction or occurrence; (2) a common question of law or fact to all defendants exists; AND (3) subject matter jurisdiction exists for each claim.
• Under the logicalrelationshiptest, all logically related events entitling a person to institute a legal action against another are generally within the meaning of “transaction and occurrence” for permissive joinder.
• Misjoinder of parties is NOT a ground for dismissing an action. Instead, the court may add or drop a party on just terms. The court may also sever any claim against a party.
Motion to Dismiss & Motion for Judgment on the Pleadings
• MotiontoDismiss: Under Rule 12(b), a Motion to Dismiss may be made prior to filing an Answer. A Motion to Dismiss requires the court to: (1) consider the facts in the light most favorable to the non-moving party; AND (2)
determine whether there is any basis upon which relief can be granted for the non-moving party. If there is any basis for relief, the court MUST deny the motion. The Court DOES NOT evaluate the merits of the case.
• MotionforJudgmentonthePleadings: A motion for any non-waivable defense may be made at any time early enough NOT to delay trial. However, it is referred to as a Motion for Judgment on the Pleadings if it is made
after the defendant has answered.
• GroundsforMotionandWaiver: A party may bring a motion in order to dismiss one or more claims on certain specified grounds. Such grounds include: (1) lack of subject matter jurisdiction; (2) lack of personal
jurisdiction; (3) improper venue; (4) insufficient process; (5) insufficient service of process; (6) failure to state a claim upon which relief can be granted; and (7) failure to join a necessary party. The grounds listed in (2)-(5) above are deemed waived if NOT raised in the first responsive pleading or Motion to Dismiss. A motion for lack of subject-matter jurisdiction cannot be waived, and may be made at any time, even on appeal.
Motion for Summary Judgment
• A court will grant a Motion for Summary Judgment when: (1) there is no genuine issue of material fact; AND (2) the movant is entitled to judgment as a matter of law. When reviewing the motion, the court MUST view the evidence in the light most favorable to the non-moving party.
o An issue of material fact is genuine if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.
o As to materiality, only disputes over facts that might affect the outcome of the suit will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will NOT be counted.
• Where the moving party presents evidence of facts that would defeat the non-moving party’s claim, the non-moving party MUST offer evidence of specific facts showing that there is a genuine issue for trial by affidavits or other evidence.
• A party may move for summary judgment on the entire case OR on certain issues (partial summary judgment), and may file the motion at any time until 30 days after the close of all discovery (unless a different time is set by local rule or court order).
• If a Motion to Dismiss (or Motion for Judgment on the Pleadings) presents matters outside the pleadings, the court may treat the motion as a Motion for Summary Judgment. When this occurs, all parties must be given a reasonable opportunity to present evidence that is pertinent to the motion.
Issue Preclusion (Collateral Estoppel)
• Issue Preclusion (collateral estoppel) precludes a party from attempting to retry an issue if there has been a final judgment on the merits by a court of competent jurisdiction. Issue preclusion may be invoked if: (1) a valid and final judgment was rendered in the first action; (2) the issue is identical to the issue decided in the prior action; (3) the issue was actually litigated, determined, and essential in the prior action; AND (4) the party against whom enforcement is sought against had a full and fair opportunity to litigate the issue in the first action.
• Issue preclusion may be used both to defend a claim/action and on offense to support a claim/action. Additionally, issue preclusion may be used even if the second action contains a new claim. A judgment entered pursuant to
settlement CANNOT be used for issue preclusion purposes because no determination by the court was made.
• Generally, a non-party to the first action CAN assert issue preclusion against a party to that action if the four-part test above is satisfied (even if used offensively by the nonparty). This approach has been adopted in Most States and by the Supreme Court for FederalClaims. However, the Supreme Court has suggested that issue preclusion is NOT appropriate when it would be unfair, such as when: (a) a plaintiff in the new action (who was a non- party in the first action) could have easily joined the first action; (b) the party’s stake was deceptively small in the original proceeding; (c) the non-party has significantly more advantageous procedural opportunities in the subsequent proceeding; OR (d) there were inconsistent prior judgments from the same incident. SomeStates still apply the mutuality doctrine, in which a non-party CANNOT assert issue preclusion to their advantage in a subsequent action.
Appeals: Final Judgment Rule & Exceptions
• FinalJudgmentRule: In federal court, a party may only appeal from a final judgment or decision (known as the “final judgment rule”). A final judgment/decision is one which ends the litigation on the merits (all claims are resolved), and leaves nothing for the court to do but execute the judgment. Appeal is thereby precluded from any decision that adjudicates somebutnotallclaims in the action, as well as from any decision which is tentative, informal, or incomplete.
• Appeals must be filed within 30 days after entry of the judgment appealed from.
• Several exceptions to the final judgment rule exist:
o Rule54(b)Exception: Under the Federal Rules of Civil Procedure, an appeal is allowed when: (1) the action has multiple parties or multiple claims; (2) the court directs entry of a final judgment for some of the claims or parties; AND (3) the court expressly determines that there is no just reason for delay. If all the above elements are NOT met, then any appeal must wait until after a final judgment for the entire case.
o StatutoryExceptions: Under federal law, a party may immediately appeal certain court orders as of right relating to: (i) injunctions; (ii) receiverships; (iii) orders affecting the possession of property; (iv) liability in an admiralty action; and (v) patent infringement orders which would be final except for an accounting.
o CertifiedAppealException: Under federal law, an immediate appeal is allowed when: (1) a federal district court judge certifies certain grounds for immediate appeal; AND (2) the Court of Appeals agrees to permit the appeal. The application for an appeal under this rule must be made within ten days after the entry of the order.
A judge will typically certify an appeal when the order involves: (i) a controlling question of law, (ii) which there is substantial ground for difference of opinion, and (iii) an immediate appeal may materially advance
the ultimate termination of the litigation.
o CollateralOrderDoctrine: The collateral order doctrine allows an immediate appeal when the interlocutory order: (1) conclusively determines the disputed question; (2) resolves an important issue completely separate from the merits of the action; AND (3) is effectively unreviewable on appeal from a final judgment. This doctrine will only apply to a small class of decisions. The Supreme Court has held that the collateral order doctrine DOES NOT allow an interlocutory order concerning the enforcement of a forum selection clause because the order is not effectively unreviewable on appeal from final judgment.
o WritsofMandamusandProhibition: When there is an abuse of judicial authority by a trial court, a party may seek a writ of mandamus or prohibition to have a federal appellate court review the trial court’s ruling. However, the writ of mandamus (an application for the court to act) or writ of prohibition (an application for the court to end litigation) are issued only in exceptional circumstances. A party CANNOT use the writ of mandamus or prohibition
to correct an ordinaryerror by the district court. The party seeking mandamus/prohibition has the burden of showing that its right to issuance of the writ is clear and indisputable.
The writs have been invoked when a court acts outside its jurisdiction or when the court fails to follow court rules. Such instances have included: (i) unwarranted judicial action threatened to embarrass the
Executive Branch in conducting foreign relations; (ii) it was the only means of forestalling intrusion by the federal courts on a delicate area of federal-state relations; (iii) it was necessary to confine a lower court to the appellate court’s mandate; and (iv) where a district judge displayed a persistent disregard of the
Rules of Civil Procedure.
o PendentAppellateJurisdiction: Under the doctrine of pendent appellate jurisdiction, a party may seek to have a non-final order reviewed along with another appealable order currently pending before the appellate court.
However, the doctrine is only appropriate when: (a) a non-appealable decision is inextricably intertwined with an appealable decision; OR (b) when review of the non-appealable decision is necessary to ensure a meaningful review of the appealable decision.
o CertificationofClassAction: Under the Federal Rules of Civil Procedure, an order granting or denying class-action certification may be appealed when: (1) a petition for permission to appeal is filed within 14 days after the order is entered; AND (2) the Court of Appeals agrees to hear the appeal (the court has discretion). An appeal does not stay proceedings in the district court unless the district court judge or the Court of Appeals so orders it.
Choice of Law Theories: Most Significant Relationship Approach
• Under the Restatement (Second) of Conflict of Laws, the laws of the state having the most significant relationship to the transaction and the parties will govern the action. Under this approach, courts consider various factors dependent on the type of action (i.e. torts) to determine the state that has the most significant relationship to the action.
Choice of Law Theories: Interest Analysis Approach
• Under the governmentalinterestanalysisapproach, the court weighs the interests of the states involved. Specifically, the court (i) examines the connections that each state has to the parties and the events of the litigation, (ii) analyzes the difference between the state laws, (iii) pinpoints the underlying policies behind those state laws, and (iv) then applies the facts to the law to determine which state has a greaterinterest in having its law applied.
• To determine which state has the greater interest, a threestep process is used:
o Step1: If the court finds that one state has an interest in the application of its policy based on the circumstances and the other state has none, it should apply the law of only the interested state.
o Step2: If the court finds an apparent conflict between the interests of the two states, it should reconsider to see if a more moderate and restrained interpretation of the policy or interest of one state may avoid the conflict.
o Step3: If, upon reconsideration, the court finds that a conflict between the legitimate interests of the two states is unavoidable (a true conflict), it should apply the law of the forum state.
• This approach DOES NOT change depending on the type of action involved (i.e. contract, tort, property).
Choice of Law Rules: Contracts
• ContractualChoiceofLawProvision:
o Parties to a contract are free to choose a particular state’s law to be applied for matters of contract construction.
o For matters of contract validity, the parties may only choose which state’s law applies if: (1) the state has some connection with the contract; (2) the contract has not been entered into under fraud, duress, or mistake; AND
(3) the choice of law isn’t contrary to a substantial policy interest of another state that has more of a significant interest in the matter.
• NoValidChoiceofLawProvision: If a valid choice of law provision is NOT applicable to a contract action, then the choice of law must be analyzed under one of the choice of law theories.
o Under the traditionalvestedrightsapproach, the law where the contract (a) was formed, OR (b) is to be performed applies.
o Under the mostsignificantrelationshipapproach of the Restatement (Second) Conflict of Laws, laws of the state having the most significant relationship to the transaction and parties will govern the action. A court must consider the following factors: (1) the place of contracting; (2) the place of negotiation of the contract; (3) the place of performance; (4) the location of the subject matter of the contract; and (5) the domicile,
residence, nationality, place of incorporation, and place of business of the parties. The factors are weighed according to their relevance to the particular issue.
o Under the interestanalysisapproach, the court weighs the interests of the states involved, and then applies the facts to the law to determine which state has a greaterinterest in having its law applied.
Choice of Law Rules: Inheritance of Real & Personal Property
• InheritanceofRealProperty: Under the Restatement (Second) of Conflict of Laws, the law of the state where the real property is located (the situs) governs its disposition under intestacy or under a last will and testament.
o In a will, a decedent may designate a particular state’s law to be applied for matters of construction, BUT the validity and effect of a will is always determined by the law of the situs state.
• InheritanceofPersonalProperty: The law of the decedent’s domicile state at the time of death governs the disposition of decedent’s personal property. Domicile is determined by a person’s: (1) residence (physical presence in the state); AND (2) subjective intent to make the state their permanent home.
Full Faith and Credit: Ceremonial & Common Law Marriage
• The validity of a marriage will be determined by the law of the state that has the most significant relationship to the spouses. A marriage that is valid where formed is valideverywhere, UNLESS it (1) violates the strong public policy of another state that (2) has the most significant relationship to the spouses and the marriage.
• Most states will honor a valid common law marriage established in another state (even if not recognized within the state). Once established, a common law marriage is equivalent to a ceremonial marriage. However, a court may refuse to honor a common law marriage when the spouses and the marriage have limited contacts with the state where the common law marriage was allegedly established.
Full Faith and Credit: Family Law Judgments
• A divorce (whether ex parte or bilateral) validly granted in another state is entitled to full faith and credit in all other states. An expartedivorce (a divorce action where only one of the spouses is before the court) may be
maintained without personal jurisdiction over the absentee spouse when the plaintiff-spouse is a domiciliary of the rendering state. The plaintiff-spouse’s status as a domiciliary gives the court subject matter jurisdiction over the marriage itself (the marital res).
• In a matrimonial action involving economicorchildcustody/supportissues (alimony, property distribution, child support and custody) the court MUST have personal jurisdiction over the defendant-spouse for the judgment to be entitled to full faith and credit in other states.
o Under the ParentalKidnappingPreventionAct(PKPA), state courts MUST give full faith and credit to child custody decrees of other state courts when: (1) the issuing court had jurisdiction under the laws of the State; AND (2) the assertion of jurisdiction by that court was consistent with the jurisdictional requirements of the PKPA. Most states have adopted either the UCCJA or UCCJEA, which has substantially similar
requirements as the PKPA.
o Under the UniformInterstateFamilySupportAct(UIFSA), state courts MUST give full faith and credit and enforce child support awards of other state courts when the issuing tribunal had jurisdiction. The UIFSA has been adopted by every state, and provides for registration of child support orders. Once registered, other states must recognize and enforce the order and cannot modify it.
State Sovereign Immunity (11th Amendment)
• The Eleventh Amendment prohibits a party from suing a state or a state agency in federal court UNLESS: (a) the state explicitly consents to waive its Eleventh Amendment protections; (b) the suit pertains to federal laws adopted under Section 5 of the Fourteenth Amendment; (c) the suit seeks only injunctive relief against a state official for conduct that violates the Constitution or federal law; OR (d) the suit seeks money damages from a state official.
• The Eleventh Amendment DOES NOT apply to: (a) local governments (counties, cities, towns); (b) federal suits brought by one state against another state; and (c) a suit by the federal government against a state.
• The Supreme Court has held that Congress CANNOT abrogate state sovereign immunity EXCEPT for federal laws adopted under Section 5 of the Fourteenth Amendment. To determine whether Congress validly abrogated State immunity, two issues must be resolved: (1) whether Congress unequivocally expressed its intent to abrogate the immunity; AND (2) if it did, whether Congress acted pursuant to a valid grant of constitutional authority.
State Immunity from Federal Law (10th Amendment)
• Under the 10th Amendment, all powers NOT granted to the Federal government are reserved to the States (unless such powers are expressly prohibited by the Constitution).
• Congress CANNOT compel state governments to implement legislation, BUT Congress may induce state government action by attaching restrictions and conditions on federal funding grants pursuant to its federal taxing and spending powers (Congress has the broad power to tax and spend for the general welfare).
• The Supreme Court has held that the Federal Government may regulate state activities on the same terms as private actors so long as it does not seek to control or influence (commandeering) the manner in which States
regulate private parties. A federal regulation CANNOT require the States in their sovereign capacity to regulate their own citizens, require the state legislature to enact any laws or regulations, or require state officials to assist in the enforcement of federal statutes regulating private individuals. A federal mandate requiring state personnel to alter their own activities is not an unconstitutional commandeering.
Negative Commerce Clause
• A state or local government may regulate intrastate commerce, as long as Congress has not enacted laws on the subject matter. If Congress has enacted laws on a particular matter, any state or local laws would be pre- empted by federal law.
• Notwithstanding the above, state and local governments generally CANNOT pass laws that: (a) discriminate against out-of-state commerce; OR (b) place an undue burden on interstate commerce.
o DiscriminatoryRegulations: A law is deemed discriminatory when it is either (a) facially discriminatory, OR (b) the law has a discriminatory impact because it favors in-state commerce over out-of-state commerce. State and local laws that discriminate against out-of-state commerce are UNCONSTITUTIONAL, UNLESS: (a) the burden on interstate commerce is narrowly tailored to achieve a legitimate, non-protectionist state objective (there are no less-discriminatory alternatives available); OR (b) the state or local government is a “market participant” rather than a regulator of economic activity (a state may favor its own citizens regarding state programs, state
businesses, or when it is the entity buying or selling goods). The Supreme Court has held that states CANNOT use discriminatory means to accomplish even a legitimate environmental purpose (i.e. prohibiting the disposal of out-of-state waste in-state).
o UndulyBurdensomeRegulations: State and local laws that are not discriminatory, but still place an undue burden on interstate commerce are UNCONSTITUTIONAL when (1) the burden on interstate commerce, (2) is clearly excessive to the putative benefits to the state/local government. Courts apply this balancing test on a case-by-case basis.
Governmental Action (“State Action”)
• When alleging a constitutional violation, a plaintiff MUST show that the violation is attributable to government action (also known as “state action”), which applies to ALL levels of local, state, and federal government. Generally, the conduct of private individuals or entities DO NOT constitute state action and is NOT protected by the U.S. Constitution. The Supreme Court has held that running a private school or college is not “state action,” even when said school is funded primarily by government funds.
• Courts will find “state action” for private conduct when the conduct involves either: (a) a traditional public function – powers traditionally and exclusively reserved to the government; OR (b) when significant government
involvement exists to authorize, encourage, or facilitate private conduct that is unconstitutional (i.e. government enforcement of certain private contracts, entanglement or joint action between a state and private actor, and encouragement of private discrimination). Examples of a traditional “public function” include holding elections and where a corporation operates a privately owned “company town” that provides typical services of the government.
Equal Protection Analysis
• The Equal Protection Clause of the 14th Amendment (applicable to the States) and the 5th Amendment (applicable to the federal government) prohibits the government from denying citizens equal protection of the laws.
• To determine if a discriminatoryclassification against a group of people exists, one of the following must be shown: (a) the law is discriminatory on its face; (b) the law is facially neutral, but is applied in a discriminatory manner; OR (c) a discriminatory motive, when the law is facially neutral but creates a disparate impact.
• When the government makes laws that classify people into groups, the constitutionality of the law will be considered using one of three different levels of scrutiny: (a) Rational Basis; (b) Intermediate Scrutiny; OR (c) Strict Scrutiny.
o StrictScrutiny: The court will apply strict scrutiny when: (a) a classification is based on a suspect class (race, national origin, or alienage in some instances); OR (b) when the law infringes on a fundamental right for a class of people (i.e. right to vote, exercise of religion, have access to the courts, and interstate travel). Alienage (legal non-citizen status) is generally a suspect class only when a State is involved (as Congress has power over aliens under the Constitution). A State may limit a non-citizen’s participation in a function of the government, which is subject to rational basis review.
Understrictscrutiny, the government must show that the classification is necessary to serve a compelling government interest.
o IntermediateScrutiny: When a classification is based on a quasi-suspect class (gender/sex, nonmarital children, and most likely sexual orientation/ gender identity), the court will apply intermediate scrutiny.
Underintermediatescrutiny, the government must show that the classification is substantially related to an important government interest (the interest MUST be the government’s actual interest in passing the law).
The Supreme Court has held that a State may treat men and women differently and provide separate facilities (bathroom facilities, separate sports teams), BUT the State must demonstrate: (1) an exceedingly
persuasive justification for separate treatment; AND (2) that the facilities are substantially equivalent. In addition, a State can use a compensatory purpose to justify an otherwise discriminatory classification but only if
members of the gender benefited by the classification actually suffer a disadvantage related to it.
The standard to use for a classification based upon a person’s sexual orientation or gender identity is unresolved. In past cases, the Supreme Court has used a rational basis standard. However, recently in
Bostock v. Clayton County (2020), the Supreme Court ruled that the Title VII of the Civil Rights Act prohibition of employment discrimination “because of sex” protects gay, lesbian, and transgender individuals. This decision likely means that discrimination based upon sexual orientation or gender identity is subject to Intermediate Scrutiny, as the Supreme Court has used Intermediate Scrutiny in past cases for “sex”
classifications.
o RationalBasis: For all other classes (age, disability, wealth, undocumented aliens), the court will apply the rational basis test.
Underrationalbasis, the plaintiff must show that the classification is NOT rationally related to any legitimate government interest (any conceivable interest is sufficient, even if it is not the government’s actual interest in passing the law).
Takings (5th Amendment)
• Under the Takings Clause of the 5th Amendment, the government may take private property for public use if it provides just compensation.
o A taking is deemed for publicuse when it is rationally related to a conceivable public purpose (public-purpose test). The right to compensation is triggered even when a third-party (not the government) is given the right to occupy the property by the government taking. The Supreme Court has held that the government MAY transfer property from one private party to another if it’s for future public use and that’s the purpose of the taking.
Public purposes may include public safety, public health, morality, peace and quiet, law and order, economic interests, or aesthetic values.
o Justcompensation is measured by the fair market value of the property to the owner AT THE TIME OF the taking (relocation/moving costs are not included).
• Two types of takings exist:
• Possessory(perse)takings occur when the government physically takes or occupies the property, even if it’s just a small portion of the property. The physical invasion or appropriation must be permanent.
• Regulatorytakings occur when the regulation (e.g. zoning ordinance) goes “too far.” The Supreme Court has divided regulatory takings into three categories.
o Depriving Owner of All Economically Viable Use (a per se taking): A regulation that completely deprives an owner of all economically beneficial use of her property is a per se taking. The government MUST pay just compensation for such “total regulatory takings,” UNLESS nuisance and property law independently restrict the owner’s intended use of the property.
o Penn-Central Taking: Courts will determine whether a regulatory taking occurred by balancing private and community interests under the three Penn Central factors: (1) the economic impact of the regulation on the claimant; (2) the extent of interference with distinct investment-backed expectations (the owner’s primary expectation of use for the property); AND (3) the character of the governmental action
The Supreme Court in Penn Central recognized that the government may execute laws and programs that adversely affect recognized economic values in a wide variety of contexts. The Court has upheld land-use regulations (i.e. zoning laws) that destroyed or adversely affected recognized real property interests in instances where the government reasonably concluded that the health, safety, morals, or general welfare would be promoted by prohibiting particular contemplated uses of land.
o Conditions on Approval of a Permit (a.k.a. LandUse Exaction): Conditions placed on the approval of permits DO NOT constitute an uncompensated taking under the 5th Amendment if: (1) there is an essential nexus
between the state interest and the permit condition – the exaction (easement demanded) would substantially advance the same government interest that would furnish a valid ground for denial of the permit; AND (2) the government makes an individualized determination that the condition is roughly proportional (in nature and extent) to advancing that state interest.
The Supreme Court has found the required nexus between a conditioned easement (bike path) and a city’s attempt to reduce traffic congestion by providing for alternative means for transportation.
Freedom of Speech: Public Forum, Limited Public Forum, & Non-Public Forum
• The 1st Amendment protects the right to freedom of speech and expressive activities that constitute speech, and is applicable to both state/local governments (by incorporation through the 14th Amendment) and the federal government. However, conduct that has no communicative value (i.e. trespass) DOES NOT fall within the protection of the 1st Amendment, and thus can be regulated by the government.
• The conduct of speech and assembly in public spaces CAN be regulated by the government in certain instances depending on the type of forum.
• A publicforum is one that has traditionally been available to the public for free speech (i.e. public sidewalks, parks, and streets).
o Content-BasedRestrictions: The government CANNOT regulate speech in public forums based on content UNLESS it satisfies strict scrutiny.
Under strictscrutiny, the government must show: (1) that the regulation is narrowly tailored to achieve a compelling government interest; AND (2) it used the least restrictive means to accomplish its purpose.
o Content-NeutralRestrictions: However, the government MAY regulate the time, place, and manner of content-neutral speech in public forums if the regulation satisfies intermediate scrutiny.
Under intermediatescrutiny, the government must show the regulation: (1) is narrowly tailored to achieve a significant government interest; AND (2) leaves open alternative channels of communication. The regulation DOES NOT need to be the least restrictive means.
o The Supreme Court has held that a government interest in keeping streets clean and of good appearance is insufficient when striking down an anti-leafletting ordinance that restricted speech. Thus, anti-littering laws that suppress speech are likely unconstitutional.
• A designatedpublicforum is one that has not traditionally been available to the public for free speech, but that the government chooses to make available (i.e. where a school makes classrooms available for club meetings).
Designated public forums are treated the same as public forums. The government MAY remove the designation, in which the place would become a non-public forum.
• Limitedpublicforums are non-public forums that have been specifically designated by the government as open to certain groups or topics (i.e. municipal meeting rooms). Limited public forums are treated the same as non- public forums.
• Non-publicforums are other public places that have traditionally been limited for free speech (i.e. schools, military bases, jails, inside of courthouses, and airports). The government may regulate speech in non-public forums if the regulation is: (1) reasonable; AND (2) viewpoint neutral.
• Privateproperty: Generally, a person DOES NOT have the right to access another’s private property (i.e. a shopping center) to deliver the speech or expressive conduct.
• ReligiousSpeech&PublicForums:
o If a school opens itself as a limited public forum, then it CANNOT deny access based upon the religious content of speech (i.e. a religious club). The Supreme Court has held that in a public forum, religious speech is treated equal to non-religious speech, and content-neutral access rules do not violate the Establishment Clause.
• LicensingRequirements:
o Licensing requirements are permitted if: (1) the government has an important reason for licensing; (2) specific, articulated standards are used to grant the licenses to remove discretion of the licensing body; AND (3)
procedural safeguards are in place, including assuring a prompt final judicial decision when a license is denied.
UCC Article 2 Governs Contracts for the Sale of Goods
• Article 2 of the Uniform Commercial Code (UCC) governs all contracts for the sale of goods. Goods are defined as all things that are movable at the time of identification to the contract (other than the money), including crops and the unborn young of animals. Under the UCC, Common Law principles continue to apply, unless the UCC specifically displaces them.
• A contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
Applicable Law: UCC Article 2 vs. Common Law
• Article 2 of the Uniform Commercial Code (UCC) governs all contracts for the sale of goods (goods are all things that are movable at the time of identification to the contract, other than the money). The Common Law
governs all other contracts (i.e. service or construction contracts).
• For mixed contracts, the predominant purpose of the contract determines which law governs. If the predominant purpose is the sale of goods, the UCC will apply. If the predominant purpose of the contract is for services, the common law will apply. In some states, when a contract divides payment between services and goods, the UCC is applied to the goods section and the common law is applied to the services section.
Mutual Assent: Offer & Acceptance
• Mutual assent to enter into a contract requires: (1) an offer by one party; AND (2) acceptance of that offer by the other party.
o An offer is (1) a manifestation of present intent to contract by one party, (2) with definite and reasonably certain terms, (3) that is communicated to an identified offeree.
o Acceptance is a manifestation of assent to the terms of the offer, which indicates a commitment to be bound. Silence generally DOES NOT manifest acceptance, but performance may be adequate. For bilateral contracts, the start of performance manifests acceptance. For unilateral contracts, the start of performance only makes an offer irrevocable, and the offer is accepted only when performance is complete.
• Offerscanbeterminated before acceptance by: (a) revocation by the offeror; (b) rejection or counter-offer by the offeree; (c) lapse of time – the time for acceptance expires after the time limit stated or a reasonable time (if no time limit was stated); (d) death or incapacity of either party; OR (e) supervening illegality – when the proposed contract becomes illegal after the offer is made.
• Most offersmayberevoked at any time before acceptance through unambiguous words or conduct by the offeror to the offeree indicating an unwillingness or inability to contract. A revocation of an offer is effective when received. An offer can also be terminated when communicated indirectly – when (1) the offeror takes definite action inconsistent with an intention to enter into the proposed contract; AND (2) the offeree acquires reliable information to that effect.
• However, some offers are irrevocable including: (1) Option contracts (when consideration is given for a promise to keep an offer open); (2) a Merchant’s firm offer; (3) Offers that were relied on to the offeree’s detriment; AND (4) the start of performance on a unilateral contract, which makes the offer irrevocable for a reasonable time to complete performance (mere preparation is insufficient).
o A Merchant’sFirmOffer is: (1) an offer to buy or sell goods; (2) by a merchant (a person who deals in goods of the kind); (3) in a signed writing; (4) which states that the offer will be held open and is not revocable during the time stated (or if no time is stated for a reasonable time), but not to exceed three months; AND (5) that the assurance to keep the offer open must be separately signed by the offeror if the form is supplied by the offeree (such as initialing the specific paragraph). A merchant’s firm offer is enforceable without consideration.
• A rejection of an offer is the manifestation of intent to not accept an offer (through words or conduct), which thereby terminates the offer. A rejection is effective upon receipt by the offeror (when it comes into the possession of the person). Unless there is an agreement to the contrary or a renewal of the offer, an offer CANNOT be accepted after it is rejected.
• A counteroffer (an offer with new terms) constitutes BOTH a rejection that terminates the original offer AND a new offer. A question or request for unspecified changed terms (when no substitute terms are offered) is NOT a counteroffer, and still allows for acceptance of the offer.
Mutual Assent: Timing of
Acceptance/Revocation & the Mailbox Rule
• Unless the offeror states otherwise, acceptance of an offer is deemed accepted once the acceptance is sent or communicated (i.e. placed in the mail). However, revocation of an offer is deemed effective when received by the offeree. A communication is received when it comes into the possession of that person. An offer CANNOT be accepted after it is revoked (unless there is an agreement to the contrary). However, once a valid contract has been created by acceptance of the offer, revocation is no longer possible.
• Under the Mailbox Rule, if the offeror mails a letter to the offeree revoking the offer, but the offeree sends a letter to the offeror accepting the offer before receiving the revocation letter, a valid contract has been created. This is because the acceptance was effective before the revocation became effective. This rule DOES NOT apply to option deadlines (when an offer is only open until a certain date or time).
Consideration: Bargained for Exchange & Substitutes
• Contracts are NOT enforceable without consideration by BOTH parties. Consideration is a bargained for exchange of a promise for a return promise or performance that benefits the promisor or causes detriment to the promisee. For example, the money paid for goods is consideration for the seller, and the goods sold is consideration for the buyer. Generally, past or moral consideration is NOT sufficient to support a contract.
• An illusorycontract is invalid, and occurs where oneparty has no obligation to perform (thus adequate consideration is not given by both parties).
• The Restatement (Second) of Contracts recognizes three exceptions when a contract will be enforced even if it lacks consideration:
o The MaterialBenefitRule, which provides that a promise made in recognition of a benefit previously received by the promisor from the promisee is binding (even without consideration) to the extent necessary to prevent injustice. Examples include a promise to correct a mistake or providing emergency services or necessities. BUT, the material benefit rule DOES NOT apply when: (a) the benefit was conferred as a gift; OR (b) the value of the promise is disproportional to the benefit conferred.
o PromissoryEstoppel/DetrimentalReliance: Contracts that lack consideration may be enforced to avoid injustice under the doctrine of promissory estoppel. Promissory estoppel applies when: (1) a party reasonably and
foreseeably relied to his detriment on the promise of the other party; (2) the promisor should have reasonably expected a change in position in reliance of the promise; AND (3) enforcement of the promise is necessary to avoid injustice.
o APromisetoPayaNon-LegallyEnforceablePastDebt is binding without new consideration (most states require a signed writing, but the Restatement Second does not have a writing requirement).
Modification of Contracts: Pre-Existing Duty Rule & Exceptions
• Under CommonLaw, contract modifications MUST be supported by consideration. When modifying an agreement, past performance or performance of a preexisting duty owed to a party is NOT treated as adequate consideration. However, several exceptions exist: (1) an addition or change in the performance or promise; (2) unforeseen circumstances – a fair and equitable modification due to unanticipated changed circumstances and the contract is NOT yet fully performed by either party (usually the unanticipated circumstances must be severe or far beyond what was foreseen); OR (3) a third-party promise – when the duty was owed to a third-person, not the promisor.
• Under the UCC, there is NO consideration requirement for contract modifications made in good faith. However, modifications must be in writing if: (a) they fall within the Statute of Frauds; OR (b) the original contract states that modifications must be made in writing. Goodfaith means honesty in fact and the observance of reasonable commercial standards of fair dealing.
Statute of Frauds: Contracts Requiring a Signed Writing
• ContractsRequiringaSignedWriting: Under the Statute of Frauds, the following contracts are not valid UNLESS they are in a writing signed by the party to be charged: (1) Marriage contracts – a promise in consideration of
marriage; (2) Suretyships (where a guarantor promises to take on the debt of another if that person fails to pay) unless the main purpose exception applies (the surety’s main purpose in making the promise was to benefit himself);
(3) Contracts that Cannot be fully performed in 1 year from the date the contract is entered into (there must be no possible way the contract can be performed within 1 year); (4) Contracts for the Sale of real property or creating an
interest in real property (e.g. easements over 1 year, leases over 1 year, mortgages, fixtures); (5) Promises to pay an estate’s debt from the personal funds of the Executor/ Administrator; AND (6) Contracts for the Sale of goods for $500 or more.
• UCCContractsfortheSaleofGoods&Exceptions:
o Under Article 2 of the UCC, all contracts for the sale of goods for $500ormore MUST be in writing. The writing must state the parties, the quantity and nature of the goods, and be signed by the party to be charged.
o However, four exceptions exist: (1) Merchant’s Confirmatory Memorandum – In a sale of goods contract between two merchants (two people dealing in goods of the kind), a writing that confirms an agreement is sufficient if it is signed by the party enforcing it (not the party whom it is enforced against), as long as the party against whom it is enforced did not promptly object within 10-days after receipt; (2) Goods Accepted or Paid For – A
seller may enforce the contract price of any goods accepted or paid for by the buyer, but NOT the whole contract price if only a portion of the total quantity of goods to the contract are accepted; (3) Custom Made Goods – A seller may enforce the contract price for custom made goods, which are goods in which the seller has made a substantial start AND are not suitable for sale in the ordinary course of the seller’s business; (4) Admission During Judicial Proceeding – A sale of goods contract for $500 or more is enforceable without a writing when the party to be charged admits that there was a contract during a judicial proceeding (i.e. in a deposition or courtroom testimony).
• CommonLawExceptionstoStatuteofFrauds: Under the Common Law, a contract that violates the statute of frauds may still be enforceable in the following situations: (1) Full Performance; (2) Partial Performance in Land
Contracts – partial performance is allowed in land sale contracts if a party has done at least two of the following: (i) made a payment for land; (ii) took possession of land; (iii) made valuable improvements to land); (3) Judicial Acknowledgement – the party admits to the agreement in pleadings or testimony; (4) Estoppel – reasonable and foreseeable detrimental reliance on a promise (only some jurisdictions allow the doctrine of estoppel to be used in
order to circumvent the statute of frauds).
• SatisfyingtheWritingRequirement: In order to satisfy the Statute of Frauds, a writing MUST: (1) be signed by (or on behalf of) the party to be charged; (2) reasonably identify the subject matter of the contract; (3) indicate that a contract has been made by the parties; AND (4) state the essential terms with reasonable certainty. The writing may be formal or informal, including a written contract, will, notation on a check, receipt, pleading, informal letter, or an electronic communication (i.e. email).
The statute of frauds DOES NOT require that an agreement be contained in one signed document; it may consist of several writings if (i) one of the writings is signed and (ii) the writings clearly indicate that they relate to the
same transaction. Signed means using any symbol with the intent to adopt or accept a writing, including: a written or typed name; initials; electronic signature; or a symbol found in a billhead or letterhead (when the UCC applies). Under the UCC, a writing is not insufficient because it omits or incorrectly states a term agreed upon, BUT the contract is not enforceable beyond the quantity of goods shown in such writing.
Parol Evidence Rule
• Under the Parol Evidence Rule, a binding integrated agreement discharges prior agreements to the extent that it is inconsistent with them. As such, a party CANNOT introduce evidence of a prior or contemporaneous
agreement (either oral or written) that contradicts a later writing.
• However, there are fourexceptions where a court will permit such evidence: (1) to correct a clerical error or typo; (2) to establish a defense against formation (that the contract wasn’t valid in the first instance); (3) to interpret vague or ambiguous terms, but courts will interpret words to represent their ordinary or plain meaning (the plain meaning rule); and (4) to supplement a partially integrated writing. The Parol Evidence Rule DOES NOT apply to
subsequent agreements.
• A partiallyintegratedwriting DOES NOT contain a complete statement of all the terms the parties agreed to. As such, proof of additional terms is allowed if the terms DO NOT contradict the writing. Under the UCC, ALL writings are presumed to be partial integrations, unless the writing is fully integrated.
• A fullyintegratedwriting is a complete and exclusive statement of the terms, and discharges prior agreements to the extent that they are within its scope.
• A merger clause is evidence that the writing is complete on its face (fully integrated) and cannot be supplemented with additional consistent terms. The absence of a merger clause is evidence that the agreement was NOT
meant to be a complete/full integration of the agreement (but it’s not determinative). If a merger clause is not included, an agreement will NOT be found to be completely integrated if the item or term might naturally have been omitted from the writing.
Minor Breach (Substantial Performance Doctrine) vs. Material Breach
• Under the CommonLaw, a material breach will excuse the non-breaching party’s performance. A minor breach, however, will NOT excuse performance, and the nonbreaching party must still perform (though he may bring a separate action for damages resulting from the breach). A material breach occurs when a party DOES NOT render substantial performance (the party did not perform major parts of the contract).
• To determine whether a breach is material, courts will consider: (1) the extent of the benefit deprived to the injured party (what was the extent of performance); (2) the adequacy of compensation for loss to the non-breaching party; (3) the extent the breaching party will suffer forfeiture (hardship); (4) the likelihood that the breaching party will cure; and (5) absence of good faith or fair dealing by the breaching party (was the breach intentional, negligent, or innocent).
• IntentionalBreach(a.k.a.WillfulBreach): Courts are split on the effect of an intentional breach by a party. Some courts have held that substantial performance CANNOT occur if an intentional breach exists (regardless of the breach’s impact). Other courts have held that an intentional breach is just a factor to be considered and does not automatically defeat recovery.
• Unless the agreement provides otherwise, the work must be substantially performed before payment can be demanded.
UCC Acceptance of Goods & Revocation of Acceptance
• Acceptanceofgoods occurs when the buyer: (a) after a reasonable opportunity to inspect the goods, signifies to the seller that the goods are conforming or that he will take/ retain them despite the non-conformity; (b) fails to reject the goods after a reasonable opportunity to inspect them; OR (c) does any act inconsistent with the seller’s ownership of the goods. Acceptance of a part of any commercial unit is acceptance of that entire unit.
• The buyer is obligated to pay for the purchase once acceptance occurs (unless a revocation of acceptance is allowed), but may still sue for breach of contract if the buyer notifies the seller of the breach within a reasonable time.
• After the acceptance of goods, a buyermaylaterrevokethatacceptanceonlyif: (1) the nonconformity substantially impairs the value of the goods; AND (2) either (a) the defect was difficult to discover (a latent defect), (b) acceptance was reasonably induced by the seller’s assurances, or (c) the buyer accepted the goods on the reasonable assumption the defect would be cured. Revocation of acceptance MUST occur within a reasonable time after the
buyer discovers or should have discovered the nonconformity. The revocation is NOT effective until the buyer notifies the seller. In addition, the revocation of acceptance must occur before there is any substantial change in the goods, not caused by their own defects. If a buyer successfully revokes acceptance, he is entitled to return of the purchase price. A buyer who revokes acceptance has the same rights and duties with regard to the goods involved as if he had rejected them.
Anticipatory Repudiation & Adequate Assurances
• Generally, a party must wait for the other party to breach before bringing an action to demand performance or for damages. However, a non-breaching party may seek damages before the time of performance is due if there is an anticipatory repudiation by the other party. An anticipatory repudiation occurs when a party unequivocally communicates that he is unable or unwilling to perform.
• A party that anticipatorily breaches a contract may retractitsrepudiation and restore the contract UNLESS the aggrieved party has: (a) cancelled; (b) materially changed his position; OR (c) indicated that he considers the repudiation final.
• In addition, a party with reasonable grounds for being insecure about the other party’s performance may demand in writing adequate assurances from the other party that it will perform in accordance with the contract. If a party DOES NOT give adequate assurances after it is asked to do so, the asking party may treat that as an anticipatory repudiation.
• When an anticipatory repudiation occurs, the non-breaching party may do any of the following: (a) treat the contract as repudiated and sue for damages; (b) treat the contract as discharged; (c) wait until performance is due and sue when performance does not occur; OR (d) urge the party to perform.
Warranty of Title
• Under the UCC, warranty of title is implied in all sales of goods contracts, and includesthefollowingwarranties: (1) the title conveyed shall be good, and its transfer rightful; AND (2) the goods shall be delivered free from any security interest or other lien or encumbrance, unless the buyer has knowledge of the same.
• A seller who does not have title to goods generally CANNOT transfer title to a buyer. HOWEVER, if the true owner entrusts the possession of goods to a merchant (one who deals in goods of that kind), then the merchant has the power to transfer all rights the owner had to a buyer in the ordinary course of business.
• The implied warranty of title may be expressly disclaimed by specific language or by circumstances that puts the buyer on notice that the seller does not claim title.
Common Law Expectation Damages
• The general measure of damages for a breach of contract are expectation damages. Expectation damages arise directly from the breach, and are an attempt to put the non-breaching party in the same position it would have been in but for the breach. To recover, the damages must be: (1) caused by the defendant (actual cause); (2) foreseeable (proximate cause); (3) certain (damages cannot be speculative); AND (4) unavoidable (the plaintiff must take
reasonable steps to mitigate his losses). An award of damages must account and deduct for any costs the injured party avoided because of the breach.
Consequential Damages
• Consequential damages arise indirectly from the breach, and are awarded because of the injured party’s special circumstances (e.g. lost profits).
• To recover, the damages MUST be: (1) reasonably foreseeable at the time of contract formation; (2) arise from the plaintiff’s special circumstances that the defendant knew or had reason to know of; AND (3) reasonably certain
(the damages cannot be speculative). An award of damages must account for and deduct for any costs the injured party avoided because of the breach.
• Consequential damages MAY be limited or excluded by agreement unless the limitation/exclusion is unconscionable.
UCC Seller’s Remedies & Damages
• Seller’sRemedies: Under Article 2 of the UCC, when a buyer breaches a contract for the sale of goods, the seller has the following remedies: (a) withhold delivery of the goods; (b) cancel; (c) recover cover damages (the
difference between the resale price and the contract price of the goods), which is used if the resale was made in good faith and in a commercially reasonable manner.; (d) recover market damages (the difference between the market price at the time and place for tender); (e) recover lost profits if the seller is a lost volume seller (a seller who regularly engages in the sale of the goods at issue and has unlimited inventory); (f) stop delivery of goods in the possession of a carrier or bailee when he discovers the buyer to be insolvent; (g) stop delivery of carload, truckload, planeload, or larger shipments of goods when the buyer breaches; OR (h) replevy identified goods in certain instances
when the buyer is insolvent.
• IncidentalDamages: A seller is also entitled to recover incidental damages, which include any commercially reasonable costs incurred resulting from the breach.
• Seller’sRighttoReplevyIdentifiedGoods: Under Article 2 of the UCC, an unpaid seller generally has no right to repossess (replevy) goods that he sent to a buyer. However, a seller of goods may repossess the goods he sent to a buyer if: (1) the buyer was insolvent when it received the goods; (2) the seller makes a demand within 10 days after the buyer received the goods; AND (3) the goods were not sold to a good faith purchaser for value. HOWEVER, if a misrepresentation of solvency had been made to the seller in writing within three months prior to the delivery of the goods, the 10-day limitation to make a demand no longer applies.
UCC Buyer’s Remedies & Damages
• Under the UCC, a buyer who (a) neverreceivedthegoods – the seller repudiates or fails to make delivery, (b) rightfullyrejected non-conforming goods, OR (c) justifiablyrevokedacceptance of the goods MAY:
o (1) cancel the contract;
o (2) recover any amount paid (a refund) – even if buyer doesn’t cancel the contract;
o (3) recover either Cover Damages or Market Damages; AND
o (4) recover Incidental and Consequential damages.
• If the buyerkeepsthenon-conforminggoods, then the buyer is entitled to Loss-in-Value Damages – measured by the difference between the value as promised and the value of the non-conforming goods.
• CoverDamages are the difference between the contract price and the price of substitute goods. This is used as the measure of damages if the buyer covered in good faith.
• MarketDamages are used if the buyer did not cover in good faith or did not cover at all, and are the difference between the market price (at the time when buyer learned of the breach) and the contract price. Market price is determined as of (a) the place for tender, or (b) the place of arrival in cases of rejection after arrival or revocation of acceptance.
Waste Doctrine & Diminution in Value Damages
• Where a contractor’s performance has been incomplete or defective for a construction contract, the usual measure of damages is the reasonable cost of replacement or completion (expectation damages).
• However, when an award for the cost of completion is wasteful, a court may apply the waste doctrine, wherein the measure of damages becomes the difference in value of the property/land (diminution in value). Thewaste doctrinewillapplyif: (1) the contractor performs in good faith but defects nevertheless exist; AND (2) remedying the defects would entail economic waste (when the cost of completion greatly exceeds the value of the completed work). In such instance, diminution in value becomes the proper measure of damages.
• If the breach is willful and only completion of the contract will enable the non-breaching party to use the land for its intended purposes, the cost of completion is considered the appropriate damage award.
Restitution (Unjust Enrichment)
• Restitution (also referred to as unjust enrichment or quantum meruit) is awarded to prevent unjust enrichment, and is available when one party confers a benefit onto another party (even if there is no enforceable contract). Damages will be awarded based on the value of the benefit conferred upon the defendant. A party CANNOT recover both expectation and restitution damages.
• Under the Restatement (Second) of Contracts, a party is entitled to restitution for any benefit that he has conferred by way of part performance in excess of the loss that he has caused by his own breach.
Mitigation of Damages
• A plaintiff CANNOT recover damages as a result of a breach that could have been avoided. Accordingly, a party must take reasonable steps to mitigate his losses. If he fails to do so, the court will reduce the total damages by the amount that could have been avoided.
• Once a party has reason to know that performance by the other party will not be forthcoming, he is ordinarily expected to stop his own performance to avoid further expenditure.
• Affirmative steps to avoid loss are NOT required if they involve undue risk, burden, or humiliation.
• SuitableSubstitute: Whether an available alternative transaction is a suitable substitute depends on all the circumstances, including the similarity of performance.
Elements of a Crime: Causation
— Causation requires both: (1) actual causation (also called cause-in-fact or “but for” causation); AND (2) proximate cause. Actualcausation is present when the result (i.e. injury) would not have occurred “but-for” the defendant’s conduct.
Proximatecause requires asking if it was foreseeable that the injury would have resulted from the defendant’s physical act (was it a natural and probable consequence).
— A Superseding Intervening Cause is a third party’s act that breaks the chain of causation, which normally cuts off the defendant’s liability. However, a third party’s act will only break the chain if the intervening force was: (1)independent of the defendant’s wrongful conduct; AND (2) not foreseeable (it was so out-of-the-ordinary that it is not fair to hold the defendant criminally responsible).
— Under the Simultaneous Acts Rule, a person’s act will still be the proximate cause of a resulting injury if his wrongful conduct created a condition of peril, even if later negligent events combined to cause the injury (so long as the later events are foreseeable). Similarly, a defendant’s wrongful act that acceleratesdeath is still the legal cause of death, even if the person was going to die eventually.
Elements of a Crime: Mental States
• The Mental State (the mens rea or intent element) is explicitly stated in the statute for the specific crime the defendant is charged with.
• Under the CommonLaw four mental state categories were used: Specific Intent (intent or desire to engage in the conduct or cause a certain result); General Intent (awareness of acting a certain way); Malice (reckless disregard of a known risk that harm may occur); and Strict Liability (no mental state is required, only that the act occurs). A mistake of fact is generally NOT a defense to strict liability crimes.
• The ModelPenalCode(MPC) applies the following categories of intent to crimes: o A person acts purposefully if it’s his conscious object to engage in the conduct or cause a certain result.
o A person acts knowingly if he is aware that his conduct is of a particular nature or will cause a certain result to occur.
o A person acts recklessly if: (1) he consciously disregards a substantial and unjustifiable risk that a certain result would occur; AND (2) the action is a gross deviation from how a reasonable law-abiding person would act. A person who creates such a risk, but is unaware of it solely because of voluntary intoxication, also acts recklessly.
o A person acts with criminalnegligence if: (1) he should have been aware of a substantial and unjustifiable risk; AND (2) that failure to perceive the risk is a gross deviation from what a reasonable prudent person would observe in similar circumstances.
• A majority of states use the Willful Blindness Standard, wherein a person can be deemed to act knowingly when he: (a) is aware that certain facts are highly probable; OR (b) is intentionally ignorant to certain facts. A minority of jurisdictions reject the willful blindness standard, and require actual knowledge. In such a jurisdiction, knowledge may be proved by circumstantial evidence.
Murder
• Under the CommonLaw, murder is the unlawful killing of a person with malice aforethought. Malice aforethought is established upon a showing of: (a) an intent to kill; (b) an intent to inflict great bodily injury; (c) a reckless disregard of an extreme risk to human life (depraved-heart murder), such as shooting a gun in a crowded room; OR (d) an intent to commit an inherently dangerous felony under the Felony Murder Rule (e.g. murder, manslaughter,
rape, robbery, arson, kidnapping, battery). Murder may be reduced to Voluntary Manslaughter if there was adequate provocation.
• Under the FelonyMurderRule, jurisdictions use two main approaches to determine if the crime was an inherently dangerous felony: (a) Facts-of-the-Case Rule – Most jurisdictions examine the particular facts of the case; or (b) In- the-Abstract Rule – Some jurisdictions consider only the elements of the underlying crime in the abstract (ignoring the specific facts of the case).
• Some jurisdictions divide murder into degrees. In these jurisdictions, second-degreemurder is the (1) unlawful killing, (2) of a person, (3) with malice aforethought. Firstdegreemurder occurs when the killing was: (1) willful
– a specific intent to kill; (2) deliberate – acting with a cool mind that is capable of reflection; AND (3) premeditated – to think about beforehand (most jurisdictions require a period of time for prior consideration, while other jurisdictions only require a brief moment of thought).
• Under the ModelPenalCode(MPC), murder is a killing of a person, committed: (a) purposely or knowingly; OR (b) recklessly under circumstances manifesting an extreme indifference to the value of human life. Under the
Felony Murder Rule, such recklessness and indifference are presumed if the killing occurred during the commission of or attempt to commit a dangerous felony (robbery, rape, arson, burglary, kidnapping) or felony escape.
• Reckless driving alone usually DOES NOT constitute a depraved-heart murder, unless it was combined with other aggravating factors (i.e. intoxication).
Manslaughter
• Voluntarymanslaughter is an intentional killing of a person without malice aforethought (there was an adequate provocation). An adequate provocation reduces the murder charge to manslaughter.
o Adequate provocation is established if: (1) the defendant was provoked (a sudden and intense passion caused him to lose control); (2) a reasonable person would have been provoked; (3) there was not enough time to cool off before the killing; AND (4) the defendant did not cool off before the killing.
o In most jurisdictions, the adequacy of provocation is based on the defendant’s reasonable beliefs.
o Adequate provocation has been found in the following situations: (i) spousal adultery, (ii) mutual combat, (iii) serious assault or injury to a friend/ relative, and (iv) unlawful arrest. The Defendant must observe or be in the vicinity of the act. Words alone are typically insufficient.
• Involuntarymanslaughter is an unintentional killing of a person committed: (a) recklessly (conscious disregard of an unreasonable risk of death or serious bodily injury); (b) under the misdemeanor-murder rule (a killing that
results during the commission of a misdemeanor); OR (c) during a non-dangerous felony (a felony not included under the felony murder rule). In some jurisdictions, involuntary manslaughter may result from criminal negligence: (1) the defendant knew or should have known that his conduct had a high or unreasonable risk of death, and (2) his actions were a gross deviation from how a reasonable person would have acted.
• UndertheModelPenalCode(MPC), manslaughter is a killing of a person: (a) committed recklessly (conscious disregard of a substantial and unjustifiable risk of death or great bodily injury); OR (b) which would otherwise be murder, but is committed under the influence of extreme mental or emotional disturbance for which there is reasonable explanation or excuse. The MPC does not distinguish between voluntary and involuntary manslaughter.
Theft Crimes & Receiving Stolen Property
• Theft crimes include the common law crimes of larceny, false pretenses, and embezzlement.
o Larceny is the (1) trespassory taking – taking with no belief of a legal right, (2) and carrying away, (3) of the personal property of another, (4) with the intent to permanently deprive the owner of the property. The intent to permanently deprive MUST exist at the time of the taking. Larceny by trick occurs when one obtains possession (not title) of the personal property of another by trick or deception.
o FalsePretenses occurs when one (1) obtains title, (2) to personal property of another, (3) through a known false statement of material fact, (4) with intent to defraud. An opinion or commercial puffery is generally NOT considered to be false pretenses.
o Embezzlement is (1) the fraudulent or wrongful, (2) conversion, (3) of personal property of another, (4) by a person with lawful possession of the property. Intent to permanently deprive the lawful owner of the property is required.
• Receiving Stolen Property is a crime when a person (1) receives possession of stolen property, (2) who knows the property is stolen at the time of receiving it, (3) with the intent to permanently deprive the owner of the property.
• Criminal Possession of Stolen Property occurs when a person: (1) possesses property; (2) that they know or reasonably should know is stolen; (3) with intent to either (a) benefit that person (or a person other than an owner of the property), or (b) impede the recovery by an owner.
• Under the modernview, knowledge that the property is stolen can be inferred from all surrounding circumstances. In somejurisdictions, proof of actual subjective knowledge is required.
Robbery
• Robbery is the (1) trespassory taking and carrying away, (2) of the personal property of another person, (3) in their presence, (4) by the use of force or threat of immediate physical harm, (5) with the intent to permanently deprive
the owner of the property. Armed robbery requires the elements above plus the use of a dangerous weapon (i.e. gun, knife).
Burglary
• Burglary is (1) the breaking and entering (entry without consent, through an unlocked door/window, or even partial entry is sufficient), (2) of a dwelling, (3) of another, (4) at night, (5) for the purpose of committing a felony
inside. Most jurisdictions have extended burglary to include any structure at any time.
Insanity
• A defense of insanity for a severe mental defect or disease will be analyzed under one of four tests, all of which consider the defendant’s mental state at the time of the offense:
o The M’NaghtenTest: (1) A mental disease or defect that (2) resulted in the defendant being: (a) unable to know the wrongfulness of his conduct; OR (b) unable to understand the nature and quality of his acts. Some states have defined wrongful as a legal wrong (that the act was criminal), while other states define wrongful as morally wrong (an act condemned by society).
o The ModelPenalCodeTest: As a result of a mental disease or defect, the defendant was: (a) unable to appreciate the criminality of his conduct; OR (b) unable to conform his actions to the law.
o The IrresistibleImpulseTest: The defendant’s mental illness made him: (a) unable to control his actions; OR (b) unable to conform his actions to the law.
o The DurhamTest: The defendant must show that his unlawful conduct was the product of mental illness.
• A defendant will be acquitted of the crime if he meets the applicable insanity test of the jurisdiction. Most states use either the M’Naghten or the Model Penal Code test.
• Most states require the defendant to prove insanity by the preponderance of the evidence (or by clear and convincing evidence in federal court). However, some states require the prosecution to prove that the defendant was
not insane beyond a reasonable doubt.
Justification: Self-Defense & Defense of Others
• Self-defense is a complete defense to a crime.
o The use of non-deadlyforce is justified when (1) the defendant reasonably believes, (2) that he is in imminent danger of being harmed, AND (3) the amount of force used is proportional to the physical harm threatened (the force used must be reasonably related to the threatened harm which defendant seeks to avoid).
o The use of deadlyforce is justified when (1) the defendant kills another based on a reasonable belief, (2) that he was in imminent danger of being killed or suffering great bodily injury, AND (3) the use of deadly force was necessary to defend against the danger.
• In a minority of jurisdictions, there is a duty to retreat before deadly force may be used. In those jurisdictions, the defendant must show that: (a) there was no opportunity to retreat; OR (b) retreat could not have been accomplished safely. There is NO duty to retreat if the defendant was attacked in her own home.
• An aggressor (the person who starts the altercation) may only use force in self-defense if: (a) he withdraws from the altercation and communicates such intent; OR (b) the other person suddenly escalates the fight with deadly force and withdrawal is not possible.
• The same rules for self-defense apply to the defenseofothers. Most jurisdictions use two rules evaluate a defense of others.
o Steps-into-the-ShoesRule – Defendant steps into the shoes of the person being attacked, and MAY use force if the person being attacked could have acted in self-defense.
o Reasonable-AppearanceRule – Defendant can use force if he reasonably (but mistakenly) believed the person being attacked had the right to act in selfdefense.
• Imperfectself-defense is a mitigating defense to murder that can reduce a murder charge to voluntary manslaughter. Imperfect self-defense is applicable when the defendant kills another based on a good faith belief that (1) she was in imminent danger of being killed or suffering great bodily injury; AND (2) the use of deadly force was necessary to defend against the danger; BUT (3) at least one of those beliefs was unreasonable. Only some courts allow imperfect self-defense to be applied to situations where the defendant was defending another person.
Fourth Amendment Right – Government Action & Standing
• Under the 4th Amendment of the U.S. Constitution, a person is granted protection from unlawful government searches and seizures. Acts by private individuals are NOT protected by the 4th Amendment.
• In order to challenge a search or seizure, the challenging party MUST have standing – he or she must have personally been subject to a purported search or seizure. A person CANNOT vicariously assert the rights of another.
• To have standing, the challenger must have a reasonable expectation of privacy regarding the item or place searched. Courts have held that individuals have a reasonable expectation of privacy in that of which they ownor possess. The U.S. Supreme Court has extended this doctrine to permit an overnight guest to challenge a warrantless search in a home in which he was staying. A person as DOES NOT have a reasonable expectation of privacy for items in plain view where the police have a legal authority to be (e.g. valid warrant or a warrant exception).
o However, courts have held that people DO NOT have a reasonable expectation of privacy in the following: (1) a paint scrapping taken from one’s car; (2) a person’s bank account records; (3) anything visible from public airspace; (4) garbage left on the curb; (5) the sound of one’s voice; (6) odors coming from one’s property; (7) one’s handwriting; and (8) anything that can be seen in or across areas outside one’s home.
Arrests
• Under the 4th Amendment of the U.S. Constitution, a person has the right to be free from unlawful searches and seizures by the government. Seizure under the 4th Amendment includes arrests.
• For an arresttobeproper, the police officer MUST have probable cause. Probable cause arises when the police officer (1) has trustworthy facts or knowledge, (2) sufficient to warrant a reasonable person to believe, (3) that the person committed a crime. If a police officer has probable cause to believe that a person has committed even a very minor criminal offense in his presence, he may arrest that person without violating the 4th Amendment. A police officer DOES NOT need firsthand knowledge to have probable cause; it may be based on the firsthand knowledge of another (i.e. an informant).
• If an arrest is conducted in a public place, probable cause is all that is required. However, a warrant is required if a police officer arrests someone in or at their home (unless exigent circumstances or another exception exists).
Request for Information, Stop and Inquire, & Stop and Frisk
• Under the 4th Amendment of the U.S. Constitution, a person is granted protection from unlawful government searches and seizures. A seizure occurs when a reasonable person would have believed that he was not free to leave.
• The police may make a requestforinformation anytime except on “whim or caprice.”
• A police officer may stopandinquire if the police officer (1) has reasonable articulable suspicion, (2) that criminal activity is afoot. A stop and inquire allows only a brief detention for questioning, after which the suspect must be released.
• A police officer may only stopandfrisk a person if the police officer (1) has reasonable articulable suspicion, (2) that criminal activity is afoot, AND (3) that the person has a weapon. Under the plain feel doctrine, a police officer may only seize items he or she reasonably believes is contraband or a weapon during the frisk.
• Reasonablesuspicion is defined as the quantum of knowledge sufficient to induce an ordinarily prudent and cautious person under the circumstances to believe that criminal activity is at hand. Courts use a sliding scale based on the particular factual circumstances to determine whether reasonable suspicion was present.
Warrant Requirement for All Searches, Unless an Exception Applies
• The 4th Amendment of the U.S. Constitution provides that everyone should be free from unreasonable searches and seizures. Thus, a police officer will need a warrant to conduct a search and to seize items, unless a valid exception applies.
• In order for a searchwarranttobevalid: (1) there must have been probable cause (reliable information that it is likely that evidence of illegality will be found at a particular location); (2) the warrant must state with
particularity the place to be searched and the items to be seized; AND (3) it must be issued by a neutral and detached magistrate.
• Evidenceobtainedwithoutavalidwarrant should be excluded unless it falls under the exceptions that permit a warrantless search and seizure. The warrant exceptions are: (1) plain view doctrine; (2) exigent circumstances;
(3) the automobile exception; (4) a search incident to an arrest; (5) consent; (6) inventory searches; (7) stop and frisk; and (8) where the U.S Supreme Court has concluded there is a special need.
Exception to Warrant Requirement: Plain View Doctrine
• Under the Plain View Doctrine, the police may seize evidence without a warrant if (1) it is observed in plain view (with any of the five senses), (2) from a place the officer is lawfully permitted to be (e.g. valid warrant or a warrant exception applies), AND (3) probable cause exists to believe that the items are evidence of a crime or contraband (it must be immediately apparent).
Confessions: 5th Amendment Privilege Against Self-Incrimination & Miranda Rights
• A defendant’s confession may be excluded at trial under the 5th, 6th, or 14th Amendments of the U.S. Constitution. Under the 5th Amendment Privilege Against Self-Incrimination, a person has a right to not incriminate oneself and MUST be given Miranda warnings during a custodial interrogation.
• Mirandawarnings inform suspects that: (1) they have the right to remain silent; (2) anything they say can be used against them in court; (3) they have the right to talk to an attorney and have one present when they are questioned; AND (4) if they cannot afford an attorney, an attorney will be provided to them. The police need only reasonably convey these rights to a suspect.
• Mirandarightsattach when there is a custodial interrogation of a suspect. If a person is not subject to a custodial interrogation, no Miranda warnings need to be given. The Supreme Court has held that the release of an incarcerated person from questioning back to their “normal” prison life ends the custodial interrogation.
o A person is in custody when they reasonably believe they are not free to leave.
o A person is subject to interrogation when the police knew or should have known that their conduct was likely to elicit an incriminating response.
• Miranda rights only protect statements or acts that are communicativeortestimonial in nature. In order to be testimonial, an accused’s communication must (explicitly or implicitly) relate to a factual assertion or disclose information. Crying is NOT considered a testimonial communication. Additionally, Miranda rights DO NOT apply to any spontaneous statements made by a person.
• Under the PublicSafetyException, limited interrogation without Miranda warnings IS ALLOWED when police officers ask questions reasonably prompted by a concern for public safety OR the safety of the officer (i.e. to secure a weapon).
• When invokingaMirandaright, it MUST be clear and unambiguous. For example, merely stating “I think I need a lawyer” or “maybe I should talk to a lawyer” is insufficient. The police have no obligation to stop questioning a suspect if the request is not clear and unambiguous.
o Once the righttoremainsilentisinvoked, the police may later question the suspect if they first scrupulously honor his right to remain silent. Additionally, if the right is invoked, the defendant’s silence CANNOT be commented on by the prosecution or be used to incriminate him at trial.
o Once the righttocounselisinvoked, the police must stop questioning the suspect on ANY crime until the suspect has spoken with an attorney. However, a custodial interrogation may be reinitiated if: (1) the suspect has been re-advised of his Miranda rights; (2) has provided a knowing and voluntary waiver; AND (3) either (a) counsel is present, (b) the suspect initiates the communication, or (c) at least 14 days have passed since the suspect was released from custody. A suspect’s statement that clearly indicates a willingness to speak about matters relating to the investigation is treated as an initiation of communication, but questions or comments relating to routine incidents of being in custody do not.
• A suspect may waivehisMirandarights. A valid waiver must be made: (1) voluntarily (it is the product of the defendant’s free will); AND (2) knowingly and intelligently (the defendant must understand the nature of the right being waived and the consequences for waiving it).
o When determining whether a confession overcame a person’s free will, courts consider (1) the characteristics of the interrogation (i.e. length of the interrogation and police tactics used); AND (2) the characteristics of the individual (i.e. age and experience).
o The police may use coercive conduct (i.e. lying) UNLESS the coercion overcomes the defendant’s free will. Police failure to provide the defendant with outside information (such as efforts by his attorney to reach him) DOES NOT invalidate a waiver UNLESS the information withheld was essential to the defendant’s ability to make a valid waiver.
• A defendant/suspect’s statements made in violation of his Miranda rights are subject to the Exclusionary Rule.
Exclusionary Rule & the Fruit of the Poisonous Tree Doctrine
• Under the Exclusionary Rule, evidence obtained in violation of a defendant’s 4th, 5th, or 6th Amendment rights is inadmissible in a criminal case. Additionally, all derivative evidence is inadmissible under the fruit of the poisonous tree doctrine.
• However, the exclusionary rule DOES NOT apply if: (a) it is shown that the police had an independent source for the secondary evidence (where there is a source for discovery and seizure of the evidence that is distinct from the original illegal source); (b) the discovery of evidence would have been inevitable regardless of the illegality; (c) through the attenuation doctrine (which admits evidence where a defendant’s free will has been restored through the passage of time and/or intervening events); (d) the police relied in good faith on a defective search warrant; OR (e) it’s a violation of the Knock-and-Announce Rule (if the search was authorized by a valid search warrant). If an exception applies, the evidence MAY be used in a criminal prosecution against a defendant.
• In addition, there are limitations on the Exclusionary Rule as applied to Miranda violations.
o Limitation#1: Failure to give Miranda warnings DOES NOT require suppression of the physicalevidence found because of the statements (as long as the statements are voluntary).
o Limitation#2: Subsequent statements made after Miranda warnings are admissible, UNLESS a non-Mirandized previous statement was obtained through the use of inherently coercive police tactics offensive to due process.
o Limitation#3: Statements obtained in violation of a suspect’s Miranda rights are inadmissible in the Prosecution’s case-in-chief. BUT, they may be used to impeach a defendant on cross examination. However, such statements CANNOT be used to impeach the testimony of third-party witnesses.
Burden of Proof, Presumptions, & Sufficiency of Evidence (Crim Pro)
• The prosecution must prove every element of a crime beyond a reasonable doubt. The burden of proof
CANNOT be shifted to the defendant under the Due Process Clause. However, a state may impose that affirmative defenses be proved by the defendant (i.e. insanity or selfdefense).
• A jury instruction that creates a rebuttablepresumption for an element of the crime (one that may be disputed or overcome by additional evidence) violates Due Process Clause if it shifts the burden of proof to the defendant. A jury instruction that creates an irrebuttablepresumption for an element of the crime (one that cannot be disputed or overcome by additional evidence) is a per se violation of the Due Process Clause.
• After the prosecution closes its case in chief or after the close of all the evidence, the defendant may move for a Judgment of Acquittal. If the evidence is insufficient to sustain a conviction for a crime (when a reasonable jury would not find that each element was proven beyond a reasonable doubt), the court MUST enter Judgment of Acquittal.
