Quiz 4

Question 1

Dan, a lifelong resident of New York, went to New Orleans for a convention. One night, he tasted a local Cajun whiskey. Liking what he tasted, he bought a case of the whiskey to take back to New York. Upon his return to New York, Dan gave a bottle to his boss, Ben, a citizen of New York. After work that evening, Ben decided to try the whiskey and prepared himself a cocktail consisting of the Cajun whiskey and water. After three or four sips of his cocktail, Ben experienced a severe burning sensation in his throat and stomach. He called his doctor, who advised him to come to the hospital and bring the bottle of the whiskey with him. At the hospital it was determined that the bottle contained a high percentage of acid. Ben was treated accordingly. He survived, but had to have part of his stomach removed and will talk in a low raspy voice for the rest of his life.

Ben comes to you, an attorney in New York, and wants you to represent him in his personal injury action. He wants to sue for $1 million to pay for his medical expenses and be compensated for his pain and suffering and permanent physical impairments. You agree to represent him and immediately begin making certain investigations. You learn that the Cajun whiskey is a product distilled by the De-Lis Whiskey Company, a Louisiana corporation with its principal place of business in Louisiana. It distributes its products in Louisiana, Alabama, and Mississippi. You learn that about 45% of all sales of the Cajun whiskey are made to New York tourists who take the product back to their home state and 50% of its sales are made to New Yorkers who purchase the liquor through De-Lis’s highly interactive web site. Sales to New Yorkers account for in excess of $3 million annually. In addition, you learn that De-Lis Whiskey Company has $500,000 on deposit in a New York bank.

Assume that the legislature in every state in the country has passed the following statute:

The courts of this state shall have personal jurisdiction over an individual, corporation or other entity who, in person or through an agent: transacts business within the state; or commits a tortious act without the state causing injury within the state; or is personally served within the state; or owns property within the state.

If the plaintiff chose to file this action in a federal district court in New York, which long-arm statute would apply?

(A) Louisiana, because the defendant is a citizen of that state.

(B) New York, because the plaintiff is a citizen of that state.

(C) Louisiana, because that is where the tortious act occurred.

(D) New York, because it is the forum state.

Answer 1

D is the correct answer. Federal Rule of Civil Procedure 4(k)(1) provides that in the absence of a governing federal statute, the federal court applies the state long-arm statute of the forum state. Since this is a tort claim governed by state law, there is no applicable federal long-arm provision and so the forum’s long-arm statute applies. No other factor is relevant, which is why the other answers are incorrect.

Question 2

2. In a tort action filed in a federal district court in Alabama by an Alabama plaintiff against a citizen of California, the defendant refuses to waive service of process. The accident that gave rise to the lawsuit occurred in Mississippi. The plaintiff wants to serve the defendant while the defendant is on vacation in New York City. Which statute governs the sufficiency of service in this case?

(A) California law, because the defendant is a citizen of that state.

(B) Federal statute, because suit was brought in a federal court.

(C) New York law, because the defendant is being served there.

(D) Mississippi law, because the accident occurred in Mississippi.

Answer 2

C is the correct answer. Under Fed. R. Civ. P. 4(e)(1), in civil actions filed in federal court, service must be made either pursuant to governing federal law, the state statute of the forum state (Alabama) or the state in which service is effected, or the specific provisions of Rule 4(e)(2) of the Federal Rules of Civil Procedure. Since service is sought to be effected in New York, C is the correct answer.

Question 3

An Arkansas citizen brought a $100,000 tort action in Arkansas state court against a restaurant located in Alaska alleging that the plaintiff had developed food poisoning while eating in that restaurant because of the unhygienic conditions present in the kitchen. The defendant removed the case. Thereafter, the restaurant filed a motion with the federal trial judge requesting that the court dismiss the case for lack of personal jurisdiction over it. The plaintiff acknowledges that the applicable long-arm statute does not provide jurisdiction over this defendant. Should the court grant this motion?

(A)No, because by removing the case the defendant consented to that court’s exercise of personal jurisdictional over it.

(B)Yes, because the defendant is not subject to personal jurisdiction.

(C)No, because the claim meets all the requirements of diversity jurisdiction under U.S.C. §1332.

(D)Yes, because defendant is not a citizen of the forum state.

Answer 3

B is the correct answer. The defendant has not waived any defenses by removing the case to federal court and can still challenge the lack of personal jurisdiction under the long-arm statute.

Question 4

4.In a breach of contract action filed in federal district court by a Florida plaintiff against a Louisiana defendant, the defendant refuses to waive service. The plaintiff serves the attorney who had represented the defendant in his previous divorce, at her law office. Is this service proper under the Federal Rules of Civil Procedure?

(A)Yes, because she is the defendant’s attorney.

(B)No, because she was not authorized to receive service.

(C)No, because she was served at her office and not at the defendant’s home.

(D)No, because she does not live in the defendant’s home.

Answer 4

B is the correct answer. Under Fed. R. Civ. P. 4(e)(2)(C), service can be made upon an agent authorized by appointment to receive service of process. The issue here is whether the defendant’s attorney meets that test, i.e., whether the attorney was appointed for the purpose of receiving service of process.

Question 5

5.In an action filed in federal district court, the defendant refuses to waive service. The plaintiff serves the defendant by placing a copy of the summons and complaint in the hands of the defendant’s housekeeper while she is working in the defendant’s home. She forgets to turn it over to the defendant. Is this service proper under the Federal Rules of Civil Procedure?

(A)Yes, because the housekeeper is in the defendant’s home.

(B)No, because the defendant was not personally served.

(C)Yes, because the housekeeper is a person of suitable age and discretion.

(D)No, because the housekeeper does not reside in the defendant’s home.

Answer 5

D is the correct answer. Under Fed. R. Civ. P. 4(e)(2)(B), service is sufficient if it is delivered to the defendant’s dwelling house or usual place of abode with some person of suitable age and discretion who resides therein. Since the housekeeper does not live in the defendant’s home, this latter requirement has not been met. While some courts have said that this defect can be cured by the fact that the defendant actually receives the notice, this defendant did not receive the process.

Question 6

6.The defendant/purchaser, a Vermont citizen, bought a television from the plaintiff/retailer, an Illinois corporation. The written sales agreement provides that the purchaser designated the company president’s secretary to receive service of process for the purchaser in any action brought by the retailer under the terms of this agreement. When the purchaser failed to make a payment, the retailer sued him for breach of contract in federal district court and served the company president’s secretary. The secretary, who was unknown to the defendant, mailed a copy of the service to the defendant’s home and the defendant received it. Is this service proper under the Federal Rules of Civil Procedure?

(A)Yes, because the defendant agreed to it by signing the contract and received the process.

(B)No, because this is a form contract and the service provision was in small type.

(C)No, because the secretary was unknown to the defendant and was the plaintiff’s employee.

(D)Yes, because the secretary was paid for being a recipient of service.

Answer 6

A is the correct answer. Under Fed. R. Civ. P. 4(e)(2)(C), service can be made upon an agent authorized by appointment to receive service of process. The Supreme Court held that a service provision in a form contract can constitute an effective appointment of an agent for service of process even if the recipient is unknown to the defendant. The only requirement of the job is to transfer service to the defendant and if that job is fulfilled, the Court ruled, the service is effective. That occurred here and so the service is proper under Rule 4(e)(2)(C).

Question 7

7. The plaintiff and defendant assert ownership to the same home located in California. The plaintiff is a California citizen and the defendant, the plaintiff’s former best friend, is a citizen of West Virginia. Plaintiff knows defendant’s home address in West Virginia. The plaintiff files suit in federal court in California and the defendant refuses to waive service. The plaintiff obtains a court order seizing the property and serves the defendant by publication in a Los Angeles publication. The defendant, who stopped corresponding with the plaintiff one week before suit was brought, files a motion to dismiss for insufficient service. Should the court grant the defense motion?

(A) No, because the property was seized.

(B) No, because service was effected by publication.

(C) Yes, because the plaintiff knew the defendant’s location and could have mailed service to the defendant’s home address.

(D) Yes, because this is an in personam proceeding.

Answer 7

C is the correct answer. The due process requirements of the Fourteenth Amendment must be applied to determine the constitutional sufficiency of notice regardless of whether the proceeding is deemed to be in personam, in rem, or quasi in rem. Thus, although this is an in rem case, mere seizure plus publication is not constitutionally sufficient under these circumstances. The constitutional requirement for notice is that notice which is reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action. Since the defendant’s whereabouts were known to the plaintiff, the ruling in Mullane would require more than publication—the plaintiff would have to mail service to the defendant’s known home address.

Question 8

8. Erica, a resident of New York City, was vacationing in California when the taxi she was riding in collided with an automobile owned by Dave, a resident of San Francisco, California, and driven by Chris, a resident of Los Angeles, California. Erica brought a tort action seeking $300,000 in damages against both Dave and Chris in the federal district court for the Central District of California, which is located in Los Angeles. San Francisco is located within the Northern District of California. Does venue lie in the chosen forum?

(A)Yes, because the plaintiff chose this forum.

(B)No, because the plaintiff is a resident of New York City.

(C)Yes, because Chris resides there.

(D)No, because Dave resides in San Francisco, which is located in the Northern District of California.

Answer 8

Answer C is correct. Venue in diversity cases is governed by 28 U.S.C. §1391(a). Under §1391(b)(1) venue will lie in a federal judicial district in which any defendant resides as long as all defendants reside in the same state. Although the two defendants reside in different federal judicial districts (the Northern and Central Districts of California), they both reside in the State of California. Therefore, under § 1391(b)(1), venue would lie in either the Central (Los Angeles) or Northern (San Francisco) District.

Question 9

11.Jill went on a vacation to Paris, France, with her best friend, Sandy. Sandy is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Paris, Jill and Sandy rented motorcycles and during their ride, Sandy’s motorcycle ran into Jill’s motorcycle while Jill was on it. Jill returned home and filed a civil action in federal court in Chicago asserting $200,000 tort claims against Sandy and Moto, the motorcycle rental company in Paris. Does venue lie in the chosen forum?

(A)Yes, because Sandy resides there and Moto is a French company.

(B)No, because Moto is a French company.

(C)Yes, because Jill used to live in Chicago.

(D)No, because the accident occurred in Paris.

Answer 9

A is the correct answer. Subject matter jurisdiction is predicated on §1332(a)(1) (as to the claim against Sandy) and §1332(a)(2) (as to the claim against Moto). So the governing venue statute is §1391(b)(1), which provides for venue in the district where the defendant resides. Since Sandy resides in Chicago, venue is clearly appropriate as to the claim against her. Moto is a foreign company. But §1391(c)(3) expressly allows that a defendant not residing in the United States may be sued in any judicial district, and that joinder of such defendant shall be disregarded in determining where the action may be brought with respect to other defendants.

Question 10

9.Jill went on a vacation to Europe with her two best friends, Lenny and Patty. Lenny is a resident of New York City, New York, and Patty is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Paris, Lenny and Patty rented motorcycles and during their ride, they ran over Jill. Jill returned home and filed a civil action in federal court in Philadelphia asserting $200,000 tort claims against both Lenny and Patty. Neither Lenny nor Patty has ever been to Pennsylvania nor have either of them had any contact with the state. Does venue lie in the chosen forum?

(A)No, because neither defendant resides there and the accident occurred in Paris.

(B)Yes, because there is no other district in which venue would lie.

(C)No, because New York law would govern the merits of the case.

(D)Yes, because Jill is a resident of Philadelphia.

Answer 10

A is the correct answer. Venue in diversity cases is governed by 28 U.S.C. §1391. Venue is proper under this statute in a district in which any defendant resides if they all reside in the same state, a district in which a substantial part of the events giving rise to the claim occurred, or a district in which any defendant is subject to personal jurisdiction if there is no other district in the United States that would qualify under either of the first two tests. Neither of the defendants (NY, IL) resides in the chosen district (PA) and the events giving rise to the claim did not occur within that district (Paris, France). Can we then rely on the personal jurisdiction-based fall-back position? Only if there is no other federal district in which venue would lie under either of the first two tests. Since there is no district in the United States in which both defendants reside and there is no district in the United States where the events giving rise to the claim occurred, then the fall-back provision comes into play. However, Pennsylvania is not a suitable venue under the fall-back provision for venue as neither have been to Pennsylvania and neither have sufficient contacts in that forum in order to be subject to personal jurisdiction in PA.

Question 11

10. Jill went on a vacation to Hawaii with her best friend, Patty. Patty is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Hawaii, Jill and Patty rented motorcycles and during their ride, Patty’s motorcycle ran into Jill’s motorcycle while Jill was on it. Jill returned home and filed a civil action in federal court in Philadelphia asserting $200,000 tort claims against Patty and Bikes, Inc., the Hawaii rental company that is incorporated under the laws of Delaware. Patty has never been to Pennsylvania and never had any contact with the state. Although Bikes, Inc. operates a highly interactive web site, no one in Pennsylvania has ever visited that site or purchased any products from the company. Does venue lie in the chosen forum?

(A)Yes, because Jill is a resident of Philadelphia.

(B)Yes, because Bikes, Inc. is subject to personal jurisdiction in Pennsylvania.

(C)No, neither of the defendants resides there and the accident occurred in Hawaii.

(D)No, because Patty is not subject to personal jurisdiction in Pennsylvania.

Answer 11

C is the correct answer. This case involves two defendants—one natural person and one corporation. Since residence is the relevant concept for venue purposes, we need to know the definition of residence for a corporate defendant. Under the terms of §1391(c)(2), a corporate defendant resides in any federal judicial district in which the corporation is subject to personal jurisdiction. And in multi-district states, the corporation is deemed to reside in any district in that state within which its contacts would be sufficient to subject it to personal jurisdiction if that district were considered to be a separate state. Here, defendant Patty is a resident of the Northern District of Illinois (Chicago). The defendant rental company clearly resides in Hawaii and is also subject to personal jurisdiction in the state under whose laws it is incorporated—Delaware. But it does not have any contact with Pennsylvania that would justify determining that it would be subject to personal jurisdiction in any part of Pennsylvania. Consequently, Bikes, Inc. does not reside in the Eastern District of Pennsylvania (Philadelphia). Therefore, we now have two defendants, each of whom resides in different states. Thus, residence of defendants is not useful for venue purposes. The events occurred in Hawaii so that will not support jurisdiction in the Eastern District of Pennsylvania (Philadelphia). And since the events occurred in Hawaii, venue would not lie in Philadelphia under §1391(b)(2). We cannot even consider the fall-back provision of (b)(3) since venue is available elsewhere under subsections (1) or (2), here in Hawaii.

Question 12

12.Mandy, a resident of New York City, was vacationing in California when the taxi she was riding in collided with an automobile owned by Charles, a resident of San Francisco and driven by Mike, a resident of Los Angeles. Mandy brought a tort action seeking $300,000 in damages against both Charles and Mike in the federal district court for the Southern District of New York, which is located in New York City. Does venue lie in the chosen forum?

(A)Yes, because the plaintiff chose this forum.

(B)No, because the plaintiff’s residence is irrelevant for venue purposes and because the accident occurred and the defendants reside in California.

(C)Yes, because the defendants are subject to personal jurisdiction in New York.

(D)No, because New York law would govern the resolution of this case.

Answer 12

Rationale:B is the correct answer. Venue in diversity cases is governed by 28 U.S.C. §1391. Proper venue here lies in the district in which any defendant resides if they all reside in the same state under §1391(b)(1), a district in which a substantial part of the events giving rise to the claim occurred under §1391(b)(2), or a district in which any defendant is subject to personal jurisdiction if there is no other district in the United States that would qualify under subsections (1) or (2) under §1391(b)(3). None of the defendants resides in New York so defendant residence under §1391(b)(1) does not provide venue. The events giving rise to the claim occurred in California, not New York, so that does not provide venue in New York under §1391(b)(2). Even if the defendants would be subject to personal jurisdiction in New York, that is not a basis for venue because that fall-back provision is only available if there is no other district in the United States that would meet either of the prior two tests. In other words, since venue options are available in judicial districts in California, Mandy cannot use §1391(b)(3) to obtain venue in New York.

Question 13

13. Sam is injured in a crash between his car and another car and a truck on a narrow country road in Concord, New Hampshire. Sam is a citizen of New Hampshire. The driver of the other car, Karen, is a citizen of Maine, and the owner of the truck, Mac Truck, is incorporated under the laws of Delaware and has its principal place of business in Connecticut. Sam files an action in the federal court for the District of New Hampshire seeking damages of $250,000 against each of the two named defendants, Karen and Mac Truck. In the same suit, Karen files a claim against Mac Truck seeking over $75,000 in damages for the damage to her car. Mac Truck files a tort claim against Sam seeking over $70,000 in damages for the damages to its truck. Mac Truck also files a claim against Ben, a citizen of Connecticut who was driving its truck at the time of the accident, seeking indemnity from any loss it might suffer in connection with Sam’s claim against it.

Does venue lie over Sam’s claim against Karen?

(A) Yes, because the parties are diverse.

(B)Yes, because Sam resides in New Hampshire.

(C)No, because none of the defendants reside in New Hampshire.

(D)Yes, because the accident occurred in New Hampshire.

Answer 13

D is the correct answer. Since original jurisdiction was founded solely on diversity in this civil action, the relevant venue provision is §1391(b). Under §1391(b)(2), venue will lie in the district where a substantial part of the events that gave rise to the claim occurred. Since the accident occurred in the chosen venue, venue lies there.

Question 14

14.A California plaintiff brought a $250,000 breach of contract action against an Arizona citizen in federal court in Phoenix, Arizona. The complaint alleges that the defendant agreed to purchase $250,000 of merchandise from the defendant’s store, shipped the merchandise to his home in Phoenix, and then refused to pay the invoice. The defendant moved to have the case transferred to the federal district court in Santa Fe, New Mexico. In his motion to transfer, the defendant declared that although he had no contacts with the state of New Mexico, he would waive any objections to personal jurisdiction and venue in that state. Should the court grant the motion to transfer?

(A)Yes, because the defendant has waived his objections to personal jurisdiction and venue.

(B)No, because the plaintiff would be subject to personal jurisdiction in New Mexico.

(C)No, because New Mexico is not a district where this action might have been brought by the plaintiff.

(D)Yes, because the plaintiff has no objection to the transfer.

Answer 14

Dvv said the below is wrong because statute was amended and only allows transfer if it could originally be heard in that court

Rationale:A is the correct answer. In this problem, the defendant seeks to transfer the case to a district that would not have personal jurisdiction over him. Pursuant to the recent amendment to the venue statute, a case can be transferred to a district where the action could not have been brought initially, since the defendant is willing to consent to the exercise of jurisdiction for the purposes of effecting a transfer. Since the defendant is willing to consent to personal jurisdiction for purposes of transfer, the presumption is that it would have been willing to consent to the exercise of jurisdiction by that court if the plaintiff had initially chosen that forum. See 28 U.S.C. §1404.

Question 15

15.A New York-incorporated and -based company brought a tort claim seeking $1 million in damages against a rival company based in Chicago, Illinois, and incorporated under the laws of Delaware. After being advised by its attorney that Texas law would be most hospitable to this claim, the plaintiff filed this action in a federal court in Dallas, Texas. None of the events that gave rise to this action were connected to Texas. Assume the defendant is subject to personal jurisdiction in Texas. The plaintiff subsequently moved to transfer the case to the district court in Chicago. Should the court grant this motion?

(A)No, because plaintiffs cannot transfer cases under §1404.

(B)Yes, because the action could have been brought in Chicago.

(C)No, because this would allow the plaintiff to go forum shopping for the most advantageous law.

(D)Yes, because the federal judges in Illinois can determine the content of Texas law.

Answer 15

Rationale: B is the correct answer. The only question is whether Chicago, the transferee court, is a district in which the action might have been brought, i.e., was the defendant subject to personal jurisdiction there and does venue lie there. Clearly the answer to that is yes since the defendant resides there. Thus, the motion to transfer should be granted.

Question 16

16. A Texas citizen was given a two-year contract by a Middle Eastern oil company to work in one of its plants in that country. After six months, the plaintiff was fired. She returned to the United States and filed a claim in federal court in Dallas, Texas, against the company alleging that she was terminated on the basis of her sex in violation of Title VII of the federal Civil Rights Act of 1964. The defendant moved to dismiss the action on the ground that although it admitted that it was subject to personal jurisdiction in Texas because of its past business dealings there (including recruiting the plaintiff from Texas), maintaining the suit there would result in extreme inconvenience to it since all the alleged acts of discrimination occurred in the Middle East, all the witnesses to the events in question were there, and defending in the United States would be extremely inconvenient. The plaintiff opposed the defense motion on the ground that the foreign court would apply foreign law to this dispute and that under that law, she would have to establish malicious conduct beyond a reasonable doubt, whereas under Title VII, she would only have to prove negligent conduct by a preponderance of the evidence. Should the court dismiss the case?

(A) Yes, under the doctrine of forum non conveniens

(B) No, because the foreign law is so hostile to the plaintiff’s claim.

(C) Yes, because the defendant is a foreign company.

(D) No, because the plaintiff is an American citizen.

Answer 16

A is the correct answer. In Piper Aircraft v. Reyno, an airplane crashed off the coast of Scotland. The plane was manufactured in Pennsylvania while the propellers were manufactured in Ohio. A suit was filed in California on behalf of the deceased. The California case was removed to federal district court and the case was transferred to the federal district court in Pennsylvania. Upon motion, the Pennsylvania court dismissed the action under the doctrine of forum non conveniens. While the Third Circuit reversed, the Supreme Court dismissed under the doctrine of forum non conveniens. The defendant here is relying on the doctrine of forum non conveniens as the basis for dismissing an action over which the court clearly has subject matter jurisdiction, in which venue lies, and with respect to a defendant over which it clearly has personal jurisdiction. Courts will grant this motion upon a showing not only that the chosen forum is extremely inconvenient but that a distinctly more convenient forum exists in which the court would have subject matter jurisdiction, venue, and personal jurisdiction. Assuming the court finds the chosen forum to be manifestly and significantly inconvenient, it will grant the motion in light of the availability of this alternative, more convenient forum.

Question 17

17. A Texas citizen was given a two-year contract by a Middle Eastern oil company to work in one of its plants in that country. After six months, the plaintiff was fired. She returned to the United States and filed a claim in federal court in Dallas alleging that she was terminated on the basis of her sex in violation of Title VII of the federal Civil Rights Act of 1964. The defendant moved to dismiss the action on the ground that although it was subject to personal jurisdiction in Texas because of its past business dealings there (including recruiting the plaintiff from Texas), maintaining the suit there would result in extreme inconvenience to it since all the alleged acts of discrimination occurred in the middle eastern country, all the witnesses to the events in question were there, and defending in the United States would be extremely inconvenient. The plaintiff opposed the defense motion on the ground that a Middle Eastern court would apply foreign law to this dispute and that law does not prohibit discrimination on the basis of sex. Should the court dismiss the case?

(A) Yes, under the doctrine of forum non conveniens

(B) No, because under these circumstances dismissal would not further the interests of justice.

(C) Yes, because the defendant is a foreign company.

(D) No, because the plaintiff is an American citizen.

Answer 17

B is the correct answer. In Piper Aircraft v. Reyno, the Supreme Court indicated that, in determining whether an alternative forum exists, if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the unfavorable change in law may be given substantial weight and the district court may conclude that dismissal would not be in the interests of justice. But the Court also stated that this standard is not met merely when the remedy provided by the alternate forum is either more difficult to obtain or not as lavish as that provided by the law that would be applied by the initially chosen forum. On the other hand, in this problem, the plaintiff would be completely divested of a right of action under Middle Eastern law and this would result in no remedy at all. Consequently, the court would deny the motion to dismiss on forum non conveniens ground because even if the chosen Texas forum is manifestly and grossly inconvenient, under these circumstances, dismissal is not in the interests of justice.

Question 18

18. A Texas plaintiff files a federal question claim against a Nevada defendant in federal district court in Houston, Texas. The events that gave rise to that action occurred exclusively in Nevada. The defendant has no contacts of any kind with Texas and so he moves to transfer the case under §1404 to the federal district court in Reno, Nevada. Nevada has one federal judicial district. Should the court grant the motion?

(A) No, because the Texas court does not have personal jurisdiction over the defendant.

(B)Yes, because the action could have been brought in Reno and transfer there is in the interests of justice.

(C)No, because venue does not lie in Houston.

(D)Yes, because the Texas court lacks subject matter jurisdiction over the claim.

Answer 18

B is the correct answer. The crucial factor in this problem is that the transferor court in Houston does not have personal jurisdiction over the defendant. So we must determine whether this defect is fatal to the court’s ability to transfer. In Goldlawr v. Heiman, the Court ruled that a court in which venue was improperly laid could still transfer a case under §1406 even if it also lacked personal jurisdiction over the defendant. The Court also stated that this result would promote the congressional objective of removing obstacles that might “impede an expeditious and orderly adjudication of cases and controversies.” In the instant hypothetical, the transferor court does not have venue since the Nevada defendant does not reside in that Texas district and the facts giving rise to the claim did not occur in Texas, but in Nevada. Additionally, the facts indicate that the Nevada defendant would not be subject to the personal jurisdiction of the Texas court. But under Goldlawr, the Texas court can cure both of these defects by transferring the case under §1406 to a district in which it “could have been brought.” Clearly, as both venue and personal jurisdiction would be available in the transferee court in Nevada, the interests of justice will be served by transferring the case there. The defendant here sought to transfer the case to Nevada under §1404. Nevertheless, to avoid unjust dismissals, the courts extend the rationale of Goldlawr to §1404-based transfers. Thus, since the action could have been brought by the plaintiff in Nevada since venue would lie there and the defendant is subject to personal jurisdiction there, the court should grant the motion.

Question 19

19.A former employee brought a defamation suit against a company he had worked for, alleging that the company had given a false negative reference to his prospective employer. The former employee sued in federal district court, invoking diversity jurisdiction. In the state where the federal court sits, the state common law of defamation requires a plaintiff to prove that the defamatory statement was false. Federal district courts within the state have questioned this element in dicta, on the ground that it is better policy for a defendant to have to substantiate the truth of the statement it made. If the federal court hearing the former employee’s case decides to take the next step and requires the employer to prove the statement was true as an affirmative defense, rather than as an element of the former employee’s claim, would it violate the Erie doctrine?

(A)No, because federal courts have the discretion to alter the elements of a cause of action in a diversity suit based on policy grounds.

(B)No, because federal courts are entitled to create a federal common law of defamation.

(C)Yes, because requiring the plaintiff to prove falsity is superior as a policy matter to requiring the defendant to prove truth.

(D)Yes, because the elements of a state common law claim is a state “law” to which a federal court must defer.

Answer 19

Rationale: D is correct. The elements of a state-created common law cause of action—here, the state’s defamation law—are “laws” to which federal courts sitting in diversity must defer. Erie Railroad v. Tompkins made this clear when it held that the Rules of Decision Act required federal courts to defer to Pennsylvania’s legal standard for trespasser negligence rather the conflicting federal common law standard. Both Erie and this fact pattern concern the state’s power to craft the requirements of its own substantive law. A is incorrect because it cuts directly against Erie—federal courts can’t discard a state substantive law whose policy they disagree with. B is incorrect because the constitution does not grant federal courts this power; under the Erie doctrine, it is reserved for the states. C is incorrect because the state law’s policy wisdom is irrelevant when the law at issue is clearly substantive and requires deference, as it does here.

Question 20

20. An out-of-state citizen sued a police department in a federal diversity case, alleging negligent retention of an officer who had used excessive force against him. Even though discovery established this claim with undisputed evidence, the department refused to settle. Ultimately, the court granted the citizen summary judgment, reasoning he had established all elements of his claim as a matter of law. The court then awarded the citizen attorneys’ fees on the ground that the department had defended the claim in bad faith. Under a 1973 U.S. Supreme Court decision, federal courts have inherent equitable power to award attorneys’ fees for “bad faith” litigation conduct even if no fee-shifting statute applies. The rationale is that the policies supporting the American rule, where each party pays its own attorneys’ fees, don’t apply to parties acting in bad faith, who need to be deterred and punished for such conduct. By contrast, courts in the state where the federal court sits never award attorneys’ fees without a fee-shifting statute. If the attorneys’ fees award is challenged on appeal, how should the appellate court rule?

(A) The appellate court should uphold the award, because the federal rule authorizing attorneys’ fees for bad faith litigation conduct is procedural in nature.
(B)The appellate court should reverse the award and defer to the state practice of requiring a fee-shifting statute to award attorneys’ fees, because this is a matter of substantive law.
(C)The appellate court should uphold the award, because federal power over attorneys’ fees is absolute.
(D)The appellate court should reverse the award, because the federal rule is unfair.

Answer 20

Rationale: A is correct. Under the Erie doctrine, when state and federal law conflict in a diversity case and there is no Federal Rule of Civil Procedure on point, the court must analyze whether the state practice is substantive (bound up with state-created rights and obligations) or procedural (a matter of forum and mode). If it is substantive, the state practice must prevail. If it is procedural, the analysis of which practice—federal or state—must be observed turns on the degree of outcome determination if both practices were to remain in place. Here, the issue of attorneys’ fees is not substantive. It’s not appended to any cause of action or other state-created right or obligation. As a matter of form and mode, it’s unlikely that maintaining the federal approach alongside the state’s conflicting practice would be outcome determinative in the Erie “twin aims” sense. Few would choose a forum based on anticipating their own or their opponents’ bad faith conduct. Even if this would result in some degree of litigant inequality—out-of-state litigants would be able to recover fees where in-state litigants would not—it is not of the extreme kind. B is incorrect because, as explained, the attorneys’ fees issue is not substantive. C is incorrect because federal power in this area is not absolute; the Erie doctrine requires a balancing test. D is incorrect because the pure fairness of competing state and federal rules is not what drives the Erie analysis.