1. 1 Agenda for 12th Class Admin – Name plates – Slide handouts – Court visits A-E. M 10/20. Starting at 10AM – Please clear your calendar 9AM-2PM F-J. M 10/20. 1-4PM. – Please clear your calendar noon-6PM – Probably done and back to USC by 4 or 5 More details later Review of German Procedure 1995 Exam Intro to 2 nd half of class Joinder Intro to Class Actions

2. 2 Class Actions Assignment FRCP 23 Yeazell 859-61, 877-93 Questions to think about / Writing assignments – Pp. 881ff. Qs 1, 2 – Summarize Walmart – Why do you think the plaintiffs brought the case as a 23(b)(2) class action rather than a 26(b)(3) class action? – What do you think the plaintiffs lawyers in Walmart should have done after the Supreme Court decision in Walmart? – Enrom manipulated the price of its stock by failing to disclose information that would cause share prices to fall. Would a class action alleging violation of federal securities law against Enrom on behalf of all shareholders who purchased stock during the period when the information was being withheld be appropriate? – RhinePool supplied blood to hemophiliacs, but failed to screen adequately for AIDS. As a result, many hemophiliacs in dozens of states got AIDS and some died. Would a product liability class action against RhinePool on behalf of all hemophiliacs who contracted AIDS as a result of contaminated blood produced by RhinePool be appropriate?

3. Review of German Civil Procedure – Judicial control of fact finding Judge questions witnesses Judge selects experts judge decides sequence – Career judiciary – De novo appellate review But based on trial judge’s summary of evidence – Possibly cheaper and more accurate – Depends on adequate supply and quality of judges 3

4. 1995 Exam 4

5. Introduction to Second Half of Class – First half of class -- Stages of simple lawsuit Service of process, pleading, discovery, trial, post-trial motions, appeals SJ, settlement, ADR – 2 nd half of course Complex litigation – Multiples parties and claims -- Joinder, class actions – Multiple suits– Collateral Estoppel & Res Judicata What court? – Subject matter jurisdiction » Federal or state court? – Personal jurisdiction » If state court, which state’s court? » If federal court, federal court in which state? – Venue – what district within a state? What law? – Choice of Law » If applying state law, which state’s law? – Erie » When apply state law in federal court in diversity case? 5

6. 6 Joinder Rules start from assumption that suits may involve a single plaintiff suing a single defendant on a single claim – Multiple parties and claims are allowed ONLY if explicitly permitted by a rule Proper joinder does NOT mean case properly in court, still need: – Personal jurisdiction – Subject matter jurisdiction – Venue Note that joinder expands possible pleadings. FRCP 7 – 3 rd party complaint – Answer to counter claim – Answer to cross-claim – Answer to 3 rd party complaint

7. Joinder of Claims Joinder of claims always allowed. FRCP 18(a) – But judge can, in discretion, always sever. Joinder is compulsory, if arises out of same transaction or occurrence – Not in FRCP, but part of res judicata – If related claim is brought in later action, defendant can have the case dismissed by raising the defense of res judicata PlaintiffDefendant Claim 1 Claim 2

8. 8 Counterclaims (FRCP 13(a) &(b)) Counterclaims are always allowed. FRCP 13(a) and (b) Counterclaims are “compulsory” if they arise out of the same “transaction or occurrence” as the original claim. FRCP 13(a) – If compulsory counterclaim is not asserted, cannot be asserted in separate suit Original plaintiff Original defendant Original Claim Counterclaim

9. Joinder of Parties Joinder of parties allowed, if claims arise out of the same transaction or occurrence AND there is a question of law or fact in common. FRCP 20 FRCP19 addresses compulsory joinder of “necessary parties,” but not part of this course Plaintiff Defendant 1 Defendant 2 Claim 1 Claim 2 Plaintiff 1 Defendant Plaintiff 2 Claim 1 Claim 2

10. Crossclaims Crossclaims are allowed only if they arise out of the same transaction or occurrence as the original action. FRCP 13(g) Crossclaimant can join unrelated claim(s). FRCP 18(a) Original plaintiff Defendant 1 Defendant 2 Original claim 1 Original claim 2 Crossclaim

11. 3 rd Party Claims 3 rd party claims allowed only if 3 rd party plaintiff claims that 3 rd party defendant is liable to 3 rd party plaintiff for some or all of liability that original defendant may owe to original plaintiff. FRCP 14(a)(1) – Indemnity – Contract in which one party (e.g. parts supplier) agrees to reimburse another party (e.g. final manufacturer) for liaiblity (e.g. liability final manufacturer may incur to consumer) – Contribution – Part of tort law which allows jointly liable defendants to sue one another to apportion liability Different from cross-claim, because 3 rd party defendant wasn’t sued by original plaintiff Original plaintiff Original Defendant 3 rd party plaintiff 3 rd party defendant Original claim 3 rd party claim

12. 3 rd Party Claims (cont.) 3 rd party plaintiff may join any claims it has against the 3 rd party defendant. FRCP 18(a) 3 rd party defendant can assert any counterclaim against 3 rd party plaintiff. 14(a)(2)(B) 3 rd party defendant can assert claim against original plaintiff, if it arises out of the same transaction or occurrence as the plaintiff’s claim against third-party plaintiff. 14(a)(2)(D) Plaintiff may assert claims against 3 rd party defendant that arise out of the same transaction or occurrence as the original claim – Then 3 rd party defendant may then assert any counterclaims. FRCP 14(a)(3) Including permissive counterclaims, not part of same transaction or occ. Original plaintiff Original Defendant 3 rd party plaintiff 3 rd party defendant Original claim 3 rd party claim

13. Joinder Questions – Pp. 816 Q5 – Briefly summarize Price – Pp. 818ff. Qs 1-2 13

14. 14 Class Actions I Class Action is super joinder device – Way of joining lots of plaintiffs (or defendants) – Single lawyer represents all – Consent from each plaintiff not required – “Class representative” is “named plaintiff” Usually chosen by class lawyer Advantages – Low cost as compared to lots of individual suits – Allows case to be brought where each plaintiff has stake that is too small to justify individual suit But where, in aggregate, significant wrong has been done Disadvantages – Class lawyer does not always act in interest of class May be more interested in fees for self than in relief for class – Large magnitude of potential liability may “coerce” defendants into settling weak claims

15. 15 Class Actions II Class actions must be “certified” – Plaintiff’s lawyer first brings regular (non-class-action) case on behalf of named plaintiff(s) – Plaintiff’s lawyer then petitions judge to certify class Prerequisites for class action – 1. Numerosity. Class is so large that joinder (under Rule 20) is not practical. 23(a)(1) – 2. Commonality. There are questions of law or fact common to all class members. 23(a)(2) – 3. Typicality. The class representative(s) have claims which are typical. 23(a)(3) – 4. Adequacy. The class representative(s) can adequately represent class. 23(a)(4) Technically about parties. In reality, about class lawyers. Also, no conflicts of interest. – 5. Case must fit into one of 23(b) categories See next page

16. 16 Class Actions III 23(b) categories – (b)(3). Primarily for money damages E.g. mass tort Common issues must “predominate” Class action must be “superior to other available methods for fairly and efficiently adjudicating the controversy” – (b)(2). Injunctive or declaratory relief appropriate for whole class E.g. desegregation, prison conditions – (b)(1). Risk of inconsistent litigation E.g. limited fund or conflicting injunctions Not very common Interlocutory appeal of certification decision. 23(f) – Grant or denial – Discretionary with court of appeals

17. 17 Class Actions IV Notice and Opt-Out. 23(c)(2) – Only (b)(3) requires “best notice that is practical under the circumstances” – Only (b)(3) requires the class members be given the opportunity to “opt out” Settlement with court approval only. 23(e)