1 Agenda for 24th Class Name plates out Fee Shifting Diversity Jurisdiction Introduction to Erie

2 Next Class 28 USC 1652, 2072 Yeazell , Questions to think about –P Q1b –P. 253 Q2. Does your answer depend on whether the plaintiff filed the complaint in federal court 1 minute before the statute of limitations expired? –Suppose West Dakota has a summary judgment practice different from the that which has governed in the federal courts since Celotex. In West Dakota, a defendant may not prevail by pointing out that plaintiff lacks evidence on an issue, but rather the defendant can only prevail on summary judgment by presenting undisputed evidence on every issue. If a diversity case is filed in federal district court in West Dakota, what standard should apply if the defendant files a motion for summary judgment? Is the answer and/or analysis different under Guaranty Trust than under Hanna? Optional. Glannon Chapters 10 and 11

3 Erie Doctrine So far have been exploring “what court” question Now moving on to “whose law.” –2 parts Federal or state law? –Erie question (Wednesday) If state law, which state law? –Choice of law (Friday) In diversity cases, what substantive law applies? –Before 1938, federal courts made own common law But applied state statutes –Erie (1938). Federal courts follow state common law In diversity cases, what procedural law applies? –Before 1938, state procedure There was no FRCP –FRCP promulgated in 1938 Sometimes difficult to know whether state or federal law applies –Statutes of limitations? Jury right? –Supreme Court says it’s not purely a question of procedural (fed) or substantive (state), but not clear what dividing line is

4 Economic Model of Settlement Factors encouraging settlement –Mutual pessimism –High litigation costs –Risk aversion –All lower plaintiff’s minimum acceptable offer and increases defendants maximum offer Factor discouraging settlement –Mutual optimism Raises plaintiff’s minimum and/or lowers defendants’ maximum offer –Hard bargaining Means that even if plaintiff’s min is lower than defendant’s max, parties may not reach a deal, because each is trying to hard to get terms favorable to it. Fee shifting problems

5 Diversity Jurisdiction I Federal subject matter jurisdiction if –Citizen of State A sues citizen of state B –AND “amount in controversy exceeds … $75,000” US citizen is citizen of US state in which “domiciled” –Domicile = residence with intent to remain indefinitely “indefinitely” means no plans to leave, even if don’t plan to stay permanently –Individuals do not lose domicile in one state until establish domicile somewhere else –Student who grew up in MA and went to school in IL and CA may still be citizen of MA, even if hasn’t lived there for 10 years, as long as never intended to remain indefinitely in IL or CA Corporations are citizens of two places –State of incorporation –State of principal place of business (corporate headquarters) (PPB) –Means LESS likely to get diversity jurisdiction If individual citizen of CA sues corporation incorporated in Delaware with PPB in CA, then no diversity jurisdiction Similarly, if individual citizen of Delaware sues…. Must, of course, still show personal jurisdiction

6 Diversity Jurisdiction II If no diversity, can, of course, still get federal jurisdiction through federal question Removal allowed if case could have been brought initially in federal court AND defendant is NOT from forum state –CA sues MA in MA court for $80,000, MA defendant cannot remove to federal court, even though CA plaintiff could have brought case in federal court Complete diversity rule –No plaintiff can be a citizen of the same state as any defendant –MA v CA & MA, no diversity jurisdiction –MA & CA v MA, no diversity jurisdiction –MA & CA v NV, diversity jurisdiction –AL & AK & CA & DE v AL & FL & KS & MO & NH & NM & OH NO diversity jurisdiction –Not constitutionally required Congress could change by statute Similar to status of well-pleaded complaint rule

7 Diversity Jurisdiction III Also diversity jurisdiction if –Suit between citizen of US and foreigner (citizen or subject of foreign state). 28 USC 1332(2) CA v. France; MA v Germany, etc. Called “alienage jurisdiction” Alien admitted to US for permanent residence deemed a citizen of the state in which domiciled –CA v French permanent resident domiciled in MA. Diversity –CA v French permanent resident domiciled in CA. No diversity Questions –German citizen v French citizen? –German (residing in Germany) v French permanent resident domiciled in CA?

8 Diversity Questions Pp. 209 Q1, 3b, 4, Suppose P is a citizen of Turkey, and D is a citizen of Egypt admitted to permanent residence in the US. P sues D in federal district court to collect a $100,000 debt. Is there federal jurisdiction? –Be sure to consider both 28 USC 1332(a) and the US Constitution, Article III, Section 2 –Does it matter if D is domiciled in MA