1. Lecture 25 Apr. 11, 2018

2. Baker v Gen Motors (US 1998)

3. some basic points

4. in general, injunctions and equitable decrees are subject to FF&C

5. also, no “roving public policy exception” to FF&C

6. substance and procedure in the recognition of judgments…

7. P sues D in Cal. , gets judgment D has no assets in Cal
P sues D in Cal., gets judgment D has no assets in Cal. D has house in Nev. P sues D on judgment in Nev., but under Nev. law houses cannot be used to satisfy judgments (in Cal. they can)

8. jurisdiction for suits on judgments

9. Matsushita Elec. Indus. Co. v. Epstein (US 1996)

10. assume no settlement and no class action

11. P sues D in state ct for state law fraud concerning securities
J for P (not settlement)
P then sues D in fed ct for fed securities law violations
what are arguments for preclusion?
what are arguments against preclusion?

12. If, under state law, federal action would be precluded
Marrese
If, under state law, federal action would not be precluded by state judgment
then the federal court may not preclude the action
If, under state law, federal action would be precluded
then the federal court must preclude the action
unless the federal statute giving the federal courts exclusive federal subject matter jurisdiction for the federal action impliedly repealed federal courts' obligations under section to give full faith and credit to state court judgments.

13. does it matter that this is a judgment pursuant to a settlement agreement?

14. P sues D in state court under state securities fraud there is a settlement agreement in which federal securities actions are included any problem?

15. does it matter that this was a class action?

16. Erie

17. constitutional duties of interpretive fidelity

18. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in federal court in NY concerning an accident in PA can it come to its own judgment about PA common law?

19. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in state court in NY concerning an accident in PA can it come to its own judgment about PA common law?

20. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in federal court in NY concerning an accident in PA now – the federal court must predict what the PA SCt would say

21. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in state court in NY concerning an accident in PA what does Sun Oil v. Wortman say about the duties of the NY state court?

22. constitutional limits on lawmaking power

23. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in state court in NY concerning an accident in PA can the NY court use NY common law on the standard of care?

24. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in federal court in NY concerning an accident in PA can the federal court use federal common law on the standard of care?

25. constitutional limits on applying procedural law

26. Tompkins (a PA domiciliary) sues Erie (a NY domiciliary) in NY state court concerning an accident in PA can NY use its own statute of limitations?

27. Tompkins sues Erie in federal court in NY concerning an accident in PA can it use its own federal common law limitations period?

28. Guaranty Trust v York (US 1945) New York actions in federal court in New York what limitations period should the court use – NY’s statute of limitations or the federal judge-created limitations of laches?

29. It is therefore immaterial whether statutes of limitation are characterized either as "substantive" or "procedural" in State court opinions in any use of those terms unrelated to the specific issue before us. Erie R. Co. v. Tompkins ... expressed a policy that touches vitally the proper distribution of judicial power between State and federal courts. In essence, the intent of that decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court.

30. outcome determinative

31. a Mississippi statute requires a corporation doing business within the state to designate an agent for the service of process before bringing suit whould this statute be used by a federal court in Mississippi entertaining Mississippi causes of action?

32. a New Jersey statute requires small shareholders bringing derivative actions to post a bond should this statute be used by a federal court in New Jersey for a derivative action under Delaware law?

33. Byrd v. Blue Ridge Elec. Coop
Byrd v. Blue Ridge Elec. Coop. (US 1958) a federal court in SC is entertaining SC tort actions there is a question of whether the plaintiff was a statutory employee subject to SC worker’s comp whether he was is decided by a judge in SC state court the federal approach would be to decide the matter by a jury

34. “First. It was decided in Erie R. Co. v
“First. It was decided in Erie R. Co. v. Tompkins that the federal courts in diversity cases must respect the definition of state-created rights and obligations by the state courts. We must, therefore, first examine the [state] rule … to determine whether it is bound up with these rights and obligations in such a way that its application in the federal court is required.”

35. when can a federal court use its power to create procedural common law to displace state substantive law in federal court?

36. when can a state court use its power to create procedural common law to displace sister state substantive law?

37. when is Congress use its power to create procedural law for federal courts to displace state substantive law?

38. “But cases following Erie have evinced a broader policy to the effect that the federal courts should conform as near as may be -- in the absence of other considerations -- to state rules even of form and mode where the state rules may bear substantially on the question whether the litigation would come out one way in the federal court and another way in the state court if the federal court failed to apply a particular local rule.”

39. P sues D in federal court in NY under PA law
P sues D in federal court in NY under PA law. PA’s statute of limitations is bound up with the PA cause of action a NY state court would use NY’s statute of limitations anyway what statute of limitations should the federal court use?

40. “But there are affirmative countervailing considerations at work here

41. P(NY) sues D(France) in federal court in LA concerning an accident in France LA as no forum non conveniens rule should the federal court use federal forum non conveniens law?

42. Hanna v. Plumer (US 1965) suit in fed ct in MA under MA law should MA’s service rule be used or can the ct use the FRCP governing service instead?

43. assume there is no FRCP governing the matter, but instead a federal common law rule

44. The [Erie] decision was also in part a reaction to the practice of 'forum-shopping' which had grown up in response to the rule of Swift v. Tyson. That the York test was an attempt to effectuate these policies is demonstrated by the fact that the opinion framed the inquiry in terms of 'substantial' variations between state and federal litigation. Not only are nonsubstantial, or trivial, variations not likely to raise the sort of equal protection problems which troubled the Court in Erie; they are also unlikely to influence the choice of a forum. The 'outcome-determination' test therefore cannot be read without reference to the twin aims of the Erie rule: discouragement of forum-shopping and avoidance of inequitable administration of the laws.

45. Are York, Woods, and Cohen still good law in the light of Hanna?

46. There is, however, a more fundamental flaw in respondent's syllogism: the incorrect assumption that the rule of Erie R. Co. v. Tompkins constitutes the appropriate test of the validity, and therefore the applicability, of a Federal Rule of Civil Procedure. The Erie rule has never been invoked to void a Federal Rule.

47. Congress is not limited by the twin aims so where do the twin aims come from?

48. what is Congress’s power to over the procedure of federal courts in diversity cases?

49. “[T]he constitutional provision for a federal court system (augmented by the Necessary and Proper Clause) carries with it congressional power to make rules governing the practice and pleading in those courts, which in turn includes a power to regulate matters which, though falling within the uncertain area between substance and procedure, are rationally capable of classification as either.”

50. could Congress pass a uniform limitations period for state law actions brought in federal court?

51. what limits has Congress put on FRCPs?

52. 28 U.S.C. § Rules of procedure and evidence; power to prescribe (a) The Supreme Court shall have the power to prescribe general rules of practice and procedure and rules of evidence for cases in the United States district courts (including proceedings before magistrate judges thereof) and courts of appeals. (b) Such rules shall not abridge, enlarge or modify any substantive right ’

53. “Under the cases construing the scope of the Enabling Act, Rule 4(d)(1) clearly passes muster. Prescribing the manner in which a defendant is to be notified that a suit has been instituted against him, it relates to the ‘practice and procedure of the district courts.’ ‘The test must be whether a rule really regulates procedure, - the judicial process for enforcing rights and duties recognized by substantive law and for justly administering remedy and redress for disregard or infraction of them.’ Sibbach v. Wilson & Co.”

54. Erie flow chart...

55. is the federal court sitting in diversity/alienage or is there a cause of action with supplemental jurisdiction? NO? - Example: P sues D in federal court in New York under federal securities law no Erie problem - no need to worry about state procedural law

56. is the federal court sitting in diversity/alienage or is there a cause of action with supplemental jurisdiction? YES

57. is the relevant federal procedural law mandated by the U. S
is the relevant federal procedural law mandated by the U.S. Constitution? E.g. 7th A if yes it applies

58. is the relevant federal procedural law a federal statute
is the relevant federal procedural law a federal statute? if yes it applies if it is arguably procedural it does not matter if it leads to forum shopping

59. really? Could Congress pass a 3-year statute of limitations for tort actions brought in federal court that displaced a 2-year statute of limitations that a state had bound up with its cause of action?

60. is the relevant federal procedural law a Fed. R. Civ. P
is the relevant federal procedural law a Fed. R. Civ. P.? if yes only questions are - is it arguably procedural and - does it abridge enlarge or modify substantive rights

61. is the relevant federal procedural law common law
is the relevant federal procedural law common law? - remember, includes cases in which the federal court simply doesn’t have anything on point, but doesn’t do what the forum state does

62. 1st is the state rule is bound up with the cause of action (Byrd) – if so, use state law examples? - statute of limitations folded into a statutory cause of action - burden of proof for contributory negligence

63. really? Could a state compel federal courts to limit the page length of briefs by folding up a rule into the cause of action...?

64. not bound up…?

65. look to twin aims of Erie - would having a federal common law rule different from the forum state’s rule lead to… - vertical forum shopping - inequitable administration of the laws?

66. forum shopping in general, not in the particular case

67. if no problem of forum shopping/ineq. admin
if no problem of forum shopping/ineq. admin., then use uniform federal common law rule example: federal common law rule concerning service

68. if there is a problem of forum shopping/ineq. admin
if there is a problem of forum shopping/ineq. admin., then use forum state rule - unless sufficiently strong countervailing federal interests in favor of the uniform federal common law rule

69. - Colorado passed a Certificate of Review Statute
- Colorado passed a Certificate of Review Statute - anyone suing a licensed professional for malpractice must provide, with the complaint filed, a certificate stating that an expert in the licensed professional’s area of practice has examined the claim and has determined that it has substantial justification.  - P (a citizen of New York) sues D (a citizen of Colorado) in the Federal District Court for the District of Colorado for medical malpractice under New York law.  - P’s suit concerns an operation that D performed upon P in New York City.  P does not file a Certificate of Review with her complaint.  In his answer, D asks that the action be dismissed for failure to file a Certificate of Review.  What result and why?

70. a federal court sitting in diversity in Del
a federal court sitting in diversity in Del. needs to determine whether Pa. or NY law applies can it use federal common law choice of law rules? NO – must use the choice of law rules of the forum state

71. Klaxon v. Stentor Mfg. Co. (US 1941)

72. Shady Grove Orthoped. Assoc. V. Allstate (U.S. 2010)

73. Allstate refused to pay NY statutory interest on late payment of claims - class action against Allstate for the interest

74. N. Y. Civ. Prac. Law Ann. §901 (no class actions for penalties or statutory minimum damages)

75. Rule 23(a) provides: “(a) Prerequisites
Rule 23(a) provides: “(a) Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if: “(1) the class is so numerous that joinder of all members is impracticable; “(2) there are questions of law or fact common to the class; “(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class; and “(4) the representative parties will fairly and adequately protect the interests of the class.” Subsection (b) says that “[a] class action may be maintained if Rule 23 (a) is satisfied and if” the suit falls into one of three described categories (irrelevant for present purposes).

76. Scalia (with Thomas, Roberts & Sotomayor)

77. Scalia: “The fundamental difficulty with …these arguments is that the substantive nature of New York’s law, or its substantive purpose, makes no difference. A Federal Rule of Procedure is not valid in some jurisdictions and invalid in others—or valid in some cases and invalid in others—depending upon whether its effect is to frustrate a state substantive law (or a state procedural law enacted for substantive purposes). That could not be clearer in Sibbach…”

78. Scalia: “In sum, it is not the substantive or procedural nature or purpose of the affected state law that matters, but the substantive or procedural nature of the Federal Rule. We have held since Sibbach , and reaffirmed repeatedly, that the validity of a Federal Rule depends entirely upon whether it regulates procedure. If it does, it is authorized by §2072 and is valid in all jurisdictions, with respect to all claims, regardless of its incidental effect upon state-created rights.”

79. Assume there is a new FRCP that determines who has the burden of proof for contributory negligence – is it valid?

80. Stevens

81. Stevens: The New York law at issue, N. Y. Civ. Prac. Law Ann
Stevens: The New York law at issue, N. Y. Civ. Prac. Law Ann. (CPLR) §901(b) (West 2006), is a procedural rule that is not part of New York’s substantive law. Accordingly, I agree with Justice Scalia that Federal Rule of Civil Procedure 23 must apply in this case and join Parts I and II–A of the Court’s opinion. But I also agree with Justice Ginsburg that there are some state procedural rules that federal courts must apply in diversity cases because they function as a part of the State’s definition of substantive rights and remedies.

82. Imagine that a class action for statutory penaties under Pennsylvania law had been brought in state court in New York. Would section 901 have applied?

83. Imagine that a class action for statutory penaties under New York law had been brought in state court in Pennsylvania. Would section 901 have applied?

84. “Justice Scalia believes that the sole Enabling Act question is whether the federal rule “really regulates procedure,”which means, apparently, whether it regulates “the manner and the means by which the litigants’ rights are enforced”…. I respectfully disagree. This interpretation of the Enabling Act is consonant with the Act’s first limitation to “general rules of practice and procedure,”§2072(a). But it ignores the second limitation that such rules also“not abridge, enlarge or modify any substantive right,” §2072(b) (emphasis added), and in so doing ignores the balance that Congress struck between uniform rules of federal procedure and respect for a State’s construction of its own rights and remedies. It also ignores the separation-of-powers presumption, and federalism presumption that counsel against judicially created rules displacing state substantive law.”

85. Ginsburg (with Kennedy, Breyer, & Alito)

86. Ginsburg: “The Court today approves Shady Grove’s attempt to transform a $500 case into a $5,000,000 award, although the State creating the right to recover has proscribed this alchemy. If Shady Grove had filed suit in New York state court, the 2% interest payment authorized by New York Ins. Law Ann. §5106(a) (West 2009) as a penalty for overdue benefits would, by Shady Grove’s own measure, amount to no more than $500.”

87. “In sum, both before and after Hanna , the above-described decisions show, federal courts have been cautioned by this Court to ‘interpre[t] the Federal Rules … with sensitivity to important state interests,’ and a will ‘to avoid conflict with important state regulatory policies.’ The Court veers away from that approach…in favor of a mechanical reading of Federal Rules, insensitive to state interests and productive of discord.”

88. Is the relevant federal procedural law a Fed. R. Civ. P
Is the relevant federal procedural law a Fed. R. Civ. P.? if yes only questions are - is it arguably procedural and - does it abridge enlarge or modify substantive rights (must consider state substantive policies)