American Civil Litigation and Dispute Resolution

1. American Civil Litigationand Dispute Resolution University of Insubria, Como, Italy Jeffrey W. Stempel William S. Boyd School of Law University of Nevada, Las Vegas

2. Segment 1 The U.S. Court System Overview of a Lawsuit Jurisdiction and Venue

3. Three Branches of Government • The Courts (state and federal) • The Legislature (state and federal—Congress) • The Executive (The President and Administrative Agencies; in states – the Governors and Administrative Agencies)

5. The United States’ Federal Court of Appeals

6. Amy E. Sloan, Basic Legal Research: Tools and Strategies 7 (4th ed. 2009).

7. Amy E. Sloan, Basic Legal Research: Tools and Strategies 7 (4th ed. 2009).

8. Amy E. Sloan, Basic Legal Research: Tools and Strategies 201 (4th ed. 2009).

9. Lexis-Nexis Congressional Universe, How Does a Bill Become Law?

10. The Sources of U.S. Law • Common Law System • Federal and state Case Precedent • But Many State and National Statutes • Common law vs. Code law? • Statutes vs. Codification • Substantive Law • Affects rights and duties • Procedure • Governs manner of enforcing rights/duties

11. American Federalism and Its Impact on Civil Litigation • State law dominates in spite of growth of federal (national) government during 20th Century • State courts have “general” jurisdiction • Federal courts have “limited” jurisdiction • Need Specific Authority to sue in federal court • Federal Courts must have “subject matter” jurisdiction over the topic of the dispute • All courts must have “personal” jurisdiction over the parties to the lawsuit • Usual focus is on the defendant; Plaintiff has consented to personal jurisdiction by filing suit in the forum state

12. American Federalism and Its Impact on Civil Litigation -- II • Concurrent Jurisdiction • Independence of the federal and state judicial systems • “Federalism” or “state’s rights” has created some cases where federal courts “abstain” from deciding a case (even when they have the power) to let state courts have first chance at the matter

13. American Federalism and its Impact on Civil Litigation -- III • Unless lawsuit involves federal law, state law governs • Where disputes involve different states or persons from different states, there may be need for trial court to conduct “choice of law” analysis to decide which state law applies Image: Four Corners National Monument / flickr.com http://www.flickr.com/photos/jakesmome/2064516469/

14. Factors for Choosing Applicable State Law Include: • Citizenship of Parties; Residency of Plaintiff and Defendant • Location of accident, contract, or events • Location of evidence, information, documents • Place where injury or impact is felt • Relative interest of state governments • Whether law of one state is “better,” clearer, or more developed than others

15. American Federalism and Its Impact on Civil Litigation -- IV • Even though state law controls in cases in federal court because of diversity jurisdiction • Federal procedure rules apply • Federal Rules of Civil Procedure (1938) as a code of procedure • Federal Rules of Evidence and Appellate Procedure as well • States have procedure similar to federal system but with significant state-to-state difference

16. Importance of Procedure • Due Process – Constitutional Guarantee – “Fairness” “Opportunity to Be Heard” • Jury Trials • Role of Judge (determines applicable law) • Role of Jury (finds facts and applies law) • Motions to Dismiss; Summary Judgment • Requirements for Complaints and other pleadings • Governs the amount of information (“discovery”) that must be exchanged

17. The Path of a Lawsuit

18. The Path of a Lawsuit • Don’t Forget the Preliminaries • Client Engagement, Interview, Retainer • Investigation • Legal Research • Attorney or plaintiff may be punished for bringing unfounded claim • Fed. R. Civ. P. 11 (must do some research to have a basis to think a claim is valid) • Forum Selection/Forum Shopping

19. The Path of a Lawsuit -- II • Complaint • Service of the Complaint (a/k/a service of process) • Defendant Response(s) • Answer • Motion to Dismiss (Fed. R. Civ. P. 12) • Counterclaim (Compulsory or Permissive) • Cross-claim

20. The Path of a Lawsuit -- III • If Motion to Dismiss is not granted, case proceeds • Mandatory Disclosure • Exchange of Basic Facts with other parties • Discovery • Efforts to ferret-out facts from opponents or others • Extensive set of Civil Procedure Rules on Discovery (more detail later)

21. The Path of a Lawsuit -- IV • Discovery Generally • Broad Scope • But Subject to Privilege • Privileges exist when social need to foster relationship and confidentiality outweigh social need for the information • Privileges developed according to common law • Unless a specific statute on point

22. The Path of a Lawsuit -- V • After adequate opportunity for discovery . . . • Parties may make “dispositive” motion that would determine the case • Summary judgment is the primary and usual motion after discovery is completed • If Summary judgment is denied, case moves forward • Pretrial conferences, witness lists, documents lists, settlement conferences

23. The Path of a Lawsuit -- VI • If no settlement, case proceeds to trial • Jury Selection • Opening Statement(s) • Plaintiff’s “case-in-chief” • Direct examination of witnesses • Introduction of documents • Introduction of “real” evidence (e.g., gun, jewelry) • Cross-examination by opposing parties

24. The Path of a Lawsuit -- VII • Expert Witnesses • Plaintiff rests • Then comes Defendant’s motion for “judgment as a matter of law” • If denied, Defendant must present its case-in-chief • Defendant presents witnesses and documents • Defense rests

25. The Path of a Lawsuit -- VIII • Motion for Judgment as a Matter of Law at the conclusion of all evidence • Usually made by both plaintiff and defendant • If denied, case to be submitted to the jury • Closing Arguments • Jury instructions • Jury Deliberation • Verdict

26. The Path of a Lawsuit -- IX • After verdict, loser may attack verdict • Motion for judgment as a matter of law (again) • Grounds for JAML (and Summary Judgment) • Movant argues that material facts not in dispute and law applied to those facts favors movant even if jury rendered verdict to opponent.

27. The Path of a Lawsuit -- X • Motion for a New Trial (as alternative to JAML) • Will not reverse the adverse verdict but will give movant another chance with new jury • Granted where • Verdict against the weight of the evidence • Verdict too high or too low • Erroneous jury instructions • Trial misconduct by lawyers, jurors • Really bad evidence rulings by judge

28. The Path of a Lawsuit -- XI • If no grant of new trial or JAML, loser must appeal within 30 days • “Briefs” by counsel argue the issue • Then “oral argument” before panel of 3 judges, sometimes entire court • Usually 18-24 months until a decision • During that time, parties often negotiate, settle claim • But appeals succeed only 40 percent of the time; the trial verdict winner has the advantage

29. Appellate Review • Did lower court err in law? • May not revisit the facts unless the lower court is the fact finder and the fact finding is clearly erroneous • Will not usually overturn the jury’s fact finding but may find that the judge’s jury instructions were erroneous - case may be tried again

30. Standards of Review for Appellate Courts • Questions of law -- look at the issue “de novo” • Questions of fact -- overturn a court’s finding of facts only if “clearly erroneous” • Appellate courts do not take testimony – fact finders had opportunity to see the witnesses testify – more qualified to decide the facts

31. The Path of a Lawsuit -- XII • After trial or when appeals process has run its course, winning party may recover some costs of litigation • In USA, loser and winner each pay their own attorney fees (the “American Rule”). In Britain, the winning party is often awarded attorney fees (the “English Rule”) • Some exceptions to the American Rule in the USA by statute, contractual agreement, or as a punishment for bad faith by a party or counsel

32. The Path of a Lawsuit -- XIII • After “judgment” is final and entered, the loser (or its insurance company) typically pays • But if no voluntary payment, the winner is a “judgment creditor” who may use “creditor’s remedies” to satisfy the judgment. Examples: • Garnish loser’s wages to pay claim • Take funds from loser’s bank account, etc. • Place lien on loser real estate; if sold, judgment paid from sale proceeds; foreclosure a possibility

33. The Rare Possibility of Supreme Court Review • After appeals process exhausted, losing party may petition for review (grant of a “writ of certiorari”) by the U.S. Supreme Court • Only about one (1) percent of petitions for review granted • Supreme Court will not take case just because it suspects error by lower courts • Case must present constitutional issue or involve important area of national law where lower courts are divided

34. Judicial Power and Subject Matter Jurisdiction • U.S. Constitution (1787) (and various amendments since) • Article I – Legislative (establishes Congress – House and Senate) • Article II – Executive (the Presidency, etc.) • Article III – Judicial (Supreme Court and basic grant of federal judicial power for federal questions and related things, “diversity” jurisdiction)

35. Federal Question Subject Matter Jurisdiction • Established in Article III of the Constitution • Codified in 28 U.S.C. § 1331 • States that federal courts have subject matter jurisdiction that “arises” under federal law (statute, treaty) • No federal question jurisdiction unless federal law is involved in the claim • A defense based on federal law does not create federal subject matter jurisdiction

36. Tests for Federal Question Jurisdiction • Does federal law “create” the cause of action? • Or • Does federal law comprise an “essential” ingredient of the cause of action? • Because federal courts are courts of “limited” jurisdiction that should not supplant state courts, federal question jurisdiction is construed narrowly

37. Federal “Diversity” Subject Matter Jurisdiction • Established in Article III • Codified in 28 U.S.C. § 1332 • Federal courts have subject matter jurisdiction when all plaintiffs and all defendants are citizens of different states (the rule of “complete” diversity) • If the matter in controversy exceeds $75,000 in value

38. Diversity Jurisdiction (con’t) • Citizenship means “domicile” • Domicile means one’s home • People are born with a domicile • Can change it by relocating with intent to change domicile (summer camp and university not enough – if you plan to return home after)

39. Diversity Jurisdiction (con’t) • Dual Domicile/Citizenship of Corporation • Place of incorporation (e.g., Delaware) (corporations are charted in a particular state in the U.S. – no national chartering system) • And • Principal Place of Business • Almost Always Means Company Headquarters • Clarified in Hertz v. Friend (2010)

40. Another Federalism Wrinkle: Removal • After a lawsuit is filed in state court, the defendant may be able to “remove” it to the nearest federal court if • It could have been brought in federal court • On the basis of either federal question or subject matter jurisdiction • Must act within 30 days • All defendants must join in multi-defendant case • If a diversity case, only a defendant who is not a resident of the forum state can remove

41. Personal Jurisdiction • Subject Matter Jurisdiction is judicial power over the subject matter of the lawsuit (e.g., violation of federal law; plaintiff and defendant from different states) • Personal jurisdiction is judicial power over the parties – particularly the defendant • Exercise of personal jurisdiction must satisfy “Due Process”

42. Due Process • Guaranteed against the federal government by Fifth Amendment to Constitution • Guaranteed against state governments by the Fourteenth Amendment • Defined as • Reasonable and fair notice of the claim • Opportunity to be fairly heard • Before a neutral adjudicator • In a fair forum

43. Personal Jurisdiction and Due Process • Court exercise of personal jurisdiction in an unfair forum violates due process • Forum considered unfair if defendant lacks sufficient contact • Where the claim is connected to forum-related activity of the defendant, there must be sufficient “minimum contacts” so that court jurisdiction does not offend sense of fairness and justice

44. Personal Jurisdiction and Due Process • Where the claim does not relate to defendant’s activity in the forum state, there may still be “general” personal jurisdiction over the defendant because it has pervasive presence in the state • Test is whether defendant’s presence is “continuous” and “systematic”

45. Venue • “Venue” means the place of trial within the jurisdiction/state • Basic rule codified at 28 U.S. § 1391 • Venue generally proper • Where all defendants reside • Where a “substantial part of the events giving rise to the claim” occurred • Some differences and complexities not addressed in this class

46. Venue -- II • If venue is improper where lawsuit first filed, defendant may move for dismissal (28 U.S.C. § 1406) • Or court may transfer case to a place of proper venue • Or defendant may seek change of venue to more convenient venue (28 U.S.C. § 1404)

47. Venue -- III • Preferable venue determined by • Location of parties • Location of real evidence • Access to/Convenience of • Witnesses • Documents and other proof • Burden on court relative to its connection to case (e.g., fairness of imposing a New York-centered trial on California jurors)

48. Segment 2 The Erie Doctrine

49. A Review of American Federalism • State law is the “baseline” governing law • Although it can often be supplanted by applicable federal law under the “Supremacy Clause” of the Constitution • If there is a sufficient link to interstate commerce or something else that conveys federal power • In the absence of federal law, state law is the default

50. Still More on Federalism • The concept is captured in the Rules of Decision Act, 28 U.S.C. § 1652 • The laws of the states should be the “rule of decision” unless the case is governed by federal law • Despite this ethos in America, there was established in the 1800s the practice of applying “federal common law” to disputes between citizens of different states in cases that were in federal court because of diversity jurisdiction