MEMORANDUM

December X, 2014

To: Judge/Justice ________

From: Your Law Clerk

Re: 12(b)(1) & 12(b)(2) Motions, Party A v. Party B, Inc.

Introduction

This memorandum will discuss two motions made by the defendant in (Case Name). The first
motion asks for dismissal for lack of subject-matter jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(1). The second motion requests dismissal based on a lack of personal
jurisdiction over defendant (defendant Name) pursuant to FRCP Rule 12(b)(2). As you have
directed, I recommend a disposition for each motion. My overall conclusion is that (both/one)
motions should be (denied/granted).
-add any additional motions i.e. procedural due process or choice of law

Open questions of law

There are a few open questions of law that the Court may need to reconcile in deciding this case.
Federal question: First, the Court needs to decide on the best test for federal question
jurisdiction. There is an unclear zone where the Mottley well pleaded complaint test and the
American Well Works creation test conflict. I think the Court should create a new test where we
return to Mottley and American Well Works and then employ a limited version of Grable in
situations where the two cases conflict.
Supplemental Jurisdiction: The Court also needs to decide if there is supplemental jurisdiction
under § 1367 for claims brought by Ps joined under Rule 20 against a single defendant since that
isn’t on the forbidden list in § 1367b. Contamination theory? Kennedy’s opinion adopt a plain
meaning approach to the statute and reject the contamination theory. Open door = the
contamination might make some sense if we are not talking about amount in controversy but
instead a violation of complete diversity.
Personal jurisdiction: Second, the question remains about the relationship of Pennoyer to shoe
and to what extent does Pennoyer still live and whether transitory physical presence is.
Personal jurisdiction: The personal jurisdiction test also needs to clarify the relationship between
the stream of commerce test and purposeful availment.
Procedural Due process: There is also an unsettled relationship between the categorical
approach of Richards v. Jefferson County which says there is an absolute right to participation
and the approach in Matthews and Doeh which says that the standard is a balancing test instead.
Horizontal Choice of Law: There is still a contested approach to determining which state’s law
should be applied between the formalist first restatement and the instrumentalist D.C. balancing
approach.

1
Vertical choice of law: The treatment of § 2072b is also unsettled and there are three possible
approaches suggested in shady grove by Scalia, Stevens and Ginsburg.

Recommendations
This memorandum recommends that the Court decides that…
1) That the supplemental jurisdiction statute extends to a claim by a nondiverse plaintiff
joined under Rule 20 against a single defendant
2) That in products liability cases, personal jurisdiction should be granted for any
jurisdiction the defendant knew or should have know its product might cause injury.
3) There there should be a baseline absolute right to participation in cases like this where a
lack of participation would result in a total lack of adjudication on the merits of the case.
(as opposed to a paper review by an administrative board)
4)

2
Issue Checklist

Subject Matter Jurisdiction

 Timeliness or Waiver
 Federal Question Jurisdiction
o Well pleaded complaint test
o Creation test
o New balancing Grable test
 Diversity Jurisdiction
o Complete diversity of citizenship
o Amount in Controversy
 Supplemental Jurisdiction
o Anchor claim
o
Personal Jurisdiction
 Consent and Waiver
 Statutory Basis – FRCP 4 & (State Name) Law
 Constitutional Basis Under the Due Process Clause
o Traditional Basis Under Pennoyer
o Claim arises from contact
o General Jurisdiction – “at home”
o Specific Jurisdiction – minimum contacts
 Purposeful availment (stream of commerce – open Q)
 Foreseeability
 Balancing fairness
Procedural Due Process
 Notice
 Opportunity to be heard
o Richards absolute right
o Matthews balancing (open Q)
Choice of Law
 Horizontal Choice of Law (open Q)
o First restatement
o DC Balancing approach
 Vertical Choice of law
o Apparent conflict based on diversity or supplemental
o Substantive or procedural federal law
 Constitutional
 Statute
 FRCP
 REA – rule of practice/ modify/abridge substantive rights
 § 2072b – (Open Q)
 Judge made law
 York outcome determinative
 Byrd balancing

3
I. Personal Jurisdiction
A. Consent and waiver
1. Is the attack direct?
a. Was the attack timely under the applicable rule?
i. “(Defendant Name) did not consent to personal jurisdiction.
Rule 12 requires that 12(b)(2) motions be filed within 21 days
of the date of service.” Here the motion was filed ___ days
after service. Therefore the motions appears to be (late/timely)
and hence the objection (is/is not) waived. Defendant also did
not sign a contract or other agreement consenting to personal
jurisdiction in advance.”
1. Consider: contract with forum selection clause or
choice of law clause?
2. Consider: Waiver of service?
a. If waiver: Service of the summons can be
waived under Rule 4(d) which extends the
deadline to file a 12(b) motion to 60 days after
sending the waiver request or within 90 days if
outside of the US.
b. RULE: Object in the action to personal jurisdiction in A1 by FRCP
motion pursuant to Rule 12b2 or Rule 12h with timing requirement
OR under the Code MTQ service of process by making a special
appearance
2. Or is the attack collateral?
a. Did D make an unsuccessful direct attack?
i. If yes, collateral attack fails
1. Once you appear, even just special appearance to
contest jurisdiction, you are bound by that court’s
determination of jurisdiction under res judicata and not
able to collaterally attack. (Insurance Corporation of
Ireland v. CDG)
ii. If no, proceed to statutory analysis
1. A default judgment in A1 preserves your right to
collaterally attack personal jurisdiction in A2.
B. Statutory Analysis
1. Identify the applicable rule or statute
a. State courts usually have statutory jurisdiction over these situations:
i. Long arm statute: Under rule 4(k)(1)(A) this court has/has
not statutory basis
1. Unlimited long arm statute: extend to the constitutional
limits. (if so, avoid statutory analysis and skip right to
constitutional analysis) i.e. Rhode Island
2. Tortious act committed in the state may justify
personal jurisdiction (Gray v American Radiator) IF the
liability arises from the actions governed by
statute/related to the tortious act (Hess v Powloski)

4
 3. Transacting business in the state/ purposeful
availment (Gray v American Radiator)
4. Property actions that arise from nonresident D’s
ownership of property within the state i.e. tort action
based on negligent maintenance of realty
5. Marital Dissolution Cases: the remaining spouse has
personal jurisdiction over spouse who abandons the
other
ii. Physical presence at time of personal service, even for
transient defendants just passing through and claim doesn’t
have to be related to his brief presence in the state (Burnham v.
Superior Court)
1. Exceptions for ^^ service by fraud or to nonresidents
who are passing through solely to take part in judicial
proceedings
iii. Domiciliaries: Even when D is not physically within the state
at the time of service, it is valid if D is domiciliary of that state
1. The state where the person is with intention of staying
there indefinitely. You keep your previous domicile
until you establish a new one. Infants adopt custodial
parent’s domicile.
iv. Consent
1. Express consent through
a. contract forum selection clause
b. appointment of agent to accept service of
process (may required for nonresident
corporations) (Kane v NJ required for
nonresident motorists)
2. Implied consent i.e. nonresident motorists (Hess v
Powloski)
3. Voluntary appearance: contesting the case without
challenging personal jurisdiction
a. Exception for special appearance
b. Federal court
i. If the forum is a federal court, look to the relevant FRCP, Rule
4 and any relevant statutes
ii. Rule 4(k)(1)(A): general default provision that gives fed court
the same personal jurisdiction as the state court of general
subject matter jurisdiction.
1. “Under Rule 4(k)(1)(A), this court has territorial
jurisdiction if a (State’s name) court of general subject
matter jurisdiction would have had personal
jurisdiction. The (State’s name) long arm statue would
allow such a court to assert personal jurisdiction, as
long as it would be constitutional to do so. Therefore,
5
Commented [ST1]: Do these cases and McGee go to
constitutional minimum contacts or state long arm statute?
Commented [ST2]: Do these belong here or under min
contacts in the constitutional section?
Commented [ST3]: 1.Consent
a.Did D consent to personal jurisdiction?
i.Consent by general appearance in court or
waiver by failure to object under Rule 12 (see
section 1 waiver/timeliness of objection)
ii.Consent by appointment of an agent for
service of process; usually states require that
corporations appoint an agent as a condition for
permission to do business in that state.
1.Supreme Court hasn’t ruled if this is
sufficient for personal jurisdiction because this
could be forced consent after international
shoe.
iii.Consent by contract: If you sign a contract that
includes a forum selection clause
1.Brahman and Carnival Cruise Lines;
Supreme Court says that forum selection
clauses are not per se violations of due process.
iv.Implied consent i.e. nonresident motorist (Hess
v Powloski)
b.Next step:
i.If yes, consent, then personal jurisdiction is
constitutional
ii.If no, then go to Pennoyer analysis
Commented [ST4]: If there is a valid contract and the
forum selection clause isn’t fundamentally unfair, then it is
ok
Corporations consent to personal jurisdiction if they do
business in the state and they appointed an agent for the
service of process = not really disputed.
What does a forum selection clause say about a different
state venue? Talk about transfer opportunity for defendant?
Shows lack of foreseeability?
Answer: carnival cruise lines started a high threshold for
fundamental unfairness. The ticket was small print and not
available ahead of time. . in light of marine atlantic
construction, they are enforceable. The implication is that
due process in personal jurisdiction.
Choice of law clause in a k constitutes a contact with the
forum and it satisifeis the purposefuly availment of that state.
This could enter the balancing test because it provides a
reason to think the burden on the plaintiff won't be so great
because they knew that law would apply. Diminishes a
state’s interest in hearing the dispute if another state’s law
will apply.
Could be relevant to judicial efficiency
Commented [ST5]: I have consent in 3 places…. Where
does it belong??
 there is no need to conduct an independent statutory
inquiry.”
iii. Rule 4(k)(1)(B): Establishes personal jurisdiction over a
defendant “who is a party joined under Rule 14(3rd party) or
19(required party) and is served within a judicial district of the
United States and not more than 100 miles from where the
summons was issued” even if crosses into another state(this
won't be tested)
iv. Rule 4(k)(1)(C): “Serving a summons or filing a waiver of
service establishes personal jurisdiction over a defendant…
when authorized by federal statute”
1. i.e. Sherman antitrust national service of process
provision
v. Rule (4)(k)(2): backstop provision that applies only in
questions of federal law cases; if you have the situation where
no state has personal jurisdiction but the D has the minimum
contacts with the US as a whole, then there is personal
jurisdiction.
1. “Rule 4(k)(2) applies if the claim ‘arises under federal
law’ and if ‘the defendant is not subject to jurisdiction
in any state’s courts of general jurisdiction’ and
‘exercising jurisdiction is consistent with the United
States Constitution and laws. If (k)(2) applies, then the
relevant contacts are those with the US as a whole.’”
c. Therefore there is a statutory basis, move on to constitutional
C. Constitutional Analysis(note: relationship between Pennoyer and Shoe is still
unsettled)
1. Pennoyer Analysis
a. Step One
i. Is there a traditional basis under Pennoyer for jurisdiction?
1. In personam: physical presence of a natural person
a. must be either a citizen/domiciliary OR
b. personally served within territory
c. “There is no traditional basis for personal
jurisdiction over ___ because it is a corporation
and therefore has no physical presence in
(state). Instead we need to analyze personal
jurisdiction under the minimum contacts test
established in international shoe.”
i. Consider: If personal service is obtained
through deceit, personal jurisdiction is
invalid (tickle v Barton)
d. Even transitory presence is valid for service
(Burnham)
2. In rem: Physical presence of a physical thing

6
 a. When the nature of the claim concerns property,
i.e. quiet title, the relief sought is against all the
world. Jurisdiction is proper IF
b. property must be attached at the outset of the
action AND
c. property is located within territory
3. Quasi in rem: physical presence of property owned by
the D on an in personam claim (relief limited to value
of property)
a. Property must be attached at the outset of the
action AND
b. Property is located within territory
c. Note: debt travels with the debtor (Harris v
Balk)
4. Policy justification for 3 rules: otherwise jurisdiction
could be obtained ex parte against non-residents who
probably wouldn’t see notice via in state
publication(i.e. Pennoyer); this could be used as
instrument of fraud and oppression
ii. Next Step:
1. If no traditional basis, go to Shoe analysis
2. If yes traditional basis go to next question
b. Step Two – burnham
i. Is there a traditional basis sufficient to meet the Constitutional
requirement, even if the Shoe test is not met?
1. Analyze this question in light of Burnham(doesn’t
resolve the question if transitory physical presence is
enough because there is no majority opinion) and
Shaffer. Do Shoe anyway and interpret Shaffer Commented [ST6]: If there is general jurisdiction, you
narrowly. have to apply shoe test. If there is specific jurisdiction over
quasi in rem do you need to apply the shoe test?
2. Physical presence test of Pennoyer applies to transitory Holding in Shaffer = 1)formalist – only about quasi in rem
physical presence as well (Burnham-plurality) jurisdiction over intangible property which says that you
3. Shoe test applies to all assertions of state court have to subject that category to shoe test as well 2) realist-
broader interpretation of holding with dicta saying
jurisdiction; quasi in rem can't be used to gain personal everything is subject to shoe but that part has been called
jurisdiction if based on incorporeal property (Shaffer) into question in Burnham
ii. Next step: what relationship does shaffer have to specific and general
general jurisdiction?
1. If the traditional basis is sufficient then personal Quasi in rem actions are a form of general jurisdiction
jurisdiction is Constitutional. (On the exam, go on to because you are not asserting jurisdiction on the bases on the
the Shoe test) property that is attached because that would be in rem when
its quasi in rem the property is unconnected to the claim.
2. If physical presence is not enough, then go to Shoe Shaffer was decided before specific v general jurisdiction
Analysis was created. Post-goodyear perspective makes it seem that
2. Identify contacts quasi in rem jurisdiction is going to fail because it won't rise
to level of continuous and systematic contacts unless the
a. Step One – General or Specific Jurisdiction?. prop you own in the forum is itself somehow the source of
i. This Court’s personal jurisdiction jurisprudence distinguishes systematic and continuous contacts i.e. it is your ownership
between general and specific jurisdiction. The International interest in a business you work in which also happens to be
the same thing as something that would qualify as basis for
Shoe minimum contacts test applies when the claim arises from general jurisdiction which is really rare.

7
 the contact; systematic and continuous contacts are required
when the claim does not arise for the contacts. I will use a but
for causation test in determining whether or not the claim arise
from a contact or not.
b. Step Two – Identify the contacts with the state
i. In this case, there are (two/three/etc) sets of contacts with the
forum. …. List contacts. Each contact needs to be assessed
independently.
1. Consider: the Default rule in federal court is $k1a
which considers contacts with the state in which the
federal court sits but if there is a federal long arm
statute or if 4k2 applies to an international party,
consider contacts with the US as a whole if federal q
and no state would have personal jurisdiction.
c. Step Three – Does the Claim arise from the contacts? (But For test)
i. The (fist) contact should be analyze under the test for
(specific/general) jurisdiction because (contact’s action) (is/is
not) the legal basis for the (type of claim by plaintiff against
defendant). But for contact X, the dispute would not have
arisen which makes it legally relevant to this case.
ii. Consider: If X had not occurred, Y would not have occurred
which could lead to a long causal chain.
d. Step Four–Conclude which contacts get specific and general
jurisdiction tests.
i. for each contact that the claim arises under, apply the
International Shoe Minimum contacts standard for specific
jurisdiction. For each contact that the claim doesn’t arise from,
apply the general jurisdiction standard.
3. General Jurisdiction
a. It’s possible that Contact 1 does constitute a systematic and continuous
contact with State Name.
b. If corporation: To determine if there is general jurisdiction over a
corporation, Goodyear directs us to analyze if the corporation is
“fairly regarded as home” in the forum state. In Goodyear, the court
rejected the assertion in Helicopteros that merely substantial
purchases would have been enough to establish systematic and
continuous contacts that would justify subjecting the corporation to
general jurisdiction. Instead, the Court in Goodyear endorses the
proposition that a corporation is subject to general in personam
jurisdiction in the state where it is incorporated and the state of its
principle place of business. However it is not clear after Goodyear if
a corporation can be subject to general in personam jurisdiction in
states other than just its state of incorporation and principle place of
business. It is also not clear what the principle place of business test
for general jurisdiction is since we have the nerve center test for
diversity of citizenship purposes in subject matter jurisdiction.

8
 However, since we are using a but for causation test in determining if Commented [ST7]: Conclusion re stream of commerce
the specific or general jurisdiction test will apply, it seems fair that a test
This is case is most similar to…
corporation should only be subject to general jurisdiction in the state
of incorp and principle place of business if it’s contacts with the state This Court needs to determine the open questions of law
can't even meet a but for causation test which suggests that the surrounding purposeful availment and the requirement for
satisfying minimum contacts. First, it is not clear if
connection with the forum state is tenuous at best. purposeful availment in and of itself meets the standard for
c. Make arguments for and the forum being the “principle place of minimum contacts and second, the several theories on the
business” and do case comparison with Goodyear!! stream of commerce test needs to be reconciled.
The Court may decide that the purposeful availment
d. Make arguments for and against the forum having “systematic and requirement as it stands now is sufficient because it wants
continuous” contacts to only extend jurisdiction in situations where the defendant
i. Compare: Perkins: CEO of Phillipinio corporation moved to was deriving some kind of benefit from having a
relationship with the forum state. This type of reciprocal
Ohio in WWII which became temporary headquarters and relationship implies that if one has such minimum contacts
enough basis for general jurisdiction. Phillipines weren’t with the state, it must be benefiting from that state’s laws
available as an optional forum. and protections which are inherent to every state.
However, the Court decide to adopt a different
ii. Compare: Helicopteros: A few purchases of training requirement which I believe is a better standard. Instead of
equipment, signing of a contract, and cashing of a check isn’t focusing on the defendant’s relationship with the contacts
enough but a large amount of purchases would be sufficient and ascertaining the benefits it received from the forum
state, we should look at the nature of their activities to
(overruled by Goodyear, restricted to “at home”) determine if it is fair to expect the defendant to defend in
4. Specific Jurisdiction this state. This test also seems to combine part of the
-Under International Shoe, in order to exercise specific jurisdiction we must foreseeability as suggested in Hustler magazine and some
of the fairness considerations from the five factor balancing
determine that the defendant has minimum contacts consistent with test. But the main reason for focusing on intentional
traditional notions of fair play and substantial justice. This test can be met by conduct in the forum state instead of benefits derived
first establishing that the minimum contacts threshold is met through therefrom is to lower the standard for obtaining jurisdiction
over corporation defendants. Therefore if the defendant
purposeful availment and foreseeability and then employing a balancing test acted with the knowledge that his actions would cause harm
for fairness. or should have known it could happen, it will satisfy the
a. Step One: - purposeful availment minimum contacts test. This test is most similar to Gray
because it focuses on foreseeability but I would also
S.o.C Test Case Status
i. If products liability case: incorporate
The stream of commerce is the prevailing method of
assessing the minimum contacts standard in products
sold product with Gray Binding law only
expectation that it could if jurisdiction has
liability cases as evidence of purposeful availment of the
cause injury in the forum adopted. benefits and protections of the forum state’s laws. This
jurisdiction = base Supreme Court coupled with the foreseeability of being haled into court in Ginsburg’s approach in McIntyre as a way to keep the
standard fair for Ps who want to sue international
S.o.C. can overrule. the forum jurisdiction is enough to justify specific in defendants.
+ sale to consumers in WWV/ Dicta. personam jurisdiction as long as the fairness 5-factor Although a formalist might be opposed to this type of test
forum j. White balancing test is also met. Go through stream of commerce because it rests on determining what conduct is intentional
+ expectation of sale to Ainsworth and institutes a lower standard for obtaining jurisdiction, the...
tests and decide which case is most similar and what the
or use by consumers in
best test is. Commented [ST8]: Dicta in wwv because the party to
forum whom it would apply – the manufacturer- is not at issue here
+ (activities directed at Asahi/ Concurring ii. If not products liability therefore only dicta. Had the court had to decide if Audi AG
forum j by manufacturer) O’Connor case: Has the defendant "purposely availed" itself of the german corporation had to decide if subject to personal
= “S.o.C. plus” McIntyre/ Plurality privilege of conducting activities in the forum state, thereby jurisdiction in OK but hey didn’t contest so therefore only
Kennedy dicta.
invoking the benefits and protections of the state's laws and The test would make a different if the product was sold in
+ regular and anticipated Asahi/ Concurring do their contacts make it reasonably foreseeable that they the forum. This is not a case where the dealer sold the car in
flow (or plus factors) Brennan would be haled into court in the forum state? OK it is just dicta preserving the soc theory for
McIntyre/ Concurring manufacturers.
Breyer
-International Shoe requires that the D have such minimum
contacts with the forum that the exercise of jurisdiction Commented [ST9]: More about targeting (aiming an
+ target at all states McIntyre/ Dissenting arrow at the jurisdiction knowing that some will cause harm.
Ginsburg does not offend traditional notions of fair play and Less harm than intentional tort. Not fit in Kaldor since it’s
not intentional

9
substantial justice

iii. Purposeful availment may make it reasonably foreseeable. Commented [ST10]: Brennan’s substantial relationship
(to satisfy minimum contacts. Or the Calder v Jones test of test: if there is a substantial relationship (continuing
obligations) within the forum state/with residents of forum
targeting the forum with an intentional tort) (McGee, Hanson, state then he has purposefully availed himself through the
Burger King, Kulko, Bellino v Simon??, WW Volkswagen) benefits and protections of the forum and its not
1. Can't be unilateral, D must take action in unreasonable to litigate there.
forum(Hanson, WW Volkswagen)
2. Sending a contract for signature into another state can
be. (McGee)
3. Signing a contract with a choice of law selection can be
evidence of purposeful availment (Burger King)
4. Stream of commerce in products liability actions.
Exam: list all the tests, identify conflict, make
argument about which test to use and why. (See table)
(Grey, WW Volkswagen, McIntyre, Asahi)
b. Foreseeability: In some cases, knowledge that conduct outside the Commented [ST11]: Circular: being lawfully hailed into
forum state will cause injury in the forum state will make it reasonably court depends on what the law is. So foreseeability cant be
standard for what is legal.
foreseeable. (Gray, Burger King, Burnham)
i. Consider the factors in purposeful availment and the
knowledge of the D that they are dealing with a resident of the
forum state and the frequency/intensity of their relationship.
ii. Compare: Hustler magazine
c. Balancing Test
i. Balance the relevant interests:
1. P’s interest in have the dispute resolved in the forum
a. Is P a resident or domiciliary of the forum?
2. D’s interest (burden of litigating in the forum on D)
3. Forum state’s interest (consider relation to the P)
a. Does the claim involve the forum state’s
residents?
b. Did the injury occur in the forum state?
4. Efficiency – interstate judicial system’s interest in least
cost
a. Look at where the witnesses and physical
evidence are located
5. Substantive social policies – consider e.g. if the forum
aids goals of products liability rules or if it will hurt
international policy relationships(Asahi)
ii. Consider the sliding scale from Justice Brennan’s opinion in
Burger King (this might make a difference in a case where
there is no alternative jurisdiction but probably won't be tested)
1. High contacts increases the burden to demonstrate
unfairness
2. High fairness reduces the level of contacts required. Go
back to minimum contacts step.

10
 iii. Apply the results of balancing and the sliding scale:
1. Has the D met the burden to demonstrate that assertion
of personal jurisdiction is unfair?
2. Next step:
a. If burden is not met, then personal jurisdiction is
unconstitutional
b. If burden is met, then personal jurisdiction is
Constitutional. Commented [ST12]: Don’t forget to include a section on
d. Conclude: Forum is consistent with due process or not. realist and formalist considerations
e. Recommendation re Personal jurisdiction:
i. Based on the analysis above, the Court should/shouldn’t hold
that defendant is subject to personal jurisdiction in the United
States(State Name). Re-cap reasons for support.

11
II. Subject matter jurisdiction Commented [ST13]: Might be implicitly tested as a “sua
sponte” issue
1. Definition: the power to hear the case; whereas personal jurisdiction is the
power to bind a D through a default judgment if they don’t show up
A. Timeliness or Waiver
1. Because objections to subject-matter jurisdiction cannot be waived, the
failure of defendant to comply with the 21-day limit in Rule 12 would not
present an obstacle to consideration of the merits of the 12(b)(1) motion.
Therefore the 12(b)(1) motion is properly before you.
A. State Subject matter jurisdiction
1. General jurisdiction = state courts are courts of general subject matter
jurisdiction and can hear cases based on state law or another state’s law or
foreign nation’s law or COAs through federal statutes UNLESS
2. Exceptions:
a. Some federal statutes only give fed courts exclusive jurisdiction
i. Eg Sherman antitrust, IP, patent law
b. Administrative tribunals; not a regular court
i. E.g. workers comp
c. Many states have jurisdictional limits that apply to different courts
i. Small claims
ii. CA municipal courts(larger than small claims but less than
general jurisdiction)
iii. Superior court – everything above the lower courts
B. Federal subject matter jurisdiction
-First we need to determine if the district court of new Mexico has subject-matter
jurisdiction which means the power to hear to the case. Federal courts like this one
are of limited subject-matter jurisdiction according to Art 3 § 2 which sets the
constitutional limits on Congress’ authority to confer subject-matter jurisdiction on
the federal trial courts. In order for a federal trial court to have subject-matter
jurisdiction, Congress must confer such jurisdiction through a statute”
1. Federal courts are courts of limited subject matter jurisdiction
2. Constitutional and statutory dimension:
a. Art 3 § 2 sets the constitutional limits on congress’s authority to confer
subject matter jurisdiction on the federal trial courts
b. In order for a federal trial court to have subject matter jurisdiction,
Congress must confer such jurisdiction though a statute
3. 4 types of federal subject matter jurisdiction are Diversity, Federal question,
supplemental, removal
1. Diversity jurisdiction
-The constitutional basis for diversity jurisdiction under art 3 only
requires minimal diversity but since Strawbridge the courts have
required complete diversity of citizenship as codified in 28 SUC §
1332 which means that no plaintiff can be of the same state as any D.
Furthermore, the amount in controversy must exceed $75,000.

12
 i. Constitutional basis: art 3 requires only minimal diversity
(complete diversity is a statutory requirement and established
in Strawbridge v Curtiss)
ii. Statutory basis -- 28 USC § 1332 requires complete diversity of
citizenship among Ps and Ds and the amount in controversy
must exceed 75k.
iii. Direct attack on subject matter jurisdiction allowed from when
complaint is filed all the way through appeal (Capron v
NavNoorden)
1. Court can raise subject matter jurisdiction sua sponte
iv. Not allowed to collaterally attack subject matter jurisdiction
(DesMoines navigation v iowa)
1. § 12 restatement of judgments exceptions (rare)
a. for circumstances in which there has been no
reliance at all on the prior judgment (rare)
b. Plain mistakes
c. Can also collateral attack if to subject matter
jurisdiction for appeals on tribunals that lack the
competence to decide their own jurisdiction i.e.
tribunals where the judge is not a lawyer i.e.
justice of the peace in rural areas
v. Diversity can be grounds for a very late direct attack but
amount in controversy must be established up front
vi. Federal courts won't apply diversity jurisdiction in cases of
domestic relations(divorce/probate)
a. Amount in controversy Commented [ST14]: If P has some insufficient amount in
contra claims against other Ds do they get split or qualify
i. Minimum amount must exceed $75,000 for supplemental jurisdiction?
1. Minimum is $75,000.01 (Freeland v. Liberty Mutual)
ii. Legal certainty standard: (Whitchurch AFA Tours) WtF is Ortega???
1. “The amount in controversy requirement is satisfied if Commented [ST15]: What is multiple Ps? Inseparable
the P’s good faith demand exceeds $75,000 and the D harm?
Same as multiple Ds, you have to show that there is either
cannot establish to a legal certainty that the amount a joint cliaim or joint liability. If its merelyseverl liability
recovered would be $75,000 or less. In this case the i.e. multiple people casued an accident isn’t good enougj.
demand is $xx,xxx therefore the total amount exceeds The ownership interest in the same piece of property or
business such that both of hyou are entirely liable for the
$75,000. Given XX facts, the D (could/could not harm or injury is indivisible because of the nature of the
establish to a legal certainty that the total value of the ownership in the piece of property.
____(claimed injury) did not exceed $75,000. If single D and single P can aggregate everything.
iii. Aggregation rules: -no you can't aggregate unless other Ds unless the claims are
1. If only 1 P and 1 D, All the claims between them can be legally indivisible. Same for multiple Ps. We don’t don’t
aggregated to determine the total amount in controversy know when claims are legally indivisible so this won't be
tested unless there is a hint or we can state more research
2. If there are multiple parties, you can only aggregate if needed to branch
the legal interest is common and indivisible.
Commented [ST16]: Joint= either both are liable or both
a. If Ds are jointly liable you can aggregate are not.
b. If Ds are severally liable you can NOT
Commented [ST17]: If joint and several, spot this issue
aggregate and just explain that we need more facts to determine if
several or not.

13
 iv. Valuing injunctive relief:
1. Majority rule; Look at the value to the P of getting the
injunction (Freeland v. Liberty Mutual)
2. Minority rule: look at which is greater - value to P or
cost to D
b. Complete diversity of citizenship (Strawbridge v Curtis)
1. “The rule of Strawbridge v Curtis is that the diversity
statue requires complete diversity of citizenship
meaning no P can be from the same state as any D”
i. Step One: Determine citizenship for every party
1. A person is a citizen of a state if...
a. Citizen of the US AND
b. Domicile of that state
i. Resident of that state AND
ii. Intent to remain indefinitely
i. Retain your past domicile until
you acquire a new one (Moss v
Perry)
ii. Children inherent their parent’s
domicile
c. Permanent resident aliens are deemed citizens
of the state in which they are domiciled
i. Diversity is destroyed if US citizen and
resident alien are “citizens” of the same
state
ii. There must be a US citizen as a party
2. A corporation is a citizen of every state where…
a. State of incorporation OR
b. Principle place of business
i. § 1331 – single location as principle
place of business and a single state of
incorporation.
ii. Nerve center test-(Hertz) USE THIS Commented [ST18]: Consider Formalist v. Realist
i. The locus of corporate decision- interpretation of “principle place of business” for one vs
multiple or no principle places of business
making authority AND over all
control constitutes a principle
place of business
ii. Corporate headquarters or home
office
iii. Corporate activities test –Don’t use
i. Corporations production or
service activities
ii. Manufacturing or profit making
activity
iii. Place of operations
iv. Total activity test – don’t use

14
 i. Considers all the circumstances
surrounding a corporation’s
business to discern its principle
place
ii. Realistic, flexible, and
nonforumalistic approach by
balancing all relevant factors
Determines the corporation’s
principle place based on all
aspects of activity
iii. Problem when upper
management in one place and
daily conduct in another
iv. Typically use daily conduct
v. Allows one to best assess the
connections between the party
and the various states to
determine which state would be
viewed as the home state by
jurors
3. An unincorporated association’s citizenship follows
that of all the members (United Steel Workers)
c. Conclude: List the citizenship of each party….. Thus the complete
diversity requirement is satisfied. But Plan B….
2. Federal question jurisdiction – 28 USC § 1331
-If no federal question issue: There is no basis for federal question
jurisdiction. P’s claim is based on state law and no federal issue is raised by
the material that you asked me to examine. Therefore, the claim does not
present a federal question under either the Mottley well-pleaded complaint
rule or the American Well Works law that creates the cause of action test.
a. Constitutional limit: essential ingredient test (Osborn v Bank of US)
i. Federal subject matter jurisdiction extends to any suit arising
under a federal question.
b. Statutory authority: 28 USC § 1331
c. Step 1: Identify claims:
i. If clearly state law claim: There is no basis for federal question
jurisdiction over (type of claim). This claim is based solely on
state law and based on the facts in the record there does not
seem to be a federal issue that would arise on the face of the
plaintiff’s well-pleaded complaint
ii. If possible federal claim: (Type of claim) may raise federal
questions. The Supreme Court has not established a clear test
for the existence of a federal question.
d. Step 2 Relevant precedent- Exam: go through the evolution!
i. Louisville & Nashville Railroad v Mottley:

15
 1. The Mottley well-pleaded complaint test says there
(is/is not) a federal question in this case because
plaintiff’s complaint alleges the violation of a federal
(rule/standard/law), and that claim is included in their
complaint as an element of the cause of action.
a. Consider: the federal question must be brought
in your statement of your COA in its elements
and not in anticipated defenses
ii. American Well Works v. Layne & Bowler:
1. The (type of claim) (passes/fails) the creation test set
out by Justice Holmes in American Well Works because
the claims were created by (state/federal)
(tort/contract/etc) law.
iii. Merrel Dow Pharmaceuticals v. Thompson: - state created but
federal issue in complaint
1. Merrell-Dow says that congressional intent and
strength of the federal interest should be considered
when determining if federal question jurisdiction exists
in situations where a federal issue appears in a well-
pleaded complaint for a state-created claim. The
congressional intent consideration is troublesome
because this is a difficult determination to make,
especially if based on committee reports or other
similar sources. The (claim) in this case ….
a. Consider: Did Congress create a private cause
of action under this case’s claim like in Merrell-
Dow?
b. Consider: Is there an important federal interest
in uniform interpretation of the (claim)
suggesting that Congress might favor federal
question jurisdiction in order to advance
uniformity?
2. The other issue is the strength of the federal interest in
having a federal court determine this issue.
a. Consider: similar to the discussion above on the
legislative intent…..this factor may also favor
federal question jurisdiction.

3. Did Congress intent for the federal state to be governed

by federal question jurisdiction? Can look to “per se
federal question jurisdiction provision or lack thereof in
the statute language”
iv. Grable & Sons v. Darue
1. Grable distinguished Merrell-Down and said that
congressional intent was only one factor in the analysis
for federal question jurisdiction. Other factors that

16
 should be included are the federal interest in a federal
forum and the division of labor between state and
federal courts.
a. Consider: Would the recognition of federal q
jurisdiction in this case upset that balance and
create a potentially enormous shift of
traditionally state cases into federal courts?
b. Consider: Can this (claim) be distinguished
from other state law claims with a federal
element because of a distinct federal interest in
uniform interpretation of (this law)?
v. Empire HealthChoice Assurance v. McVeigh
1. Empire narrowly applied Grable to only apply to a
limited category of cases where the federal issue is “a
pure question of law” and that no federal agency has a
direct interest in the dispute.
a. Compare: Does this case resemble Empire?
vi. Grable test
1. Is there fed issue on the face of complaint; actually
disputed and necessary for resolution. AND
2. Is there a strong fed interest; i.e. substantial requirement
a. Therefore there is jurisdiction UNLESS
b. Jurisdiction would upset the division of
congressionally approved labor between state
and fed courts
3. AKA
4. State law claim necessarily raises a stated fed issue
a. Complaint must state a federal issue
b. The fed issue must be necessary to resolving the
case; without raising the federal issue your
claim would be invalid. (similar to Motley well
pleaded complaint rule)
5. The fed issue must be actually disputed and substantial
a. Actually disputed: the D is disputing the issue
otherwise no contest
b. Substantial: must be one that can actually make
a difference. And the position of the P on this
issue must be nonfrivolous.
i. Not substantial for malpractice case with
hypothetical resolution (Gunn v Minton)
ii. Yes substantial for government interest
in collection of delinquent taxes (Grable
v Darue)
6. Federal interest: Can't interfere with congressionally
approved balance of division of labor between state and
fed courts.

17
 a. Supreme Court’s attempt to reconcile Merril and
Grable
vii. Shoshone: federally created claim (creation test) but not on the
face of the well pleaded complaint
viii. Smith: state created claim (fails creation test) but passes the
motley well pleaded complaint rule – yes jurisdiction.
e. Step 3: make arguments for a new test
i. Resolving the option question in existing law5
3. Supplemental jurisdiction – 28 USC § 1367
Supplemental jurisdiction authorizes a federal court to entertain related state
claims that arise from the same facts as a federal claim
a. Constitutional dimension
i. Common nucleus of operative fact (Gibbs)
b. Statutory dimension – 28 USC § 1367
i. Step One – § 1367(a) confers supplemental jurisdiction, and
implicitly adopts the Gibbs test. Supplemental jurisdiction
over a jurisdiction insufficient claim is conferred if and only if
the following are met:
1. There is a jurisdictionally sufficient base claim AND
2. There is at least one jurisdictionally insufficient claim
AND
3. The jurisdictionally insufficient claim share a common
nucleus of operative facts with the jurisdictionally
sufficient claim
ii. Step Two – § 1367(b) Divests the court of supplemental
jurisdiction if all the following are met:
1. Jurisdiction over the jurisdictionally sufficient claim is
founded solely on § 1332 (alienage or diversity) AND
2. The claim falls into any one of the following categories:
a. If claim is brought by a P against a person made
a party under any one of the following rules:
i. Rule 14 (3rd party D) OR
ii. Rule 19 (joined as D) OR
iii. Rule 20 (multiple D joinder) OR
iv. Rule 24 (intervening joinder)
b. If claim is brought by a person proposed to be
joined as a P under Rule 19 OR
c. If claim is brought by a person seeking to
intervene as a P under Rule 24 AND
3. Jurisdiction over the claim is inconsistent with the
requirements of § 1332
iii. Step Three – § 1367(c) OPEN QUESTION Gives the district
court power to dismiss jurisdictionally insufficient claims over
which there is supplemental jurisdiction, if any of the following
are met:
18
Commented [ST19]: Resolving the Open Question of Law
The evolution of federal question cases show a changing
emphasis on different factors that will influence our decision
today. Before this Court can decide whether federal q
jurisdiction should be extended here, it needs to reconcile the
precedent and adopt an approach that will clearly spell out
the relationship and current standing of each holding. The
possible factors that have been identified by the precedent
include 1) the law that created the cause of action, 2) the
existence of a federal issue in the plaintiff’s well-pleaded
complaint, 3) congressional intent, 4) the federal interest in a
federal forum for adjudication, 5) the division of labor and
case load between the two system, 6) whether the federal
issue is pure law, 7) the directness of the federal interest in
the dispute. Reconciling these factors through either a realist
or formalist type test will make this stream of analysis much
clearer for future cases.
Against the Adoption of a Formalist Creation Test
Since the controlling cases in federal question jurisdiction
have such a large mix and different weighing of the different
factors, it might be easier to just abandon the attempts to
save the balancing test and instead to a formalist test like
Mottley or American Well Works. Although Justice Thomas
was correct when he said that returning to a pure creation test
would be easier from the standpoint of judges trying to
decide this issue in future cases. Formalist tests like this one
are beneficial because they provide predictability, stability,
and equal application across cases. This test would also be
beneficial for potential litigants and their attorneys who want
to know up front what court their case can be tried in.
However, I think that a formalist test is not sophisticated
enough to deal with the myriad of potential claims that either
should be brought in federal court but won't because of the
creation rule. I think our court system has evolved to the
point where flexible standards are acceptable and even
expected for situations involving nuanced distinctions and
conflicts.
Proposed Adoption of a Realist Balancing Test
Since I think the formalist approach isn’t flexible enough
to deal with every situation and that judges should have the
discretion to make the best decision for the judicial system
on a case by case basis, the court should adopt a balancing
test for the unclear cases. Where both the Mottley well- ...
Commented [ST20]: If plain meaning then strawbridge
was modified by § 1367 because it seems to say that if
you’re joined multiple Ps under rule 20 and only 1 d then not
on the forbidden list and supplemental jurisdiction is
allowed. Need alternative theory of statutory interpretation
(plain meaning, intent of congress[evaluate the legislation
history from dissent but only committee report so not
convincing], functionalist policy arguments)
If the 3 theories conflict, meta levelabout which is the better
theory = formalist v. instrumentalist
Commented [ST21]: Relationship between this and
Gibbs? In class notes it says you can dismiss under Gibbs or
1367c.
 1. The claim raises a novel or complex issue of state law
OR
2. The claim substantially predominates over the claim/s
over which the district court has original jurisdiction
(Judgment call about when almost all of the relief
sought comes from the state law claim as compared to
relief sought on federal claim ) OR
3. The district court has dismissed all claims over which it
has original jurisdiction OR
4. In exceptional circumstances, there are other
compelling reasons for declining jurisdiction. Commented [ST22]: Is it possible that we will get an
4. Removal jurisdiction - 28 USC § 1441 exam hypo that would fall under this category? If so how do
we know what an exception circumstance is?
a. What kinds of cases can be removed?
i. Must be civil actions, and must be in jurisdiction of general
subject matter jurisdiction of the state.
1. Not criminal cases
2. Not administrative tribunal cases i.e. workers comp,
professional licensing
ii. Removal must be from state courts, can't start in administration
agency
b. What are the subject matter categories that can be removed?
i. § 1441A - If the whole case could have been heard in fed court
subject to a limitation in § 1441b; if yes, then removable
1. Go claim by claim by every P against every D and
identify if they are all jurisdictionally sufficient
(diversity/alienage or federal question)
a. If there are some jurisdictionally insufficient
claims, identify if there is supplemental
jurisdiction over all. If yes, then removable.
2. If any claim that is not jurisdictionally sufficient or
supplemental jurisdiction, then no removability
c. Limitations for § 1441b: you can't remove a diversity case if any D is
a citizen of the state in which the action is filed. If it’s a federal
question case it can be removed irrespective of the citizenship of the
parties.
d. § 1441 c: independent route to removal; you can get removal of a
whole action if you have a federal question claim and a claim that has
neither original nor supplemental jurisdiction of the district court(state
law claim that lacks a common nucleus of operative fact with the fed
claim, no diversity)
i. BUT then the district court will sever the jurisdictionally
insufficient claims and remand them to the state court
1. We want fed courts to decide which claims are
jurisdictionally insufficient and give them the power to
sever and remand after removal. These are not

19
 supposed to be discretionary decision, the fed court is
supposed to apply the rules.
ii. Under § c, you have a federal question claim and a state law
non diversity claim that lacks common nucleus. C allows
removal of both but then remand of the state law claim
e. What kinds of cases can be removed?
i. § 1441a is common
ii. § 1441c is not common
f. Who can remove?
i. Only Ds can remove, Ps can't remove a counterclaim
ii. All Ds must join in order to remove under § 1441a
g. What if erroneous removal?
i. First try to remand
ii. If the remand motion has a short time limit and then remand is
no longer available but dismissal is still available
h. You cannot appeal the granting of a motion to remand; you’re stuck
back in state court even if there is a mistake.

20
III. Notice and opportunity to be heard
A. Constitutional requirements for notice
1. Due process requires the notice be reasonably calculated to reach the
beneficiaries (Mullane)
a. If you know their address, you have to send the notice directly
(certified mail)
b. If you don’t their address now but you could easily get it, you have to
make reasonable efforts to figure out their address (standard not rule)
c. If you don’t have any easy way to find their address or don’t know
who they are, notice by publication is ok.
i. The money required to track every beneficiary would be
deducted from the fund
ii. Just notice by publication when there may be easy ways to
track down the addresses of trust holders is not sufficient
notice. (Mulane)
2. Possible limits on Mullane – consider procedural fairness argument if Commented [ST23]: What is this referring to? The cost
necessary issue? Procedural fairness?
B. Constitutional Opportunity to be heard
1. Life and liberty are rarely raised in civil cases
a. Property interests:
i. Old property (ownership interests)
1. Originalists: property is limited to the old kind of
property that was contemplated at the time the clause
was made i.e. land, chattels, bank accounts, but not
government jobs/benefits(Black’s dissent in Goldberg)
ii. New property(government benefits)
1. Living constitutionalism: the old conception of property
no longer serves an adequate function. Property should
include government benefits, welfare, government
contracts, government employment, etc and therefore
protected by due process (established in Goldberg)
2. Was there a deprivation?
a. Permanent deprivations
i. Richards v Jefferson County: permanent deprivation decision
can't bind you unless you have notice and opportunity to be
heard unless privity, special remedial schemes, or adequacy of
representation/class action.
b. Temporary deprivations
3. What process was due?
a. Elements of process: (all subject to balancing)
i. Hearing
1. Right to be represented?
2. Rules of evidence?
ii. Before whom?
1. Clerk
2. Hearing officer

21
 3. Judicial officer (magistrate, commissioner, judge)
b. When? (all subject to balancing)
i. Pre-termination
ii. Post-termination
1. Immediate
2. Later
c. Bond
i. Posted by party seeking provisional remedy
ii. Posted by party whose property was taken
d. Balancing test
i. Matthews v Eldridge balancing test = Irc * (Pcrp-Pcsq
(probability of more accurate outcome)) > Ig +Iop
1. Irc = interest of the rights claimant (erroneous
deprivation)
a. Depends on the time of interest at stake i.e.
means-tested welfare(Goldberg) is a larger
interest than disability benefits(Mathews)
because they are available to all income levels
2. Pcrp = probability of correct adjudication with the
requested procedure in effect
3. Pcsq = probability of correct adjudication given the
status quo
4. Ig = interest of the government
5. Iop – interest of other parties that would incur costs
because of requested procedure (Connecticut v. Doehr)
ii. Mathews and Doehr
1. Mathews (systemic versus case balancing- when we use
Matthews we are looking at the whole system)
balancing test adopted in Connecticut v. Doehr and
balance yielded that pre notice attachment of property
after just an affidavit is not constitutional because of the
low risk of D selling his property and the low
probability of correct adjudication based on flimsy
affidavit evidence.
a. Connecticut v. Doehr- adds in other parties
iii. If you are entitled to a hearing, it can be pre- or post-
termination depending on the balancing
iv. What is the relationship between the balancing test and the
categorical rule in Richards v. Jefferson unless bound by
action 1, you did not get heard.
C. Normative assessment of the current doctrine. Is the balancing test the best approach
to procedural due process:
1. From the perspective of constitutional theory:
a. Originalism
i. Judges should base their interpretations on the original
meaning of the text.

22
 ii. Fixation thesis: (linguistic) meaning of a text is fixed at the
time it is written. Because the meaning of words changes over
time.
iii. Constraint principle: we should be constrained by the meaning
the text had when it was written.
iv. Public meaning originalism: the relevant meaning is the public
meaning of the text; the words and phrases as the public would
have interpreted them at the time the text was adopted (Scalia,
Thomas, etc)
v. Original intent originalism: concerned with the intent of the
framers. No longer very popular because many minds created
the text.
vi. New originalism: distinction between interpretation and
construction
1. Interpretation = activity of discovering the linguistic
meaning or communicative content of a legal text
2. Construction = activity by which we determine what
legal affect the text will have. Must be translated to
doctrine
a. Construction zone = where the text is too vague
there will be some hard cases that interpretation
won't be enough; we need construction to give
legal effect.
b. Living constitutionalism
i. Realist approach to constitutional interpretation (i.e. Shoe),
much looser concept than originalism
ii. Looks at the purposes or function of the constitutional
provision in question i.e. due process clause represents
procedural justice and fairness
iii. Believe the Constitution needs to change in response to
changing circumstances and values in society. the text itself is
not binding
iv. Plurality method of constitutional interpretation, looks also at
history, constitutional structure, pragmatic concerns,
precedent/case law, underlying values and arguments of policy
and principle
2. As a matter of procedural fairness
a. Accuracy model: aims to get the law right, gets the facts right, and
correctly applies the law to the facts 100% of the time irrespective of
costs. Too expensive.
i. The fairness of a procedure is a function of its accuracy. The
goal of the system should be to maximize accurate outcomes.
The accuracy model rests on the assumption that litigants have
a right to win if the facts and the law are really in their favor.
ii. Be sure you understand the difference between case accuracy
(ex post) and systemic accuracy (ex ante).

23
b. Balancing model: weigh the costs of the procedures against the
benefits of increased accuracy (Goldberg v Kelly) (Matthews v
Eldrige)
i. The fairness of a procedure is a function of the balance
between the benefits of the procedure and its costs. The goal
of the system should be to maximize the sum of benefits. The
balancing model is based in part on the notion that perfect
accuracy would be enormously costly, and therefore the system
must compromise.
c. Participation model: constitutional rule that you can’t bind someone in
a judgment(determine their legal rights with finality) unless you afford
them rights of participation (Richards v Jefferson County)
i. The fairness of a procedure requires that interested parties have
notice and an opportunity to be heard at some meaningful time.
This model is sometimes called the “day in court” ideal. Two
further ideas are associated with this model:
1. that an opportunity to be heard is required by respect
for the dignity of litigants, and
2. that the correctness of outcomes can only be measured
after the interested parties have had an opportunity to
tell their side of the story.
ii. Participate in the process of litigation = opportunity to be
heard. Not necessarily a trial if MSJ.
1. Exceptions
a. Privity: court was unable to offer a test or
definition of privity but examples like
guardian/ward who can act on your behalf and
be bound to litigation on your behalf as well.
Covenants that run with the land also establish
privity
b. Adequacy of representation
i. Usually class action
i. Didn’t apply in Richards v
Jefferson County because there
was no class action and no notice
of representation that would bind
others
c. Special remedial schemes –
probate/bankruptcy
d. OPEN QUESTION: After Mathews v. Eldridge, the balancing model
seems to predominate. A fundamental question, not yet faced by the
Supreme Court, is whether the balancing test allows governments to
dispense with hearings altogether if it can be shown that hearings are
not cost-beneficial in a particular context. In considering this question,
you might think about arguments that could be generated from the
accuracy model or the process model.

24
 i. There might be arguments that the correct ideal should give
more weight to normative concerns of accuracy participation
model and balancing should take a secondary role where
opportunity to be heard is infeasible.
3. Minimum threshold of accuracy and participation with a balancing

IV. Choice of Law

A. State Court – Horizontal Choice of law
1. Traditional, first restatement approach (formalist)
a. Step One: characterize the suit into one of the categories
b. Step Two: apply the appropriate choice of law rule based on the
“single aspect” the crucial factual element of the case that
determines which law applies
i. Tort cases: apply the laws of the state where the tort occurred
1. (where the last event necessary to make an actor liable
for an alleged tort takes place – § 377)
2. Products liability - can argue about where the injury
occurred in manufacturing (Gray) or where injury
happened. States have their own rules on this.
ii. Contract cases: apply the laws of the state where the contract
was made
1. (place of contracting is where “the principle event
necessary to make a contract occurs” – § 311 (d))
2. If contract is mailed, place of contracting is where the
document is posted or received by the carrier – § 314
3. If informal bilateral contract, the place of contracting is
where the second promise is made in consideration of
the first promise – § 325
a. The law of the place of contracting determines
the validity and effect of a promise. (Issues with
formation/creation)
iii. Property cases: apply the laws of the state where the tangible
property is located at the time of the events which create the
interests– § 211
1. Validity of conveyance of interest in land is determined
by the law of the state where the land is – § 218
2. The validity and effect of a mortgage on land is
determined by the law of the state where the land is – §
225
2. Modern, second restatement approach (realist)
a. Multiple approaches (second restatement, interest balancing, prof
Leflar, CA approach) all use interests and contact like in Shoe.
b. Is there a true conflict?
i. False- nope, move on
c. Balancing test aka DC approach (Kaiser v Stutsman)

25
 i. Look at the public policy interests of the competing states’
choice of law
1. Does state 1 have an interest in the application of their
law in this dispute?
a. Look at residences of the Ps and Ds and location
of injury/disagreement
2. Does state 2 have an interest in the application of their
law?
a. Look at residences of the Ps and Ds and location
of injury/disagreement
b. Look at how their law differs from state 1 and
see who their laws would benefit
ii. If only 1 state has an interest in applying their law = false
conflict
iii. If multiple states have an interest in applying their laws = true
conflict
1. We presume the forum law governs unless the foreign
state’s interest is greater (Herbert v DC)
B. Federal Court- Vertical Choice of law Commented [ST24]: We haven’t gone in depth in choice
There is a vertical choice of law issue here because there is an issue of state law in of law do he’ll give us something similar to the cases we’ve
read but won't make us apply the dc interest based appprach
federal court through (supplemental/diversity) jurisdiction and there is an apparent to a completely new fact situation
conflict between provisions of state and federal law. Commented [ST25]: Include Klaxon.
1. Background Information
a. Definition: Vertical choice of law addresses the question of whether
federal or state law applies to a particular issue in a dispute
b. Rules of Decision Act 1789: The laws of the states apply unless
otherwise provided by the Constitution, treaties, or statutes.
c. Swift v. Tyson interpreted RDA to give federal judges ability to pull
authority from general common law, not just from the state in which
the court sits.
i. Justice Story’ natural law view that each state tries to find what
the law is. The law exists beyond the courts and rules as a
“transcendental body of law.” (Black & White Taxicab v.
Brown & Yellow Taxicab Co)
ii. Allows for forum shopping and negation of state law
iii. Holmes dissent in B&W – there is not outside body of law to
be discovered, no “august corpus” of true rules of law
1. The law is just a written body of rules by those in
power
d. Erie overruled Swift because it didn’t accomplish goals
i. States didn’t fall in line with federal general common law
ii. Forum shopping allowed diverse Ps to choose federal court’s
law but in-state plaintiff would only get state law (reverse
discrimination)
iii. Ignoring state law is un constitutional, federal judges don’t
have authority to make law on certain issues reserved for states

26
2. If diversity case  the federal court must apply the law of the state in which
it sits if judge made law i.e. contracts, torts, probate, property (Hanna v.
Plumer)
3. Klaxon – federal courts use the choice of law of the state in which they sit
4. Step One: apparent conflict?
a. When federal courts consider state law common law claims, the
federal court is obligated to follow the law of that state as articulated
by the state’s courts and it doesn’t matter what kind of case it is. This
is the law after Erie which erases the local v. general law distinction
made in Swift. However there is still the ability to follow federal
common law on issues in which there is a strong federal interest in
having a uniform application of the law (Hinderlider) i.e. federal
common law governs in disputes involving interstate boundaries.
5. Step Two: clearly judge made substantive law?
a. If YES 
i. if valid federal common law = apply federal law (Hinderlider)
ii. if not valid federal common law = apply state law (Erie)
b. If NOT clear  id type of federal law…
i. Constitutional provision – pertinent?
1. If not pertinent = apply state law
2. If pertinent = apply federal Constitution (Supremacy
clause)
ii. Federal statute – constitutional?
1. If not pertinent = apply state law
2. If pertinent but not constitutional = apply state law
3. If pertinent and constitutional = apply federal statute
(supremacy clause)
a. Compare: Ricoh
iii. Rule (FRCP) – REA?
1. If not pertinent = apply state law (Ragan, Walker)
2. If pertinent but not authorized by REA = state law
3. If pertinent and authorized by REA and constitutional
= apply federal law
a. Authorization under Rules Enabling Act:
i. Does the rule regulate court procedure
and practice? A
ii. Does the rule abridge, enlarge, or modify
substantive rights? (OPEN QUESTION)
b. Compare: (Hanna, Shady Grove, Walker)
iv. Judge made law – York/Byrd?
1. If not pertinent = apply state law
2. If pertinent = apply York and Byrd tests
a. York: Is the rule outcome determinative from
the pov of a party choosing a forum?
b. Byrd balancing: balance the following…
27
Commented [ST26]: Dicta in hanna because this test
doesn’t apply to FRCPs. For that we use 2072 not byrd/york
Commented [ST27]: 3 positions in shady grove- look and
see if State law is procedural and if Federal is procedural for
all the tests
Scalia sibbach position – skip 2072B, just do 2072A
Stevens position – can you apply the same rule in different
scenarios? Can't ignore 2072b, this in sibbach was just dicta.
No theory of substance and procedure; instead there is a fact
about this ny rule that it must be procedural since it is
transsubstantive so it can't be substantive. (if it is
transbtantive rule than it does not violate B)
Stevens must have some theory of what is substance =
Harlan’s theory from Hanna(the key is whether we are
regulating primary conduct) laws of other jurisdictions are
unlikely to be substantive in this sense
Ginsburg’s position – doesn’t directly find a 2072 violation
by construing narrowly to avoid the collision because
otherwise it would collide with substantive law. her
argument is based on NY law in form is procedural but could
have been reformulated and the same function would have
been achieved by a damage cap.
1)Look at the State Law
Substance has to do with how much money you get.
Her argument is logically invalid because a damage
cap could have been formed as a class action block because
then it would procedural. Therefore she doesn’t have a good
theory about substance but maybe it deals with remedy.
Which is a variation on frankfurter’s outcome determinative
test.
-If we are in the Supreme Court we need to decide which is
the best approach
-if we adopt the stevens approach, formalist says can't write
out 2072 b and sep pow. Then 2072 is about regulating
primary conduct. Then ask the question of the exam if it
really regulates primary conduct because then we would
invalidate the FRCP because it would be substantive and in
conflict. If it destroys ability to get relief, under Ginsburg it
could be substantive. If the pleading standard is strict enough
it can destroy substantive rights and affect primary conduct
which means we apply the state law
-If we are in district court, say there is no shady grove
narrowest grounds.
Commented [ST28]: there are 2 governing cases York
outcome determination and Byrd balancing test…. They can
fit together because they are functionally the same. Question
1- si the choice between federal and state law outcome
determinative from the POV of alitigatn choosing a forum
(proper understand of York test from ahnna ) if that answer
is no, then apply FRCP. If yes it is outcome determinative,
then do the byrd balancing test. OR outcome determination
or the twin aims of erie are part of the balancing process in
Byrd which makes it . Pick either the 2 step or the 1 step
where York is either separate or part of the Byrd balancing.
 i. federal interest in applying the federal
rule
ii. state interest in applying the state rule
iii. forum shopping if apply federal (Erie)
iv. inequitable administration of justice if
apply federal (Erie)
v. York outcome determination analysis
c. Compare: York, Byrd, Gasperini

28
 Personal Jurisdiction Flowchart

Statutory Analysis:
Identify and Apply the
Forum’s Statute or No Personal
Rule. No Statutory Basis Jurisdiction

Statutory Basis is Present

Constitutional Analysis

Pennoyer Analysis

Traditional Analysis: Is Yes Is traditional basis Yes, traditional basis is

a physical thing, real sufficient? sufficient
property or natural Shaffer/Burnham
person, present in the
jurisdiction?

No, traditional basis is

not sufficient.

Shoe Test
No

Minimum Contacts Threshold

For each contact, does No-General Jdx

contact arise from
claim? But-for &
proximate cause tests.

Yes-
Specific
No
JDx

Are contacts sufficient? Are contacts systematic No

Purposeful availment. and continuous?
Stream of commerce.
Intentional creating
harm in forum.

Yes Yes

Balance Interest of Sliding Scale: More Personal

Defendant, Forum, and contacts increases
Plaintiff, Efficiency, burden, more fairness Jurisdiction
and Policy Goals decreases threshold. Balance Favors Jurisdiction Allowed

Fairness Balancing Test

Balance Opposes Jurisdiction

29
 Supplemental Jurisdiction Flowchart §1367(a)
28 U.S.C. § 1367 step by step Analysis

Is there a Is there a common

jurisdictionally nucleus of operative
sufficient (base) claim Yes fact between the Yes
and at least one jurisdictionally
jurisdictionally insufficient claim and
insufficient claim? the base claim? §1367(b)
Analysis

No
No

Are all of the Yes Does claim fall within one of Yes Would assertion of
jurisdictionally these three categories? jurisdiction over the
sufficient claims based jurisdictionally
solely on §1332? (1) Claim by plaintiff insufficient claim violate
against person made a the requirements of
party under Rule 14, 19, §1332?
No 20, or 24?
(2) Claim by plaintiff joined
under Rule 19? Yes
(3) Claim by plaintiff
intervening under Rule
24?

No No

Jurisdictionally
insufficient claim
should not be heard
on the basis of
Supplemental
Jurisdiction
Consider dismissal under the four No
discretionary factors: (1) novel or
complex issue of state law, (2) state
claim predominates, (3) jurisdictionally Jurisdictionally
sufficient claim dismissed, or (4) other insufficient claim
exceptional circumstances. Should should be heard on
claim be retained in light of these the basis of
factors?
Yes Supplemental
Jurisdiction

§1367(c)
Analysis

30
 Handout on Substance and Procedure
(The Entanglement of Substance with Procedure)

Overlap Between Substance and Procedure

Purely
Purely substantive
procedural rules
rules

Entangled rules,
mixture of substance
and procedure

Form and Function in Substance and Procedure

Form

Substantive Procedural
Function Substantive Pure substantive Procedural form
rule. with substantive
function. Commented [ST29]: Parol evidence rule = procedural
Procedural Substantive form Pure procedural form but substantive function because it governs the terms of
the contract
with procedural rule. -for erie problems with the spoliation tort but this won't be
function. tested.
We have only been talking about the procudral in form and
substantive in function category.
The Modalities of Entanglement

Substantive Form Procedural Form,

Procedural Function
Type I Type I: Formal Conduct
Intended Function Rules with Intentionally
Procedural Functions
Example: Spoliation tort
(tort action for destruction of
evidence)
Type II Type II: Particularized
Particularization Decision Rules
Example: Particularized
standard for summary
judgment
Substantive Function
Type I: Formal
Procedural Rules with
Intentionally
Substantive Functions
Examples: Parole
Evidence Rule, PSLRA
Type II: Particularized
Conduct Rules
Example: Declaratory
judgment

31
Vertical Choice of Law and Federal Rules

32
33