Civil Procedure I University of Mississippi

Fall 2009 School of Law

Final Exam Michael H. Hoffheimer

(Model answers at end)

General instructions

This is a closed book exam. Do not consult any materials in any form or communicate with any person while taking the exam other than the faculty member who is administering the exam.

Do not remove the exam, blue books, or any exam materials from this room while you are taking the exam. When you have finished and turned in your answers, you may take these questions with you.

This exam consists of two parts. You will have three hours to complete the exam. Answer all questions. Do not answer a question by referring to an answer to a different question, and do not use abbreviations. If you assume any additional facts, explain why it is necessary to do so.

Identify yourself on your blue books only by your exam number. By placing your exam number on your blue book and by submitting your blue book for credit, you are agreeing to the following pledge as required by law school policy:

"On my honor I have neither given nor received improper assistance. And I will report any improper assistance that I am made aware of."

I. SHORT ANSWERS (suggested time ten minutes each or one hour total)

Instructions. Answer each of the following questions in your blue book. Each question in this part can be answered adequately with a short well-written answer that is not longer than one paragraph.

1. On April 1, 2009, Dale, a lifelong resident of Memphis, Tennessee, agreed to sell her house in Memphis, to Pam, a lifelong resident of Jefferson, Mississippi. They reduced their agreement to a written contract and signed it.

After many unsuccessful attempts to communicate with Dale by telephone and email, on December 8, 2009, Pam commenced a civil action against Dale in Circuit Court in Mississippi. Pam laid venue in the Circuit embracing the county in which Jefferson is located, and Pam arranged for personal delivery of service of process on Dale while Dale was physically present in Mississippi attending a football game.

On December 14, 2009, Dale comes to you for legal advice and asks whether she must litigate this dispute in the court where she has been sued. Please advise.

2. Jack Hartbrecher, a citizen of New York, promised to marry Jill Tedd, a citizen of California. The two agreed to meet at the Thrifty Drive Thru Chapel in Sinn City, Nevada to get married. They gave each other diamond rings, each of which cost $10,000. Hartbrecher changed his mind and failed to show up as agreed.

Jill sued Jack in federal court. Her complaint stated two claims. The first was for breach of contract of marriage, for which she demanded $80,000. The second was for a court order requiring the return of the ring she gave Hartbrecher.

After the completion of discovery, both parties moved for summary judgment. After viewing the videotaped depositions, the trial judge granted the defendant’s motion for summary judgment on the breach of contract of marriage claim. The judge explained in her written opinion, “The plaintiff claims that she experienced pain and suffering that could be valued at $80,000. While she undoubtedly suffered some embarrassment, the defendant has paid her back for her trip to Sinn City and is letting her keep a ring valued at $10,000. Her claim that she suffered additional damages in the amount of $80,000 is inherently incredible. The court has observed defendant and is of the decided opinion that plaintiff is far better off, financially and emotionally, as a result of the defendant’s refusal to marry her. There is simply no legally sufficient evidentiary basis for a jury to award damages in this amount for this claim.”

In contrast, because there was conflicting evidence about whether the gift of the ring was conditional, the court denied the motions for summary judgment on the claim for return of the ring and has scheduled that claim for trial.

Jill’s lawyer has come to you for legal advice and wants to know if the court’s grant of summary judgment on damages was erroneous or appealable. Please explain.

3. A truck owned by Acme Trucking Co. and driven by Tom Trucker collided with a car driven by Vick Vickers. The company is incorporated in Delaware with its principal place of business in Alabama. Trucker is a citizen of Alabama, and Vickers is a citizen of Georgia. Two days after the collision, the company fired Trucker. Trucker believes he was fired because of his race, not because of the accident.

Vickers brings a diversity action in federal court joining both Acme Trucking Co. and Trucker as defendants. Trucker serves an answer. In addition he serves a cross claim on Acme Trucking Co. His cross claim alleges that Acme Trucking Company violated federal law by firing Trucker based on his race. He demands damages in the amount of $5000 and reinstatement in his old job.

Acme Trucking Co. comes to you for advice and asks whether there is any problem with the cross claim. Please explain.

4. Cattlemen’s Bank, Inc., is a Delaware corporation with its only office in Bonechill, Colorado. Stella Dedder, one the bank’s customers died, leaving five one hundred dollar bills in a safe deposit box. The bank manager has received two letters demanding the money. The first is from Brady Dedder, a citizen of Canada who has been admitted to permanent residence in the United States and is domiciled in Denver, Colorado. The second is from Deb Dedder, a citizen of Mexico.

The bank manager calls you and wants to know whether the bank can resolve the dispute by means of an interpleader action in federal court. Please explain.

5. The New York Time Magazine is published by the New York Time Magazine Corp., a Delaware corporation with its principal place of business in New York City. In 2008 the magazine fired one of its employees, Denise Denison. At the time it fired her, the magazine ran a feature article explaining that Denison had been fired because she had written a story in which she had made up some of her sources and because Denison had submitted falsified vouchers for travel expenses in connection with the story. Denison is a citizen of Connecticut.

In June 2008 the New York Time Magazine Corp. sued Denison in state court in New York. The complaint stated claims under state law for breach of contract and fraud, seeking to recover $20,000 that the magazine had paid Denison for travel expenses that it alleged she had never incurred. During discovery, the magazine learned of additional instances where Denison submitted false claims for travel expenses. Moreover, Denison’s lawyer began to threaten to sue the magazine for slander, claiming that the 2008 article contained false statements.

Consequently, in July 2009, the magazine amended its complaint to add two new claims. The first new claim alleged additional acts of fraud and demanded total damages in the amount of $80,000. The second new claim alleged that the magazine took due care in investigating the 2008 story and requested a declaratory judgment to the effect that the article was protected speech under the First Amendment of the U.S. Constitution and that the newspaper is not liable for defamation.

Denison’s lawyer contacts you for legal advice about whether Denison can remove the lawsuit to federal court. Please advise.

6. Peters, a citizen of Illinois, was seriously injured when his car was struck by a car operated by Dodge, a student at the University of Michigan visiting Illinois. Dodge has qualified as a Michigan resident for purposes of tuition, but he continues to vote in Arizona where he resided with his grandmother before going to college. Dodge’s parents live in Illinois and he was visiting them at the time of the accident.

Peters’s attorney, Charles (“Champ”) Champerty, filed a lawsuit in federal court, alleging diversity of citizenship jurisdiction. Rather than suing Dodge, he sued Dodge’s wealthy grandmother. Champerty did not research whether Dodge was an adult or was driving his grandmother’s car. If he had researched the facts, he would have learned that Dodge was twenty-two at the time of the accident and was driving his own car.

Soon after filing the complaint, Champerty was disbarred and imprisoned for unrelated misconduct. Peters secured the legal services of Edgar (“Eager”) Beaver to continue the lawsuit.

Grandmother Dodge moved to dismiss, and Beaver opposed the motion. At a hearing on the motion, Beaver could identify no facts or law that supported the complaint’s claim that defendant was liable. Consequently, the trial judge granted the motion to dismiss. As Beaver was preparing to leave the courtroom, the trial judge said, “Wait a minute, Counselor. Is there any reason I should not find you in violation of Rule 11 and impose sanctions on you, including the defendant’s attorney’s fees?”

What should Mr. Beaver say to the court?

II. Instructions. Consider the following problems carefully and write coherent, literate essays in your blue book that respond to them.

A. The Case of the Fishy Forum (suggested time 60 minutes)

Dolly, Molly and Holly Doodledorf are three sisters who live in Smoky Hollow, Tennessee. The sisters own and operate a restaurant named The Three Sisters. They share the work and profits on an amicable basis. Because it is not incorporated, the restaurant business is a partnership.

In the summer of 2006, Harry Hartburne, a citizen of the recently created state of West Florida, was visiting Smoky Hollow for recreational purposes. On his last day in town, he ate lunch at The Three Sisters restaurant. After returning to West Florida, Hartburne became very ill as a result of exposure to vermicelli verybadicus, a rare parasite that is transmitted by trout. Hartburne had ordered trout at the restaurant and eaten a mouthful of undercooked fish before sending it back to the kitchen.

In December 2008, Hartburne commenced a civil action in West Florida state court naming the Three Sisters Restaurant as the defendant. The lawsuit demands damages in the amount of $12.98 for the cost of the meal, $25,000 for medical expenses, and $50,000 for pain and suffering.

Hartburne’s lawyer sent a waiver of service request to the restaurant’s address. Dolly opened the mail and signed and returned the waiver.

One week later, Hartburne’s lawyer arranged for personal delivery of a summons and copy of the complaint upon Molly while she was physically present in West Florida. Molly was visiting the state for seven days for her honeymoon, the only time she ever visited the state.

The three sisters hired a lawyer who removed the lawsuit to the United States District Court for the District of West Florida. After removing the action, the restaurant served an answer admitting that Hartburne dined in the restaurant but denying that he was served bad fish. The answer also raised the affirmative defense of laches, alleging that the plaintiff had unreasonably delayed litigating his claim and that the delay prejudiced the restaurant’s ability to defend itself by preventing it from preserving evidence.

After serving its answer, the defendant moved to transfer the lawsuit pursuant to 28 U.S.C. section 1404(a) from the federal district where it was pending to the federal district where the alleged tort occurred and where the defendant does business. The plaintiff opposed the motion, citing Porgy v. Bass, a 2009 decision of the West Florida Supreme Court. In that case the West Florida court refused to recognize the doctrine of forum non conveniens, and it opined that any lawsuit properly filed in West Florida may not be dismissed or transferred to the court of any other state. After reading the opinion, the trial judged denied the motion.

Upon completion of discovery, the defendant moved to dismiss due to the defense of laches. The defendant acknowledged that the West Florida statute of limitations for personal injury claims is three years and that the lawsuit was not barred by the statute. But the defendant cited the decision of Flounder v. Grouper in which the West Florida Supreme Court held that when a tort claim is not barred by the statute of limitation, it may still be dismissed under the doctrine of laches whenever plaintiff’s delay in filing suit is unreasonable and the delay prejudices the defendant’s ability to defend. The federal judge denied defendant’s motion, explaining that adopting the defense of laches would promote forum shopping by encouraging defendants to remove lawsuits to federal court.

At trial, an issue arose concerning whether the judge or jury should decide the amount of damages for pain and suffering. Although the Seventh Amendment preserves the right in federal court to jury decisionmaking on facts, including the amount of damages, West Florida’s Omnibus Tort Reform Act provides that the amount of pain and suffering damages must be determined by the judge, not the jury. Pursuant to the Act, the defendant requested the court not to submit the issue of pain and suffering to the jury. The court denied the request. The jury returned a verdict in the total amount of $54,012.98, which included $24,000 for pain and suffering.

The case is now on appeal to the federal Circuit Court. The plaintiff raises as error the submission to the jury of the amount of damages for pain and suffering in violation of the state statute.

The restaurant cross appeals on several grounds. First, the restaurant asserts that waiver of service was not proper because West Florida rules of procedure require waiver requests to be sent by certified mail, and the plaintiff’s lawyer sent the request by ordinary first class mail. It also argues that personal service on a partner who is temporarily in the state on a honeymoon is not adequate service on the partnership.

Second, the restaurant asserts that the court lacked personal jurisdiction over the restaurant. It argues that the restaurant does not engage in any business in West Florida and that the lawsuit does not arise out of any contacts by the restaurant with West Florida. It maintains that Molly’s honeymoon should not be construed as presence in the state by the partnership, and it argues that, even if there were such contacts, it would be unreasonable to require the restaurant to litigate in West Florida.

Third, the defendant asserts that the court lacks subject matter jurisdiction because the jury’s verdict shows conclusively that the amount in controversy was less than the amount required by statute.

Finally, the restaurant maintains that even if the federal court had jurisdiction, its refusal to transfer and its refusal to apply the defense of laches were erroneous.

You are clerking for the Circuit Court. Please write a memorandum proposing the correct disposition and fully addressing issues: 1) the submission of the question of damages for pain and suffering to the jury; 2) the adequacy of service of process on the defendant; 3) the court’s personal jurisdiction on the defendant; 4) the court’s subject matter jurisdiction; 5) the denial of the motion to transfer; and 6) the court’s failure to dismiss on grounds of laches.

B. The Case of the Faux News Blues (suggested time 60 minutes)

The Tennessee Tattler is a weekly newspaper that focuses on dramatic and scandalous events featuring people in Tennessee. The newspaper is owned and operated by Tentatco, a Delaware corporation. The paper’s editors and writers work at offices leased on the fourth floor of the Grump Building in downtown Memphis. The paper is printed at a building owned by Tentatco that is located in North Haven, Mississippi. Tentatco also owns four delivery trucks, which are licensed in Mississippi and parked at its building in North Haven when not in transit. Of Tentatco’s 24 employees, 18 live in Tennessee; 5 live in Mississippi; and 1 lives in Arkansas.

The Tennessee Tattler publishes 100,000 copies weekly. Over 90 percent are sold at news stands and in convenience stores. The rest are mailed to subscribers. Over 98 per cent of all sales and over 98 percent of all subscribers live in the state of Tennessee. Only 750 copies are sold at news stands or convenience stores in the state of Mississippi, and only 120 copies are mailed to subscribers in Mississippi. The paper derives about half its income from the sale of advertisements; all of this comes from businesses in Tennessee.

In July 2009, Ed Torr, the newsroom editor, received a tip that Penny Vickers, the mayor of North Haven, Mississippi, was being sentenced at noon for driving under the influence. Although the paper had never previously covered events in Mississippi, Torr thought the story might appeal to the paper’s readers. Accordingly, Torr called one of the writers, Cubby Porter, into his office and assigned him the story.

Porter informed Torr that he lived in Memphis and never visited Mississippi except when he went to lunch at Smoky’s BBQ, a restaurant located in Mississippi just south of the Tennessee state line.

Torr gave Porter faulty directions to North Haven, and Porter arrived just as Mayor Vickers was leaving the North Haven court house with a lawyer. Porter took a photograph of the mayor with the lawyer. When he asked the lawyer what the sentence was, the lawyer answered, “Six months for a second offense, all suspended except for two days in the county jail.”

The next week’s edition of the Tennessee Tattler published the photograph of the mayor and lawyer on the front page with the caption “North Haven Mayor tanked, tagged and serving time—six months for second DUI.”

The caption was false. The mayor’s son, not Mayor Vickers, had been convicted of DUI. The mayor abstains from drinking alcohol and speaks publicly on the risks of alcohol abuse. The false story enraged her and hurt her reputation.

When the newspaper refused to print a suitable apology, Vickers commenced a civil action in federal district court for the Northern District of Mississippi. Her complaint alleges diversity jurisdiction, names Porter and Tentatco as defendants, states a claim for libel, and demands actual damages for injury to reputation and embarrassment in the amount of $50,000 and punitive damages in the amount of $100,000.

Vickers’s lawyer mailed Tentatco a request for waiver of service at its office in Memphis. The corporation’s president signed and returned the waiver form. Vickers’s lawyer arranged for personal delivery of process on Porter while he was eating lunch at Smoky’s BBQ.

Mississippi law provides: “Punitive damages may not be awarded if the claimant does not prove by clear and convincing evidence that the defendant against whom punitive damages are sought acted with actual malice, gross negligence which evidences a willful, wanton or reckless disregard for the safety of others, or committed actual fraud.” Miss Code § 11-1-65(1)(a).

You are the newspaper’s lawyer. Please identify and evaluate possible defenses to the action in federal court—specifically 1) personal jurisdiction over each defendant, 2) subject matter jurisdiction, and 3) venue. Also explain whether the court will have jurisdiction over a possible cross claim by the newspaper against the reporter for indemnification in the event the newspaper is liable.

Answers

1. The defendant may effect timely removal to federal court but only if the amount in controversy exceeds $75,000. If the complaint states a claim for specific performance of the contract, then the action may and should be transferred to Chancery Court if it remains in the state system.

2. The summary judgment was probably erroneous. The court used the wrong standard by evaluating the sufficiency of evidence instead of determining whether there was no genuine issue of material fact and the moving party was entitled to judgment as a matter of law. The judgment is not appealable because it is not final as it does not end all claims against all parties.

3. The cross claim is improper because it does not arise from the same transaction or occurrence as the plaintiff’s claim.

4. There is no interpleader under Rule 22 because the amount in controversy does not exceed $75000. The amount for statutory interpleader is met ($500 and up), and if the bank deposits the money with the court and there is minimal diversity, then the requirements for statutory interpleader are satisfied. But federal courts are split over whether an alien admitted to permanent residence will be deemed a citizen of the state in which he or she resides when treating the alien as a state citizen creates (rather than destroys) diversity.

5. The amended complaint is not removable based on diversity of citizenship because more than one year has passed since the action was commenced. The amended complaint is not removable based on federal question jurisdiction because it raises the federal issue in the form of an anticipated defense and thus does not satisfy the well pleaded complaint rule.

6. Even though the lawyer did not sign the complaint, advocating a claim in a pleading that was signed in violation of Rule 11 is also a Rule 11 violation. (Frivolously opposing the motion to dismiss might not be a violation, but frivolously advocating positions asserted in the complaint in opposing the motion could be.) The 21 day warning period is not required for a judge who initiates proceedings. But sanctions generally are limited to what is necessary to deter, and fees to the other side are not authorized when the court initiates proceedings.

Long A

A good answer would identify and analyze the following issues:

1. The court correct submitted pain and suffering damages to the jury because the 7th amendment trumps state law (substantive or procedural) under the Supremacy Clause.

2. Adequacy of service issues were waived when not raised in the answer or in a motion to dismiss and were cured in any event by subsequent proper service

3. Personal jurisdiction issues regarding the partnership were waived when not raised in an answer or motion to dismiss.

4. Subject matter jurisdiction issues can be raised as they are not waived.

Diversity was complete—partnership’s jurisdiction is every state in which a partner is a citizen, and for natural persons that means where they are domiciled. All here were domiciled in Tennessee.

Amount in controversy can be met by adding together all types of damages

The amount is determined by the amount demanded in good faith unless the court can say that the amount is less as to a legal certainty

The jurisdictional amount is determined at commencement and is not affected by a lower recovery

5. The denial of the motion to transfer based on state law was erroneous. A federal statute (section 1404(a)) governs under the Supremacy Clause.

6. The failure to apply state law of laches in addition to the state statute of limitation was erroneous. Erie requires federal courts to apply state law regardless of whether its source is a state statute or case. Applying an unguided Erie analysis, the state doctrine of laches clearly significantly affects the outcome of litigation in a way that would encourage forum shopping.

Long B

A good answer would identify and analyze the following:

1. There is good personal jurisdiction over Porter. Personal delivery of process in state (tagging) is either always valid or usually is so when supported by minimum contacts. Here there are minimum contacts because the action arose out of or related to the defendant’s activity in the state.

2, There is valid personal jurisdiction over Tentaco:

General jurisdiction may be established by systematic and continuous business activity in the state including operating a warehouse, printing, owning property

Specific personal jurisdiction can be established because

Miss. Long arms authorizes (either tort was committed in part in state or defendant does any character of work or service in state)

The application of the long arm is constitution because there are minimum contacts

-intentional statement made in state causing injury in state

-authority of Jones v. Calder (holding persons in Florida subject to personal jurisdiction in California where paper was distributed in state, statements affected reputation of person in state, and defendants knew plaintiff was located in that state)

3. There is a problem with federal subject matter jurisdiction because there may not be complete diversity. The corporation is a citizen of both Delaware and its principal place of business. Under the nerve center test its principal place of business is Tenn. (and there is complete diversity) but under the muscle test, its principal place may be Miss. (and there is not complete diversity in an action commenced by a Miss. citizen)

The amount in controversy is met because the plaintiff can add compensatory and punitive damages, unless the court can say that the claim will not authorize punitive damages as a matter of legal certainty.

4. Venue is proper because significant acts or omissions giving rise to the claim occurred in the district. The libel was printed and distributed there and concerned the reputation of a person living there.

5. If the court has diversity jurisdiction over plaintiff’s claim, then there is supplemental jurisdiction over the cross claim because it arises from the same constitutional case as the claim in the complaint over which the court has original jurisdiction. It arises from a common nucleus of operative fact.