Civil Procedure I § 2 University of Mississippi
Fall 1998 Law School
Final Exam Michael H. Hoffheimer
I. SHORT ANSWERS
1. Pete, a citizen of Mississippi, was visiting New Orleans during Mardi Gras. While Pete was walking down the street, he was approached by Dan, a citizen of Louisiana. Dan was drunk and mistook Pete for someone else. Dan called Pete a "dirty thief" and punched him in the face.
When Pete returned home, he commenced a civil action against Dan in Mississippi Circuit Court for slander and for assault and battery. Pete was unable to arrange to serve Dan in hand in the state of Mississippi, but he learned that Dan inherited some real property in Mississippi that was used as a hunting camp. Two years ago, Dan visited the camp once, obtained a Mississippi state hunting license, and killed three squirrels. He has had no other contact with the state of Mississippi (other than injuring one of its citizens in New Orleans).
Pete obtained an attachment against the land pursuant to Miss. Code Ann. § 13-3-15, which provides: "When the defendant shall not be found, the plaintiff may have an attachment against the estate of the defendant. If, upon such attachment, the sheriff shall seize or attach any property of the defendant, the same proceedings shall thereafter be had as if the suit had been originally commenced by attachment." Together with the attachment, Pete mailed Dan a copy of the complaint by certified mail.
Dan has moved to dismiss. Rule on his motion and explain, citing relevant legal authority.
Motion to dismiss granted. Shaffer v. Heitner required all
exercises of personal jurisdiction to comport with the minimum contacts
and fairness standards set forth in International Shoe. (Even Justice
Scalia recognizes the validity of the Shaffer holding for quasi in rem
actions). In this case, there are absolutely no contacts supporting jurisdiction
from which the cause of action arises; nor does the mere ownership of unrelated
property in state constitute continuous and systematic activity so that
the defendant could be subject to general jurisdiction.
2. Same facts. In addition to moving to dismiss, Dan has asserted a counterclaim alleging that the prejudgment attachment authorized by state law violated his right to due process. He demands damages on the counterclaim in the amount of $10,000.
Pete has moved to dismiss Dan's counterclaim arguing that 1) it is frivolous and 2) that the state court lacks subject matter jurisdiction over it because it is a federal question. Rule on Pete's motion to dismiss and explain.
Motion denied. First, the claim is clearly not frivolous. The state
procedure permitting an interference with property rights prior to any
hearing may well support a cause of action for violation of due process
rights. See Connecticut v. Doehr. Second, the Circuit Court has
general subject matter jurisdiction, which includes jurisdiction over federal
questions. These are not taken away out of the court's jurisdiction any
federal or state law.
3. You represent Big Mississippi Bank Corp., which is incorporated in Delaware with its principal place of business in Oxford, Mississippi. Your client has custody of a diamond ring that was left in a safe deposit box by Dee Ceased when Dee died. Ms. Able and Ms. Baker each claim to be entitled to the ring. Dee left a will bequeathing all personal property to Ms. Able, but Baker says Dee gave her the ring as a gift during Dee's life.
For its part the bank does not claim any right to the ring and concedes that either Ms. Able or Ms. Baker should get the ring. The ring is valued at $10,000. Both Ms. Able and Ms. Baker are citizens of Tennessee.
Your client's in-house attorney has suggested that federal interpleader may be the best remedy. Please explain fully whether federal interpleader is available.
Federal interpleader is not available. Interpleader under Federal
Rule of Civil Procedure 22 is unavailable because there is not jurisdiction:
there is neither a federal question nor is there diversity jurisdiction
(as the amount in controversy does not exceed $75,000). Moreover, federal
statutory interpleader under section 1335 is unavailable because the claimants
are both from the same state so there is not even the minimal diversity
required by the statute.
4. Paul is a citizen of Mississippi. In September 1997 he was injured when his car collided with a car driven by Doug. At the time of the accident Doug was a citizen of Texas. Doug first moved to Mississippi in June 1997. But in December 1997 he decided to make Mississippi his permanent home. He registered to vote in Mississippi, got a Mississippi drivers license, and got in-state residency for tuition purposes.
In January 1998, Paul commenced a civil action against Doug in Mississippi Chancery Court for personal injury, demanding money damages in the amount of $90,000. Doug removed the action to federal district court for the district in which the state Chancery court was located.
In federal court Paul immediately filed a motion to dismiss or to remand the case to state court. Paul argues removal is improper because 1) Chancery Court lacked subject matter jurisdiction and 2) the district court lacked original jurisdiction. Please rule on the motions and explain.
Motion to remand granted. While it is true that Chancery Court lacked
subject matter jurisdiction over this action for damages at law, the lack
of state court jurisdiction does not prevent removal to federal court if
the federal court would have had original jurisdiction and the other requirements
for removal are met. Nevertheless, the federal court lacked original jurisdiction
because there was no diversity of citizenship. The parties' citizenship
is determined at the time of the commencement of the action, and by 1998
Dough had changed his domicile to Mississippi by having the intent while
there to make the state his permanent home.
5. In January 1997, Jane Smith, citizen of Mississippi, received a summons and complaint by certified mail in a civil action that had been commenced in a federal district court in Alabama. The complaint alleged that she had seriously injured Phil Phink, a Mississippi citizen, in a car accident in Alabama. The complaint alleged incorrectly that Smith was an Alabama citizen and further alleged falsely that Smith had been driving recklessly and while intoxicated in causing an accident in which Phink was injured.
Smith has never been to Alabama. Because she often gets phone calls and mail for other "Jane Smiths," she assumed that the plaintiff had served her by mistake, and she ignored the complaint.
In September 1998, Smith received legal process informing her that her savings account in Mississippi has been garnished. She is surprised to learn that after she ignored the process she received in the federal case in Alabama, the federal court entered a default judgment against her in the amount of $100,000. Now Phink's lawyer has come to Mississippi to attempt to satisfy the judgment by garnishing Smith's account.
Smith has appeared in the garnishment proceeding and filed a motion to dismiss the claim against her account. First, she argues that the federal judgment is void for lack of subject matter jurisdiction. Second, she argues that the federal judgment is void for lack of personal jurisdiction. Third, she argues that the judgment was erroneously entered against the wrong person because she had never been to Alabama and did not cause the accident.
Rule on Smith's motion and address each of her arguments.
1. Even thought the Alabama federal court lacked subject matter jurisdiction because there was no diversity of citizenship between the parties, that error cannot be raised now in a collateral attack on the judgment and it is not void for that reason. 2. The Alabama federal court lacked personal jurisdiction because the defendant had no minimum contacts with that state, and because the defendant did not appear in Alabama and instead took a default judgment, the judgment may be challenged in the collateral garnishment proceedings and must be declared void. 3. Any errors going to the merits of the claim (such as the defendant did not do it or was wrongly named) may not be raised to invalidate a default judgment.
6. State Legislator Nemo is outraged to learn that many plaintiffs bring diversity cases in federal court but do not recover damages above the amount in controversy. Nemo believes that the federal statute, 28 U.S.C. § 1332(b), is the cause. Although this statute permits a federal court to impose costs on plaintiffs that do not recover more than $75,000 damages, the taxing of such costs is discretionary, and Nemo is convinced that only the certainty of having to pay costs will deter plaintiffs from bringing such cases in federal court. Accordingly, Nemo has proposed an amendment to the state constitution that would provide:
In all actions at law, where a plaintiff recovers a final judgment that is below the jurisdictional amount in a court of limited subject matter jurisdiction, the trial judge must impose court costs on the plaintiff.
This proposed amendment has been referred to the Judiciary Committee, which has sent it to you for your legal opinion. Will the amendment achieve its desired results? Please explain.
No, the amendment cannot achieve its desired results. First, it will
not be applied by the federal courts. The discretionary shifting of costs
derives from a federal statute, and acts of Congress must prevail under
the supremacy clause. Second, court costs (unlike fees and damages) are
generally so small that it is questionable whether the taxing of costs
would in fact deter those who seek a federal forum.
II. Long Answer
The Case of the Awful Eiffel Tower Trick (60 minutes)
Pat Patterson was born and raised in Lamarville, Mississippi and has lived there all his life. One day, while looking at information on the Internet on his home computer in Lamarville, Patterson read an interesting announcement claiming that the French government had decided to sell shares of the Eiffel Tower, a famous building in Paris.
The announcement explained that the Tower had been divided up into 50 parts, each to be sold at $1000 per part. Because Patterson always liked the Eiffel Tower and thought it might be a good investment, he decided to purchase all of its parts so that he would own the entire tower.
He followed instructions and sent a certified check for the purchase price in the amount of $50,000 to a post office box in Memphis. He received a certificate by return mail acknowledging that he owned the Eiffel Tower in fee simple absolute.
Patterson has subsequently learned that he was the victim of a fraud. The Internet ad was posted as part of an unlawful scheme to get money, and all the claims in the ad were false. The perpetrator of the fraud was Canard Menteur, a French citizen who had been admitted to the United States for permanent residence. Menteur lived in a trailer. He kept the trailer at a commercial trailer park in Memphis about half the time and kept it on property he rented on a lake in Mississippi about half the time. Menteur identified himself as a Tennessee resident when he applied for a Tennessee driver's license, but he identified himself on the very same day as a Mississippi resident when he enrolled for classes at a community college in northern Mississippi.
Menteur published or posted the Internet ad from his home computer while the trailer was parked in Tennessee. He also rented a post office box in Tennessee to which Patterson sent the check. Upon receiving the check, Menteur deposited the funds in a bank account in Tennessee.
Patterson's lawyer commenced a civil action against Menteur in federal district court for the northern district of Mississippi--the district in which Lamarville is located and the district where Patterson read the false statements, where he relied on these statements, and from which he sent the payment. Patterson's claim contains two separate causes of action. First, he claims that Menteur violated federal securities laws and seeks damages under a federal statute in the amount of $50,000. Second, he claims that Menteur engaged in common law fraud and demands compensatory damages in the amount of $50,000 and punitive damages in the amount of $50,000.
Patterson sent a copy of the complaint to Menteur's Tennessee post office box together with a waiver-of-service form. Menteur signed and returned the waiver form and then filed a motion to dismiss. The only grounds set forth in the motion to dismiss were the court's lack of subject matter jurisdiction and its lack of personal jurisdiction.
The trial court denied the motion. After a full trial, judgment was eventually entered against Menteur in the amount of $75,000. Menteur has appealed. The only errors he raises on appeal are that the trial court failed to dismiss the case for lack of subject matter jurisdiction, lack of personal jurisdiction, and lack of venue.
You are clerking for a judge on the United States Court of Appeals for the Fifth Circuit. She has asked you to draft a memorandum explaining fully whether the trial court has 1) subject matter jurisdiction over both causes of action, 2) personal jurisdiction over defendant, and 3) venue.
The trial court has subject matter jurisdiction over both causes of action. First, there is federal question jurisdiction over the securities fraud claim as it arises from a federal statute and no further amount in controversy need be satisfied.
Second, there is federal jurisdiction over the fraud claim based on state law in one of two different ways depending on where the defendant is domiciled. There is diversity of citizenship jurisdiction if the defendant is domiciled in Tennessee, because under the diversity statute, an alien admitted to permanent residence is a citizen of the state in which he or she is domiciled. Domicile requires presence plus intent to make a place one's home. The facts are unclear: the defendant spends significant time in two states, has ties to each, and has indicated that each is his place of residence for different purposes. Because intent is the key question and evidence is sufficient to support a finding of domicile in Tennessee, I would be inclined to affirm a trial court finding of Tennessee citizenship. If there is diversity, then the amount in controversy (exceeding $75,000) is easily satisfied by aggregating the damages demanded in good faith (punitives may be counted and even the damages sought on the federal question claim).
But even if the defendant is domiciled in Mississippi and there is no diversity of citizenship jurisdiction, the court may nevertheless exercise supplemental jurisdiction over the state-law claim because it has original jurisdiction over the federal question claim and the state claim is part of the same constitutional case because it arises from a common nucleus of operative facts. None of the special grounds that authorize federal courts to decline to exercise supplemental jurisdiction seem to be present: the claim does not raise novel or complex issues of state law, nor does the state-law claim substantially predominate over the federal claim.
The federal court also has personal jurisdiction. The territorial reach of the federal court's personal jurisdiction is coextensive with the Mississippi state courts. In this case Mississippi state courts could exercise valid personal jurisdiction for two reasons. First, there may be valid general jurisdiction. If the defendant established domicile or residence in Mississippi, the court has general jurisdiction. Even if the defendant did not establish legal domicile, his ongoing physical presence in the state, rental of real property, attendance at a community college, and other acts (including doing some business in state) may establish enough continuous and systematic activity in state to subject the defendant to general jurisdiction.
But even if the defendant is a nonresident and not subject to general jurisdiction, he is subject to specific jurisdiction under the Mississippi long-arm statute. In fact three different parts of the statute are probably satisfied: he entered into a contract with a Mississippi resident to be performed in part in Mississippi (plaintiff's performance and part of defendant's occurred in state); he committed a tort in part in state (several elements of fraud occurred in state including false statements, reliance, and damages); and he engaged in some character of business in the state.
The exercise of such jurisdiction would not violate defendant's due process rights because it is supported by minimum contacts and would be fair and reasonable. The fraud claim arises out of the contacts that are the basis of long-arm jurisdiction. By sending false statements into Mississippi through the Internet and perpetrating a fraud here on a Mississippi resident by inducing the plaintiff to act in reliance on the statement, the defendant did purposeful acts directed at the forum state. Balancing further confirms the reasonableness or fairness of such jurisdiction: the state and plaintiff have a strong interest in such jurisdiction, and the inconvenience to defendant is minimal.
Lastly, venue cannot possibly support a reversal. First, the defense of venue was waived when it was not raised in defendant's pre-answer motion to dismiss. Second, venue may be laid against an alien in any district.