FINAL Exam prep BCP Quiz

ABC, Inc., which is incorporated in and has its principal place of business headquarters in State A, builds airplanes at its factories in State B and State C. Because State B is small and ABC’s operations are large, ABC is the largest manufacturer in the state.

ExecuJet is a corporation under the law of Euphoria (a foreign country) that uses ABC airplanes to carry out its executive jet service. During a recent flight, an ExecuJet airplane lost all power and crash-landed in Euphoria, severely injuring the four passengers and two crew members on board. The airplane involved in the accident was manufactured by ABC in State C.

The injured passengers sued ABC for damages in State B federal court. Assume that the State B long-arm statute permits the exercise of personal jurisdiction to the constitutional limit. ABC responded by filing a motion to dismiss for lack of personal jurisdiction. How should the court rule on the motion?

• 1. Deny it, because although ABC’s State B contacts did not give rise to the passengers’ claims, ABC’s operations in State B are sufficient to subject it to general jurisdiction there.

• 1. Deny it, because State B’s long-arm statute goes to the constitutional limit.

• 1. Grant it, because ABC’s State B contacts did not give rise to the passengers’

     claims, and its operations in State B are insufficient to subject it to general

     jurisdiction there.

• 1. Grant it, because Euphoria would be a more appropriate venue for this lawsuit.

Answer explanation

Correct. The crash did not arise from an airplane manufactured in State B (thereby preventing specific jurisdiction) and its manufacturing operations in State B are not sufficient to subject ABC to general jurisdiction.  The corporation’s contacts with the state must be such that it may fairly be considered at home there, such as being incorporated there or having its headquarters there.  Here, ABC is incorporated and headquartered in State A, not State B, so general jurisdiction is not possible there. Daimler AG v. Bauman, 571 U.S. 117 (2014); Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011); see also Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (2017) (outlining the requirements for specific jurisdiction).

An attorney from State A helped a client from State B purchase property in State A. The two corresponded regularly through the mail while they were working on the transaction. The attorney ultimately arranged the purchase of the land for the client, but the client failed to pay the attorney’s legal fees.

The attorney sued the client for the unpaid fees in State A state court, providing notice by publication in a local State A newspaper as allowed under State A law. The client has

now approached you for advice on whether the notice by publication is constitutionally sufficient under these circumstances. What is your advice?

• 1. The notice is sufficient, because the client owns property in State A that is related to the suit.

• 1. The notice is sufficient, because it was done consistent with State A law.

• 1. The notice is insufficient, because this is an in personam action, the attorney is

     aware of the client’s mailing address, and the two have previously corresponded

     through that address

• 1. The notice is insufficient, because this is an attempt to assert quasi-in-rem

     jurisdiction, which the Supreme Court has invalidated.

Answer explanation

Correct. Because the facts indicate that the attorney had previously corresponded with the client and was aware of the client’s address, using that address to achieve notice would be more reasonably calculated to apprise the client of the action than notice by publication. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 315 (1950) (“The means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it.”).

A car driver from State A was hit by a truck and severely injured. The car driver initiated an action in State A federal court against the truck driver, a State B citizen, for negligence arising from the car accident. The car driver sought $50,000 in damages. A passenger in the same car, also from State A, joined in this action as a co-plaintiff to assert a claim against the truck driver for $30,000 in damages arising from the same car accident. Thus, the car driver and the passenger are plaintiffs permissively joined together in this action under Rule 20.

May the court exercise subject matter jurisdiction over the passenger’s claim in this case?

• 1. No, because the car driver and the passenger are both from State A, destroying complete diversity.

• 1. No, because the amount of damages sought by the passenger is insufficient and those damages may not be aggregated with the damages sought by the car driver to satisfy the required amount.

• 1. Yes, because the car driver and the passenger may aggregate their claimed damages to reach the required jurisdictional amount in controversy.

• 1. Yes, because the passenger’s claim and the car driver’s derive from a common nucleus of operative fact and the passenger is a plaintiff joined under Rule 20.

Answer explanation

Correct. Multiple plaintiffs may not aggregate their individual claims, related or unrelated, against a defendant.  Snyder v. Harris, 394 U.S. 332, 335 (1969) (“Aggregation has been permitted only (1) in cases in which a single plaintiff seeks to aggregate two or more of his own claims against a single defendant and (2) in cases in which two or more plaintiffs unite to enforce a single title or right in which they have a common and undivided interest.”); Troy Bank of Troy, Ind. v. G.A. Whitehead & Co., 222 U.S. 39, 40 (1911) (“When two or more plaintiffs, having separate and distinct demands, unite for convenience and economy in a single suit, it is essential that the demand of each be of the requisite jurisdictional amount.”).  As a result, that means that both of the claims of each plaintiff are too low to satisfy the required $75,000-plus threshold. Thus, there can be no diversity jurisdiction over either of them.  28 U.S.C. § 1332(a).  Supplemental jurisdiction fails because of the lack of any claim over which the court has an original basis for jurisdiction.  28 U.S.C. § 1367(a).

A shareholder filed, in State A federal court, a federal securities fraud action under the Securities and Exchange Act against a corporation based on a dramatic decline in the price of its stock.  Assume that under a State A statute, judges must adjudicate all fraud claims without the aid of a jury, whereas in federal court either party would be entitled to demand a jury trial for such claims.

Must the federal court follow State A’s judge-decides statute in this case? 

• 1. No, because ignoring the State A law would not necessarily cause forum shopping or result in the inequitable administration of the law.

• 1. No, because the federal interest in resolving such questions by juries outweighs the interests favoring application of the conflicting state legal rule.

• 1. No, because the securities fraud claim is created by federal law.

• 1. Yes, because ignoring the State A statute would result in a different outcome in

     the case.

• 1. Yes, because ignoring the State A statute would promote forum shopping and

     inequitable administration of the laws.

Answer explanation

Correct. There is no need to reconcile conflicts between federal and state law when the underlying claim is based on federal law.  Wright, Miller & Cooper, 19 Fed. Prac. & Proc. Juris. § 4525 (3d ed.); Maternally Yours v. Your Maternity Shop, 234 F.2d 538, 540–41 n.1 (1956) (“[T]he Erie doctrine is inapplicable to claims or issues created and governed by federal law.”).

ABC, Inc. (a State A corporation) had an exclusive supply agreement with a retailer (a State B corporation). After the retailer entered into a contract with XYZ, Inc., (a State A corporation), ABC initiated an action in federal court against the retailer, seeking to set aside the contract between the retailer and XYZ. ABC’s basis for its lawsuit was that it believed the contract between the retailer and XYZ violated the exclusive supply agreement that ABC had with the retailer.

After filing its answer, the retailer filed a motion to dismiss the claim under Rule 12(b)(7) based on the failure to join XYZ as a necessary party defendant in the action. How should the court respond to the motion?

• Deny the motion, because the dispute between the retailer and ABC can be resolved completely without the presence of XYZ.

• Deny the motion, because the retailer has waived the ability to raise this motion at this point in the proceedings.

• Grant the motion, because XYZ’s rights under its contract with the retailer will be prejudiced if the court grants the relief ABC seeks, XYZ’s joinder is not feasible because it would destroy complete diversity, and the court cannot otherwise protect XYZ’s interests.

• Order the joinder of XYZ as a party defendant, because XYZ’s rights under its contract with the retailer will be impaired if the court grants the relief ABC seeks.

Answer explanation

Correct. A judgment in this case will concern a contract to which XYZ is a party, making XYZ a necessary party.  Lomayaktewa v. Hathaway, 520 F.2d 1324, 1325 (9th Cir. 1975), cert. denied, 425 U.S. 903 (1976) (“No procedural principle is more deeply imbedded in the common law than that, in an action to set aside a lease or a contract, all parties who may be affected by the determination of the action are indispensable”). Because XYZ and ABC are from the same state, complete diversity would be destroyed, making ABC’s joinder not feasible.  28 U.S.C. § 1332(a); Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806).  Finally, the action should not proceed without XYZ because the prejudice to XYZ cannot be lessened, and the action could proceed with all parties joined in state court. Fed. R. Civ. P. 19(a), (b).

A pilot filed a breach of contract claim against an airline in federal court. The airline responded with an answer in which it raised the defenses of a lack of personal jurisdiction and improper venue. The court rejected both defenses. 

After the case was submitted to the jury, the airline sought to dismiss the action for lack of subject matter jurisdiction. May the court consider this defense at this point in the proceedings? 

• 1. No, because airline previously filed motions to dismiss for lack of personal jurisdiction and improper venue

• 1. No, because a motion to dismiss for lack of subject matter jurisdiction must be made prior to the conclusion of the trial

• 1. Yes, because a motion to dismiss for lack of subject matter jurisdiction may be made at any time

• 1. Yes, because the jury has not yet rendered its verdict.

Answer explanation

Correct. It accurately reflects Rule 12(h)(3), which reads as follows: “If the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed. R. Civ. P. 12(h)(3) (emphasis added); see also Fed. R. Civ. P. 12(g)(2) (making an exception to waiver for Rule 12(h)(3) subject matter jurisdiction defenses).

A baker initiated a breach of contract action in federal court against a flour supplier for providing poor quality flour over the past three years.  During discovery, the baker issued a request for “All records pertaining to the production, purchase, and maintenance of flour and sugar over the past three years.”  The supplier objected and produced records relating only to flour over the past three years.

If the baker were to move for an order compelling the supplier to produce the records pertaining to sugar over the past three years (after meeting and conferring with the baker), how would the court be likely to rule?

• 1. Deny the motion, because the requested documents are outside the scope of discovery.

• 1. Deny the motion, because producing such records would be unduly burdensome.

• 1. Grant the motion, because the records are relevant to the baker’s claim in the

     action.

• 1. Grant the motion, because the records relate to the subject matter of this action.

Answer explanation

Correct. The claim regards only the quality of flour supplied over the past three years. Parties are entitled only to material that is relevant to a claim or defense actually raised in the action.  Unless there is some demonstration that the records pertaining to sugar are relevant to the baker’s claims, those records lie outside the scope of discovery. Fed. R. Civ. P. 26(b)(1).

Bob, a lawyer, and his firm were being sued in federal court for legal malpractice by several of his clients, including Susan. Susan hired a process server to deliver the summons and complaint to Bob. When the process server arrived at Bob's home, he discovered that it was unoccupied. The process server then proceeded to the law firm office. The process server discovered that Bob was out of the office with another client, but served the summons and complaint on

Carl, Bob's partner in the law firm. Was service of process properly executed?

• No, because the summons and complaint was not served on Bob

• No, because service of process was executed by a process server rather than Bob himself.

• No, because service of process was executed by a process server rather than Bob himself.

• Yes, because Susan had the process server go to Bob's home first.

Answer explanation

C is correct. Since the law firm is named as a party to the lawsuit, Carl is permitted to receive the summons and the complaint. Carl is a partner in the firm, and therefore is considered of the same managerial authority as an officer, managing or general agent under Rule 4. Therefore it was proper for Carl to accept the summons and complaint. Answer (a) is improper because Rule 4 does not restrict service of process on the party itself. Answer (b) is an incorrect statement of the law. Answer (d) is not correct because the process server is not required to serve process at the defendant's home before proceeding to the defendant's place of business

Chandler (from Alabama) is a regional manager for a brand new textbook company, East Law Publications (incorporated and principal place of business in Connecticut). Chandler’s job requires him to travel from school to school to show new casebooks to law professors. His assignment for the first week of February was to visit law schools in Alabama, Georgia, and Florida. While in Florida, Chandler goes to South Beach to have some fun. He ends up getting into a bar fight with Joey, a law student from Miami Beach, Florida. Chandler and Joey each blame the other for starting the fight. Joey sues Chandler in Florida state court for battery. Chandler does not contest personal jurisdiction and instead asserts a counterclaim against Joey for battery. Joey serves papers asserting a special appearance regarding Chandler’s counterclaim and contesting personal jurisdiction.

Will the court grant Joey’s motion to dismiss the counterclaim for lack of personal jurisdiction?

• Yes

• No

Answer explanation

The correct answer is B. Here, where Chandler asserted a counterclaim against Joey arising from the same transaction or occurrence as Joey’s initial claim against Chandler, Joey has most probably either consented to personal jurisdiction or waived any objection to personal jurisdiction.

In civil litigation filed against CVS Caremark and other defendants in federal district court in Kentucky, the plaintiff filed a motion to compel production of two emails sent from the defendants’ outside counsel to one of the defendant’s employees who worked in compliance operations. The outside counsel also carbon-copied one of the two e-mails to an in-house paralegal and an in-house attorney of the defendants. The first e-mail gave outside counsel’s legal analysis of facts provided by the defendants. The second e-mail appeared to contain no new information, but rather be a reply containing only copies of the communications previously sent to outside counsel. The first e-mail similarly contained copies of the prior communications from the client, albeit with additional text written by outside counsel.

On the plaintiff’s motion to compel disclosure of the content of the defendants’ outside counsel emails, the federal district court should:

• Grant the plaintiff’s motion to compel disclosure of the emails because the emails were sent to non-parties;

• Grant the plaintiff’s motion to compel disclosure of the emails because facts are not privileged information;

• Grant the plaintiff’s motion to compel disclosure of the emails because they were copied to a paralegal;

• Deny the motion to compel disclosure of the emails because these communications are protected under the attorney-client privilege;

Answer explanation

D is correct This problem explores application of the doctrine of attorney-client privilege and motions to compel production of documents during discovery.