Presentation Transcript

1. DTS Session: Tomorrow. Room 245. 1 to 2 pm. Questions?
2. Today’s Class, Part I One last hypo to apply the Hanna framework. The Court’s Preference (?) for the Statutory Track: Burlington Northern Railroad. Stewart Organization. The most recent Erie decision: Shady Grove.
3. Two Tracks on the Erie Railroad Statutory Constitutional
4. The Two Tracks of Erie from Hanna:Track I (Statutory) If a state law conflicts with a Federal Rule of Civil Procedure (or a federal statute), then the federal court will use the Federal Rule of Civil Procedure (or federal statute) unless, the Federal Rule of Civil Procedure does not comply with the Rules Enabling Act (or is otherwise unconstitutional) or the federal statute is otherwise unconstitutional (e.g., it violates the due process clause).
5. The Two Tracks of Erie from Hanna:Track II (Constitutional) If a federal judicial practice (not a Rule of Civil Procedure/statute) conflicts with a state law, then the state law should be used if use of the federal judicial practice would lead to: 1. Forum-shopping; or 2. The inequitable administration of the laws. And if there is not a strong federal interest in using the federal judicial practice. See Byrd.
6. HYPO Kim Kardashian, a citizen of California, is now bringing a suit for medical malpractice after an “augmentation” that went horribly wrong. Kardashian is suing her plastic surgeon, Dr. Christian Troy, who is a citizen of Florida. The case is in federal district court in Florida. Assume that Florida tort law applies to this case and that, in Florida, medical malpractice plaintiffs must go to non-binding arbitration before a neutral panel of medical experts before coming to trial. Assume that in federal district court, there is no rule or statute requiring malpractice claims to go to non-binding arbitration—medical malpractice claims in federal court just follow the normal course of any other federal lawsuit. What will Dr. Troy argue? What should be the result?
7. Burlington Northern Railroad v. Woods (1987) Alabama law: Defendant who loses appeal of money judgment must pay 10% extra. E.g., Defendant loses $300,000 judgment at trial; defendant appeals and loses the appeal; defendant now must pay plaintiff $330,000. Federal law: No automatic 10% rule. But, Federal Rule of Appellate Procedure 38 says: “If the court of appeals shall determine that an appeal is frivolous, it may award just damages and single or double costs to the appellee.”
8. Conflict Between State Law and Federal Rule? How? “Rule 38 affords a court of appeals plenary discretion to assess just damages in order to penalize an appellant who takes a frivolous appeal and to compensate the injured appellee for the delay and added expense of defending the district court’s judgment. Thus, the Rule’s discretionary mode of operation unmistakably conflicts with the mandatory provision of Alabama’s affirmance penalty statute. Moreover, the purposes underlying the Rule are sufficiently coextensive with the asserted purposes of the Alabama statute to indicate that the Rule occupies the statute’s field of operation so as to preclude its application in federal diversity actions.”
9. Two Considerations First, Alabama also had its own version of Federal Rule of Appellate Procedure 38. Second, Alabama had passed its 10% rule in order to provide additional damages as compensation to the appellee for having to suffer the ordeal of defending the judgment on appeal.
10. Stewart Organization v. Ricoh (1988) An Alabama citizen and a New York citizen enter a contract with a forum selection clause that says any lawsuit that emanates from the contract will occur in New York. The Alabama citizen sues in Alabama federal court; the New York citizen then seeks a transfer to the New York federal court. Alabama law: Forum selection clauses in contracts are void. Federal law: Forum selection clauses in contracts can be valid. Federal statute in conflict: “For the convenience of the parties, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404.
11. Conflict Between State Law and Federal Statute? How? Federal law was in conflict with state law because federal law allowed the consideration of forum selection clauses as one of the factors in making decisions on whether to transfer a case; in contrast, state law totally prohibited use of the forum selection clause.
12. Consider Three Things Does the language of the transfer statute clearly tell federal courts to consider forum-selection clauses as part of the transfer analysis? Second, doesn’t the enforceability of a contractual provision seem like “substantive” contract law? Third, doesn’t this create incentives to forum-shop?
13. Shady Grove v. Allstate
14. Two Questions Why does the federal rule win out? Should the federal rule win out?