Civil Procedure II Outline

CIVIL PROCEDURE II
Professor Shipley
UGA Law Spring 2013
 
 
 
 
 
 
I. Chapter V.  Incentives to Litigate
A.         Litigation in US 21st century
a.        95% in state courts~ 108 million cases- this is bc of limited jurisdiction of federal courts
b.       19 million civil lawsuits nationwide (excluding domestic cases)
c.        Nationally, about 3% of cases go to trial- of these, 70% are before a jury and 30% go before a judge-settlement is most common outcome of cases
d.       Torts are less than half of filings but 60% of trials- contracts still most of cases though
B.         Substitutionary Remedies- Remedies that are usually money damages, and are awarded when a specific remedy is not available. (D cannot replace an injured limb or fix the pain of insult so money damages substitute it.)
1.       two broad categories of damages are specific and substitutionary.
2.       Damages: compensatory, liquidated (statutory-caps are put on this),statutory,  punitive
3.       Economic vs.  noneconomic/ pecuniary v. nonpecuniary
4.       Compensatory Damages:
a.       Proof must be given in order to show that compensatory damages are appropriate.
b.      These are “economic damages” which compensate a π for $$ lost (wages) or $$ paid ( hospital bills).
i. It is easy to calculate
c.       Other compensatory damages may not be for money lost or paid but awarded to compensate for other things like:
i. pain and suffering
ii. emotional distress
iii. loss of consortium (harm to a relationship)
iv. humiliation
v. harm to reputation.
vi. courts typically do not compensate successful litigants for costs of litigation
d.      Measuring non-economic damages is a challenge.
i. In pain and suffering, three times the amount of economic damages.
o    This is not a law and so cannot be instructed to a jury.
5.       Liquidated Damages: A contractual agreement to what the damages would be if the contract was breached.
a.       26(A)(1)(a)iii-mandatory disclosures in regards to damages
b.       bifurcation- separate liability and damages portions of trial
c.        There are certain regs for liquidated remedies and are only allowed if the actual damages difficult to calculate.
6.       Statutory Damages: legislature determines what the range is wherein damages can be recovered in the case of breach- usually a minimum/maximum limit on damages. –Ex: fees for copyright infringement.
7.       Punitive Damages: They aim entirely at punishment.
a.        The normal ratio is 3 compensatory to 1 punitive.
b.       In some jxds P’s seeking punitive must introduce testimony about D’s net worth to determine how much money would actually be a punishment.
c.        Punitive damages awarded must be proportional to the harm inflicted and there must be a focus on
1. Degree of reprehensibility of D’s misconduct 
2. Disparity between the actual or potential harm suffered by P and the punitive damages awarded and
3. Difference between punitive damages awarded by jury and civil penalties authorized or imposed in comparable cases.- from BMW v. Gore
8.    Usually damages are either substitutionary or specific. In debt collection it is both since specific performance would be money and so would substitutionary damages.
9.    Median award for punitive damages is $64,000- often lower than compensatory damages.
10.    Interest- Two types:
i.                     prejudgment is calculated from the time the claim accrues
ii.                   judgment interest is from time judgment is made to when judgment amount is actually paid.- interest rules vary by jurisdiction;
iii.                 Most damages accrue interest-rationale is that it provides incentive for D to pay judgment. 
11.   State Farm Mutual Automobile Insurance Co. v. Campbell
a.       Rule of Law.Due Process prohibits the imposition of grossly excessive or arbitrary punishments on a tortfeasor; For purposes of determining whether an award of punitive damages is excessive, an award that exceeds 9X (single digit ratio) ratio between punitive and compensatory damages is excessive. Supreme Court also noted that there must be some correlation between the two, so presumptions against 145 to 1 ratio of punitive to comp damages.
b.       Why wasn’t State Farm’s conduct super egregious to meet #1 of Gore test? Focused on behavior all over the country, but needed to just look at what happened in Utah.-#2 Gore factor-nature/ratio of harm suffered by P- Campbell’s weren’t physically harmed and got all money back with compensatory- not too much harm suffered, just economic and not personal-Gore guidepost #3- disparity between punitive damages award and civil penalties imposed/authorized by comparable cases.
C.          Specific Remedies
1.       No equitable relief (specific) unless inadequate legal remedy, ie, damages won’t compensate P for what will or has happened
2.       Law and equity merged in 1938 with FRCP. Same for most states except MS, DE, TN (separate equity courts)
3.       In GA, to get equitable relief, still have to go in and show that have inadequate remedy at law- don’t want money to substitute, want actual contract performed, for example
4.       Other types of specific relief- ejectment (kick ppl off premises), replevin (get property back that has been taken from you), injunction (most prevalent)
5.       Idea of Specific Relief-court may order party to do things or refrain from doing them; can also enlist help of officials in recapturing personal or real property from D wrongfully possessing or occupying
6.       Some courts insist that P must demonstrate harm is irreparable. This rule is starting to go away
7.       Equity and specific relief
a.        Injunctions- most prevalent form of equitable relief- stop doing something
i.         Rule 65-p146 in supplement: Injunctions and Restraining Orders
b.       Constructive trusts-here, constructive means it isn’t true, so here there really isn’t a trust, but court will assume it is to achieve fairness
c.        Rescission or cancellation of contract
d.       Quiet title
e.        Replevin- legal action to recover property vs illegal ejectment
8.       Sigma Chemical Co. v. Harris
a.       Belief that injunctive relief can only be applied where the hardship to P if relief is denied is greater than the hardship to D if relief is granted. Thus, because the court found that P planned to lose part of a competitive edge and trade secrets it had taken over forty years to develop, while the potential harm to D was slight given that other former employees of P have gone on to find work without great difficulty, injunctive relief was appropriate. 
9.       What are standards for grant of permanent injunction?
1.       P has to show are threatened by injury for which there is no adequate legal remedy
2.       Hardship on P if no injunction is much greater than hardship on D. P has to convince the Court that if there is injunction D won’t be severely affected but if not granted there WILL be severe harm incurred by P.
3.       What doesn’t get brought out with permanent injunction but does in temporary injunction is that P has to show they will likely succeed on the merits of the case.
4.       in Permanent Inj,: success is established, so just look at two factors above.
5.       temp injunction also looks at public interest factors- not so in permanent injunction analysis.
10.    Rule 52: Findings and Conclusions by the Court- judgment on partial findings: p126 statute
a.        says what judges have to say- for interlocutory injunctions, need written explanation so parties can know how he reached his decision- function of due process. This is a check on arbitrary decision making.
11.    Is there a remedial hierarchy? Courts often state that they prefer legal to equitable remedies. Usually to get an equitable remedy (usually an injunction) you must show that legal remedies (ie damages) are inadequate.
12.    Notes from class:  damages are one time remedy while permanent injunction is backed by contempt power so that this repeatedly keeps someone from doing something (ex: fine for trash in yard will be one time stopper, but injunction to stop leaving trash all over sidewalk will keep trash off sidewalk permanently).
12.    ACC and Stiles Property handout:
(1)    Have to show 4 things: moving party will suffer irreparable injury. Substantial harm suffered. Likely to prevail on merits. Not contra to public policy.
(2)    Same factors used by fed cts and state cts- Ga version of rule 65 a lot like fed rule 65. Nothing in rule saying these 4 standards, but these are sort of like common law rules for getting an injunctionàinterlocutory injunction is what GA uses for permanent injunction.
(3)    Why inadequate remedy at law here? Ct says the interest in land is threatened and property is unique. Old presumption in law that property is unique so presume irreparable harm since each piece of property is unique.
D.        Declaratory Relief
1.       Used when a party has a legal problem that neither damages nor specific remedy can resolve.
2.       Relatively new remedy, but predates federal rules.
3.       DR is when an individual can seek a court declaration of their rights without an injunction.
4.       Procedure for DR in FCs is governed by Rule 57
5.       Sought most often in insurance and patent litigation
6.       Existence of another adequate remedy does not preclude a declaratory judgment that is otherwise appropriate
(Rule 57).
7.       28 USC 2202- further relief- may be granted after reasonable notice and hearing against any adverse party whose rights have been determined.
8.       “Because Clause”- implicit in every damage judgment is a declaratory judgment that in effect says we give judgment in amount of X or impose injunction, because (because clause is the implicit declaratory judgment)… in declaratory judgment, the P only asks for the “because” clause
9.       Declaratory judgment often used for contracts, scope of copyright, etc.
10.    Don’t forget still need SMJ for fed courts (so diversity, amt in  controversy, or fed ques)
11.    Nationwide v. Zavalis Case:
a.        University of Illinois students torch the football field, while drunk
b.       There was state court case of astroturf company and Safeco going on so they dismissed without prejudice for state court to find on who was liable since this is premature- only an issue if found liable in state court case.
c.        Sent back and fed district court told to rule on these circumstances- presumption that we should ordinarily defer to state when there are parallel actions, but fed ct does rule and shows standard use of declaratory judgment- to interpret insurance policies.
E.         Temporary Remedies- present problems because are granted before case is heard on the merits.
1.       Preliminary Injunctions and Temp Restraining Orders
a.        To get injunction- Rule 65: same four factors for injunction
b.       Washington Capitals v. Barry
i. Basketball player that Capitals trying to restrain from playing for another basketball club
ii. Test that Northern District of Cali uses to determine whether to grant preliminary injunction against Barry: have to show serious questions on the merits and maintain status quo (defined by court as last peaceable uncontested status of both parties) and that damage will result from denial of the motion.- here status quo is stay on w/ capitals
d.       If you get a preliminary injunction in your favor, will have to post a bond to cover any damages that D will have to incur if the injunction turns out to be overturned
e.        In this case, Barry wants a higher bond
f.         Winter v. Natural Resources Defense Council, Inc (2008)
i. Standard for properly granting a preliminary injunction is not based on the “possibility” of irreparable harm to marine life, but rather that “irreparable injury is likely” in the absence of such an injunction.
ii. Regardless, Court reasoned that in this case the public interest in conducting naval training exercises outweighed even certain irreparable harm to marine life.
iii. Ginsberg and Souter dissented- Ginsberg says that there is a sliding scale and need some flexibility.
Ø  Note 2: circuits split across the nation on if sliding scale is still around or if majority opinion here stands- majority says must meet all prongs of P seeking prelim injunction must establish is likely to succeed on merits, likely to suffer irreparable harm, balance of equities tips in his favor, and that injunction is in public interest. Ginsberg’s dissent says that if you have a lot of one of these can offset not as much of another (this is what is meant by sliding scale).
Ø  some circuits will grant PI if P can show EITHER irreparable harm or one of the other factors.
Ø  GA: goes with a sliding scale approach utilized in superior courts- don’t have to meet all 4 requirements! Make a much stronger case on one to offset weak argument on the other.
Ø  got to SupCt because special exception to finality requirement (28 USC 1291) that allows interlocutory appeals from orders granting injunctions, etc.
Ø  Note 4: there are also processes that are provisional monetary relief avenues: attachment and garnishment.
·         Attachment is seizure of real property
·         Garnishment is asking a third party- bank or employer- not to pay D because P has a claim on the money.
·         Justifications for these remedies resemble preliminary injunction: additionally, it may help to have these things to gain leverage in settlement discussions.
F.         Provisional Remedies and Due Process
(1)    Rule 65(b)- Temporary Restraining Orders (TRO)- issuing without notice (1)- used in cases of DV, debtor who will run off with assets, etc.
(2)   Fuentes v. Shevin
i. Facts: Margarita Fuentes (P) purchased a gas stove and service policy and a stereo from the Firestone.
ii. primary purpose with this case is need PRIOR notice; some exceptions, but usually need notice to satisfy DP
iii. General rule: notice and opportunity to be heard must happen BEFORE property is seized.
iv. There are exceptions:
1. Seizure is necessary to secure an important governmental or general public interest
2. Need for very prompt action
3. State has kept strict control over its monopoly of legitimate force; if person initiating seizure has been a govt official responsible for determining under standards of narrowly drawn statute it was necessary and justified
4. also, there should be some initial determination made by someone other than a  functionary clerk of a court, either in a hearing or something else meaningful, that has some judicial involvement on the front end.
5. waiver wasn’t legitimate because there was no bargaining over contractual terms- one sided, small print, etc.
(3)     Matthews v. Eldridge now leading case on what sort of hearing is required by due process: 3 factors determine whether person has received process that is due-
a.        Private interest that will be affected by official action
b.       Risk of erroneous deprivation of such interest and probable value, if any, of add’l/subst procedural safeguards
c.        Govt’s interest including function involved and fiscal/admin burdens that add’l/subst procedural reqs would entail
1.       Cost analysis is a factor- what kind of hearing will satisfy due process, but Court has been flexible, due to fiscal burden of hearing (ie hearing a towing case 5 days after car towed- more judges, more staff, maybe more space needed, etc).
II. Chapter 6: Pleading
A.      Story of Pleading
(1) Pleading is P’s complaint and D’s response to that complaint are the first steps
(2) Rule 7(a): definitions of pleading
(3) Rule 7(b): distinguishes between pleadings and motions
(4) Rule 8(a): recitation for basis for jx- States adapting FRCP as their procedural guidelines usually omit the need to plead jx
(5) Rule 8(b): denial
(6) Rule 12(b): defense motions- “demurrer” is a 12(b)(6)- P’s story doesn’t m