Settlement - Civil Procedure - Lecture Slides, Slides of Civil procedure

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Agenda for 23nd Class • Name plates out • Subject matter jurisdiction – Federal Question Jurisdiction • Next Class -- Settlement – Settlement Handout – Writing Assignment - Settlement Problems • Mid-semester feedback – 2 suggestions made by substantial number of people • 1) Lecture on topic before assigning reading and writing – Will start today • 2) Shorter writing assignments – Will stop asking you to summarize cases – If assignment goes longer than 3 pages, just stop » Will give full credit for 3 good pages, even if you have not answered all questions – Will also try to take into account other suggestions – Not sure how to make cold-calling less anxiety producing Docsity.com Court Visit Info • Small change to procedure for turning in assignment on Monday 11/5 • Two options for turning in writing assignments: – Turn it in in the normal way, at USC Law School, by 8AM Monday morning • Over the weekend is also fine. • Papers turned in to the Law School after 8AM on Monday will be marked late. – Turn it in to Julie Ryan near the entrance to Judge Snyder’s court room by 9:15AM Monday morning. • Courtroom is 312 N. Spring Street, 2nd Floor, Courtroom 5. • Julie will stay until 9:45 to collect late papers. • More details later Docsity.com Venue Questions • Pp. 175ff. Qs 2,4a,b,d (ignore the reference to 28 USC 1392) • Briefly Summarize Dee-K Enterprises • Plaintiffs sued Malaysian, Indonesian, and Thai corporations in the ED of VA alleging conspiracy to fix rubber thread prices. It is implicit that plaintiffs also sued some US corporations. Defendants challenged jurisdiction and venue. The Clayton Act provides for worldwide service of process. FRCP 4(k)(2) says that service of process establishes jurisdiction if defendant is not subject to jurisdiction in any state (which seems to be the case here) and if consistent with US law (which is the case, because of the Clayton Act) and if it is consistent with the US Constitution. Jurisdiction is constitutional because defendants had a US sales agent and customized products for the US market. The court was implicitly applying O’Connor’s “Stream of Commerce Plus” test. 1391(d) (now 1391(c)(3)) says that non-residents may be sued in any district. The US defendants reside in different states and the relevant actions and omissions took place outside the US, so jurisdiction was proper “in a judicial district in which any defendant may be found.” (This is no longer in 1391). It isn’t clear whether any defendant can be “found” in ED of VA, so the court ordered the plaintiff to show that at least one has a connection to EDVA in order for venue to be proper. Docsity.com Venue Questions • P. 176 Q5; pp. 178ff Q1a, 2 • Suppose a chemical plant in India owned by an American company leaks gas into the surrounding neighborhood and kills 16,000 people and injures half a million. The victims sue in US court. Defendants move for dismissal on the basis of forum non conveniens. The plaintiffs argue that dismissal is inappropriate, because Indian courts require a filing fee equal to 5% of damages claimed, which in this case could be billions of dollars. There are long delays in Indian courts. Indian courts have very few tort precedents and none relevant to mass torts. Discovery is usually very narrow, if allowed at all. Should the court grant the forum non conveniens motion? If it does, are there any conditions it should attach? Docsity.com Subject Matter Jurisdiction I • 2 meanings – Federal or state court (focus of class) – Specialized federal or state court • Bankruptcy court • Probate court • Other specialized courts • Federal subject matter jurisdiction – Federal courts are supposed to be of limited jurisdiction (power) – Can only exercise jurisdiction over cases allowed by Article III and authorized by federal statute • E.g. no general federal subject matter jurisdiction until 1875 – 2 basic headings of federal subject matter jurisdiction • Federal question • Diversity • Need subject matter jurisdiction AND personal jurisdiction AND Venue Docsity.com Settlement I • A settlement is a contract between the plaintiff and the defendant – Usually the defendant promises money or other relief to the plaintiff – The plaintiff promises to drop the case and/or not to bring related cases – Usually involves compromise • Extremely common – Roughly 2/3rds of cases settle – A quarter are resolved by motions to dismiss and summary judgment – Only about 5% go to trial • Usually negotiated by lawyers – Sometimes assisted by judge --- Settlement conference – Sometimes assisted by mediator • Mediation is sometimes required by courts • Mediation is sometimes completely voluntary • Settlement can occur at any time – Before filing of suit; before, during, or after discovery; during trial; while case is on appeal… – Often settlement happens after discovery is complete and after summary judgment Docsity.com Settlement II • Advantages – Saves litigation costs for parties and courts – Reduces uncertainty – Can provide relief that courts cannot or would not order • Apology, continuing business relationship, etc. – Can preserve secrecy/confidentiality • If part of settlement agreement • Disadvantages – No precedent – Usually provides less than full relief – Secrecy means public may never learn about wrongdoing • Judicial policy is to encourage settlement • Buffalo Creek, Part III provides good description of settlement negotiation – Harr, A Civil Action, provides even better description Docsity.com Economic Model of Settlement I • Economic models are simplifications of reality – But can provide insight into real world • There are many more complicated models of settlement that take into account informational asymmetries, the multi-stage nature of litigation, multiple parties, and other complications not included in the model you read • Plaintiff determines minimum settlement amount it will accept = expected recovery if goes to trial = (Estimated probability of prevailing x damages if prevails) – litigation costs – Litigation costs here are additional costs incurred if case does not settle – Cost already incurred are sunk costs, which should not effect negotiations – Irrational to settle for less than expected value of going to trial • at least if plaintiff is risk neutral Docsity.com