Civil Procedure Prof.

Leubsdorf

Discussion of 2008 Exam Essay Questions

This is not a model answer but a discussion of the essay questions. It includes more than
anyone could have been expected to include in an answer, and omits good points that some
students made. The questions in this exam are not easy ones.

First Essay Question

Please assume that the State of Montana has passed a Fairness in Personal Injury Act, containing
the following provisions to be applied in all personal injury actions:

(a) Each party must disclose the name of every expert it consults within 30 days of the
first consultation, and may not enter into any agreement with an expert in which the expert
agrees not to speak with an opposing party or its lawyer.

(b) Upon a showing that the plaintiff is more likely than not to prevail and is unable to
support himself or herself and obtain needed medical care pending the action, the court may
order the defendant to make interim payments to cover the plaintiff’s necessary living and
medical expenses during the action. If the plaintiff does not prevail, the court must order him or
her to reimburse any such awards.

( c) Upon a showing that the defendant is more likely than not to prevail, the court may
require the plaintiff to file a written undertaking that, should the defendant prevail, the plaintiff
will pay the defendant’s reasonable litigation costs.

Please discuss whether these provisions should be applied in a diversity action in the
United States District Court for the District of Montana for personal injuries to a Montana
plaintiff resulting from an automobile accident in Montana. You should assume that, if state law
is to be applied to any issue in the action, it is the law of Montana and not that of another state.

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 Discussion

(A) Discovery Provision

1.Conflict with Federal Rules? The time provisions of the Montana statute are clearly
inconsistent with those in Fed R Civ P 26(a)(1)(C) and (a)(2)(C), even granting that those rules
give the court discretion to alter the default timetable. For example, the Montana statute might
even require disclosure before an action has been filed, or before the defendant answers.

The Montana statute requires disclosure of the names of all consulted experts, while the
Federal Rules just cited require disclosure only of testifying experts. (Note that the statute
concerns only disclosure of names, not of the experts’ findings.) True, these are only
requirements for disclosure without any request by the opposing party. That party can still seek
the names of other consulted witnesses, for example by requesting them in an interrogatory. This
discovery method should work for nontestifying occurrence experts—for example, a surgeon
who happened to be present in the operating room at the time of the defendant’s alleged
malpractice, but whom the defendant will not use as a witness because her testimony would help
the plaintiff. When it comes to the names of nontestifying consulting witnesses, some courts
allow discovery, while others don’t, reasoning that there is no proper use that the party seeking
discovery can make of the names. That still leaves us with a conflict: Montana requires
automatic disclosure of the names of nontestifying experts, while under the Federal Rules a party
must seek such discovery and may not get it.

The divergence between the statute and the Federal Rules is even less in the case of
expert contracts not to speak with an opposing party. Montana forbids such contracts (which
may be governed by state contract law to start with) but leaves the expert free to refuse to talk on
his own initiative, leaves the party free to explain to the expert why he should not speak, and
leaves the court free to forbid communications. Note that the statute does not refer to discovery
proceedings, but to voluntary discussions. On the other side, the Federal Rules say nothing about
such discussions or contracts forbidding them, and also leave the court free to forbid discussions
(or for that matter to require them). As will be mentioned below, there is a policy difference
between Montana and the Federal Rules, but in my view the rules themselves do not conflict in
the way considered in Hanna.

2.York as modified by Hanna. The differences are unlikely to lead to forum shopping,
still less to unfairly different treatment, because: (a) what a party gains in access to the names of
experts on the other side it loses by disclosing the names of its own experts; and (b) in any event,
getting the names of experts is most unlikely to lead to getting any useful information from them.
The most that can be said is that it is possible to imagine situations in which the difference might
influence the plaintiff’s choice of forum—for example, if it has no experts itself, thinks that the
defendant will have many, and thinks it will be able to speak with them if it can get their names.
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 3. Byrd balancing. The state’s goal of increasing transparency and decreasing expert
partisanship (which I myself think would be a fine thing) seems limited to what happens during
the litigation. In that sense it is procedural and hence deserves less weight when the litigation is
in federal court. On the other hand, the Federal Rules set up an integrated system in which the
availability of relevant information is limited in view of the “work product” considerations such
as enabling parties to prepare their cases and develop their arguments and strategy in private.
These considerations are of course embodied in Fed R Civ P. 26(b)(4)(B)’s limits to discovery
from nontestifying experts. Even though that provision does not directly clash with the Montana
statute, I think its policies warrant disregarding even those parts of the statute that are not
directly inconsistent with the Federal Rules, especially in the absence of any significant forum
shopping problem.

(B) Interim Relief Provision

1.Federal Rules conflict? Rule 65 provides for interim relief. Its standards are different
from those of the Montana statute because the statute does not refer to irreparable injury to the
defendant or to the public interest, considers the strength of the plaintiff’s case not on a sliding
scale but only with reference to whether it is more likely than not to prevail, and hence calls for
less discretionary balancing. The Montana statute also does not require the plaintiff to provide
security for repayment (unlike Rule 65( c)). Because plaintiffs seeking interim relief under the
statute must be unable to support themselves, this means that they are more likely to get relief
than under Rule 65, and also that a defendant who prevails will be less likely to obtain
reimbursement. One can avoid these conflicts only by arguing that Rule 65 probably does not
contemplate this kind of interim monetary relief in the first place (see Grupo Mexicano de
Desarollo, SA. v. Alliance Bond Fund, Inc., 527 U.S. 308 (1999), which you could not be
expected to know about) and that the Montana statute is better read as setting up a new damage
remedy as part of Montana tort law.

Rule 64 is another arguably relevant rule, which if it applies expressly permits recourse to
state law remedies. But I don’t think it applies, because it is limited to “seizing a person or
property to secure satisfaction of the potential judgment.”

2. York/Hanna. If the Montana statute is not applied in federal court, poor plaintiffs will
select the state court forum where they might be able to get interim relief. And poor plaintiffs
whose cases are removed by the defendant into federal court will obtain quite different relief,
which might reasonably be called unequal administration of justice.

3. Byrd/Gasperini balancing. Some students argued that making a defendant pay out
money on the basis of a judge’s preliminary determination cuts back on the role of the jury, and
may even deprive the defendant of its Seventh Amendment jury trial right, or of its due process
rights. (If the statute does deny due process, it could not be applied either in state or in federal
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court. If it violates the Seventh Amendment, it could not be applied in federal court, but its state
court fate would depend on Montana’s constitution.) The counterargument is that the effect is no
different from that of a preliminary injunction, which sometimes issues to protect rights granted
by the common law or to compel monetary payments—for example, when a defendant is ordered
to keep on paying an employee pending decision of his suit for improper discharge. On the state
side, Montana’s concerns may include interlocutory protection of plaintiffs—which might be
considered a merely procedural concern—but also extends to providing compensation to
personal injury victims that will protect them from further injury during the suit. The latter
concern makes it reasonable to consider the statute as a tort reform measure like the one upheld
in Gasperini—note that it is limited to personal injury cases, and is part of a statutory package
that is also so limited. On the whole, in light of this, and of the forum shopping problem, I
would be inclined to apply the Montana statute in federal court, but there is certainly a case to
the contrary.

(C) Litigation Costs Provision

Because of my unclear drafting, the phrase “litigation costs” could be narrowly read as
referring only to the costs recoverable in federal court, in which case it would not include
attorney fees and expert witness fees, and would add little or nothing to what Rule 54(d)(1)
already provides. What I intended, and what you understood, was a broader reading that
includes attorney fees and expert witness fees. As so read, the provision modifies the American
Rule. It does not (contrary to what many people said) adopt the English Rule because it is one
way: prevailing defendants can recover, but not prevailing plaintiffs. The provision is thus a
mirror image of the much more common one-way pro-plaintiff attorney fee statutes.

1.Federal Rules conflict? Although one might read Rule 54(d)(1) and 28 U.S.C. §§ 1920,
1923 as requiring compliance with the American Rule in all cases, it has rather been read as
establishing a default rule that allows recovery of attorney fees when otherwise provided by
statute, contract, or the common fund doctrine. Rule 54(d)(2) recognizes this by referring to
“substantive law” that allows attorney fee recovery. That rule does lay down procedural
requirements, but those are consistent with the Montana statute: even if the court requires the
plaintiff to file a written undertaking to pay litigation costs should the defendant prevail, if the
defendant does prevail it will still have to seek those fees and specify what they are by filing a
Rule 54(d)(2) motion.

Some people thought that the Montana provision might conflict with Rule 11, which
allows an attorney fee order against a plaintiff filing a baseless complaint but is subject to
qualifications (e.g., the judge’s discretion to require another sanction, and the “safe harbor” for
avoiding sanctions by withdrawing the offending document) not found in the Montana provision.
One could therefore argue that the Montana provision undermines Rule 11’s creation of a
carefully balanced system intended to deter clearly baseless suits while keeping the courtroom
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doors open to plausible but ultimately unsuccessful ones. (The Court upheld this kind of
argument in the Woods case, p. 247.) On the other hand, there is some difference between the
goals of these two provisions, Rule 11 concerning baseless pleadings and the Montana provision
concerning claims that (even if properly pleaded) turn out to be unmeritorious. One can also
regard the Montana provision, not as a litigation sanction directed at in-court behavior, but as a
remedy under the “substantive” law of torts analogous to a cause of action for malicious
prosecution, and hence included in a tort reform package. Here again, I’m playing the Gasperini
game. On the authority of that case, I’m inclined not to find a conflict requiring that the
Montana provision be rejected.

2.York/Hanna. Failure to apply the Montana provision in federal court would promote
forum shopping: any plaintiff who thought he might lose would stay out of the Montana courts.
And many prevailing defendants in Montana courts would not have to pay their defense costs,
while those in federal courts would have to pay, which might well be considered inequitable
administration of the laws. The situation is much like that in the Cohen case (p. 236), in which
the Court required federal courts to use a state statute requiring plaintiffs in shareholder suits to
post bond for the payment of the defendant’s expenses.

3.Byrd balancing. Here the Rule 11 argument which I rejected as constituting a direct
conflict with the Montana provision reappears as an important federal policy. Rule 11, together
with the summary judgment rule and others, seeks to dispose of meritless suits but at the same
time to leave the door open to plaintiffs, including poor plaintiffs and plaintiffs seeking to
establish new kinds of claims, who assert claims that are ultimately rejected but not lacking in
foundation. Having to pay the defendant’s litigation costs interferes with the second part of this
balanced scheme. On the other hand, one can once again rely on Gasperini to characterize the
Montana provision as implementing the state’s valid “substantive” interest in tort reform:
discouraging weak litigation, for example, may reduce insurance costs for everyone and avoid
burdens on desirable industries. And Montana has sought to temper the impact of its provision
by leaving some discretion with the judge (who “may” require an undertaking), requiring the
defendant not only to prevail but to establish before trial that it is more likely to prevail, and
using an enforcement method (a written undertaking not backed by a bond or other security) that
will in practice exempt judgment-proof plaintiffs from having to pay. This is another close case,
but I think (rather tentatively) that federal courts are likely to adopt the Montana provision.

(D) Further Comments

1.Some common mistakes. Some people wasted time on general discussions of the Erie
doctrine instead of proceeding right away to discuss this particular problem, and some even
discussed subject matter and personal jurisdiction. Some people applied the York “outcome
determinative” test instead of the much modified version of it set forth in Hanna. Some people
thought that an unexplained assertion that a provision is “substantive” or “procedural” could

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justify a result, forgetting that cases such as York and Hanna make clear that classifying a
provision requires reasons in many cases, including those in this problem.

2.Under Hanna, when must state provisions be rejected because they conflict with
Federal Rules? What does this mean in this context to say that two rules conflict? This is a
murky question which I mention for completeness, not because I expected you to resolve it. In
Hanna itself, a state provision requiring in-hand service was held to conflict with a Federal Rule
allowing service either in-hand or at the defendant’s residence. Note that there was a conflict
even though it was possible to comply with both provisions by making in-hand service.
Similarly, if one rule requires or forbids an act and the other leaves the same act in the court’s
discretion, the rules conflict and the federal rule (whichever one it is) prevails. Things become
more difficult when there is no Federal Rule governing the specific act governed by the state
provision, but that provision falls within a general area such as discovery for which there are
Federal Rules. In this situation, it may be possible to conclude that the Federal Rules constitute a
unified system balancing the relevant policies and that the state provision would disrupt this
system. Alternatively, it may be more plausible to say that there is no conflict within the
meaning of Hanna, but that the Federal Rules embody policies that should be weighed against
state policies under Byrd.

3.Another general question, which again I did not expect people to resolve (though some
people did see it), concerns the relationship between the parts of the Montana statute. Parts (b)
and (c) in particular seem related, with (b) helping plaintiffs and (c) defendants. Politically, we
might guess that getting the statute through the Montana legislature might have required
including both pro-plaintiff and pro-defendant provisions. Are we then betraying the legislative
intent if we apply only one of these provisions in federal court? If so, a court might conclude that
the statute is not “severable” and must be applied either completely or not at all. Another
argument might be that, so far as forum shopping is concerned, (b) and (c) cancel out: plaintiffs
will be drawn toward state court by (b) but pushed away by (c). That is so for some plaintiffs,
but poor plaintiffs with strong claims would still prefer state courts, and wealthier ones with
weaker claims would still prefer federal court.

Second Essay Question

During this course we have examined several litigations having a broad public impact.
Martin v. Wilks (p. 787) and Amchem Products, Inc. v. Windsor (p. 836) clearly fall in this
category, as may other cases, not all of them class actions. Abram Chayes’ article on “public
law litigation” also discusses this sort of litigation. Such cases often give rise to a conflict
between two goals: (1) reaching (with reasonable efficiency) a result that will resolve a problem
affecting many people; and (2) protecting the rights of each affected individual. Civil procedure
relies on several approaches to resolving this conflict, including: (a) making it possible for
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affected individuals to participate in the court proceedings; (b) seeking to ensure that active
participants in the proceedings will represent the interests of all those affected; and ( c) making it
possible for affected individuals to remove themselves from the proceedings and avoid being
bound by them.

Please discuss one or more of these three approaches. Your discussion should include
specific examples of how the law of civil procedure now implements the approach in question,
the advantages and disadvantages of current law in meeting the two goals described in the
previous paragraph, and one or more possible ways of changing current law together with their
advantages and disadvantages.

Discussion

Because this is a more open-ended question than the first one, what I say here is still less
a model answer than what I said about that question. It represents some of my own thoughts
about the issues, and mentions various reform possibilities without stopping to appraise them in
any detail. By the way, the three approaches mentioned in the question correspond to three
approaches—voice, loyalty, exit—used by Albert O. Hirschman to describe ways of protecting
members of a community, and recently adopted by class action scholars.

(A) Participation

The easiest route to participation is under Rule 23( c)(2)(iv), which allows any member of
a 23(b)(3) class action to file an appearance—though this may be expensive, and the court will
not necessarily allow everyone who files an appearance to participate fully. In other actions
(class or nonclass) someone who wants to intervene must persuade the court that it meets the
requirements of Rule 24(a) or that the court should exercise its discretion under Rule 24(b). This
is meant to protect the court and existing parties from the burdens of an additional party that may
be unnecessary if that party has no interests deserving protection or its interests are already
adequately represented. This could be thought of as promoting efficiency, or as protecting the
rights of the original parties. Two other methods of joining an action require in practice the
consent of someone already a party: joinder as plaintiffs under Rule 20 only happens when all
the plaintiffs agree to file together, and the addition of persons who should be joined under Rule
19 only happens when someone who is already a party objects to the failure to join a nonparty.
(Contrary to what a few people said, Rule 20 does not provide a way for someone who wants to
join as a defendant to do so: defendants are named by the plaintiffs, and anyone who wants to
participate on the defense side must then seek intervention.)

Aside from these requirements of approval by the court or another party, someone
wishing to join faces obvious cost problems, which will be greater if the case is in a far off
forum. Several people suggested that forms of participation less elaborate than full joinder might
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ease this problem: intervention limited to specified issues; participation as an amicus, without
any possibility of presenting evidence or engaging in discovery; or simply writing a letter to the
court (with copies to other parties), which some judges have allowed in class actions. All these
things now occur, but providing for them by rule might encourage judges to permit them more
often. Now that courts have begun to allow electronic filing, the burdens of participation could
be further reduced.

Another problem with these various methods is that nonparties may not know that their
interests could be affected by an action. In 23(b)(3) class actions, individual notice is required to
all class members identifiable with reasonable effort. That leaves some people out, but may be as
much as can economically be required, especially since the plaintiff must bear the costs of notice.
Courts may require similar notice in other class actions, and may also require other forms of
notice such as advertising, announcements included by corporate defendants in monthly bills, or
(in cases involving medications or the like) notices to physicians that may get them to alert their
patients. Typically, these forms of notice are used only when it is already clear that the class will
recover money, and the goal is to get class members to claim their share (or perhaps to opt out).
Giving notice just so that people may decide to participate is likely to be too expensive in view
of the likelihood that virtually no one will respond. Thus in a 23(b)(2) class action for some
kinds of injunctive relief, where it is not practical for people to opt out of a classwide injunction
and they do not have to make a claim to benefit from the injunction, not much effort is spent on
notice. But there could certainly be class actions that are not under Rule 23(b)(3) but involve
individual stakes large enough to make it practical for class members to participate or opt out,
and one could well require notice in such cases. Also, when outsiders do seek to join in class
actions, the source of the attempt is usually their lawyers, who often have a number of potential
class members as clients. One could require notice to such lawyers, though in practice members
of the tort bar are likely to know without formal notice what class actions affecting many of their
clients are pending.

Outside the class action area, there is no provision for requiring notice to those who
might be affected by an action. Rule 19(c) does call for parties seeking relief to name those who
are required to be joined if feasible, so a court might then require notice to them. But the court is
not required to do so, and I suspect that few litigants ever list people under this provision. There
are virtually no cases discussing it. So one reform might be providing sanctions or incentives
that could cause litigants (and courts) to pay attention to this provision. In a sense, claim and
issue preclusion law provides one incentive: if one wants a nonparty to be bound by the result,
one should seek to bring them into the action.

(B) Representation

Class actions have several features meant to ensure adequate representation of class
members. Rule 23(a)(3 & 4) require that the class representative have typical claims and will
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adequately protect class interests. Rule 23(g) imposes a duty of adequate representation on class
counsel, and requires the court to consider various factors and to appoint as class counsel the
lawyer or firm best able to represent the class’ interests. When there are conflicting interests
within the class, as in Amchem, the court should either deny class certification or recognize
subclasses, each with its own class representatives and counsel. In addition to generally
protecting the interests of class members during the action, the court must pass on the fairness
and adequacy of any settlement. And under Hansberry a class member who did not participate in
the action may later avoid being bound if representation was inadequate (although some courts
now hold that the class action court’s findings of adequacy sometimes foreclose such a collateral
attack). There is also the possibility of a malpractice suit by an inadequately represented class
member against class counsel, though I’m not sure that anyone has actually obtained relief in
such a suit.

In practice, these safeguards don’t always work. One problem is that class counsel,
whose interests in the action are likely to be much greater than those of any class member, may
sacrifice class interests to obtain a large fee (the opposite of the Evans v. Jeff D problem). The
defendant is likely to benefit from such a sacrifice and is therefore unlikely to object, and unless
someone else appears to challenge a settlement the court will have no reason to question it. And
because class counsel is obligated to seek the best interests of the class as a whole, counsel has a
good deal of leeway in deciding what to do, which can be abused. One possible solution here is
to devise a fee formula aligning the interests of class members and their counsel—though it is
easier to imagine such a formula than to find it. Other approaches to this problem include having
the lead plaintiff or the court negotiate a fee agreement at the outset of the case (some courts
have used competitive bidding among law firms), court review of the lawyer’s fee request at its
end, and (in the case of percentage fees) calculating the fee on the basis of the benefits actually
received by class members rather than the amount stated in the settlement. Some of these
approaches are more likely to prevent overcharging than to ensure that class counsel will put in
enough work to maximize the class recovery before accepting a settlement.

Another approach is to make it more likely that the named plaintiffs will keep an eye on
their lawyer. The 1995 legislation on securities law class actions seeks to do this by providing
that the class member with the largest stake—often a state pension fund—should be the
presumptive class representative. This won’t work when no class member has a large stake, and
at least one student pointed out that the interests of a large stake class members may conflict with
those of a small stake one. Some courts have appointed a class guardian, charged with evaluating
a settlement and reporting to the court. I have suggested going a step further by appointing a
“Devil’s Advocate” to present all plausible objections to a settlement whenever no one else is
objecting and large sums are in dispute.

In suits that are not class actions, parties have no duty at all to represent nonparties,
except to the extent that some body of law outside civil procedure creates such a duty. (For
example, a trustee is obliged by trust law to protect the interests of beneficiaries.) A party’s

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failure to represent the interests of outsiders can, however, help provide grounds for a motion to
intervene, or for a motion to dismiss for failure to join an indispensable party.

(C ) Getting Out

In 23(b)(3) class actions, class members have the option to opt out when the class is
certified, and the court may give them another chance to do so at settlement time. Whether this
option is effective depends on whether notice is comprehensible, reaches all class members, and
overcomes their natural inertia—problems that might be overcome by switching to an “opt in”
class action. The problem with extending the right to opt out to other class actions is that it may
not be possible to exclude one party from class-wide injunctive relief in a 23(b)(2) class action,
and that doing so in a 23(b)(1) class action may harm those already parties. But this is not so in
all instances. A 23(b)(2) class action, for example, might include ancillary money relief, or
injunctive relief such as promotions that could be given to some class members but not others.
Another barrier to opting out as a protection for class members is that in many class actions the
individual claims are too small to be litigated separately, so that those who opt out will receive
nothing. This is not always the case: recently some pension funds and other investors with large
claims have been opting out of securities fraud class actions and negotiating very large
settlements for themselves.

In actions that are not class actions, plaintiffs can “opt out” by dropping the suit, for
example by seeking voluntary dismissal under Rule 41(a) and later bringing another suit, subject
to safeguards meant to protect other parties from plaintiffs who do this more than once or
otherwise burden other parties. A defendant who prefers to litigate in another forum can
sometimes persuade the court to order arbitration (if there is an arbitration agreement), transfer
the case under 28 U.S.C. § 1404, dismiss it for forum non conveniens, or sever the claims against
it under Rules 21 and 42(b). Each of these remedies of course requires a showing going beyond
the defendant’s preference not to be sued in a particular forum.

The law of claim and issue preclusion backs up these various methods of opting out by
providing that a nonparty will not be bound by the judgment. Indeed, one way issue preclusion
places a premium on nonparticipation: a nonparty to a case may be able to use a judgment in that
case against an opponent that had a chance to litigate the issue, but will not be bound by a
judgment in the opponent’s favor. But as Martin v. Wilks illustrates, the same law creates an
incentive for those who are parties to a case and hope to prevail to join all potential opponents to
ensure that they will be bound. Similarly, defendants in class actions like Amchem—that is,
those in which individual claims are large enough to press separately--often prefer the class
action to be a 23(b)(1) or 23(b)(2) action so that all the class members will be bound by the
adjudication or settlement without being able to opt out.

Although removing oneself from an action protects those who do it from claim and issue
preclusion, it still may leave them exposed to other impacts from the action. As noted in the
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NDRC case, some cases are likely to lead to precedents that will affect similar claims. And some
court decisions change the legal or practical state of affairs in ways that outsiders cannot avoid.
Bush v. Gore decided who won the 2000 Presidential election, making the winner President for
everyone, including nonparties to the case. The dissenters in Martin v. Wilks wanted court
decisions in employment discrimination class actions to have a similar effect, a result later
legislated by Congress for all those aware of the action who do not intervene. The presence of
such effects on outsiders not resulting from claim or issue preclusion is one of the requirements
for intervention as of right under Rule 24(a)(2) and for requiring joinder when possible under
Rule 19(a)(1)(B)(i).

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