Civil Procedure I

Civil Procedure Day 9:Judgment on the Pleadings, Dismissals, Default Judgment1

AGENDA1) Judgment on the Pleadings 2) Voluntary DismissalMarques v. Federal Reserve Bank of ChicagoHinfin Realty v. Pittston3) Involuntary DismissalAura Lamp & Lighting v. International Trading Corp4) Problems5) Default Judgment6) Problems2

Resolution on the PleadingsRule 12(b)(6) & Rule 12(c)Rule 12(b)(6) allows the Defendant to ask the Court to dismiss the case for failure to state a claim upon which relief can be granted. Rule 12(c) allows either party (but most often the Plaintiff) to request the Court to rule based only on the pleadings. For example, if Defendant admitted every allegation in the Plaintiffs complaint and the Plaintiffs claim states a cause of action upon which relief can be granted we dont want to waste resources but we cant give default judgment (the D answered) and so instead we use Rule 12(c) to request a decision on the pleadings. 3

Problem (pg. 758)B and G are law students. B agrees to keep Gs notebook while G has an interview. While the notebook is in Bs possession he uses it to play frisbee and it gets destroyed. G brings suit against B arguing that B was a BaileeB admits in his answer all the facts alleged by G but claims that because he received no consideration he could not be a Bailee. The law does not require consideration. G wants to resolve the case without the time and expense of discovery and trial. What can she do? (Hint: Rule 12(h)(2) and 12(c)). 4

Rule 41Rule 41(a)(1) Voluntary Dismissal(A) the plaintiff may dismiss an action without a court order by filing(i) a notice of dismissal before the opposing party serves either an answer or a motion for summary judgment; or(ii) a stipulation of dismissal signed by all parties who have appeared(B) The effect of voluntary dismissal unless stated otherwise is without prejudice. BUT if the Plaintiff previously dismissed any federal or state court action based on or including the same claim, a notice of dismissal operates as an adjudication on the merits. 5

Rule 41Suit #1: P sues D for trespass to property. Before D answers, P files a notice of dismissal. What result?Suit #2: P refiles the SAME suit against D. After discovery has begun both parties agree to a stipulation of dismissal. What result?Suit #3: P refiles the SAME suit against D. Now D refuses to stipulate a dismissal. Before D answers P enters a notice of dismissal. What result?Suit #4: P refiles the SAME suit against D. D responds that the suit is barred because it has already been decided on the merits. What result?6

Marques v. Federal Reserve BankPlaintiffs want the Federal Reserve to redeem $25 billion in bonds supposedly issued in 1934. Court notes that this is preposterous, no debt in excess of $100 million was issued prior to 1940, gold was purchased in 1934 at $35/oz. not the $467.02 claimed by the plaintiffs, total gold reserves at the time were only $9 billion, etc. Plaintiff sends notice of voluntary dismissal (which would allow it to refile later)Defendant asks for summary judgmentThe documents arrive at the court on the same day. 7

Marques v. Federal Reserve BankQuestion:When it cannot be determined whether the notice to dismiss or motion for summary judgment is filed first which party has the burden of proof for purposes of dismissal under Rule 41?8

Marques v. Federal Reserve BankDo the facts influence the Courts decision?No. [O]ne doesnt need a good reason, or even a sane reason or any reason to dismiss a suit voluntarily. So which side has the burden to prove their documents arrived first?It is sensible to the Court that it is the defendant that is asserting the right to prevent the plaintiff from dismissing the suit9

Marques v. Federal Reserve BankSo what is the holding?Because the defendant has not proven that the motion to dismiss arrived before the notice of dismissal the case is dismissed without prejudice under Rule 41(a)(1)Does the Court decide any question of law based on the outlandish claims made by the plaintiff?a judgment on the merits that is entered after the plaintiff has filed a proper Rule 41(a)(1) notice of dismissal is indeed void10

Rule 41Rule 41(a)(2) Unless (a)(1) applies, an action can only be dismissed by court order on terms the court considers proper. If the Defendant has entered a counterclaim, the action may be dismissed over the Defendants objection ONLY IF the counterclaim can remain pending for independent adjudication. Unless otherwise stated, dismissal under this section is WITHOUT prejudice. 11

Henfin Realty Corp v. PittstonLandowner (Henfin) brings a claim against polluter (Pittston) seeking to recover costs of environmental cleanup.After Discovery has begun Henfin moves to voluntarily dismiss the action. Pittston opposes the motion. 12

Henfin Realty Corp v. PittstonQuestion:Should the Court grant the motion to dismiss with or without prejudice? 13

Henfin Realty Corp v. PittstonTEST: We have 5 factors to consider when deciding whether a Court should grant a motion to dismiss under Rule 41(a)(2) without prejudice. (1) the Ps diligence in bringing their motion(2) any undue vexatiousness on the Ps part(3) the extent to which the suit has progressed, including the Ds expense and preparation for trial(4) the duplicative expense of relitigation; and(5) the adequacy of the plaintiffs explanation for a need to dismiss14

Henfin Realty Corp v. Pittston(1) The Ps diligence in bringing their motionPs were diligent in brining their motion to dismiss the action without prejudice because they filed it immediately after the events that led to their decision not to pursue the action at this timeThese factors include limited finances and the critical illness of a key witness (Donald Death Sr.)15

Henfin Realty Corp v. Pittston(2) Any undue vexatiousness on the Ps partthe Court finds no evidence of vexatiousness on the part of the plaintiff there is no evidence to suggest that the case was brought to harass the defendant. To the contrary, the plaintiffs have made few, if any, requests of the defendant after filing this lawsuit16

Henfin Realty Corp v. Pittston(3) The extent to which the suit has progressed, including the Defendants efforts and expense in preparation for trial.The fact that the case is approximately 21 months old weighs against granting the motion to dismiss without prejudiceHowever, when the Ps first asked Pittston to agree to dismissal without prejudice virtually no discovery had been conducted Ps have not made any discovery requests no depositions have been concluded a trial date has not been set. Thus the Court finds the third factor to be neutral17

Henfin Realty Corp v. Pittston(4) The duplicative expense of relitigationthis is not a case in which substantial discovery has been conducted, and the Court does not perceive a large amount of duplicative expenditures. As such, the fourth factor does not weigh against dismissal without prejudice18

Henfin Realty Corp v. Pittston(5) The adequacy of the plaintiffs explanation for a need to dismissthe explanations for the plaintiffs application are sufficient to support the motion the president of the Ps corporation needs time to settle his late fathers affairs to review the companies documentshe is sparing the defendants from expending additional monies in the defense of this lawsuit the Court finds that the plaintiffs explanation for their request weights heavily in favor of dismissing the action without prejudice.19

Henfin Realty Corp v. PittstonWhat about the award of attorney fees under the Rule?The purpose of such awards is generally to reimburse the defendant for the litigation costs incurred, in view of the risk faced by the defendant that the same suit will be refiled By contrast, courts rarely award fees and costs when an action is dismissed voluntarily with prejudiceSo what solution does the Court offer?It denies the award of attorneys fees without prejudice allowing Henfin to ask for dismissal with prejudice and avoid the fees OR allowing Pittston to submit proof of its costs and reduce the $135,000 sought by whatever work could be used in future litigation. 20

Rule 41Rule 41(b) If the plaintiff fails to prosecute or to comply with these rules or a court order, a defendant may move to dismiss the action or any claim against it. Unless the dismissal order states otherwise, a dismissal under this subdivision (b) and any dismissal not under this rule except for lack of jurisdiction, improper venue, or failure to join a party under Rule 19 operates as an adjudication on the merits21

Aura Lamp v. ITCAura Lamp brings suit against ITC for breach of contractAura Lamp being a one man operation and its attorney not having assistance proceeds to flagrantly violate the rulesIn addition to failing to sign pleadings filed with the court, Aura Lamp repeatedly missed court-imposed deadlines for both discovery and motion practice failed to amend its complaint to cure a jurisdictional defect for several months after the court ordered it to do so asked permission to propound discovery on the defendant after the court-imposed discovery cut-off date, a date that Aura Lamps counsel had himself selected ITC moves to dismiss under Rule 41(b) for failure to prosecute. The Court grants the motion. Aura Lamp appeals.22

Aura Lamp v. ITCQuestion:Did the Court abuse its discretion in granting ITCs motion to dismiss with prejudice?

What is required for dismissal?The Plaintiff has to be given notice that the case could be dismissedThe decision to grant the motion must be reasonable (The Courts decision is reviewed only for abuse of discretion)23

Aura Lamp v. ITCDid the Court give the Plaintiff notice?All that is required is explicit warning. Here, the court repeatedly and expressly warned Aura Lamp that it was contemplating dismissalIll set a deadline, if the case isnt met, the case is going awayI want to set a date that is going to be real so that if it isnt met Im going to take severe action in this caseif there is not good faith compliance by that date, I am going to seriously consider a motion to dismiss for want of persecution24

Aura Lamp v. ITCOK so Aura Lamp was given an explicit warning. Did the Court abuse its discretion in granting the motion to dismiss?We have upheld dismissals in cases where the violations were comparable to or less severe than they are here, and no court would find an abuse of discretion in these circumstances 25

Aura Lamp v. ITCNote 1: Can the Court dismiss without a motion by the Defendant?Link v. Wabash Railroad Company (U.S. 1962)After 6 years the Court sets a pretrial conference2 hours before the conference counsel tells the Court he cannot attend and asks for the conference to be rescheduleTrial Court dismisses for failure to prosecuteLink appeals all the way to the Supreme Court which concludes that the Court may act on it own to dismiss the case for lack of prosecution. 26

Rule 55Rule 55 Default Judgment(a) When a party against whom a judgment for affirmative relief is sought has failed to plead or defend, and that failure is shown by affidavit or otherwise, the clerk must enter the partys default.(b)(1) If the plaintiffs claim is for a sum certain or a sum that can be made certain by computation, the clerk with Ps request and an affidavit showing the amount due - must enter judgment for that amount and costs against a defendant who has been defaulted for not appearing and who is neither a minor nor incompetent person. NOTE: (b)(1) is only available when the clerk has entered default pursuant to Rule 55(a) AND the party has NEVER appeared. All other cases are governed by Rule 55(b)(2)27

Rule 55Rule 55 Default Judgment(b)(2) All other cases the party must apply to the Court for a default judgment. Minors/Incompetent Persons must be represented by counsel. If the party appeared in prior proceedings they must be given at least 7 day notice of the motion for summary judgment before the hearing. (c) The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b)**We will discuss Rule 60(b) under relief from judgment28

Intro ProblemCarter loans Clinton $1,000,000 for 1 year at 5 percent interest. Clinton signs a promissory note to signify the debt. At the end of the year Clinton refuses to pay. Carter brings suit seeking $1,050,000 in damages. Clinton does not answer or appear and so the clerk enters Clintons default and subsequently enters a default judgment against Clinton in the amount of $1,050,000. May a court clerk enter a judgment with such serious consequences to a defendant?29

Problems#1: Who enters the default judgment:A: P sues D for trespass for an uncertain amount of damages. The city is served with process and doesnt answer. B: Same except the damages are for a sum certain.C: Same as in B except D moves to dismiss for improper service, but after losing the motion does nothing more.D: Same except D answers the complaint and then does nothing else in the case. 30