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Personal Injury Cases: Federal vs State Court

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Personal Injury Cases: Federal vs State Court

This course is designed for attorneys who already practice in state court. It will emphasize how litigating personal injury cases in federal court is different than in most state courts. Legal issues will be discussed as well as custom and practice, including examples from the presenter’s own experience.

Transcript

- [Atty. Schiavetta] Hello, my name is Dan Schiavetta. This presentation is on how litigating personal injury cases in federal court differs from state court. It is aimed at attorneys who already practice in state court. I've been a lawyer for 30 years, and mostly practice in New York. This gives me a special perspective on this topic, because probably no state court differs more from federal court than New York. It was certainly a surprise the first time I got thrown into a federal court case after practicing in state court for five years. What are the general pluses and minuses of federal court? First, the pluses, I put here cafeterias, and indeed, the cafeterias are nicer in federal court, but my point is the buildings are more impressive and there's a more serious atmosphere. Also, states do not appoint judges for life. Except for I think New Hampshire, and a couple of other states, federal judges are appointed for life, and they are accomplished people. Every time I've argued in front of a federal judge, they had fingertip knowledge of the case, and asked probing questions that showed that they had done their own research, or their clerks have. A federal clerkship is the most plum assignment any new lawyer can had, and these clerks research the hell out of everything. Also the jurors are more serious, or at least they take their jobs more seriously. You are less likely to have a juror try to excuse his way out of serving. This is even though state and federal courts seem to draw their juror candidates out of the same database. How they get that database I don't know, but it includes all kinds of people, voters or not, citizens or not. As an example, my wife is from the Dominican Republic, and some years ago, her mother visited us and stayed for about a month. Two years later, we got in the mail a federal jury summons addressed to her. My wife and I were thinking, how did they get her name? The only thing we could think of was she had to go to the emergency room one night, and that's how they got her name. Anyway, when jurors, and I should say venire persons, they're not actually jurors until they're selected this morning. When jurors walk into a federal courthouse, they seem to realize this is serious business. Now the minuses, federal courthouses are more formal with stricter security. Until recently, you had to check your cell phone in at the door. If you've tried to talk in a hallway, you will be shushed by the officer. This to me is a minus. Also they have higher expectations of attorneys in their firms. A lot of federal judges come from big law backgrounds, and they assume you have an army of paralegals on hand to turn out thousands of pages of discovery in a few days, and you certainly can't bluff your way through an appearance if you don't know everything about the pile. Federal practice is also meaner. All the states have some statute of regulation that sanctions frivolous conduct or conduct meant to harass or delay, but Federal Rule of Civil Procedural 11 is a powerful factor in federal court practice, and as the sanctions are against a law firm, as opposed to against a party, an award of sanctions is immediately appealable. I'll get to that later on. Also in federal court, you spend a lot of time, and it's really a waste of time, on whether the court has jurisdiction. Sometimes most of the activity and the expense on a case is squandered on jurisdictional issues. We'll explore that in a moment. Now I'm going to go into why plaintiffs like federal court, and why defendants like it. Plaintiffs like it because it makes the case look bigger. We are suing in federal court sounds more impressive. Also with some rare exceptions we'll get into later, if defendant makes a motion for summary judgment and it's denied, the defendant has to wait until final judgment to appeal it. Most defendants would rather settle than wait through trial and verdict. Also, large verdicts, in fact, any size verdict is more likely to be left alone by the trial judge than by the circuit court. This is because of the seventh amendment to the Constitution, which states that no fact tried by a jury shall be reexamined by any court except under the rules of common law, and those rules give a lot of deference to the jury. Finally, federal courts are more likely to allow expert testimony based on inventive theories. We'll get into the Daubert standard, which is now codified as federal rule of evidence 702, which allows expert opinions based on reliable principles reliably applied. Some states such as New York and eight or nine others still use what's called the Frye standard, F-R-Y-E, the cite is in your written materials, which requires the expert's methods to be generally accepted, which is a narrower standard. Now, why do defendants like federal court? First, you might say, how would they get there? Well, two ways, one by removing a case from state court, and also indirectly by bringing a related action in federal court. For example, a declaratory judgment action, which decides an insurance issue and which, because coverage is so important, might end up controlling how the state court action gets settled. I've done that several times. Also in the first place, a lot of plaintiff's attorneys are not admitted in federal court. It's unknown territory for them, and it might be a little scary. They might be hesitant about handing off the case to someone who is admitted in federal court, and they'd have to split their fee. Federal courts also have less toleration for delay. You're dragged into a rule 16 conference right away, and there are strict guidelines as to, deadlines as to what has to be done by when, when witnesses are produced, when trial will happen, and so forth. They can't just threaten to fully litigate. They will actually have to do it. Finally, federal judges, like I said, had industrious clerks working for them, and they're already very knowledgeable about the law. Sometimes a state court judge won't understand a complex legal or insurance issue, maybe because they don't have the resources to look through it. I've had that happen in federal court only once, well, twice. Anyway, complex arguments are more likely things that a defendant would care about as opposed to a plaintiff. I'm going to talk now about how to get into federal court, and then if you're stuck there, some ways to maybe get out of it. You get into federal court if the claims involve a legitimate federal issue, if they're based on the federal constitution, or a federal statute. One example important in personal injury litigation is 42 USC 1983, the Civil Rights Statute, which allows you to sue anybody who, under color of law, violates any constitutional right. It says under color of law, but a suite can be brought not just against governmental defendants, but also private entities. If a private entity is fulfilling a traditional state function, for example, a private security force, which is hired by a municipality to act as a police force, they become what's called a state actor, and can be sued under 1983. Another example is I spent some years defending foster care placement agencies in sexual abuse lawsuits where the abuse was allegedly by one of the foster parents, typically the father. The claim included violation of due process and equal protection under the constitution, and foster care placement was traditionally done by the state. The state contracted out to the agency, and so the agency became a state actor which could be sued under 1983. Now, that's the rule in New York, but it's not universal. The analysis is different in some states where foster child placement was traditionally done not by the state, but by churches and charities, and in those states, you can't sue a placement agency under 1983 because they would not be state actors. Also, the Constitution gives federal courts jurisdiction over cases brought in admiralty, for example, anybody injured while working on a vessel. They don't have to be an actual sailor or a Merchant Marine person. There's also a federal statute for that, the Jones Act. One nice thing about admiralty cases from a plaintiff's standpoint is there's no collateral source rule, or rather, there isn't the typical abrogation of the collateral source rule. Someone whose medical treatment was paid for by insurance can still collect those expenses and get a double recovery. These cases can be also be brought in state court, although there wouldn't be any point. Some claims have to be brought in federal court, bankruptcy proceedings, for example. This relates to personal injury actions, because sometimes both plaintiff and defendant get sucked into bankruptcy court on a state law claim. The trustee has jurisdiction over all the assets of the debtor, which includes any claims he might have. Also a defendant sometimes can get into federal court, I forgot to mention this before, if he can cook up a counterclaim based on federal law. This relates to removal, which we'll talk about in a minute. Aside from federally based claims, pure state law claims can be brought in federal court if there is diversity of citizenship, if there is, as article three of the Constitution puts it, suits between citizens of different states. You might remember in law school early on, Chief Justice Marshall in a case called Strawbridge versus Curtiss in 1806 held that there must be complete diversity. In other words, every single plaintiff must be from a different state from every single defendant. That's not a necessary reading of the constitutional phrase, and Marshall himself regretted it later on, but since then it's been the established rule. In the 1970s, there was an attempt in Congress to get rid of diversity jurisdiction, and it probably would not have violated the Constitution to do that, but it was shot down by the lawyers' lobby. Lawyers like to have more options on where to sue and be sued. The diversity requirement applies only to real parties and interests. Sometimes the plaintiffs are not really against all the defendants. For example, in an insurance coverage dispute, the underlying plaintiffs might have been joined as nominal defendants. There's no claim against them, but they have an interest in the outcome. They can be from the same state as plaintiffs. The court will conceptually realign the caption without actually changing it, to see who is really against whom. In an insurance coverage dispute, they'll put the insurance company, which is trying to get out of doing something on one side, and everybody else on the other, 'cause everybody else wants that insurance company to do that thing, to cover something. If the insurer is from a different state than the others, once the caption is conceptually realigned, then there will be diversity. Sometimes diversity is impossible, for example, in class actions where there might be thousands of plaintiffs, one of them surely would be from the same state as one of the defendants. In those situations, all that's required is what's called minimal diversity, just one party from one side is from a different state than just one party on the other side. This is also true in interpleader actions, which I have brought in federal court, where an insurance company puts up its policy and sues, so to speak, anyone who has a claim on it. If just one claimant that is defendant is from a different state, just one defendant is from a different state than the insurer, then there will be minimal diversity, which is enough for interpleader. In a diversity action with just state claims at issue, as we know, the court applies the law of the state that the court sits in. That's the Erie doctrine, which you learned about in law school. Erie, which came down in 1938, by the way, was a prudential decision. There's nothing in the constitution that requires it. Until 1938, Supreme Court regularly created case law on various common law issues, and state supreme courts were only too happy to follow along, but federal courts were getting more and more involved in federal issues through the 14th amendment, and they had to finally give up the practice of creating common law. I recommend to you a little book called, "The Death of Contract" by a Grant Gilmore, which gives a good account of what happened. Now on to what's called removal. Another way of getting into federal court is by taking a state court action and removing it. There's the removal statute, 28 USC 1446. A defendant can transfer the case to federal court if it's the kind of case that could have been brought there, either a federal question or diversity. The notice of removal is self-executing. All you do is serve it on plaintiff, and file it in the local federal district court, and the case is now in federal court, and the state court clerk closes up his file. This has to be done within 30 days of being served, and is this 30 days from service on the first served defendant, or 30 days from service on the last served defendant? You'd think we'd have a rule on this by now, but in fact, there's a split of authority. Just if you're a defendant who wants to remove, do it as soon as possible. All defendants have to agree to remove, and the case can't be removed if there is just one defendant who is in state. Defendants have to all be from out of state. Once removed, it is up to plaintiff to make a motion to remand it to state court. He has 30 days to do that. If the motion to remand is granted, well, that order is not appealable, because at that point, the case is back in state court, and the federal courts don't have jurisdiction. If the motion is denied, that's not appealable either. There are some exceptions for certain kinds of cases. When the motions remand, with the motion to remand, the judge often orders discovery to test jurisdiction. This is an example of the waste of time I spoke about earlier. Federal judges are very picky about this. Recently, I defended a case in New Jersey district court where our client was a limited liability company, and all the partners were in New York, so we had diversity, but the judge on her own, without plaintiff bringing it up, ordered us to inspect company records, and look at all the silent partners, and there were a lot of them, and lo and behold, one of them was a resident in New Jersey. That destroyed diversity, and the case was remanded to state court. Sometimes depositions are ordered, and extensive document discovery. Now, I said that the notice of removal is self executing. It gets removed even if the case on its face shows that there's no diversity, but you can still do that if one of the defendants has been added by plaintiff just to stay in state court. Is the claim against that defendant just a sham claim or just insubstantial? There's case law on that. If that's true, the court will dismiss that defendant from the case, the motion to remand is denied, and the case stays in federal court. Now I'm gonna talk about getting out of federal court. What if you're a defendant who got sued there, and you'd rather be in state court, or if you're a plaintiff who has brought suit in state court only to see it get removed? There are some strategies you can use. If you bring in a third party under rule 14, the federal court still has jurisdiction, even though the third party has the same residence as plaintiff, so long as the third party action arises from what the court calls a nucleus of operative fact. The leading case on that you might remember from law school was Owen Equipment versus Kroger from 1960, I think, and there, the plaintiff was an electrician who was injured in a crane accident. He sued the power line owner, and the power line owner under rule 14 brought a third party action against the crane manufacturer, and that was allowed even though the manufacturer was in the same state as plaintiff. But sometimes plaintiff is better off if that party is a direct defendant. Plaintiff's council might not be in a position to know this when he brings suit, but a couple of times I pointed out that the third party I'm bringing in has more direct liability, or has a bigger pocket, and he should sue, the plaintiff should sue directly, even though that would destroy diversity. An intelligent plaintiff's attorney will listen to that, and I stress in such a situation that I'm not telling you to let my client out of the case. I'm just saying you will get a better recovery if you sue this other party alongside my client. So the intelligent plaintiff's attorney will see the logic in that, and will get the judge to agree to sign a discontinuance, and bring a new suit in federal court. You can't just discontinue in federal court, by the way. You have to get the judge or the magistrate to sign off on it. Also, by the way, when you are on an extension of time to answer, you have to get the judge to sign off on that too. They always do, but it's a formality you have to follow. In other words, everything in federal court is so ordered. There are a few things you can actually stipulate to just between the parties. Now, rule 19 is another way of getting out of federal court. It requires what it calls indispensable parties to be joined. One example is given in the written materials where the parents of a child brought suit in federal court against the hospital for medical malpractice. It was a misdelivery causing, I think in that case, causing intellectual disability. They sued for the expenses of bringing the kid up, loss of income. There might have been emotional distress in there, I don't know, depending on the law of the state. Meanwhile, the child, or rather as guardian, I suppose, sued the hospital in state court, basically on the same claim. So this hospital is a defendant in two different cases, one federal, one state. On the motion by the hospital, the federal court held that the child was an indispensable party, because otherwise, you'd have a waste of judicial resources, possible inconsistent results. It would have to be just one lawsuit, and adding the child would destroy diversity, because the child and the hospital were in the same state, so the case was remanded to state court. Then there's rule 20, which permits a new party added who if not indispensable, really should be in the case. Massaro versus Bard Access Systems, in your written materials, arose out of a product defect. It was defective catheter tube. They brought suit against the manufacturer, but adding the physicians who were not diverse to plaintiff would help plaintiff make out his proof better and avoid inconsistent results if the case he wanted to sue the doctors in a separate suit. It was plaintiff who moved in that case to permit joinder, and gets the case remanded to state court. That sounds like another instance where plaintiff's attorney at first did not know all the facts, and sued just the manufacturer, but he had a better case if he added the physicians, and to do that, he would have to go to state court. Sometimes to get into federal court, plaintiff makes a federal claim that really doesn't fit the fact of the case, or is insubstantial. Such a claim should be dismissible on the pleadings with rule 12. One example I had was a suit against a foster care placement agency for sexual abuse, where they added a federal claim. For some reason, they didn't put in a 1983 claim, I don't know why, I wasn't about to tell them, but they did not. Instead their federal claim was based on the fourth amendment, that there was an unreasonable search and seizure, and they said the abuse was a search. Now, that's really a stretch, that didn't play. We got that claim dismissed, and the case got dismissed with an order to bring suit in state court in 30 days. By the way, there are various situations where if a case is in federal court and the judge eventually finds that there's no jurisdiction, the statute of limitations is told. More frequently, the order says bring suit in state court within a certain amount of time, typically 30 days, depends upon the actual district. Then there are various abstention doctrines where the federal court will refuse to hear a case, even though a technically has jurisdiction. One is the domestic law abstention. Federal judges hate dealing with child custody issues, alimony issues, things like that. Another abstention, and this applies in state court also, has to do with disputes that are already in ecclesiastical or rabbinical court, or in Islam, they're called Sharia courts, In the Catholic church, they're called diocesan tribunals. Another abstention is for matters usually addressed by probate courts, will contests. This is rather new abstention. There's a lot of old Supreme Court case law on wills, but not so much recently, unless you can bring in a federal issue. One example of that which is pretty recent is the Obergefel case, which legalized gay marriage nationwide. That arose out of a will contest. The plaintiff, who was a longtime partner and legally married, wanted to claim on the estate. And so that was a situation where there was a probate situation, but there was a definite federal issue involved. Finally, sometimes a bankruptcy court will transfer out a state law case. That is not what is called a court proceeding. Now, I don't know exactly what that means. Every time I look that up, I get confused. I'm not a bankruptcy lawyer, and I find banking law to be really complicated and confusing. The only familiarity I really have with that court is when the case gets sucked into bankruptcy court, and you make a motion under section 362 of the bankruptcy code to unstay the proceeding in state court. When the trustee takes over the state court matter, if it's not directly subsumed, it's stayed. Try to unstay it to the extent of the available insurance, 'cause the insurance is not part of the bankruptcy estate. Anyway, there's also specific named abstentions. Here are a few, the Younger abstention, and by the way, the cites for all these cases are in the written materials. The Younger abstention is if there's a civil rights suit based on a criminal proceeding or some aspect of it, for example, let's say a suit for false arrest, the federal court will abstain. It will wait until that criminal proceeding is resolved before continuing, resolved either by acquittal, or conviction, or plea bargain, or the prosecutor dropping the case. Then there's the Burford abstention, which is where there is an ongoing state administrative proceeding. The federal court will just stop the case, and maybe even dismiss it with permission to refile when the administrative proceeding is over. The Colorado River abstention, where there is a parallel state lawsuit, and there are a few others not listed here. I'm now gonna talk a bit about federal court pre-trial procedure. There's not much case law on this, because as I've noted before, generally one has to wait for final judgment before appealing, and by that time, a lot more has to be fought over than the disputes over discovery. There's a lot on Westlaw and Lexis as to district court decisions on discovery by magistrates and such, but that's not really instructive because it's so specific to the facts of each case. You really can't use it as precedent or as a guide. First, there's another thing that's different about state court in that if you want a jury trial, you have to demand it with the complaint. Usually it's written right next to the caption, plaintiff demands trial by jury. This is different than in most states where you don't have to demand it until some later point. For example, in New Jersey, you can wait until 60 days after the answer. In New York, you wait until the case is actually on the trial calendar before you demand it, so federal court's different that way. Second, if your client is a publicly traded corporation or a parent or affiliate of one, you have to submit what's called a rule 7.1 statement identifying all the parents and affiliates. That's so the case doesn't get assigned to a judge who has stock in one of those companies. You don't want judge who has a conflict. Right away under rule 16, there will be a conference to discuss the case, at which time you will be asked if a magistrate can conduct pretrial discovery instead of the judge, and you always say yes to that. You don't want the judge who will try your case pissed off at you for loading her with pretrial trivialities. Always say yes to the magistrate. Rule 16 conferences are held too early, in my view. They expect you to already know the facts, and they try to settle a case. It's usually too early for that. Sometimes the magistrate will conference the case, and conference the case to death until the party settles. Of course, he can't make you settle, but he does have the power to keep asking you back. Just as an aside, one of the good things about federal court is there's no cattle call kind of situations where you have long calendars and crowded courtrooms. There's usually only a few cases on the calendar, and the rule 16 conference is a special set aside time. It's a pleasure to have the time to discuss the law, and bat things around with the magistrate in the facts of the case. These folks know their stuff, and they're prepared. It more closely suits my own personality. I hate blustering. I can do it if I want to, but it's a more low-key situation where you have time and space, and you can have intelligent conversations. Another feature of federal pretrial procedure is rule 26. Increasingly, it's being adopted by state courts. Rule 26 means you have to automatically, without a demand being made, produce all the evidence that supports your case. If you're the plaintiff, anything that supports your claim, if you're a defendant, anything that supports your defenses. No hiding the ball until trial, which is something you can sometimes do in state court, not in federal. Another difference is the seven hour limit on depositions. It's not absolute. If the appellants' attorney objects, and you can show that you really need more time, the judge will give it to you. The rule says the court "must allow additional time to fairly examine the opponent." On motion for more time, the judge will see from the transcript, which you have to submit, whether you have been an efficient questioner or just wasting time, or worse yet, just being abusive. That's rule 11 territory if you try that. Federal court subpoenas are good all over the country. This is the 2013 amendment to rule 45. Before that, subpoenas were only good for a 100 mile bubble around the courthouse, In the Northeast, that counted for a lot. 100 miles from the Southern District Courthouse in Manhattan got you into Connecticut, New Jersey, and Pennsylvania, but now it's nationwide. You can serve a subpoena in Yakima, Washington on someone there without having to start a new law lawsuit there, or even having to get the district judge there to sign off on it. You still have to serve it properly with all the formalities, and by the way, federal courts follow whatever the state court rule is on proper service, even if it's a federal issue kind of case. Anyway, you still have to serve the subpoena properly, and it has to be returnable within 100 miles of that person's residence. This is a big advantage of federal court. The courthouse is part of a nationwide system. In federal court, you get to conduct a deposition of the expert. This is true in a lot of state court systems, not all. You can't do it in New York, at least not as two opinions, although you can depose 'em as to facts that they have observed if there's no other way to get that information. For example, if it's a product liability case, and they examine the product, and then somehow it gets misplaced or lost, you can depose the expert as to what he observed, and maybe get his raw data, but even then you can't ask his opinions. Then there are places like New Jersey where expert depositions are often waived, at least that's been my experience. In federal court, you always get to depose them, and inspect their file and their notes. Again, the point is to avoid surprise at trial. I've had a lot of surprises in state court trials. That doesn't happen in federal court, thank goodness. Because the federal court system is nationwide, you can also change venue across the country if most of the evidence is there, convenience of witnesses and so forth. I was once defending a breach of non-compete agreement case, where we got the case for a low number by threatening to do just that. The witnesses were in California, both the party witnesses and the non-parties, and the other side was less willing to incur the expense than we were. Before we leave the topic of discovery, and this isn't in the written materials, but I wanna say a few words about electronically stored information, the internet of things. Discoverable evidence is present on cell phones, computers, online databases, smart watches, fitness trackers, smart homes with computerized temperature controls, motion-activated lighting, cameras on doorsteps with facial recognition software, Bluetooth in cars. It goes on and on, even virtual assistants like Alexa or Google Home. Alexa turns on, by the way, not just when you say Alexa, but if you say one of another what are called hot words that activate it, and it's all recorded, and you know, sometimes listened to. There was lawsuit a few years ago alleging a violation of privacy because Alexa and Google Home, they have their people listen to conversations, and that's for the reasons of quality control. For that reason, I think the case was dismissed. Anyway, there've been cases where conversations recorded by Alexa have gotten into evidence. Electronically stored information is mentioned in federal rule 30 and 37, and federal courts have taken a lead on getting us through this mess. For one thing, you know, the best evidence rule has been shot to hell with everything being digital, and no hard copy originals anymore. Also shot to hell has been the business records exception to the hearsay rule. Records are now online with proprietary software, which sometimes the law firm can't purchase, for example, medical record online charts, and it no longer comes to us in the format used in the regular course of business. Attorneys have to agree on how to exchange and to proffer material that is, strictly speaking, not admissible anymore. I refer you to a recent Southern District case. This is not in the written materials, by the way. It's called Morgan Stanley Data Security Litigation, December 9th, 2020. It's a long decision, but it shows how judges want attorneys to agree on formats, how to produce the material, and it introduces you to a lot of the new jargon. Reading that case is like taking a class on ESI in litigation. Anyway, onto summary judgment, in federal court, it's similar to state court. In law school, I learned about the Celotex case, C-L-O-T-E-X, where justice Brennan's concurring opinion laid forth the common rules as to summary judgment. In federal court, you could have to make pass permission before you make the motion. You put in a statement of undisputed facts, and what I do is to then put a statement of disputed facts while pointing out that those facts are not relevant to my motion. I'm putting 'em there, 'cause I don't wanna be accused of ignoring them. Federal judges get very upset when you don't follow the rules, so make sure the undisputed facts really are undisputed. In federal court, there's the usual uncertainty as to affirmations and memos of law. Typically the affirmation is just a vehicle for exhibits. I think the whole system is stupid. Theoretically, the affirmation discusses the facts, and the memo of law discusses the law, but I've never seen a memo of law that didn't have a statement of facts in it. I've been told that an attorney can't swear to the law, but in the first place, the affirmation doesn't swear to any facts. The attorney can't swear to any facts, except in very narrow situations where the important fact is whether a law firm receives something or not. And the second place, as to swearing the law, we have to, we ethically have to under the modern rules, we are required to represent that each piece of law really does say what we say it does. We are also required to cite any directly adverse authority. So why am I bringing this up? The main problem with memos of law is that they usually don't get into the record on appeal. Now, we know that sometimes you can make a new argument on appeal, and sometimes you can't. What if you're the respondent, and the appellant is making a new argument, and it's improper? How can you prove that's a new argument if the memos of law aren't in the record? I'm sorry for my little tirade there, let's move on. In the federal district court, decisions from other circuits are not controlling. This is different from the situation in some state court systems where the appellate level, the intermediate appellate level is one big court, one big statewide court. And let's say you're in New York, you're in Bronx County, which is in the first department of the appellate division, and there's no first department case on point, but there is in the fourth department. The Bronx County court is bound by that fourth department case it's controlling. That's not true in federal court. In the Southern district of New York, which is in the second circuit, you can cite an eighth circuit case, which might be persuasive, but the judge doesn't have to follow it. Now we get to the complicated area, interlocutory appeals. Under 28 USC 1291, only final judgements are appealable, though there's an exception for certain of what are called collateral orders. The exception that comes up most in personal injury litigation is an order denying or granting qualified immunity. Some defendants like police officers may have qualified immunity. That means is you can't sue them for ordinary negligence, just gross negligence or recklessness. The defendant might make a motion to strike the ordinary negligence claim. The order determining that motion is immediately appealable. Then there's rule 59 B, which allows the trial judge to certify an order as an appealable judgment as to certain claims or certain parties. It's discretionary, but if the judge certifies, then the circuit court has to hear the appeal. This is the reverse of the usual situation where the lower court is required to do something, and it's the appellate court that has jurisdiction. As you might imagine, this rule is rarely used. Most trial court judges don't want to be in the business of telling circuit judges what they have to do. Most of 'em want to be circuit judges themselves one day, and they don't wanna piss 'em off. Finally, we have 28 USC 1292, which also requires certification by the trial judge, but the circuit court has discretion to refuse to hear it. This applies to orders that, to quote the statute, involve a "controlling question of law with substantial ground for difference of opinion, and immediate appeal, would materially advance the ultimate termination of litigation." The leading case on this statute is Cohen versus Beneficial Industrial Loan Corp, it's in your written materials, a stockholder's derivative action where the Supreme Court allowed an appeal of an order granting security for costs, because the issue of security costs comes up all the time in derivative actions, and how it be granted was an unsettled question. The decision in Cohen created a little wiggle room, as what we'll talk about in a little bit, pendant appellate jurisdiction. 1292 also applies to injunctions, which is why we get circuit courts and the Supreme Court involved, the so-called shadow docket. It also applies to orders involving non-parties. The big example here is a rule of order sanctions awarded against not a party, but against the law firm. The law firm is not a party, and as such, no final judgment will ever include it, so this is the only chance to appeal. Rule 11 is still pretty bad, but it used to be horrible. In the 1990s, we were sitting around before a conference, and I had the professional courtesy to tell my adversary that I was going to ask permission to move for summary judgment. He said if I did that, he would move for rule 11 sanctions just because I was going to ask for permission to make a motion. It got as bad as that. If you want some fun reading, well, fun's the wrong word, but look up a Supreme Court case from that era, Cooter & Gell verus Hartmarx. This is not in the written materials. It's 496 US 384, the year was 1990. Rule 11 sanctions got awarded, then they were appealed. Then the circuit court sent it back for recalculation, then it was appealed again. Then there was a motion for sanctions for doing a frivolous appeal, et cetera, et cetera. As the Supreme Court put it, this is was all satellite litigation, and they were trying to stamp it out. I forget what finally happened in that Cooter & Gell case. It was just too confusing, but it was entertaining, I suppose. Now we get to trial. A few things have to be said here. First, in state court, only about 3% of cases nationwide ever get to trial. In federal court, it's only 1%. Second, federal judges are appointed for life, and they last forever. The average age of active federal judges is 68. That's the average, and that's just the active ones, the ones who haven't taken senior status or have been pushed into taking senior status. So you're probably dealing with a judge who is past retirement age for state court judges. Now, not that a lot of these folks aren't sharp. Law is the kind of business you can do into your 80s. But one time we were involved in a serious sexual abuse case, lots of witnesses, lots of facts, and we got assigned a judge who was about to turn 90, and we all looked at each other, and we decided to settle. Whether you get a jury trial is determined by the seventh amendment, and this rule applies even in diversity cases, because it's procedural issue. The case for that is Byrd versus Blue Ridge Rural Electric 356 US 525, 1958. The seventh amendment states that in civil trials, the right to a jury is to be preserved. The Bill of Rights was adopted in 1791, so to determine whether there was a right to a jury trial, we look at what the practice was in American and British courts in 1791. Here in 2022, we undergo a historical analysis to see what guys in big white wigs were doing 231 years ago. If that sounds silly, it's because it is. In those days, there were two court systems, legal and equitable, and only the legal system had juries. So is the cause of action in the federal court case brought today legal or equitable? If it's legal, for example, breach of contract, you get the right to a jury. If it's equitable, for example, unjust enrichment, you could only get a bench trial. The analysis always leans in favor of a jury trial. If both legal and equitable are pleaded, then there's a jury. Even if you prefer a bench trial, because a lot of technical information is involved that an ordinary juror won't understand, you're stuck with a jury trial if your adversary demands one. There was a case in 1959, Supreme Court case Ross versus Bernhardt. In a footnote, Supreme Court said that one factor in deciding the right to a jury trial is "the practical abilities and limitations of juries," but that was just a footnote, and that idea never caught on. Whether a case is complex or not is not related to whether there's a right to a jury trial or a right to a non-jury trial. Voir dire is usually conducted by the judge under rule 47 with attorneys getting to ask some questions. This is good, because it helps with motions to vacate verdicts due to juror misconduct. For example, if a juror in a malpractice case says she doesn't know the defendant doctor, and it turns out she's actually one of his patients, so she should have been excused. There was national case like that in New York recently. The motion to set aside to vacate the verdict was denied because in New York, only the attorneys do voir dire, and there's no record made. In federal court, there's always a record. You've got three peremptories per side, which is about the same as most state courts. One thing not widely known is that using peremptories to exclude based on race, which of course, is not permissible in criminal actions. We all know the Batson case, Batson versus Kentucky, 1986, but it's also not permissible in civil actions. There's the case cite right there, Edmonson versus Leesville Concrete 1991. Trials in federal court tend to be unified. In general, that is bad for defendants. In personal injury actions, they don't want the jury to hear about how badly injured the plaintiff was at the same time they're deciding liability. You can move for bifurcation under rule 42, but you have to have a good reason. I should say here that federal judges tend to not like diversity cases, particularly trying diversity cases, and they also tend not to like personal injury cases. They'd rather deal with lofty constitutional issues, I suppose. In federal court, plaintiff gives the opening statement first, then defendant, and defendant gives the closing statement first, then plaintiff. I understand that in state court systems, the plaintiff closes first. I found that out for the first time a couple years ago when I was judging a mock trial competition. Plaintiff opening first and closing last, of course, is a big advantage for plaintiff. As we all know, the worst part about the trial is scheduling witnesses. In state court, I have sometimes been forced to present my defense witness before plaintiff is finished with their case. Now, defense counsel don't like this. You want all plaintiff's evidence to go in before you put in any of yours. If plaintiff's case is going badly, you can move for a directed verdict when they rest their case, and you might get it, whereas if you're forced to put on your witness, he might really crash and burn, and suddenly you're back in a case you thought you were getting out of. That kind of thing does not happen in federal court, also no surprise witnesses. New York state judges, at least, regularly permit this, but in federal court, each side has a list of witnesses and evidence, and the judge will make you stick to it. There's also better segregation of jurors, because the courthouses are better designed. There's no situation like I had a few years ago where I was on my way to what I thought was an obvious defense verdict, and just before the last day of trial, as everyone was leaving the building, plaintiff fell down a flight of stairs, and the jurors saw it, mistrial. At the time, the jurors going back to the jury room had to go via the hallway, and there they saw the witness I just presented, crying and saying her rosary. None of that happens in federal court. Now, the federal rules, as you probably know, are the model for the rules of evidence in most states, with some glaring exceptions, such as New York. Even the numbering of the rules of evidence is often the same, but there's some differences. For example, there's the ancient documents exception to the hearsay rule. If it's in a document 20 years old or more, it gets into evidence, and you have to try to rebut it. That means everything put on the internet before 2002 gets in. Think of all the crap that's been put on the internet. You see in the advisory committee notes to that rule, that they were aware of the problem, but they didn't know how to deal with it. I think it's simple, just add an internet exception to the ancient documents rule, but anyway. In New Jersey, it's 30 years, so New Jersey state courts for now, you're safe going back to 1992 instead of 2002. Very little was on the internet before 1992. I don't think it became even publicly available until 1991. Federal courts used the Daubert standard in evaluating the admissibility of expert testimony. It has to be based on reliable principles reliably applied. This replaced the stricter Frye standard, which I've mentioned, which allowed only generally accepted principles. Frye is still used in New York and in eight other states. The other states have accepted Daubert, though not always the case of law that it gave rise to. Daubert is used for expert opinions on all issues, even state law issues. I've listed here a Daubert hearing, but usually because the experts have already been deposed and their transcripts are available, objections are usually decided on papers. An example of applying Daubert to a novel theory is testimony based on recovered memories, where the results of getting that evidence in have been mixed. There is so much case law already in the materials. I don't want to add any more, but I don't think this is in there. We all know that memories can be recovered, but those of you my age remember the McMartin scandal in the 1980s when little children at a daycare center were all but hypnotized into testifying as to satanic ritual sexual abuse. If you read the federal case law on recovered memory testimony opinion, you can see that the theory is considered reliable, but sometimes not reliably applied as the testimony. For example, the testimony might not be specific enough to the supposed abuser. As for post-trial motions, the usual rules apply. You can only move for judgment notwithstanding the verdict or a new trial if you've already moved for a directed verdict. Entering judgment and cost is governed by rule 60, and there's usual allowance for revising a judgment in case of mistake, et cetera, if you do it within a year, or after that if you have a really good reason for the delay. Now we get into the circuit court. To be honest, I haven't been there too often. Federal rule appellate procedure 3C says that in your notice of appeal, you have to specify what orders or verdicts, et cetera are being appealed. How much can you appeal? In the written materials, there is a cite to a first circuit case, Tomlinson Vets versus New Albersons, which says you can bring up "any ground made manifest by the record." That's the outer limit of appealability. Some circuits are more restrictive than that. As for new arguments on appeal, it's the usual rule as in state court. You can bring up a new argument if the other side could not have countered it in the trial court with additional evidence or legal countersteps. It's still risky though. The court has discretion to not address a new argument. Now on to standards of review, again no surprises here, or rather just one surprise. Grants of summary judgment are reviewed de novo. Directed verdicts, judgments NOV, are upheld only if no reasonable jury could have found against the movement as to errors made by the trial judge and verdict sheets, jury instructions, interrogatories to the jury, only if it's erroneous and prejudicial. We're talking about here, harmless error review, which means they will leave everything alone unless it clearly changed the result. I mentioned before the seventh amendment reexamination clause, which says, "no fact found by a jury shall be reexamined by any court except under rules of common law," which again freezes us in the year 1791. In those days, verdicts were mostly left alone. There was a special case a few years ago rising in New York, a state law claim brought in diversity. It's in your materials, Gasperini versus Center for Humanities, 1996. A photographer sued to recover for lost income and emotional distress after defendant lost his negatives. Applying the Erie doctrine, the court saw that New York state courts have a very permissive standard of review for both the trial judge and the appellate division. Either can change the amount of the verdict if it "deviates materially from reasonable compensation." That's a very permissive standard, but then the court read into the seventh amendment the reexamination clause. What they held was the district court judge on a post-trial motion applies that more permissive standard, whereas the circuit court is bound by the common law as it stood in 1791, because of the reexamination laws. We saw before that the district court can have jurisdiction over non-diverse third party defendants. That's called supplemental jurisdiction. There's also supplemental appellate jurisdiction, what you'd be called pendant appellate jurisdiction, where the circuit court in hearing the appeal of an appealable order also hears the appeal of a related order which is normally not appealable. This jurisdiction is discretionary and very limited. One example is given in the written materials, National Fire Insurance versus Bardelazo, where plaintiff and defendant both moved for summary judgment. Defendant's motion was granted, so the case was over, final judgment, plaintiff appealed, and the circuit court agreed to also review the denial of plaintiff's motion because it was the same subject matter. The issue was whether plaintiff was or was not covered under defendant's insurance policy. As it turned out, the circuit court held that plaintiff's motion had been properly denied, but also reversed on the grant to defendant on procedural grounds. The motion had been improperly made orally instead of on paper, but anyway, this kind of situation where both parties move for summary judgment is the most common situation for pendant appellate jurisdiction. I'm gonna finish now with res judicata and collateral estoppel, or as we're supposed to be calling them now, claim preclusion and issue preclusion. I don't like those terms, they're too broad. Claims can be precluded, and issues can be precluded for several reasons, only one of which would be the involvement of one of the parties in previous litigation, but anyway, federal courts have led the way on these issues, so if you've practiced in state court, you already know the rules. A claim or an issue cannot be asserted if it was fully and fairly litigated and rejected in a previous action. It doesn't matter if it wasn't state court or federal court. Federal courts give equal respect to both. And you know about non-mutual estoppel, where only one side was involved in the previous litigation. There's , there's a cite where collateral estoppel was used defensively as a shield. That was a patent suit where plaintiff argued that defendant's patent was not valid, but defendant had already won on that issue in a previous suit brought by someone else. A previous court had already found that the patent was valid. And then there was Parklane Hosiery, where non-mutual estoppel was used offensively as a sword. Plaintiff shareholders sued the corporation's directors for misrepresentation, and they automatically won because the SEC had already gotten a finding of misrepresentation against the directors in their regulatory proceeding. And finally, there's the law of the case doctrine. Federal judges hate being asked to rule on something they've already ruled on. Federal practice is a big topic, and as you might remember from law school, there's a lot to it. The emphasis in this presentation is to what new things a state court lawyer might find when she steps into federal court for the first time, and to repeat, the cafeterias are better. Here's my phone and email. Don't hesitate to contact me if have any questions. Take good care of yourself.

Presenter(s)

Dan Schiavetta
Of Counsel
Russo & Gould LLP

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