Logourl black

Civil Procedure

Exam 29
30 minutes

Fact Pattern

X and Y are individuals, who together sell stock and other securities to investors. An investor pays X and Y $1,000,000 for some securities. The purchase occurs in State A, where X and Y have their office. The investor is a citizen of State A. X and Y are citizens of Country C, a sovereign nation in Europe. X holds a so-called green card, which means that X is lawfully admitted for permanent residence in the United States. X is domiciled in State A. Y holds a temporary visa to visit the United States, but is not admitted for permanent residence.

After the purchase, the investor discovers that the securities are counterfeit and worthless. The investor sues both X and Y in a single lawsuit in the U.S. District Court for the District of State A. The cause of action is securities fraud under State A law. The investor seeks $1,000,000 in compensatory damages and $2,000,000 in punitive damages, jointly and severally against both defendants. Assume that the court would have personal jurisdiction over both X and Y upon proper service of process.

The investor sends X a request to waive service of process, using the correct procedure under Fed. R. Civ. P. (Rule) 4. X returns the waiver request and agrees to waive service. In attempting to serve Y, the investor learns that Y has returned to Country C. Country C is not a party to any international treaty regarding service of process.

Country C’s law allows a plaintiff to serve a defendant by publishing notice of suit for four consecutive weeks. The plaintiff may publish the notice in any newspaper of general circulation in the area of the defendant’s last known place of abode. The investor hires a process server in Country C. The server publishes notice of the suit in the appropriate newspaper for four consecutive weeks. Assume that this procedure complies with Country C’s law.

Before answering the complaint, X moves to dismiss for lack of subject-matter jurisdiction, arguing that there is not complete diversity of citizenship. In opposing the motion, the investor argues that X is not a citizen of any state, because X is a foreign subject. Consequently, diversity is satisfied. The investor also argues that by waiving service, X has waived any challenge to subject-matter jurisdiction. Finally, the investor argues that the claim against X falls within supplemental jurisdiction, even if it does not fall within diversity jurisdiction. The judge denies the motion.

Y never answers the complaint. The clerk enters Y’s default. After an evidentiary hearing, at which Y does not appear, the judge enters a default judgment against Y for $1,000,000 in compensatory damages and $2,000,000 in punitive damages. Assume that the default and the default judgment both comply with Rule 55.

The case against X proceeds to trial. The trial produces a judgment against X for $1,000,000 in compensatory damages and $2,000,000 in punitive damages.

X and Y separately file timely motions for relief from judgment under Rule 60. X again argues that the judgment is void for lack of subject-matter jurisdiction. Y admits seeing the notice of the suit in the newspaper. However, Y argues that the judgment is void for lack of personal jurisdiction, because Rule 4 does not permit service by publication. Assume that a Rule 60 motion is the correct vehicle for both X’s and Y’s arguments.


Questions

  1. How should the judge rule on X’s motion for relief from judgment? Explain.
  2. How should the judge rule on Y’s motion for relief from judgment? Explain.

Question 1

How should the judge rule on X’s motion for relief from judgment? Explain.

Question 2

How should the judge rule on Y’s motion for relief from judgment? Explain.

Here's why 135,000 law students rely on our practice exams:

  • Written by law professors.
  • Uniform format for all our exams.
  • Model answers included for every exam.
  • Use our exams to prepare for the Multistate Essay Examination (MEE).
  • Unlimited access to 216 exams with model answers in 12 subjects.
  • Top-notch customer support.
  • 24/7 access on desktop, tablet, or mobile devices.
Start Your Free Trial Now