An Essay Question from the 2007 Civil Procedure Exam
An Essay Question from the 2010 Exam

Two Multiple Choice Questions from the 2008 Exam

The following are two multiple choice questions from the 2008 Civil Procedure Exam. The updated answer key follows.

  1. P is suing D in federal court for federal securities fraud. Which of the following is most likely a violation of Rule 11?

 a. P’s complaint failed to state with particularity facts giving rise to a strong inference that D knew what D was saying was false.

b. In oral argument, P’s lawyer asserted that a legal contention in the complaint was warranted by existing law. P’s lawyer had a good faith belief that this was so, but the court concluded that no non-frivolous argument that it was warranted by existing law could be found.

c. The facts alleged in P’s complaint failed to state a claim for federal securities fraud.

d. P’s complaint offered two theories of why D was liable to P under federal securities fraud law that were inconsistent with each other.

e. At the time of filing, the evidentiary support that P had for the factual allegations in his complaint was hearsay inadmissible at trial.

5. Which of the following actions, brought before the federal district court for the Southern District of New York (located in Manhattan, in New York City), is most likely to be dismissed for lack of
personal jurisdiction
over the defendant?

 a. The defendant (a corporation incorporated in California with its principal place of business in California) is being sued for federal securities fraud violations that occurred in California. The defendant has no contacts with New York, except for the following: The corporation was served, in accordance with Fed. R. Civ. P. 4(h), by delivering the summons and complaint to its CEO while he was in Manhattan on a brief business trip that took him through the state.

b. The defendant (an individual domiciled in California) is being sued for a battery that took place in Albany, New York, in the Northern District of New York. The defendant has never had any contacts with the Southern District of New York and was served in California.

c. The plaintiff is bringing an in rem action to quiet title to some property in Manhattan, which the defendant (an individual domiciled in California), among others, claims to own. The defendant has never set foot in the state of New York and was served in California.

d. The defendant (a corporation incorporated in New York with its principal place of business in California) is being sued for violations of federal securities fraud law that occurred in California. Aside from being incorporated in the state of New York, the defendant has no other  significant contact with the state. The corporation was served, in accordance with Fed. R. Civ. P. 4(h), by delivering the summons and complaint to its CEO while in California.

e. The defendant (an individual domiciled in Manhattan) is being sued for a battery that took place in California. The defendant was served in California.

Answers

1. P is suing D in federal court for federal securities fraud. Which of the following is most likely a violation of Rule 11?
 
a. P’s complaint failed to state with particularity facts giving rise to a strong inference that D knew what D was saying was false.

Wrong. With respect to the allegations of fraud in P’s complaint, Rule 11 would require only the following: It would have to be the case that, to the best of P’s (or his lawyer’s) knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, the allegations had evidentiary support or, if specifically so identified, would be likely to have evidentiary support after a reasonable opportunity for further investigation or discovery. Rule 11 is about having evidence available for one’s factual allegations – it is not about any requirement to put evidence in the complaint.

23 chose this answer.

b. In oral argument, P’s lawyer asserted that a legal contention in the complaint was warranted by existing law. P’s lawyer had a good faith belief that this was so, but the court concluded that no non-frivolous argument that it was warranted by existing law could be found.

Correct. This is the most likely violation of R 11. Under R 11(b)(2), by presenting a complaint one certifies to the best of one’s “knowledge, information, and belief, formed after an inquiry reasonable under the circumstances” that one’s legal contentions are “warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law.” The standard here is reasonableness. It is not enough that one has a good faith belief that one’s argument is nonfrivolous. So the fact that P’s lawyer had a good faith belief that his argument was nonfrivolous will not help.

But couldn’t one argue that Rule 11 might still be satisfied because there might still be a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law (even if there was no nonfrivolous argument that one’s legal contention was warranted by existing law)? This strategy is unlikely to work, because P’s lawyer asserted that his legal contention was warranted by existing law. A nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law does not support a claim that one’s legal contention is warranted by existing law. We spoke about this in class. For this reason (and given that the other answers are clearly wrong), this is the best answer.

35 chose this. The point biserial was .50.

c. The facts alleged in P’s complaint failed to state a claim for federal securities fraud.

Wrong. Simply because a complaint has failed to state a claim does not mean that Rule 11 was violated.

Could one argue that when one fails to state a claim one has offered a frivolous legal contention in violation of R 11(b)(2) (see b above)? This does not follow. One way that one can fail to state a claim and nevertheless satisfy R 11(b)(2) is when one argues that existing law should be extended, such that factual allegations that do not currently state a claim will state a claim, and the court refuses to accept the extension. R 11 will not be violated provided that one has a nonfrivolous argument for the extension, even if this argument was not accepted by the court.

Even when one does not seek to extend the law, one’s complaint can fail to state a claim and nevertheless satisfy R 11(b)(2) – for example when one has a nonfrivolous argument that under current law one’s factual allegations state a claim and the court simply disagrees with one’s argument.

11 chose this.

d. P’s complaint offered two theories of why D was liable to P under federal securities fraud law that were inconsistent with each other.

Wrong. There is no reason that one cannot offer alternative theories of liability that are inconsistent with one another. (This is suggested by R 8(d)(3), which states that “[a] party may state as many separate claims or defenses as it has, regardless of consistency.”) Each theory of liability would have to satisfy R 11, but that would be possible if one had a nonfrivolous argument in favor of each.

Only one chose this.

e. At the time of filing, the evidentiary support that P had for the factual allegations in his complaint was hearsay inadmissible at trial.

Wrong. Rule 11 does not demand that the evidentiary support for one’s factual allegations be admissible evidence. I mentioned that it could be inadmissible evidence a number of times in class. This makes sense. After all, the question Rule 11 is supposed to answer is only whether your case is sufficiently non-frivolous to proceed, not whether you could win at trial. If you have evidentiary support for your factual allegations, you should be able to go forward and try to get admissible evidence in discovery.

11 chose this.

5. Which of the following actions, brought before the federal district court for the Southern District of New York (located in Manhattan, in New York City), is most likely to be dismissed for lack of personal jurisdiction over the defendant?

a. The defendant (a corporation incorporated in California with its principal place of business in California) is being sued for federal securities fraud violations that occurred in California. The defendant has no contacts with New York, except for the following: The corporation was served, in accordance with Fed. R. Civ. P. 4(h), by delivering the summons and complaint to its CEO while he was in Manhattan on a brief business trip that took him through the state.

Correct. There are no International Shoe contacts with New York. Delivery of the summons and complaint to the CEO in Manhattan is adequate service under FRCP 4(h), but it is not sufficient to give a state court in New York PJ over the corporation (which is required for PJ in federal court in New York under FRCP 4(k)(1)(A)). There is no evidence in the question that the CEO has been appointed the corporation’s agent for service of process in a manner that would create PJ.

60 chose this. The point biserial was .53.

b. The defendant (an individual domiciled in California) is being sued for a battery that took place in Albany, New York, in the Northern District of New York. The defendant has never had any contacts with the Southern District of New York and was served in California.

Wrong. A state court in New York would have PJ over the defendant. The fact that the battery occurred in Buffalo NY would be adequate for specific PJ. It does not matter for PJ that the contacts were in the Northern District of New York.

12 chose this.

c. The plaintiff is bringing an in rem action to quiet title to some property in Manhattan, which the defendant (an individual domiciled in California), among others, claims to own. The defendant has never set foot in the state of New York and was served in California.

Wrong. The claim to ownership of the New York property would be sufficient for PJ for such an in rem action in New York state court. We discussed this in class.

5 chose this.

d. The defendant (a corporation incorporated in New York with its principal place of business in California) is being sued for violations of federal securities fraud law that occurred in California. Aside from being incorporated in the state of New York, the defendant has no other significant contact with the state. The corporation was served, in accordance with Fed. R. Civ. P. 4(h), by delivering the summons and complaint to its CEO while in California.

Wrong. There is always general PJ over a corporation in its state of incorporation. We discussed this in class.

3 chose this.

e. The defendant (an individual domiciled in Manhattan) is being sued for a battery that took place in California. The defendant was served in California.

Wrong. There is always general PJ over a individual in his state of domicile. We discussed this in class.

None chose this.

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