LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE July QUESTION 1 (25 Points)

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1 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE July 2016 QUESTION 1 (25 Points) Lou, a long-time resident of Lake Charles, Louisiana decided to build a small covered parking garage to protect his newly purchased sports car. Lou hired Covered Cars, LLC to build the garage. Covered Cars is a Louisiana limited liability company, which specializes in the design, manufacturing and sales of stand-alone residential parking garages. Reliable Roofing, Inc. is a corporation organized in Delaware, but licensed to do business in all 50 states and owns 50% of Covered Cars. All shares of Reliable Roofing are owned by Bill, who lives in New York. Reliable Roofing s main executive office is located in New York, but Reliable Roofing s two vice presidents who oversee all daily operations are in Reliable Roofing s Oklahoma office. Reliable Roofing also has manufacturing facilities in ten states, with its two largest being in Oklahoma and Louisiana. The other 50% of Covered Cars is owned by Good Garages, L.P., a partnership in commendam organized under Louisiana law. Its general partner is Sturdy Steel, LLC, a LA limited liability company. Tex, who lives in Houston, Texas, is Sturdy Steel s sole member. The sole limited partner in Good Garages is Mitzi, Tex s sister. Mitzi also lives in Houston, Texas. Unfortunately, while Lou was sitting in his car waiting out a storm in his new garage six months ago, heavy winds caused the roof to cave in, severely injuring Lou and damaging his car. The damage to Lou s car is estimated at $20,000, his medical bills will total $25,000, and he will have $25,000 in lost wages. Lou has also experienced several months of serious pain during his recovery, and his doctors say he will have lifelong knee pain because of the accident. Following the accident, Lou moved in with his son in Oklahoma so that his son could look after him during his recovery. Lou let a friend look after the home he owns in Louisiana. Doctors now state that Lou will be fully recovered in one more month, but Lou is undecided where he will live after that. Lou has just filed a complaint against Covered Cars in a Louisiana federal court. The complaint prays for an award of the property damage, medical bills, and lost wages. 15 pts. 1.1 Does the federal court have subject matter jurisdiction over Lou s complaint? Discuss. 5 pts. 1.2 More than a year after the suit was filed, and after an answer was filed and much discovery conducted, Reliable Roofing moved its two vice presidents to Louisiana. Reliable Roofing then filed a motion to dismiss for lack of subject matter jurisdiction arguing that Lou and Reliable Roofing are now non-diverse. Should the court grant Reliable Roofing s motion to dismiss? Discuss. 5 pts. 1.3 Solely for purposes of this question 1.3, assume (i) that Covered Cars answer includes a defense that Lou s property damage claim is limited by a Louisiana statute that provides that a plaintiff may not recover more than the Blue Book value of a destroyed car even if the plaintiff can prove that his car was more valuable. Lou believes that modifications to his car made it much more valuable than the Blue Book listing. Thus, he has filed a motion under Federal Rule of Civil Procedure 12(f) to strike this defense on grounds that this Louisiana statute does not apply to his claim. Should the federal court grant Lou s motion to strike? Discuss. [End of Question 1] TEST CONTINUES ON NEXT PAGE Page 1 of 6

2 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE July 2016 QUESTION 2 (30 Points) Paul, a Texas citizen, was shopping at Food Mart in Shreveport, Louisiana, when he slipped on a puddle of water near the restroom and fell. Paul filed a petition against Food Mart, a Louisiana corporation, on May 1, 2015 in Louisiana state court in Shreveport. His petition, consistent with Louisiana law, did not demand a particular amount of damages, and the petition offered no greater description of Paul s injuries than to state that he had suffered physical injuries as a result of the fall. Paul delayed requesting service on Food Mart as long as possible, until July 31, Food Mart attempted to conduct discovery to learn the details about Paul s injuries, but he requested several extensions of time and, in answers to interrogatories, stated only that he had suffered back injuries for which he continued to receive treatment. After additional delay, Paul eventually produced his medical records to Food Mart on June 1, The records showed that Paul suffered two ruptured discs and that his treating physician told him soon after the accident that he would need expensive surgery and lengthy rehabilitation. The production of the medical records was accompanied by Paul s first settlement demand, which was for $450,000. Food Mart removed the case to federal court 27 days later on June 28, pts. 2.1 a) Describe in detail the procedure and requirements counsel for Food Mart have followed to remove the case to federal court. b) To which federal court may the case be removed? 5 pts. 2.2 a) What must Paul s lawyer file to seek a return of the case to state court? b) What time limits, if any, does he face? c) Describe the effect, if any, on the grounds you identified in question 2.1, if Paul s lawyer takes that action on August 5, 2016? 10 pts. 2.3 a) What objections, if any, might Paul raise to the removal? Discuss. b) As to each such objection, what, if anything, should Food Mart argue to overcome such objection? 5 pts. 2.4 For purposes of this question 2.4 only, assume that the case remains in federal court. Food Mart then filed a summary judgment motion that was supported by an affidavit from a Food Mart employee, who states that he saw Paul near the restroom but did not see him fall. Food Mart also submitted an affidavit from Paul s former parole officer, who states that Paul was convicted three years earlier for perjury after he offered false alibi testimony at a friend s burglary trial. Paul opposed the motion and offered his own affidavit in which he states that he did slip and fall in the puddle of water, just as alleged in his complaint, and in which suggests that the employee must have looked away before he fell. What standard should the court use for assessing Food Mart s motion for summary judgment? How should the court rule on this motion? Discuss. TEST CONTINUES ON NEXT PAGE Page 2 of 6

3 5 pts. 2.5 Assume for purposes of this question that the case is pending in Louisiana federal court. The owner of Food Mart met with an attorney to discuss a defense to the lawsuit. The attorney asked the owner to gather up all paperwork and records Food Mart had related to the store s maintenance and clean-up procedures and send them to the attorney. Food Mart s owner later delivered the business records to the attorney along with a letter in which the owner of Food Mart explained why he believed Food Mart did not follow proper procedures the day of the accident and explained what was included in the business records. The attorney reviewed the records and determined that they would not be useful to a defense of the lawsuit. Paul served Food Mart with a request for production of documents that asked for all correspondence, s, or business records of any kind that reference or are related to maintenance and clean-up procedures implemented by Food Mart. In response to the request, must Food Mart, produce either (1) the letter from Food Mart s owner or (2) the business records Food Mart delivered to its attorney? Discuss. [End of Question 2] TEST CONTINUES ON NEXT PAGE Page 3 of 6

4 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE July 2016 QUESTION 3 (25 Points) 5 pts. 3.1 Plaintiff filed a complaint against Defendant in federal court. Defendant s attorney believes that the complaint has no basis in fact and wants to file a motion for sanctions under Rule 11 of the Federal Rules of Civil Procedure. Explain what steps Defendant must take before filing any such motion for sanctions. 5 pts. 3.2 Rachel filed a federal civil rights claim against a deputy sheriff based on claims of excessive force and unlawful arrest. The parties settled the case for $25,000. The next year, Rachel s property assessment was significantly higher, which resulted in her owing several thousand dollars in additional property taxes. Rachel did not believe that this was a coincidence, and she filed a new federal action pursuant to 42 U.S.C alleging a civil rights conspiracy against her. Rachel s complaint alleged that she filed and successfully settled a civil rights claim against a deputy sheriff. Her sole allegations of a civil conspiracy were as follows: (1) The sheriff and tax assessor entered into a conspiracy to falsely and grossly inflate the assessed value of plaintiff s property, which resulted in plaintiff Rachel being obligated to pay significant amounts of additional taxes ; and (2) The conspiracy was entered into in retaliation for plaintiff having earlier exercised her First and Fourteenth Amendment rights to access the courts. The sheriff s lawyer researched the applicable law and determined that a person may state an actionable Section 1983 claim based on retaliation by a government official for a person s exercising her right to access the courts. The sheriff s lawyer nonetheless filed a motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure on the grounds that the complaint fails to state a claim on which relief may be granted. a) What legal standards should the court should apply when assessing the motion? b) Should the court grant or deny the motion? Discuss. 5 pts. 3.3 Plaintiff, a custom-home builder and Louisiana citizen, has routinely bought gas lanterns from Defendant, a Utah citizen who sells the gas lanterns on a website. The two never spoke to one another and the transactions were done entirely online. Defendant sells his gas lanterns to customers in all 50 states, with no particular focus on any state. He advertises his gas lanterns in national home-builders publications. Plaintiff purchased two gas lanterns to build a 7,000 square foot custom home for a homeowner in Louisiana. Shortly after the homeowner moved in, the homeowner s home burned down. The homeowner asserted that one of the gas lanterns was defective and caused the fire that burned down his home. The homeowner settled his claim against Plaintiff for $100,000 in an arrangement that allowed Plaintiff to pursue the homeowner s claims against Defendant in an effort to obtain reimbursement. Plaintiff filed a diversity-jurisdiction complaint against Defendant in a Louisiana federal court and alleged that Defendant was responsible for the fire due to a defect in one of the gas lanterns he sold. TEST CONTINUES ON NEXT PAGE Page 4 of 6

5 Defendant lived in Louisiana from , before he moved to Utah. He still visits relatives in Louisiana about once per year for holidays. He has attended a two-day home-builders expo in Louisiana twice in the last three years, and he has stated on multiple occasions that he plans to retire in Baton Rouge, Louisiana in a few years. a) May the Louisiana federal court exercise general personal jurisdiction over Defendant? Discuss. b) May the Louisiana federal court exercise specific personal jurisdiction over Defendant? Discuss. 5 pts. 3.4 Petroleum, Inc., which is a citizen of Pennsylvania only, is obligated to pay royalties to David under a mineral lease of land in Louisiana. David died intestate, and his three heirs disagreed as to which of them inherited what percentage of the royalty under the lease. At the time of his death, David was a citizen of Texas. Two of the heirs are citizens of Mississippi, and the third is a citizen of Texas. Petroleum, Inc. wants to file an interpleader action in Louisiana federal court, deposit the $50,000 in royalty funds in the court registry, and require the three heirs to resolve their claims in that action. Which type of interpleader action may Petroleum, Inc. file? Discuss. 5 pts. 3.5 Cal, a California citizen, was interested in opening a chain of mattress stores in Louisiana. He looked for fellow investors and found Flo from Florida and Vera from Vermont. The three investors met in Florida for three days to finalize the terms of their agreement, which called for Flo and Vera to make monthly capital contributions over the course of the next three years. Cal was to use the funds to open and stock the Louisiana stores. The contract contemplated six stores opening across Louisiana during the first three years, with more to be funded by profits if the business was successful. Flo is a lifelong citizen of Florida, but she has owned a condominium in New Orleans, Louisiana for more than 10 years and stays in it six to eight weeks each year. Vera was born in Louisiana but moved to Vermont 20 years ago. She does not have any business connections in Louisiana other than the mattress stores, but she spends Thanksgiving with her aunt in Alexandria, Louisiana every year. Both Flo and Vera have extensive business investments in California and visit the state often to tend to those businesses. They play no role in the management of the Louisiana mattress stores. The stores were not doing well two years into the arrangement. Flo and Vera accused Cal of breaching their agreement by not producing timely financial reports, and they stopped making monthly payments. Cal would like to sue Flo and Vera in a federal court for $100,000 each, representing the remaining payments due under the agreement. a) Is California a proper venue for this civil action? Discuss. b) Is Louisiana a proper venue for this civil action? Discuss. c) Is Florida a proper venue for this civil action? Discuss. [End of Question 3] TEST CONTINUES ON NEXT PAGE Page 5 of 6

6 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE July 2016 QUESTION 4 (20 Points) law: Multiple choice questions, each worth 2 points, tested the following areas of the 4.1 Joinder of claims 4.2 Waiver of defenses 4.3 Timing of appeals; interlocutory dismissals 4.4 Amendments to pleadings; supplemental jurisdiction 4.5 Substitution of parties; amending pleadings 4.6 Venue 4.7 Removal 4.8 Grounds for judgment as a matter of law 4.9 Personal jurisdiction; waiver on appeal 4.10 Joinder of non-diverse party [End of Question 4] END OF FEDERAL JURISDICTION AND PROCEDURE EXAM Page 6 of 6

7 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE FEBRUARY 2016 QUESTION 1 (30 Points) Rose, a Colorado (CO) citizen and professional downhill skier, recently began training for the 2018 Winter Olympics. Due to her previous success in the sport, Rose had amassed numerous sponsorships, including SkiDrone, the world's most innovative aerial drone device designed to film live sporting events while hovering in close proximity to the individual being filmed. Unfortunately, during a recent qualifying event in Colorado in which the SkiDrone was being used to film Rose, a malfunction in the SkiDrone's motor caused the drone to crash. This distraction caused Rose to lose her balance and fall, resulting in severe damage to Rose's back and knee. Rose's injuries have forced her to retire from skiing. After meeting with her attorney, Rose discovered that SkiDrones are manufactured by Drone Designs, LLC (DD), a Louisiana limited liability company, which specializes in the design, manufacturing and sale of drones. All of DD's management and design team are located in Louisiana, where it also distributes products. Ethan, a Louisiana citizen, owns a 95% interest in DD. However, Ethan recently moved to Salt Lake City, Utah to assist DD in opening a Utah location but plans to return to Louisiana once that location is opened. The remaining 5% of DD is owned by Innovative Parts, Inc. (IPI), a corporation organized in Delaware and owned by four shareholders who all live in Colorado. IPI has warehouses in Texas, Colorado, and Louisiana, and has a dispatcher in its Texas warehouse which directs all shipments from all warehouses. More than 60% of IPI's products are sold in Colorado and the majority of its employees work in the Colorado warehouse. The business office and management staff are located in the Texas facility. Alleging a defect in the design of the SkiDrone, Rose filed suit against DD in a Louisiana federal court seeking $300, in damages. After receiving notice of the suit, DD was informed that by retiring from skiing, Rose was in breach of her sponsorship contract with SkiDrone, and immediately filed a $60, counterclaim against Rose for breach of contract. Questions are based on the above facts. 15 pts. 1.1 Does the federal court have subject-matter jurisdiction over Rose's complaint and DD's counter-claim against Rose? Discuss. Assume for Questions that the case remains pending in Louisiana federal court. 5 pts. 1.2 More than a year after the suit was filed, and after an answer has been filed and much discovery has been conducted, Ethan moved to Colorado. DD then filed a motion to dismiss for lack of subject-matter jurisdiction arguing that diversity no longer existed between the parties. Should the court grant DD's motion to dismiss? Discuss. 5 pts. 1.3 Ethan, on behalf of DD, met with an attorney to discuss a defense to Rose's lawsuit. The attorney asked Ethan to gather all paperwork and records DD had related to the SkiDrone and to send them to the attorney. Ethan later delivered the business records to the attorney along with a letter in which Ethan explained why DD believed the SkiDrone had a faulty design defect. The attorney reviewed the records and determined that they would not be useful to a defense of the lawsuit. Page 1 of 5

8 Rose served DD with a request for production of documents that asked for "all correspondence, s, or business records of any kind that reference or are related to the SkiDrone." In response to Rose's discovery request, must DD produce (1) the letter from Ethan or (2) the business records DD delivered to its attorney? 5 pts. 1.4 The parties disagree over whether Rose's sponsorship contract with SkiDrone should be interpreted under the laws of Louisiana or Colorado. The Louisiana conflict of law provision states that the contract should be interpreted under the laws of the state where performance is to be delivered, which in this case is Colorado. The Colorado conflict of law provision states that a contract should be interpreted under the laws of the state where it is executed, which in this case was Louisiana. Does the Louisiana or Colorado conflict of laws provision govern the dispute? Discuss. [END OF QUESTION 1] QUESTION 2 (25 Points) On February 14, 2014, Hank, a Louisiana citizen, entered Bud s Meats, a small grocery store located in Caddo Parish, Louisiana. Bud s Meats is owned and operated by Jorg Industries, Inc. ( Jorg Inc. ), a Texas corporation that owns many such grocery stores and has its principal place of business in Oklahoma. Bud Jorgenlen owns 100% of the stock of Jorg Inc. The store s butcher, Ed, was on duty at the time acting also as its assistant manager. Ed is a citizen of Louisiana. Upon entering the store Hank proceeded to the deli when he tripped and fell over a display of Sour Punch, a beverage distributed and stocked in the store by Lou, an employee of Yukon, LLC. Yukon is an Arkansas LLC with its sole principal being Lorne, a citizen of North Dakota. After being summoned to the scene Ed discovered that Lou, when setting up the display, did not properly assemble the platform on which the Sour Punch was stacked, causing a portion of the assembly to stick out into the aisle of the store. After receiving immediate treatment for knee pain and missing several days of work, Hank continued with physical therapy. Believing his injuries to be minor, Hank and his attorney spoke informally with counsel for Jorg Inc. about settling for payment of Hank s medical expenses and lost wages in the amount of $25,000. The parties were unable to resolve their issues, so Hank filed suit against Jorg Inc. in the First Judicial District, Caddo Parish, Louisiana, on February 1, Hank served Jorg, Inc. through its registered agent for service of process on February 15, Hank brought his suit under LA. R.S 9: which imposes upon a merchant a duty to exercise reasonable care to keep the aisles, passageways and floors in a reasonably safe condition for persons who use its premises and alleged that Jorg Inc. s failure to do so rendered it liable to Hank for damages. Hank also named Ed as a defendant; he alleges that Ed failed to properly supervise those responsible for Hank s injuries. However, he withheld service of process on Ed as they were very good friends. Finally Hank also named Yukon as a defendant; he alleges that its employee, Lou, similarly failed to keep the aisle in a reasonably safe condition and that Yukon was liable to him for his injuries. Yukon was served with process on February 29, TEST CONTINUES ON NEXT PAGE Page 2 of 5

9 On March 18, 2015, counsel for Jorg Inc. received an from Hank s attorney. Attached to the is a report from Hank s treating physician indicating the results of a recent MRI showing extensive damage to the interior of Hank s knee, which will require expensive surgery to repair and necessitate that Hank miss several weeks of work for recovery. This surgery, according to the report, could also prevent Hank from returning to his current occupation (lumber worker). On April 1, 2015, counsel for Jorg Inc. filed a Notice of Removal in the United States District Court for the Western District of Louisiana, Shreveport Division; Caddo Parish is included in that division. Counsel alleged that diversity jurisdiction existed, that the notice was timely filed, and that Yukon consented to the removal as evidenced by an from counsel for Yukon to counsel for Jorg Inc. stating that Yukon consented; a copy of this was attached to the Notice. Questions are based upon the foregoing facts. (10 pts) 2.1 Has Jorg Inc. followed the proper procedure for removal? Discuss. (5 pts) 2.2 Hank would like this matter to stay in state court and has asked his attorney to do what he can to make that so. What should Hank s counsel file to accomplish this goal? What should counsel argue as the basis for this filing, what remedies would be available, and how should Jorg Inc. respond? (5 pts) 2.3 Assume the matter remains in federal court. Yukon, which has yet to file any responsive pleadings, believes that it should be dismissed from this case because it maintains that it is not a merchant as defined by the law under which plaintiff sued. What should Yukon file to raise this issue and is it likely to succeed? Discuss. (5 pts) 2.4 Jorg Inc., which has filed responsive pleadings, believes it has information from Ed that would show that it did everything it was required to do under the act sued upon and that it should also be dismissed from the litigation. What type of pleading should Jorg Inc. file to raise this issue and is it likely to succeed? Discuss. [END OF QUESTION 2] QUESTION 3 (25 Points) Part A. Tex, a citizen of Texas, was interested in opening a chain of mattress stores in Louisiana. He looked for fellow investors and found Al from Alabama and Mona from Montana. The three investors met in Alabama for three days to finalize the terms of their agreement, which called for Al and Mona to make monthly capital contributions over the course of the next five years. Tex was to use the funds to open and stock the Louisiana stores. The contract contemplated ten stores opening across Louisiana during the first three years, with more to be funded by profits if the business was successful. Al is a lifelong citizen of Alabama, but he has owned a hunting camp in Coushatta, Louisiana for more than 5 years and hunts on it two to four weeks each year. Mona was born in Louisiana but moved to Montana 30 years ago. She does not have any business connections in Louisiana other than the stores, but she spends Mardi Gras with her cousins in Lafayette, Louisiana every year. Both Al and Mona have extensive business investments in Texas and visit the state often to tend to those businesses. They play no role in the management of the Louisiana stores other than investment of their capital. Page 3 of 5

10 The stores were not doing well three years into the arrangement. Al and Mona accused Tex of breaching their agreement by not producing timely and accurate financial reports, and they stopped making monthly payments. Tex decides to sue Al and Mona each for $100,000, representing the remaining payments due under the agreement. Tex filed the complaint against Al and Mona in a Louisiana federal court. 15 pts. 3.1 May the Louisiana federal court exercise over Al: (a) general personal jurisdiction? Discuss. (b) specific personal jurisdiction? Discuss. May the Louisiana federal court exercise over Mona: (a) general personal jurisdiction? Discuss. (b) specific personal jurisdiction? Discuss. Part B. Dan is the lawyer for Speedy Delivery Service (Speedy), which was sued in federal court for damages related to an auto accident. Questions are based upon the foregoing facts. 5 pts. 3.2 Dan s initial disclosures are due soon, so he reviewed his files to assess what items he must disclose as part of that procedure. He found: (1) A certified copy of a 2013 conviction of the plaintiff for aggravated assault; (2) The name and contact information for John, an eyewitness who saw the accident and said Speedy s driver was 100% at fault because he ran a stop sign; (3) A copy of Speedy s auto liability policy with a $25,000 deductible; and (4) A computation by Speedy s own expert economist about the possible value of the lost wages the plaintiff driver may claim. Explain whether Dan must disclose each item as part of his Rule 26 initial disclosures. 5 pts. 3.3 Speedy s attorney, Dan, sent a letter to the plaintiff s lawyer and suggested that counsel hold a conference to develop a proposed discovery plan pursuant to Rule 26(f). Plaintiff s lawyer instead served notices of 15 depositions of Speedy s employees who are believed to have witnessed or have information regarding the accident. What procedural grounds, if any, might Speedy s attorney raise to object to the depositions? Explain. [END OF QUESTION 3] TEST CONTINUES ON NEXT PAGE Page 4 of 5

11 QUESTION 4 (20 points) Multiple choice questions, each worth 2 points, tested the following areas of the law: 4.1 Personal Jurisdiction Waiver 4.2 Venue 4.3 Appeal 4.4 Removal Remand 4.5 Personal Jurisdiction 4.6 Rule 56 Motion for Summary Judgment 4.7 Rule 11 Sanctions 4.8 Venue District Court Location 4.9 Rule 50 Judgment as a Matter of Law 4.10 Interpleader Page 5 of 5

12 LOUISIANA BAR EXAMINATION FEDERAL JURISDICTION AND PROCEDURE JULY 2015 QUESTION 1 (30 Points) Dale and Roy, both citizens of Texas, owned several restaurants in Texas, which offered dishes containing only organic, non-genetically modified ingredients. They decided to open a restaurant in Baton Rouge, Louisiana and properly formed a Louisiana Limited Liability Company, Healthy Foods, LLC, to own the restaurant. Dale and Roy managed the business affairs of the LLC from their office in Austin, Texas. Healthy Foods entered into a contract with Opelousas Wholesale of Louisiana, Inc. (OWL), to supply organic fruits and vegetables to the restaurant in Baton Rouge. OWL is a corporation organized in Delaware and owned by three shareholders who all live in Texas. OWL has warehouses in Arkansas and Louisiana and has a dispatcher in its Arkansas warehouse, which directs all shipments from all warehouses. More than two-thirds of its sales are made in Louisiana and the majority of its employees work in the Louisiana warehouses. The business office and management staff are located in the Arkansas facility, which is where the contract was signed. Summer, who grew up and spent all her life around Austin, Texas, recently moved to Arkansas to become the marketing manager for OWL. She has only been in Arkansas for six weeks but plans to stay as long as the job remains interesting. Extreme weather conditions have caused OWL to begin losing money on its deliveries to Healthy Foods under the prices agreed to in its contract with Healthy Foods. The deliveries started to be late or not be made at all. Healthy Foods eventually had to turn to another supplier and calculated that it suffered $100,000 in damages to offset its additional costs of obtaining food products and loss of business at the Baton Rouge restaurant. Healthy Foods filed a breach of contract claim against OWL in Louisiana federal court. A Baton Rouge television reporter asked Summer to comment on the suit from her Arkansas office. Summer said that the public should be more interested in whether Healthy Foods was serving organic foods in its restaurant or some cheap and unhealthy substitutes. Healthy Foods immediately filed an amended complaint asserting a $50,000 defamation claim against Summer. 15 pts. 1.1 Does the federal court have subject matter jurisdiction over Healthy Foods claims against OWL and Summer? Explain fully. Assume for each of the following three subparts that the case remains pending in Louisiana federal court. 5 pts. 1.2 More than a year after the suit was filed, and after an answer had been filed and much discovery had been conducted, Roy, one of the members of Healthy Foods, LLC, moved to Delaware. OWL then filed a motion to dismiss for lack of subject matter jurisdiction arguing that Roy and OWL are now non-diverse. Should the court grant OWL s motion to dismiss? Explain. Page 1 of 5

13 5 pts. 1.3 As Healthy Foods prepared for trial, its accountant determined he had made a mistake in his damage calculation so that the total breach of contract loss was $64,000. Healthy Foods communicated this to OWL and offered to settle for that amount, but OWL declined, thinking that it had good defenses to all claims and would prevail at trial. OWL pointed out that the amount was now less than the required amount in controversy and the parties agreed that, because it was so close to the trial date, neither would raise any objection on this issue. What effect, if any, do these developments have on the authority of the federal court to resolve the case? Discuss. 5 pts. 1.4 The parties disagree over whether the contract should be interpreted under the laws of Louisiana or Arkansas. The Arkansas conflict of law provision says that the contract should be interpreted under the laws of the state where the performance is delivered, which in this case is Louisiana. The Louisiana conflict of law provision says that a contract should be interpreted under the laws of the state where it is executed, which in this case was Arkansas. Does the Louisiana, or the Arkansas conflict of laws provision govern the dispute? Discuss. QUESTION 2 (25 points) Tex, a citizen of Texas, was fulfilling his lifelong dream to visit the French Quarter. Unfortunately, while there he slipped and fell in the bathroom of a restaurant owned by Louis, a Louisiana citizen. Tex filed suit against Louis in Louisiana state court in New Orleans on March 6, His petition alleges plaintiff was a customer in defendant s restaurant when he visited the restroom and unexpectedly stepped in a pool of water, which caused plaintiff to slip and fall. The source of the water was a nearby leaking pipe. The rust and mildew indicated that the pipe had been leaking for some time so the defendant knew, or should have known, of the dangerous condition of his premises, making him negligent and liable for damages. Louis was served with the petition and filed an answer. Louis served Tex with an interrogatory that asked for the amount of damages that he claimed. Tex responded that his damages did not exceed $50,000. Later, on March 15, 2015 (more than a year from the date of the original petition), Tex served Louis with an amended petition. The amended petition added a claim under the Public Accommodations provisions of the Federal Americans with Disabilities Act, alleging that the bathroom did not have proper safety railings. On March 30, 2015, Louis took action to remove the case to federal court based on the assertion in the new claim. 5 pts. 2.1 Describe in detail the procedure and requirements counsel for Louis must follow to properly remove the case to federal court. To which federal court may the case be removed? 5 pts. 2.2 Tex s attorney believes there are procedural defects in the removal. What must Tex s attorney file to seek the return of the case to state court? What time limits, if any, does Tex face? 5 pts. 2.3 Tex s attorney makes a timely submission of the proper filing to raise objections to the removal. She objected to the removal because she alleges that 1) it was untimely, and 2) Louis is a citizen of the forum state. Are each of these objections valid? Explain. 5 pts. 2.4 Assume for this question that the case proceeds in federal court. Louis next filed a motion to dismiss the slip and fall claim under Federal Rule 12(b)(6) for failure to state a claim on which relief could be granted. His attorney argues in his memorandum that Louis employed a handy man who monitored the entire restaurant premises for leaks and spills and his inspection records did not indicate any leaks in the bathroom on the day of the alleged incident. What legal standards should the court apply when assessing the motion to dismiss? Should the court grant or deny the motion? Discuss. Page 2 of 5

14 5 pts. 2.5 Assume for the purposes of this question that the court denied the motion to dismiss. Louis later filed a motion for summary judgment that was supported by an affidavit from a waiter at the restaurant who testified in the affidavit that he was in the bathroom with Tex that evening and did not see him fall. Louis also submitted an affidavit from Tex s parole officer who testified that Tex was convicted three years earlier for perjury after he offered a false alibi at a friend s burglary trial. Tex opposed the motion and offered his own affidavit in which he testified that he did slip and fall in the water just as alleged in his complaint. Tex also stated in his affidavit that the waiter must have left the room before Tex fell. How the court should rule on the motion? Discuss. QUESTION 3 (25 points) Dude, a citizen of California, was interested in opening a chain of bowling pro shops in Louisiana. Dude found two investors, Donnie from Delaware and Walter from Florida. The three met in Florida for three days at a bowling tournament in Miami to finalize the terms of their agreement, which called for Donnie and Walter to make monthly capital contributions over the course of the next three years. Dude was to use the money to open and stock the Louisiana stores. The contract contemplated six stores opening across south Louisiana during the first three years with more to be funded by profits if the business was successful. Walter is a lifelong resident of Florida but has owned a condominium in New Orleans for more than ten years and occupies the condo for six to eight weeks each year. Donnie was born in Louisiana but moved to Delaware twenty years ago. He does not have any business connections in Louisiana other than the bowling stores but does come to Louisiana every year for a bowling tournament in the Superdome. Both Donnie and Walter have extensive business investments in California and visit that state often to tend those businesses. They play no role in the management of the Louisiana shops other than investment of their capital. The stores were not doing well after two years into the contract. Donnie and Walter accused Dude of breaching the agreement by not producing timely financial reports and they stopped making their monthly capital contributions. Dude would like to sue Donnie and Walter for $100,000 each representing the remaining payment due under the agreement. 5 pts. 3.1 Dude would like to file the suit against Walter and Donnie in his home state of California. Is California a proper venue for the civil action? Discuss. Would Louisiana or Florida be proper venues? Discuss. 8 pts. 3.2 Dude decides to file the complaint against Walter and Donnie in Louisiana federal court. May the Louisiana federal court exercise: a) general personal jurisdiction, or b) specific personal jurisdiction, over Walter? Discuss. May the Louisiana federal court exercise: a) general personal jurisdiction, or b) specific personal jurisdiction, over Donnie? Discuss. Page 3 of 5

15 5 pts. 3.3 Assume that any venue and jurisdictional obstacles are overcome and the case proceeds in federal court in Louisiana. Donnie, six months before he stopped making payments under the agreement, secretly entered into a contract with a competing bowling retailer to make a substantial investment in it should the stores built by Dude go out of business. Donnie also has letters written by Dude in which Dude states that bookkeeping problems might result in his required financial statements being late. Should Donnie produce a) the contract, or b) the letters, in his initial disclosures? Discuss. Should Donnie produce a) the contract, or b) the letters, if he were responding to a request for production of documents that asked for copies of all correspondence related to the business venture and any agreements between Donnie and competing businesses? Discuss. 7 pts. 3.4 The case proceeds to a trial before a jury. At the close of evidence, Dude is convinced that neither Donnie nor Walter proved their defense that Dude breached the contract. What motion should Dude make to seek judgment in his favor before the case is submitted to the jury? What standard should the court apply in deciding that motion? Discuss. TEST CONTINUES ON NEXT PAGE Page 4 of 5

16 QUESTION 4 (20 points) Ten multiple choice questions, each worth 2 points, tested the following areas of the law: 4.1 Timeliness of appeal 4.2 Joinder of claims 4.3 Rule Third party complaint 4.5 Amended complaint 4.6 Judgment as a matter of law 4.7 Amount in controversy 4.8 Waiver of defenses 4.9 Discovery 4.10 Removal END OF TEST Page 5 of 5

17 LOUISIANA BAR EXAMINATION Federal Jurisdiction and Procedure February 2015 Question One (30 Points) Tim, a citizen of Florida (FL), was traveling through Louisiana (LA) when he accidentally ran a stop sign and collided with a delivery truck owned by Zip Trucking, LLC (Zip). Zip, organized under LA law, has a trucking hub facility and management offices in Fort Worth, Texas (TX). It has two members. The first is Pam Zip, a citizen of New York, who has the final say on any important company decisions. The other member is Transport Partnership, Ltd. (Transport), a limited partnership organized under LA law and with its main office in Mississippi (MS). The two partners who formed Transport are Flo, a FL citizen who is the general partner, and Cal, a California citizen who is a limited partner. Tim did not have liability insurance for the accident, so Zip made a claim against its own collision insurer, Safe Ins. Co. Safe is a MS corporation. It operates in several southern states. The sales office that generates almost all of its revenue is in FL. Its claims office that handled the claim by Zip is in TX. Business decisions are made by a small group of directors and officers in LA. Zip submitted a claim to Safe for $70,000 in property damages to its truck. Safe assured Zip that it would promptly resolve the claim, but it did not do so and stopped returning phone calls. Zip filed suit against Safe in an LA federal court and sought $70,000 in property damages plus a 10% penalty based on a LA statute that imposes a penalty if an insurer unreasonably fails to resolve a claim by its insured within 60 days. Safe filed an answer and a third-party demand against Tim for the $70,000 in property damages claimed by Zip. Questions are based on the above facts. With respect to these and other questions on the exam, your ability to demonstrate knowledge of how to properly analyze the issues may be more important than your conclusion with respect to some issues, so conclusory answers will receive little credit. 15 pts. 1.1 Does the federal court have subject-matter jurisdiction over Zip s complaint and Safe s third-party demand against Tim? Explain fully. Please use paragraph breaks to separate the major components of your answers. 3 pts. 1.2 Assume for the rest of Question One that the case remains pending in the LA federal court. Zip becomes concerned that its coverage with Safe may have lapsed due to untimely payment of a premium. It decides that, out of an abundance of caution, it should amend its complaint to add Tim as a second defendant. Discuss whether the court would have subjectmatter jurisdiction over Zip s claim against Tim. Page 1 of 12

18 4 pts. 1.3 The parties are required to exchange initial disclosures pursuant to Federal Rule of Civil Procedure 26. Zip has in its file the name and address of the mechanic who repaired Zip s truck but did not witness the accident itself. Safe s file includes an from a Safe adjuster to his supervisor in which the adjuster wrote: It appears that Zip s claim is legitimate, but I believe Zip will accept less than the full amount of loss if we can drag out the process for a few months. Discuss whether the party in possession of each of those items must produce it as part of its initial disclosures. 4 pts. 1.4 Safe takes the position that the LA penalty statute is inapplicable in the federal court dispute because federal common law does not impose a penalty on an insurer for delays in settlement. A Louisiana statute limits a party to five depositions when the amount in controversy is less than $100,000. Federal Rule of Civil Procedure 30 allows each party to take 10 depositions. Zip argues that LA law, which governs its insurance claim, should also govern the number of depositions allowed in resolving that claim. Safe once again argues that the federal rule should apply. Explain how the federal court should resolve each of these disputes. 4 pts. 1.5 Zip financed the purchase of its truck with a loan from A-1 Auto Loans, Inc. (A-1), a company organized and located in Maine. The balance due on the loan is $30,000. The terms of the finance agreement allow A-1 to join or pursue any action for damages to its collateral, the truck. A-1 wants to join the suit to ensure that any proceeds Zip obtains are used to repair the truck or pay on the debt. What procedural device should A-1 use? Discuss whether the federal court would have subject-matter jurisdiction over A-1 s claim. Page 2 of 12

19 Question Two (25 Points) Ann is a citizen of Louisiana (LA). She purchased a new car from Jack s Auto in Jackson, Mississippi (MS). Jack s Auto is a sole proprietorship owned by Jack Jones, a MS citizen. The tires on the new car were manufactured by The Round Wheel Company (RW), a Texas (TX) citizen. Ann was driving her new car home to Rayville, LA, and as soon as she crossed the Mississippi River into LA, one of her tires suddenly went flat. She pulled to the side of the interstate where her car was soon struck by Paul, a citizen of Alabama. Ann suffered more than $150,000 in property and personal injury damages. Ann believes that the tire failed because of a manufacturing defect. She filed suit in state court in Monroe, LA on January 3, 2014 against RW, Jack s Auto, and Paul. Long arm service was made on RW on February 10, 2014, and on Jack s Auto on March 15, Ann has tried to serve Paul, but she has been unsuccessful so far. The tire company and the dealership decided that they would prefer to be in federal court. Their attorneys were nervous that a deadline might be missed if they waited to hear from Paul, so on April 10, 2014, they removed the case to federal court. 5 pts. 2.1 Describe in detail the procedure and requirements counsel for the removing defendants would have to follow to remove the case to federal court. To which federal court may the case be removed? 3 pts. 2.2 Ann s attorney believes there are procedural defects in the removal. What pleading would Ann s attorney file to seek a return of the case to state court? What time limits, if any, does Ann face to file this pleading? 6 pts. 2.3 Ann s attorney makes a timely submission of the proper filing to raise objections to the removal. She objected that the removal was defective because (1) Paul did not join in the removal, (2) the removal was untimely, and (3) the removal was improper because the plaintiff is a citizen of the forum state. Explain whether or not each of these objections is valid. 3 pts. 2.4 Assume the case remains in federal court. Ann learns that Jack Jones purchased a new home in Louisiana shortly before Ann filed the suit. Ann believes that this means there is a lack of complete diversity among the parties. She filed a motion on June 15, 2014 to challenge the removal on those grounds. The defendants argue that Ann s arguments are untimely. Explain how the court should rule on the defendants argument that Ann s motion is untimely. Page 3 of 12

20 4 pts. 2.5 Assume the case remains in federal court. Ann s attorney finally found a current address for Paul in Alabama and mailed him a copy of the complaint, two copies of a request for waiver of service form, a prepaid return envelope, and satisfied the other requirements of Fed. R. Civ. Pro. 4(d) regarding requests for waiver of service. Paul refused to sign the waiver of service because he did not want to waive what he believed is a valid objection to the LA court s personal jurisdiction over him. Explain whether Paul s concern is well founded. Paul s refusal to sign and return the waiver of service required that Ann have formal service papers delivered personally to Paul. What financial penalties, if any, does Paul risk incurring because of his refusal? Discuss. 4 pts. 2.6 The case remains in federal court. Jack s Auto and RW filed a motion for summary judgment and argued that all claims against them should be dismissed because the tire was not defective. The motion was supported by affidavits from three expert witnesses retained by RW from local engineering universities. Each testified that an inspection of the damaged tire revealed no manufacturing defects, so the deflation must have been caused by a puncture. Ann opposed the motion with an affidavit from a single expert engineer, who she is paying $750 per hour for his work. Ann s expert testified that he could find no evidence of a puncture in the tire and, in his opinion, the tire s poor quality air-valve allowed the air to leak from the tire. His testing was able to demonstrate such leaking. He has testified for plaintiffs more than a dozen times in similar tire failure cases and earned a great deal of money doing so. Set forth the applicable standard for assessing the motion for summary judgment, analyze the submissions of the parties under the applicable standard, and state how the court should rule on the motion. Page 4 of 12

21 Question Three (25 Points) 5 pts. 3.1 Paige, a citizen of Texas (TX), opened a knitting supply store in a Louisiana town where there were three competing stores. The other stores began holding frequent sales, which caused Paige s store to struggle. She believed the other owners, all Louisiana citizens, had conspired against her in violation of the Louisiana Unfair Trade Practices Act (LUTPA). She filed suit against the three competing owners in federal court based on diversity jurisdiction. Paige s complaint alleged: (1) Plaintiff opened a knitting supply store and priced her goods at a fair markup. (2) Competing stores in town began holding sales, one after the other, so that one of them always offered the same goods for a lower price. (3) Plaintiff is of the belief that the three defendant owners conspired to structure their sales in the manner most harmful to Plaintiff s business, in violation of the LUTPA. The defendants lawyers filed a motion to dismiss pursuant to Rule 12(b)(6) on the grounds that the complaint failed to state a claim on which relief may be granted. The defendants acknowledged that a person may state an actionable claim under the LUTPA based on an unfair conspiracy to restrain trade, but they argued that Paige s complaint was too conclusory to plead such a conspiracy claim. What legal standards should the court apply when assessing the motion? Should the court grant or deny the motion? Discuss. 4 pts. 3.2 Noah was sued in city court and held liable for $1,500. The winning plaintiff scheduled a judgment debtor exam where Noah was required to answer questions about his assets. The judge found that Noah was not being truthful, held him in contempt, and sentenced him to 30 days in jail. Noah learned that the city court judge had previously represented the plaintiff in a divorce case. Noah believed that this made the judge unfairly biased and violated Noah s federal right to due process. Noah filed a complaint in the local federal court pursuant to 42 U.S.C and prayed for an injuction ordering his release from jail. Discuss whether the federal court should entertain the request for injunction. Page 5 of 12

22 4 pts. 3.3 Daisy, a Louisiana citizen, entered into a contract with Recruitment Co., also a Louisiana citizen, by which Recruitment would provide Daisy temporary employees to work in her factory at an agreed hourly rate. Labor costs in the area began to rise, so that the contract was no longer profitable for Recruitment, and it began to send fewer workers than required under the contract. Daisy demanded that Recruitment keep its word under the agreement, but Recruitment responded that it was concerned the contract was void because some of its terms violated federal laws regarding disabled workers and paying overtime pay. Attorneys for Daisy and Recruitment exchanged several letters and legal research regarding whether the contract violated the federal employment laws. When they could not reach an agreement, Daisy directed her lawyers to file suit against Recruitment for breach of the contract and related damages. Discuss whether a federal district court in Louisiana would have subject-matter jurisdiction over Daisy s suit against Recruitment. 4 pts. 3.4 Kenneth, a Louisiana state trooper, was on duty when he stopped Jean for texting while driving. Being curious, Kenneth insisted on searching Jean s car. Jean did not consent to the search and, having recently studied the law, argued to Kenneth that a search would violate the Fourth Amendment and subject him to a lawsuit. Kenneth proceeded with the search, which revealed nothing illegal. Kenneth then arrested Jean for attempting to intimidate a public officer. Jean filed a complaint in federal court and prayed for damages pursuant to 42 U.S.C based on claims of illegal search and arrest. She named as defendants (1) Kenneth and (2) his employer, the Louisiana Department of Public Safety, a state agency. The defendants filed a motion to dismiss on the grounds that the Eleventh Amendment barred Jean s claims. Discuss, with respect to each of the two defendants, whether the motion has merit. Page 6 of 12