Indiana Law Review


1991 Federal Practice and Procedure Update for the

Seventh Circuit Practitioner

John R. Maley*

Introduction

Indiana practitioners litigating in federal court continued to encounter

significant developments in federal civil practice last year. Several key

amendments were made to the Federal Rules of Civil Procedure effective

December 1, 1991, local rules were amended in the Southern District

of Indiana, Civil Justice Reform Plans were adopted in the Northern

and Southern Districts of Indiana, and the Supreme Court, Seventh

Circuit, and regional district courts rendered important decisions affecting

many aspects of federal litigation. This Article, as the fourth of an
annual section on federal civil practice, highlights the more important

developments in an effort to assist local attorneys in their federal civil

litigation.
1

Federal civil practice is noteworthy for the broad spectrum of pro-

cedural issues that often arise in getting to the merits of a case or

controversy. As a result, this Article covers diverse topics such as subject

matter jurisdiction, rules of pleading, discovery, trial rules, and post-

judgment issues. The developments that this author deems of greatest

importance are discussed in detail. Other issues are merely raised so

that practitioners are aware of them.

The subjects are presented in the order in which they often arise

in litigation. For ease of future reference, the following table of contents

outlines the subjects discussed:

Topic Page

Subject Matter Jurisdiction 1074

Diversity Jurisdiction 1 074

Amount-In-Controversy 1 077

* Associate, Barnes & Thornburg, Indianapolis. Adjunct Professor, Indiana Uni-
versity School of Law—Indianapolis; Lecturer, Indiana Bar Review (Civil Procedure, Torts).
B.A., 1985, University of Notre Dame; J.D., 1988 (summa cum laude), Indiana University
School of Law—Indianapolis. Law clerk to the Honorable Larry J. McKinney, United
States District Court for the Southern District of Indiana, 1988-90. The views expressed

are solely those of the author.

1. As in past years, this Article concentrates on federal civil practice and procedure.

Substantive federal decisions and matters of federal criminal procedure are left to other

forums.



1074 INDIANA LAW REVIEW [Vol. 25:1073

Supplemental Jurisdiction 1 079

Removal 1082
Service of Process 1084

Rule 9(b) - Pleading with Particularity 1085

Rules 19 & 12(b)(7) - Proper Parties 1085
Rule 15 - Amendment of Pleadings 1086
Discovery 1087

Summary Judgment 1 089
Trial 1090

Rule 58 Judgments, Post-Judgment Motions, and Appeals 1095

Costs 1098

Sanctions 1099

Local Rules and Civil Justice Reform Plans 1100

Miscellaneous 1101

I. Developments in Subject Matter Jurisdiction

A. Diversity Jurisdiction

Diversity jurisdiction generated a number of reported decisions during

the survey period. As in past years, the Seventh Circuit somewhat sternly
advised district judges and practitioners to address such jurisdictional

questions early in litigation. For instance, in Market Street Associates

Limited Partnership v. Frey, 2 the defendants removed an action to federal

court on the basis of diversity jurisdiction, asserting in the removal

papers that the plaintiff limited partnership was a Wisconsin entity based

on its sole general partners' Wisconsin citizenship and that none of the

plaintiffs was a Wisconsin domiciliary. The district court proceeded to

address the merits of the action, apparently without delving further into

jurisdiction.

On appeal, the parties' lawyers were confronted by the panel with
the settled rule that in considering the citizenship of a limited partnership,

the residence of all partners, including limited partners, must be con-

sidered. This had been the law in the Seventh Circuit since 1984, 3 and

was adopted as the law of the land by the Supreme Court in 1990. 4

Writing for the Market Street panel, Judge Posner chastised counsel

2. 941 F.2d 588 (7th Cir. 1991).

3. Elston Inv., Ltd. v. David Altman Leasing Corp., 731 F.2d 436 (7th Cir.

1984). Accord Stockman v. LaCroix, 790 F.2d 584 (7th Cir. 1986).

4. Carden v. Arkoma Assoc, 494 U.S. 185 (1990). The Carden decision is discussed
at length in last year's federal practice survey. See John R. Maley, 1990 Federal Practice

and Procedure Update for the Seventh-Circuit Practitioner, 24 Ind. L. Rev. 631, 632-34

(1991) [hereinafter Maley, 1990 Developments].



1992] FEDERAL CIVIL PROCEDURE 1075

noting, "Even when the appeal was argued, more than a year after

Carden came down, the parties' lawyers were unaware of the rule; indeed

they seemed astonished at the suggestion that the citizenship of the

limited partners was relevant to jurisdiction."5

The Seventh Circuit ordered the parties to submit affidavits con-
cerning diversity and determined that jurisdiction was, in fact, present.

Judge Posner nonetheless added the following warning:

[B]y their insouciance concerning jurisdiction the litigants not

only ran the risk of having to start the case over in state court

but also made more work for us and delayed the decision of
the appeal. We remind the bench and bar of this circuit that
it is their nondelegable duty to police the limits of federal

jurisdiction with meticulous care and to be particularly alert for

problems in diversity cases in which one or more of the parties
is neither an individual nor a corporation. For it is with respect

to the other, the unconventional entities — two of which, a
partnership and a trust, are involved in this case — that mistakes
concerning the existence of diversity jurisdiction are most com-

mon. Among other unconventional entities that lawyers and
judges in diversity should be wary of tripping over are joint

ventures, joint stock companies, labor unions, religious and

charitable organizations, municipal corporations and other public

and quasi-public agencies, and the governing boards of unin-

corporated institutions. 6

Thus, as pointed out in last year's federal practice article, extreme care

must be taken in the Seventh Circuit to ensure that subject matter

jurisdiction exists. 7 If the district court does not raise the issue, which

is unlikely, 8 the Seventh Circuit obviously will.

In another significant decision, General Railway Signal Co. v. Cor-

coran,9 the Seventh Circuit held that a suit naming the administrator

of a federal agency as a defendant cannot be rooted in diversity juris-

diction.
10 In writing for the panel, Judge Easterbrook declined to follow

a decision from the D.C. Circuit holding otherwise. Judge Easterbrook

followed the general rule that the United States and its agencies cannot

be sued in diversity, reasoned that a "suit against an agency administrator

5. Market St. Assocs., 941 F.2d at 589-90.

6. Id. at 590.

7. Maley, 1990 Developments, supra note 4, at 637.

8. E.g., Lutkowski v. High Energy Sports, 768 F. Supp. 224 n.l (N.D. 111. 1991)

("This Court always undertakes an immediate review of newly-filed complaints.").

9. 921 F.2d 700 (7th Cir. 1991).

10. Id. at 703.



1076 INDIANA LAW REVIEW [Vol. 25:1073

is equivalent to a suit against the agency," and added that a "contrary

holding would undermine the longstanding rule that agencies cannot be

citizens of any state for diversity purposes and would arbitrarily expand

diversity jurisdiction over instrumentalities of the United States." 11

In Metropolitan Life Insurance Co. v. Estate of Common, n the
Seventh Circuit revisited the proper test to be used in determining the

citizenship of corporations for diversity purposes. Recall that 28 U.S.C.

§ 1332(c)(1) provides that a corporation is deemed to be a citizen of

the state in which it is incorporated and the state in which it has its

"principal place of business." 13 No other statutory guidance is given,
however, for determining what constitutes the principal place of business.

The Seventh Circuit has followed the "nerve-center" approach, which

holds that a corporation has a single principal place of business where

its executive headquarters are located. 14 In Metropolitan Life, the Seventh

Circuit reaffirmed its commitment to the nerve-center approach, declining

to follow other courts, such as the Ninth Circuit, that reject this concept.
15

Finally, the Seventh Circuit also addressed the citizenship of indi-

vidual litigants. In Galva Foundry Co. v. Heiden,* 6 an Illinois corporation

sued its former president, Ray Heiden. Mr. Heiden had lived and worked

in Illinois all his life. In 1966, he bought a second home in Florida
and continued to vacation there. In 1988, Heiden quit the plaintiff's

company and sold his stock. That same year he registered to vote in

Florida, took out a Florida driver's license, listed Florida as his permanent

address on his tax returns, and stated in an application for a Florida

tax exemption that he was a Florida resident. In 1989, when the lawsuit

was filed, Heiden continued to maintain his home in Illinois and spent
the greater balance of the year there rather than in Florida. He retained
his memberships in an Illinois country club and church.

Faced with these facts and a motion to dismiss from Heiden for

want of diversity, the district court found Heiden to be a nondiverse

Illinois resident and dismissed the action. The Seventh Circuit affirmed.
17

Writing for the panel, Judge Posner began by noting that although there

is no statutory definition of "citizenship" for an individual, the courts

have held that it is the state of the individual's domicile, and a district

11. Id. at 704-05.

12. 929 F.2d 1220 (7th Cir. 1991).

13. 28 U.S.C. § 1332(c)(1) (1988).

14. E.g., Kanzelberger v. Kanzelberger, 782 F.2d 774 (7th Cir. 1986).

15. Metropolitan Life, 929 F.2d at 1223 (declining to follow Indus. Tectonics, Inc.

v. Aero Alloy, 912 F.2d 1090 (9th Cir. 1990)).

16. 924 F.2d 729 (7th Cir. 1991).

17. Id. at 731.



1992] FEDERAL CIVIL PROCEDURE 1077

court's conclusion on domicile"must stand unless clearly erroneous." 18

Judge Posner elaborated on the domicile standard, writing:

Unfortunately, in this age of second homes and speedy trans-

portation, picking out a single state to be an individual's domicile

can be a difficult, even a rather arbitrary, undertaking. Domicile

is not a thing, like a rabbit or a carrot, but a legal conclusion,

though treated as a factual determination for purposes of de-

marcating the scope of appellate review. And in drawing legal
conclusions it is always helpful to have in mind the purpose for

which the conclusion is being drawn. The purpose here is to
determine whether a suit can be maintained under the diversity

jurisdiction, a jurisdiction whose main contemporary rationale

is to protect nonresidents from the possible prejudice that they

might encounter in local courts. 19

Applying this standard, the Galva Foundry court concluded that Heiden

was an Illinois domiciliary, noting that he was a "long-time resident of

Illinois and unlikely therefore to encounter hostility in its state courts." 20

Judge Posner interpreted Heiden's Florida declarations as steps to avoid

Illinois taxes, and concluded, "[t]his is shady business but it cannot

convert a suit between two residents of Illinois into a suit against a

Floridian."21

B. Amount-In-Controversy Requirement

The current amount-in-controversy requirement for diversity juris-
diction is that the matter exceed the sum or value of $50,000. 22 As
anticipated, the increase from $10,000 to $50,000 in 1988 appears to

have resulted in a corresponding surge in decisions addressing the amount-

in-controversy requirement. 23 Two decisions from the survey period re-
iterate the basic standards and address situations that recur with some
frequency.

In Sharp Electronics Corp. v. Copy Plus, Inc.,24 the plaintiff sued
in diversity for $15,000 in compensatory damages and an unspecified

18. Id. at 729.

19. Id. at 730.

20. Id.

21. Id. at 731.

22. 28 U.S.C. § 1332(a) (1988). A proposal was introduced in the Senate in 1991
to raise this to $75,000. See S. 1494, 102d Cong., 1st Sess. (1991). The recommendation
was not enacted.

23. See John R. Maley, 1989 Developments in Federal Civil Practice Affecting
Indiana Practitioners, 23 Ind. L. Rev. 261-63, 263-66 (1990) [hereinafter Maley, 1989

Developments].

24. 939 F.2d 513 (7th Cir. 1991).



1078 INDIANA LAW REVIEW [Vol. 25:1073

amount of punitive damages for fraud. The district court dismissed the

action for want of diversity jurisdiction, reasoning that "any recovery

of punitive damages was highly unlikely to be sufficient to bring the

recovery within the jurisdictional prerequisite."
25

On appeal, the Seventh Circuit began by noting that the Supreme
Court has long since determined that "[w]here both actual and punitive

damages are recoverable under a complaint each must be considered to

the extent claimed in determining the jurisdictional amount."26 The

question, in determining whether it "appear [ed] to a legal certainty that

the claim is really for less than the jurisdictional amount," was thus

whether the plaintiff could recover punitive damages under local law in

view of the circumstances alleged.27 Because the plaintiff could recover

punitive damages under governing Wisconsin law, the Seventh Circuit

could not say to a legal certainty that the suit was for less than the

jurisdictional threshold, and the court thus reversed the judgment of the

district court.

Judge Shadur of the Northern District of Illinois addressed similar

issues in Griffin v. Dana Point Condominium Association,2* holding that
a woman with serious injuries from a slip-and-fall accident met the
$50,000 threshold, while at the same time dismissing her spouse's loss

of consortium claim for insufficient damages.29 The court noted that

whenever the potential recovery is not susceptible to precise measurement,

as is always the case in personal injury cases, "both the litigants and

the court must be keenly aware of the need to establish at least a

colorable basis" for meeting the amount-in-controversy requirement. 30

There was no dispute about the wife's claim, for she alleged medical

expenses exceeding $20,000, pain and suffering she valued in excess of

$40,000, and loss of quality of life and mental anguish she pegged at

some $20,000. By contrast, her spouse's consortium claim did not de-
lineate the elements of damage, and the court reasoned that if the wife

placed only a $22,000 loss on lost quality of life, "there appears to be

no predicate for assigning a much larger price tag (over $50,000) to the
intangible loss claimed by [her spouse]." 31

Thus, depending upon whether a litigant desires to be in federal

court or not, care must be taken in such situations to address amount-

in-controversy issues in the framing of pleadings. In the Griffin setting,

25. Id. at 515 (paraphrasing district court's decision).

26. Id. (quoting Bell v. Preferred Life Soc'y, 320 U.S. 238, 240 (1943)).

27. Id.

28. 768 F. Supp. 1299 (N.D. 111. 1991).

29. Id. at 1301.

30. Id.

31. Id. at 1301 n.3.



1992] FEDERAL CIVIL PROCEDURE 1079

for example, it appears that the husband could have kept his claim in

federal court had he gone into more detail in delineating his damages

and had his wife been less specific (or less conservative) about her

intangible damages. In the punitive damages setting, by contrast, no

specification of the amount of damages appears necessary under Sharp

Electronics. However, for plaintiffs that prefer to remain in state court

and who believe their chances of obtaining a sizeable punitive damages
award are slim in their particular cases, removal could possibly be

defeated by requesting total compensatory and punitive damages of

$50,000 or less. Plaintiffs' attorneys are reminded, however, that in

Indiana no specific dollar prayer may be made for personal injuries,
wrongful death, or punitive damages. 32

C. Supplemental Jurisdiction

As reported last year, Congress codified the concepts of pendent
claim and pendent party jurisdiction by creating "supplemental juris-

diction" under 28 U.S.C. § 1367." This statute provides that when the
district courts have original jurisdiction over a claim, they also have

"supplemental jurisdiction over all other claims that are so related to

claims in the action within such original jurisdiction that they form part

of the same case or controversy under Article III." 34 Although the statute

appears clear on its face, questions remain, several of which were ad-

dressed in this circuit during the survey period.

For instance, one issue is whether a plaintiff who has no independent
basis of original jurisdiction can join a related action with a co-plaintiff

under supplemental jurisdiction. Section 1367(a) initially seems to indicate

that this is possible, for it provides: "Such supplemental jurisdiction

shall include claims that involve the joinder or intervention of additional

parties." 35 A reported decision from the Northern District of Illinois,
however, holds otherwise.

Specifically, in Griffin v. Data Point Condominium Association,
discussed above in the amount-in-controversy context, Judge Shadur held

that the husband's consortium claim, which did not meet the $50,000

threshold, could not find its way into court based on supplemental
jurisdiction. 36 The court acknowledged it had previously suggested to the
parties the possibility that section 1367 might save the consortium claim,

32. Ind. R. Tr. Proc. 8(a)(2).

33. See Maley, 1990 Developments, supra note 4, at 644-46.

34. 28 U.S.C.A. § 1367(a) (West Supp. 1991).

35. Id.

36. Griffin v. Data Point Condominium Ass'n, 768 F. Supp. 1299, 1301 (N.D.
111. 1991).



1080 INDIANA LAW REVIEW [Vol. 25:1073

but concluded that "a close look at both the language of the statute
and its legislative history teaches that the new provision does not change
the old law in this area at all." 37 The court relied primarily on Zahn
v. International Paper Co., 38 wherein the Supreme Court held that claims

of different plaintiffs asserting their individualized claims cannot be

aggregated to satisfy the jurisdictional amount. 39 From this presupple-
mental jurisdiction holding dealing with the amount-in-controversy re-

quirement, Judge Shadur apparently extrapolated that in the supplemental

jurisdiction setting "each plaintiff's claim must be considered on its own
as though it were a separate lawsuit."40 Judge Shadur added in a footnote

that the House Report on supplemental jurisdiction indicates that Zahn
is not intended to be affected by section 1367. 41

Judge Shadur seems correct in his ultimate decision, though his

analysis does not entirely stick to the "language of the statute" as

promised. The Zahn decision dealt only with aggregating claims of
different parties to reach the $50,000 threshold, although the broader

principle that a plaintiff must have his own basis of original jurisdiction
can reasonably be drawn from the Court's opinion. The result in Griffin
might be more directly supported by section 1367(b), which provides

that when original jurisdiction is founded solely on diversity, supplemental
jurisdiction is not proper over claims made by plaintiffs against parties
joined under Rule 14, 19, 20, or 24 of the Federal Rules of Civil

Procedure. 42 Note that in the Griffin context it is the plaintiff without

original jurisdiction that attempts to get into court in the first place,

rather than an original jurisdiction plaintiff trying to get additional

defendants into court. In a sense, the second plaintiff can be viewed

as an intervener under Rule 24 or a party whose joinder is needed under

Rule 19, and according to section 1367(b), such intervention or joinder

is ordinarily improper in the diversity context.

The bedrock of Griffin could also be that supplemental jurisdiction,

a concept not fully defined by Congress, simply does not encompass

claims made by related plaintiffs that do not enjoy their own source
of original jurisdiction. The only definition of supplemental jurisdiction,

implicit though it may be, is found in section 1367(a), which states that
in any action of which the district courts have original jurisdiction, the

district courts shall have "supplemental jurisdiction over all other claims

37. Id. at 1301.

38. 414 U.S. 291, 292-95 (1973).

39. Id. at 299.

40. Griffin, 768 F. Supp. at 1301.

41. Id. at 1302 n.4 (citing H.R. Rep. No. 734, 101st Cong. 2d Sess. 76-77 (1990),

reprinted in 1990 U.S.C.C.A.N. 6802).

42. 28 U.S.C.A. § 1367(a) (West Supp. 1991).



1992] FEDERAL CIVIL PROCEDURE 1081

that are so related to claims in the action within such original jurisdiction

that they form part of the same case or controversy under Article III."43

The first element of this test (an action over which the court has original

jurisdiction) would seem to be satisfied in the Griffin setting, for the

wife's claim was properly before the court on diversity. What might
not be satisfied is the constitutional standard of being so closely related

to the original jurisdiction claims that Article III is satisfied.

This issue is a highly technical one that need not (and cannot) be

resolved here. For Seventh Circuit practitioners, the important points

are that supplemental jurisdiction embodies the former concepts of an-

cillary and pendent jurisdiction and that the requirements for invoking

supplemental jurisdiction, particularly in the diversity context, require

study prior to filing. An excellent and concise review of section 1367
is found in the Practice Commentary following this statute in the United
States Code Annotated.44 The Commentary is highly recommended as
a starting point for those confronting these issues.

Supplemental jurisdiction was invoked rather routinely in a number
of reported decisions. For instance, in Corporate Resources, Inc. v.

Southeast Suburban Ambulatory Surgical Center, Inc., 45 the plaintiff

sued nine diverse defendants. Original jurisdiction existed only as to

four of the defendants because the claims against the others did not

exceed $50,000. The district court nonetheless exercised supplemental
jurisdiction under section 1367, finding that the claims derived from the

same common nucleus of operative facts as those in the original juris-
diction claims and that exercising full jurisdiction would be in the interests

of judicial economy.46

Similarly, in American Pfauter, Ltd. v. Freeman Decorating Co., 41

the district court chose to exercise supplemental jurisdiction over a

defendant that was not named as a federal question defendant. Six
defendants were named, with all but one of them sued under the Carmack
Amendment.48 The sixth defendant was sued under a related state law
contractual claim. Judge Aspen addressed the discretionary exceptions

to exercising supplemental jurisdiction under section 1367(c), particularly

subsection (c)(2)' s exception where the state-law claim "substantially

predominates" over the federal claim. 49 Judge Aspen found that the

43. Id.

44. See Daniel D. Siegel, Practice Commentary — The 1990 Adoption of § 1367,
Codifying "Supplemental Jurisdiction," reprinted in 28 U.S.C.A. § 1367, at 219 (West

Supp. 1991).

45. 774 F. Supp. 503 (N.D. 111. 1991).

46. Id. at 506.

47. 772 F. Supp. 1071 (N.D. 111. 1991).

48. 49 U.S.C. § 11707 (1988).

49. 28 U.S.C.A. § 1367(c)(2) (West Supp. 1991).



1082 INDIANA LAW REVIEW [Vol. 25:1073

state law claim did not so overwhelm the federal claim and thus, retained

jurisdiction over the sixth defendant. 50

Finally, it was noted last year that supplemental jurisdiction was

created to override the Supreme Court's anti-pendent party decision in

Finley v. United States, 51 and that because section 1367 was enacted

December 1, 1990, and made effective to actions commenced on or after
that date, there exists a gap in pendent party jurisdiction for all actions

predating December 1, 1990. 52 This was confirmed during the survey

period by Judge Gordon of the Eastern District of Wisconsin in McGraw-
Edison Co. v. Speed Queen Co. $i After determining that pendent party
jurisdiction did not exist under CERCLA,54 Judge Gordon also declined
to invoke supplemental jurisdiction over a pendent party because the

action had been filed in June of 1990, "well before the December 1,
1990, effective date of the statute." 55

Because there are still hundreds if not thousands of pre-December

1, 1990, actions pending in the Seventh Circuit, the bench and bar

should still be on the lookout for erroneously placed pendent party
claims. Despite the apparent harshness of the rule, such claims cannot

lie in federal court, and if they are not dismissed at the district court

level, they most surely will be in the Seventh Circuit. Practitioners need

not panic, however, for in Indiana, such claims can be refiled in state

court under Indiana's savings statute. 56

D. Removal

Several removal issues were addressed during the survey period. These

are merely highlighted so that practitioners are aware of the developments:

1 . Removal was allowed even after the one-year jurisdictional

limitation of 28 U.S.C. § 1446(b) had expired where the

defendant had once removed to federal court in a timely

fashion, the plaintiff had later added a diversity-destroying

defendant leading to a remand, that defendant was vol-

untarily dismissed after the one-year period had expired,

50. American Pfauter, 772 F. Supp. at 1073.

51. 490 U.S. 545 (1990).

52. Maley, 1990 Developments, supra note 4, at 645.

53. 768 F. Supp. 684 (E.D. Wis. 1991).

54. 42 U.S.C. §§ 9601-9675 (1988 & Supp. I 1989).
55. McGraw-Edison, 768 F. Supp. at 688.

56. See Ind. Code § 34-1-2-8 (1988); Huffman v. Anderson, 118 F.R.D. 97, 100
(N.D. Ind. 1987); Torres v. Parkview Foods, 468 N.E.2d 580, 582-83 (Ind. Ct. App.

1984).



1992] FEDERAL CIVIL PROCEDURE 1083

and the diverse defendant then promptly sought removal

a second time. 57

2. 28 U.S.C. § 1446(b) contains a mandatory thirty day period

for removing an initially non-removable action after notice

of a paper from which it may first be ascertained that
the case is removable; this thirty day period begins to run

when a defendant is able reasonably and intelligently to

conclude that federal jurisdiction is present, and in actions

without a specific prayer, "it is unreasonable to expect

the defendant to calculate with any amount of certainty

the claims of the plaintiff." 58

3. The right of removal of a federal question or diversity

action is fixed upon compliance with the statutory re-

quirements, and removal cannot be denied based on the

state court's concurrent jurisdiction. 59

4. Defects in removal procedure, but not subject matter ju-

risdiction, are ordinarily waived unless raised within thirty

days. 60

5. Fees and costs may be ordered upon remand of a case
improperly removed, and such fees and costs can be or-

dered even after the order of remand is issued. 61

6. An award of fees and costs on remand is generally in-
appropriate if the defendant raised legitimate and sub-

stantial grounds for removal and asserted them in the best

of faith. 62

7. Fees and costs were imposed where the defendants could

have easily ascertained "with minimal research" that re-

moval was clearly improper. 63

8. In personal injury and other such cases where local law

prohibits a specific ad damnum, removal is not guaranteed,
and the removing party should indicate in the removal

notice that the jurisdictional amount has been satisfied. 64

57. Kite v. Richard Wolf Medical Instruments Corp., 761 F. Supp. 597 (S.D. Ind.

1989).

58. Roberson v. Orkin Exterminating Co., 770 F. Supp. 1324, 1329 (N.D. Ind.

1991) (quoting Smith v. Executive Life Ins. Co., 651 F. Supp. 269, 271 (M.D. La. 1986)).

59. Pettit v. Consolidated Rail Corp., 765 F. Supp. 508 (N.D. Ind. 1991).

60. Western Sec. Co. v. Derwinski, 937 F.2d 1276, 1279 (7th Cir. 1991).

61. M.D.C. Wallcoverings v. State Bank of Woodstock, 771 F. Supp. 242 (N.D.
111. 1991).

62. Roberson, 770 F. Supp. at 1330-31.

63. M.D.C. Wallcoverings, 111 F. Supp. at 244.

64. Navarro v. LTV Steel Co., 750 F. Supp. 930 (N.D. 111. 1991).



1084 INDIANA LAW REVIEW [Vol. 25:1073

9. Except for civil rights cases, orders remanding a case that

was improperly removed are not ordinarily appealable. 65

II. Service of Process

Perhaps the biggest news in the area of service of process is that

the proposed amendments to Rule 4, which made it through the Judicial
Conference and were passed on to the Supreme Court for consideration,

were not adopted. The proposed changes to Rule 4 would have reor-
ganized the Rule almost completely, permitted nationwide service of

process in federal-question cases, and implemented a cost- and time-

saving procedure whereby the formality of service could be waived by

a defendant. 66 Although many other proposed rules were approved by
the Supreme Court and enacted by default by Congress on December

1, 1991, the Supreme Court did not transmit the proposed amendments

to Rule 4 "pending further consideration by the Court."67 Otherwise,

the service of process arena was relatively quiet during the survey period,

with the following decisions merely highlighted:

1. Dismissal for failure to properly serve a defendant within

120 days was affirmed under Rule 4(j) where the plaintiff

could show no good cause for his delays or deficiencies in

service.68

2. A pro se litigant showed good cause under Rule 4(j) when
he relied on erroneous advice of the clerk's office.69

3. A default judgment was reversed where service on the de-
fendant was technically improper; actual knowledge of the

lawsuit does not confer jurisdiction, nor do a plaintiff's

efforts in diligently trying to serve a defendant. 70

4. The defense of insufficient service of process can be waived

by failing to assert it by motion or in first responsive pleading

or by leading a plaintiff to believe that service was adequate,

by for instance, testifying regarding the default judgment

without raising the propriety of service. 71

65. Hernandez v. Brakegate, Ltd., 942 F.2d 1223 (7th Cir. 1991).

66. See Proposed Amendments to the Federal Rules of Civil Procedure, Committee
on the Rules of Practice and Procedure, Report of the Judicial Conference (June 19,

1990) [hereinafter 1990 Report] (on file with author).

67. Letter from Chief Justice William H. Rehnquist to Speaker of the House

Thomas S. Foley, Accompanying Transmittal of Amendments to the Federal Rules of
Civil Procedure (April 30, 1991).

68. Williams v. Leach, 938 F.2d 769 (7th Cir. 1991).

69. Poulakis v. Amtrak, 139 F.R.D. 107 (N. D. 111. 1991) (following Judge McKinney's

decision in Patterson v. Brady, 131 F.R.D. 679 (S.D. Ind. 1990)).

70. Mid-Continent Wood Prods., Inc. v. Harris, 936 F.2d 297 (7th Cir. 1991).
71. Trustees of Cent. Laborers' Welfare Fund v. Lowery, 924 F.2d 731 (7th Cir.

1991).



1992] FEDERAL CIVIL PROCEDURE 1085

III. Rule 9(b) — Pleading With Particularity
Rule 9(b)'s requirement that all averments of fraud be "stated with

particularity" was addressed by Chief Judge Moran of the Northern
District of Illinois in In re First Chicago Corp. Securities Litigation, 12

in which it was held that a securities fraud complaint cannot simply

quote verbatim from annual reports and press releases and assert that

the statements are untrue. 73 Rather, the complaint must explain "what

is untrue about each of the challenged statements." 74

Similarly, in Fairmont Homes, Inc. v. Shred Pax Corp.,15 Judge
Miller explained that although Indiana's Trial Rule 9(b) has been in-

terpreted to require averments of the time, place, and substance of the

false representations, the facts misrepresented, and the identification of

what was procured by fraud, the federal courts interpret Federal Rule

9(b) more stringently. 76 In federal court, a plaintiff must also "identify

particular statements and actions and specify why they are fraudulent." 77

Further, in federal court, the allegations of fraud cannot be based on

information and belief except as to matters within the opposing party's

control and even then, must be accompanied by a statement of facts

upon which that belief is founded. 78 Judge Miller further held that the
federal version applies even when the action is originally filed in state
court and removed by the defendant to federal court. 79 Thus, plaintiffs

averring fraud in a federal action or in a state case that has any potential

of being removed to federal court must go the extra mile to comply

with the strict requirements of the federal interpretation of Rule 9(b).

IV. Proper Parties

Rule 19 basically provides that a party who is subject to service of
process and whose presence will not destroy subject matter jurisdiction

shall be joined if complete relief cannot be accorded without that party,

or alternatively, if that party claims an interest in the litigation. 80 Such

parties are often called "indispensable" parties. Rule 12(b)(7) backs up
Rule 19 by allowing dismissal for failure to join a party under Rule

72. 769 F. Supp. 1444 (N.D. 111. 1991).

73. Id. at 1452.

74. Id. at 1453 (quoting Loan v. Federal Deposit Ins. Corp., 717 F. Supp. 964,
967 (D. Mass. 1989)).

75. 754 F. Supp. 665 (N.D. Ind. 1990).

76. Id. at 667-68.

77. Id. at 667.

78. Id.

79. Id.

80. Fed. R. Civ. P. 19(a).



1086 INDIANA LAW REVIEW [Vol. 25:1073

19. 81 In Todd v. Merrell Dow Pharmaceuticals,%1 the Seventh Circuit
rejected an argument that joint tortfeasors are indispensable parties. In

so doing the court noted the Supreme Court's statement in 1990 that

"[i]t has long been the rule that it is not necessary for all joint tortfeasors

to be named as defendants in a single lawsuit." 83 This rule has significance
in the diversity jurisdiction setting as well, for a plaintiff can obviously

preserve diversity by naming only diverse defendants.

V. Rule 15 — Amendment of Pleadings
Rule 15(a) and (b) allows for amendments to be made to pleadings

in various circumstances 84 Rule 15(c) then speaks to amendments made
after the statute of limitations has run and whether such amendments

relate back to the original pleading so as to be deemed timely. Rule

15(c) was rewritten in 1991 in an effort to clarify and liberalize the

standards. The Rule now reads in relevant part:

(c) Relation Back of Amendments. An amendment of a
pleading relates back to the date of the original pleading when

(1) relation back is permitted by the law that provides the

statute of limitations applicable to the action, or

(2) the claim or defense asserted in the amended pleading
arose out of the conduct, transaction, or occurrence set forth

or attempted to be set forth in the original pleading, or

(3) the amendment changes the party or the naming of the
party against whom a claim is asserted if the foregoing provision
(2) is satisfied and, within the period provided by Rule 4(m)

for service of the summons and complaint, the party to be
brought in by amendment (A) has received such notice of the
institution of the action that the party will not be prejudiced

in maintaining a defense on the merits, and (B) knew or should

have known that, but for a mistake concerning the identity of
the proper party, the action would have been brought against

the party. 85

Thus, three subsections to Rule 15(c), each separated by the disjunctive

"or," provide an independent basis for relation back. Rule 15(c)(2)

makes no substantive changes from former law, leaving intact the basic

81. Fed. R. Civ. P. 12(b)(7).

82. 942 F.2d 1173 (7th Cir. 1991).

83. Id. at 1176 (quoting Temple v. Synthes Corp., Ill S. Ct. 315 (1990) (per

curiam)).

84. Fed. R. Civ. P. 15(a), (b).

85. Fed. R. Crv. P. 15(c).



1992] FEDERAL CIVIL PROCEDURE 1087

standard for relation back of arising out of the same "conduct, trans-

action, or occurrence." The other two subsections, however, alter prior

law.

First, Rule 15(c)(1), by providing that relation back occurs if it is

permitted by the law providing the applicable statute of limitations, is

meant to ensure that if an applicable state limitations period provides

a more liberal standard for relation back, that standard should apply.

The decision in Schiavone v. Fortune,™ could have been interpreted

otherwise, and this subsection is intended to make it clear that such a
strict interpretation is not warranted. 87

Second, Rule 15(c)(3) is intended to override directly Schiavone''s

holding by permitting an amendment to change or add the name of a
party if that party received actual notice of the action within 120 days

of filing or, within the same period of time, knew or should have known
that but for a mistake, the action would have been against that party. 88

Of course, Rule 15(c)(3) incorporates 15(c)(2)'s "same conduct, trans-
action, or occurrence" standard as well.

89

Thus, new Rule 15(c) encompass a common-sense approach to the

relation back of amended pleadings. The perceived harshness of Schiavone

has been ameliorated, and the Rule has been subdivided into a logical,

workable framework.

VI. Discovery

Several significant amendments were made to the discovery rules,
in particular, Rules 34, 35, and 45. Unlike Indiana's version of Rule

34 which allows production of documents from nonparties, 90 the federal

version of Rule 34 has not allowed such production. Instead, a party

seeking to obtain documents from a third party custodian often had to

go through the formality of serving a subpoena duces tecum on the

custodian for production of documents at a deposition and sometimes

even had to go through with a cursory deposition if the third party or

the opponent did not cooperate. By amending Rules 34 and 45, the
Supreme Court and Congress significantly improved this aspect of dis-

covery, bringing it in line with the goal of the Federal Rules to secure

86. 477 U.S. 21 (1986).

87. See Fed. R. Crv. P. 15(c) committee notes; 1990 Report, supra note 66.

88. See supra note 87.

89. As initially drafted, Rule 15(c) referred to Rule 4(m). Had Rule 4 been rewritten
as proposed with the set of rules changes, Rule 4(j) would have been relocated at Rule

4(m). However, as part of a technical correction bill signed by the President on Dec. 9,
1991, Congress corrected the reference from 4(m) to 4(j). Pub. L. No. 102-198, 105 Stat.

931, 1623-27 (1991).

90. Ind. R. Tr. Proc. 34.



1088 INDIANA LAW REVIEW [Vol. 25:1073

the just, speedy, and inexpensive determination of every action. 91

Rule 35, speaking to physical and mental examinations, formerly

allowed for examinations only by physicians or psychologists. The Rule

was broadened by an amendment to allow examinations by a "suitably
licensed or certified examiner."92 According to the drafters, the revision

is intended to "include other certified or licensed professionals, such as

dentists or occupational therapists, who are not physicians or clinical
psychologists, but who may be well-qualified to give valuable testimony
about the physical or mental condition that is the subject of the dis-

pute." 93 In addition, by adding the requirement that the examiner be

"suitably" licensed or certified, the drafters intended to allow the court

to assess the credentials of the examiner and assure that the examiner

is competent. 94

Although not specifically limited to discovery, Rule 72, which pro-

vides for a ten-day appeal period from a magistrate's ruling on non-

dispositive matters, often arises in the discovery context. In the past,

there was ambiguity over when the ten days begin to run. Indeed, the
former rule provided that the district judge shall consider objections,

"provided they are served and filed within 10 days after entry of the

order," but later stated that objections are to be made within ten days
of service of the order. 95 The Rule was amended to resolve this ambiguity

and fortunately, to adopt the "ten days from service" standard. 96 The

Rule also makes it clear that if timely objection is not made to the
district judge, any claimed error is waived. Thus, practitioners must

carefully consider whether to object to a magistrate's order, keeping in

mind, however, that the standard of review is whether the order is

clearly erroneous or contrary to law.97

Finally, several important discovery decisions were issued from district

courts in Indiana. In Spangler v. Sears, Roebuck & Co.,9* Judge Tinder
held that a party may take trial depositions after the close of discovery. 99

An order closing discovery thus does not prevent a party from me-
morializing a witness's testimony in order to offer it at trial. This makes

91. Fed. R. Civ. P. 1.

92. Fed. R. Civ. P. 35.

93. See Fed. R. Crv. P. 35 committee notes; 1990 Report, supra note 66.

94. See supra note 93.

95. Fed. R. Civ. P. 72(a).

96. Id. ("Within 10 days after being served with a copy of the magistrate's order,

a party may serve and file objections to the order; a party may not thereafter assign as
error a defect in the magistrate's order to which objection was not timely made.").

97. Id.

98. 138 F.R.D. 122 (S.D. Ind. 1991).

99. Id. at 123-26.



1992] FEDERAL CIVIL PROCEDURE 1089

sense, for if the witness will be unavailable for trial (or if the parties

agree to use a deposition in lieu of live testimony), the "trial" or

"evidence" deposition will, by definition, not involve discovery of that

witness. Instead, the trial deposition will be the time when evidence for

trial is elicited, and the parties will adjust their "deposition" styles to

more of a trial format accordingly.

In Wauchop v. Domino's Pizza, Inc.,m plaintiffs brought a personal
injury action charging Domino's with negligence. The case was based

in part upon Domino's thirty-minute delivery guarantee. Plaintiffs sought

to discover a broad array of information relating to the thirty-minute

guarantee, and Domino's responded with a motion for a protective order

under Rule 26(c). Judge Miller denied the protective order, reasoning

that while such orders are appropriate under Rule 26(c)'s "good cause"

standard when trade secrets are involved, Domino's had not established

that its policies on this subject constituted trade secrets or that dissem-

inating the information would affect the court's ability to impanel an

impartial jury or otherwise specifically embarrass Domino's. 101 Judge

Miller's decision contains an excellent discussion of these issues, including

references to case law on the subject from across the nation. His decision

also signals that the standard protective order that has generally been

readily obtainable in this circuit is no longer automatic.

VII. Summary Judgment

Last year it was noted that the failure to follow a district court's

local rules on summary judgment can result in a summary grant or
denial of the motion, particularly in the Northern District of Illinois. 102

During 1991, the courts continued to rely on such local rules to dispose

quickly of summary judgment motions. 103 The district judges in Indiana
have begun to take note of their local rules on summary judgment, and
practitioners must ensure that summary judgment materials comply with
them.

100. 138 F.R.D. 539 (N.D. Ind. 1991).

101. Id. at 546.

102. Maley, 1990 Developments, supra note 4, at 664.

103. E.g., Maksym v. Loesch, 937 F.2d 1237, 1240-41 (7th Cir. 1991) (Judge Posner
deems facts asserted in the movant's papers to be admitted, writing, "We have approved
strict enforcement of [Local] Rule 12(m) [of the Northern District of Illinois] repeatedly.");

Appley v. West, 929 F.2d 1176, 1179-80 (7th Cir. 1991) (per curiam); Colby v. J.C.

Penney Co., 926 F.2d 645, 647 (7th Cir. 1991) (Judge Cummings notes effect of failure
to follow local rules on summary judgment); Property Owners Ins. Co. v. Cope, 772 F.
Supp. 1096, 1098 (N.D. Ind. 1991) (Judge Moody notes Local Rule 11); Terre Haute
Indus., Inc. v. Pawlik, 765 F. Supp. 925, 928-29 (N.D. 111. 1991) (party failed to comply

with local summary judgment rule).



1090 INDIANA LAW REVIEW [Vol. 25:1073

VIII. Trial

A number of developments occurred affecting federal trial practice.
First, Rules 41, 47, 48, 50, and 52 were amended. Rules 47 and 48

deal with jurors. The former version of Rule 47 allowed alternate jurors. 104

New Rule 47 eliminates this option, 105 recognizing that the "use of
alternate jurors has been a source of dissatisfaction with the jury system

because of the burden it places on alternates who are required to listen
to the evidence but denied the satisfaction of participating in its eval-

uation." 106

Rule 48 formerly allowed any number of jurors, 107 but new Rule

48 provides that the jury must initially consist of not less than six and

not more than twelve jurors. 108 New Rule 48 further adds that each
juror shall participate in the verdict unless excused for good cause (illness,

etc.) during trial or deliberations. Rule 48 also provides that unless the

parties stipulate otherwise, the verdict shall be unanimous, and no verdict

shall be taken from a jury of fewer than six members. Thus, depending

on the length of trial, practitioners can expect juries of seven, eight,

or nine members in civil cases, with each juror voting on the verdict.

Rules 41, 50, and 52 were amended to effect a housekeeping change

in the names used for concluding bench and jury trials. Rule 41(b)

formerly provided for bench trials to be dismissed as a matter of law

when the plaintiff fails to carry its burden of proof. 109 This provision

is simply deleted from the amended Rule 41(b), and the same substantive

provision is inserted in new Rule 52(c). 110 In bench trials, parties will

thus no longer make motions for involuntary dismissal under Rule 41(b),
but will instead make motions for "judgment on partial findings" under
Rule 52(c). As under former Rule 41(b), the courts retain discretion to
enter no judgment until the close of all the evidence, and factual findings

made pursuant to a Rule 52(c) judgment are reviewed under the "clearly
erroneous" standard. 111

Finally, Rule 50, dealing with jury trials, was rewritten to do away

with the directed verdict and judgment notwithstanding the verdict (j.n.o.v.)

labels. Amended Rule 50 instead uses a single, common-sense label for
these rulings, which will now be called "judgments as a matter of
law." 112 New Rule 50 does the following:

104. Fed. R. Civ. P. 47.

105. Id.

106. See id. 47 committee notes; 1990 Report, supra note 66.

107. Fed. R. Crv. P. 48.

108. Id.

109. Fed. R. Crv. P. 41(b).

110. Fed. R. Crv. P. 52(c).

111. See id. committee notes; 1990 Report, supra note 66.

112. Fed. R. Civ. P. 50.



1992] FEDERAL CIVIL PROCEDURE 1091

1

.

A party may move for judgment as a matter of law (formerly
the directed verdict motion) on any claim or issue during

trial, and the court may grant the motion if under controlling
law the nonmovant cannot obtain a favorable ruling." 3

2. A motion for judgment as a matter of law must be made
during trial if a party desires to renew the same motion

(formerly the j.n.o.v. motion) after an adverse jury verdict. 114

3. The renewed motion for judgment as a matter of law (for-

merly the j.n.o.v. motion) must be made not later than ten
days after entry of judgment." 5

4. A motion for a new trial or alternative motion for a new
trial may be joined with the renewed motion for judgment
as a matter of law."6

5. The standard for determining a motion for judgment as a

matter of law or a renewed motion for judgment as a matter

of law is the same as under prior practice for directed verdicts

or j.n.o.v.s. Specifically, as the name suggests, judgment is
proper if, as a matter of law, the nonmovant cannot prevail

on the issue or claim in question. This is the same standard

invoked at summary judgment pursuant to Rule 56 wherein
the court construes the evidence favorably to the nonmovant

and determines, as a matter of law, whether any rational

jury could find for the nonmovant on the issue." 7

Thus, the amendments to Rule 50 reflect a common-sense effort to

invoke standard terminology throughout the Federal Rules. New Rule
50 also implicitly confirms that the standard for Rule 56 and Rule 50

is the same. Finally, new Rule 50 confirms that an initial motion for

113. Fed. R. Civ. P. 50(a)(1).

114. Fed. R. Civ. P. 50(b). This was true in the Seventh Circuit with directed

verdict motions, a requirement for a later j.n.o.v. motion, but was not specifically required

by the text of former Rule 50 nor universally adopted by all circuits. See Continental

Airlines, Inc. v. Wagner-Morehouse, Inc., 401 F.2d 23, 27 (7th Cir. 1968) (requiring

motion for directed verdict as prerequisite to seeking j.n.o.v.); Amendments to Federal
Rules Are Approved By Supreme Court, 59 U.S.L.W. 2695, 2696 (May 21, 1991) ("The
practice followed in some courts of allowing a motion for judgment notwithstanding the

verdict to be made even though not preceded by a motion for directed verdict is thus
clearly prohibited.").

115. Fed. R. Civ. P. 50(b).

116. Id.

117. See id. committee note (discussing implicit standard and noting that because

this standard "is also used as a reference point for entry of summary judgment under
Rule 56(a), it serves the link the two related provisions"); John R. Maley, Developments

in Federal Civil Practice Affecting Indiana Practitioners, 22 Ind. L. Rev. 103 (1989)

(analyzing the modern view of summary judgment).



1092 INDIANA LAW REVIEW [Vol. 25:1073

judgment as a matter of law at trial is a prerequisite for a later renewed

motion for judgment as a matter of law after judgment is entered.

Several significant decisions dealing with trial issues were issued

during 1991. In Oostendorp v. Khanna, 118 the Seventh Circuit approved

of Judge Shabaz's practice of prohibiting reading of more than five
pages from depositions at trial and requiring five page narrative sum-

maries of each deposition used at trial. Although the Seventh Circuit

acknowledged that it "might question the validity of an overly rigid

application of the district court's requirement" and noted that the five-

page limit should be increased in "appropriate cases," it held that the

use of depositions at trial pursuant to Rule 32 is discretionary with the

district court.
119 Further, the Seventh Circuit held that neither the Due

Process Clause nor the Seventh Amendment requires courts to admit
deposition testimony. 120

The Oostendorp decision should not be taken lightly, for there

appears to be a move towards requiring deposition summaries throughout
the Seventh Circuit. Judge Lee of the Northern District of Indiana has

made this standard practice in many cases, and Judge Dillin of the
Southern District of Indiana has reportedly imposed similar limitations

on occasion as well. Although it no doubt results in speedier trials, it

is uncertain whether this practice actually promotes justice. The practice

might end up costing clients more in attorney time spent attempting to
summarize depositions in a manner that is effective for trial. For plain-

tiffs' counsel working on a contingency basis, this could result in undue,

unpaid busy work that does not enhance the client's case. It is also

difficult to imagine how a five hour deposition of a crucial out-of-state
examining physician can be adequately summarized in several pages to

include key points elicited during cross-examination. 121

Practitioners should seek to determine at the onset of litigation

whether the assigned judge might follow such a practice. If so, trial

118. 937 F.2d 1177 (7th Cir. 1991).

119. Id. at 1179.

120. Id. at 1180.

121. Many of the current so-called civil justice "reforms" could well be nothing
more than mechanisms for shifting work from the courts to litigants. This is a prime

example, for it would seem to take less total time (court + parties) to have a three-hour
deposition read into evidence, boring though it may be, than having the parties spend
several hours each to reduce the three-hour deposition to five pages. Further, it is unclear

whether such a device would actually save courts time over the long run, for there will

no doubt be disagreements over the characterizations of deposition summaries and ad-

missibility of testimony that could require court attention. There is no question that the

federal courts are busy, but if the problem is too many cases chasing too few judges,
magistrates, and law clerks, then it must be questioned whether further efforts to enlarge

the resources of the federal courts are necessary.



1992] FEDERAL CIVIL PROCEDURE 1093

strategy could be affected accordingly, for instance, by ensuring the

selected witnesses are, to the extent possible, presented by live testimony

rather than deposition. Further, practitioners would seem to be able to

enhance the chances of having a deposition used at trial by videotaping

the deposition, which is always preferable to a rote reading of a depo-

sition.

The use of video depositions is common in most federal courts.
Indeed, the taking of video depositions is implicitly authorized by Rule

30(b)(4), which allows the parties to stipulate or the court to order that

the deposition be recorded other than by stenographic means. 122 The

Seventh Circuit recently explicitly approved of video depositions, noting

that "[videotaped depositions are a necessary and time effective method

of preserving witnesses' time and allocating precious court and judicial

time in this age of advanced court technology and over-crowded court

calendars." 123 Moreover, a video deposition need not be expensive, for

there is no reason why, with a little preparation, counsel cannot set up

the video and audio equipment and make a perfectly adequate re-
cording.

124

Counsel can also enhance the prospects of having the deposition

rather than a summary used at trial by keeping trial depositions reasonable

in length. The point of the deposition-summary orders is obviously that

judges believe most witnesses' testimony can be reduced to a few pages.

There is merit to this belief, and certainly most witnesses' testimony

could be handled in a one-hour deposition as effectively as in a five

hour deposition. The former would seem to have a good chance of

being used at trial; the latter not. Thus, the lesson from the Oostendorf

decision would seem to be that fans of the full day (and longer) deposition

will not be rewarded for their efforts and should reconsider their styles,

at least in most situations. This is probably not so bad after all.

Several other decisions of interest dealing with trial issues were

rendered during the survey period. These are merely highlighted below:

122. Fed. R. Civ. P. 30(b)(4). See also Commercial Credit Equip. Corp. v. Stamps,

920 F.2d 1361, 1368 (7th Cir. 1990) (Rule 30(b)(4) allows the parties to stipulate to

recording a deposition by "other than stenographic means," and videotaped depositions

qualify as "other than stenographic means").

123. Commercial Credit, 920 F.2d at 1368.

124. Unless costs are a real problem, it is of course still wise to have a court

reporter present to take testimony and prepare transcripts. This author has used this joint

system on several occasions and found it satisfactory. Assuming your law firm has the

equipment (video camera, microphones, tripod, two VCRs for copying, and a monitor),
all of which can be obtained for less than $2,000, there is no additional cost in videotaping

a deposition. Moreover, there is something about a video camera that seems, beyond the

oath and presence of the court reporter, to give witnesses additional pause in departing

from the truth. Finally, there are the obvious benefits at trial of playing a witness's

testimony on television rather than merely reading pages and pages of a deposition.



1094 INDIANA LAW REVIEW [Vol. 25:1073

1. The Batson125 rule that prohibits the use of peremptory
challenges on the basis of race applies equally in civil cases

as in criminal cases. 126

2. Batson was not violated when the government used peremp-
tory challenges to excuse two Italian-American surnamed

jurors because the Italian defendant did not make a prima
facie showing that the veniremen belonged to a particular

ethnic group or that the purported ethnic group (Italian-

Americans) comprises a cognizable ethnic group subject to

discrimination. 127

3. A litigant may object to the discriminatory use of peremptory
challenges under Batson even though the litigant is not of

the same race as the member of the venire. Thus, a white
plaintiff has standing to assert error in the discriminatory

exclusion of a black individual from the jury. 128

125. Batson v. Kentucky, 476 U.S. 79 (1986).

126. Dunham v. Frank's Nursery & Crafts, Inc., 919 F.2d 1281 (7th Cir. 1990).
The Supreme Court agreed with the Seventh Circuit's view several months later in Edmonson
v. Leesville Concrete Co., Ill S. Ct. 2077 (1991). The Batson rule and its application

were aptly summarized by Judge Kanne in Dunham as follows:
In order to establish a prima facie case under Batson, the defendant must

first show that he is a member of a cognizable racial group and that the
prosecutor has exercised peremptory challenges to prevent members of his race

from serving on the jury. Second, the defendant is entitled to rely on the fact

that the mere exercise of a peremptory challenge can be used as circumstantial

evidence of discriminatory intent. Finally, the defendant must show that these

facts and any other relevant circumstances raise an inference that the prosecutor

used peremptories to exclude veniremen from the petit jury on account of their

race.

Once the defendant makes a prima facie showing, the burden shifts to the

state to come forward with a non-racial explanation for its challenge. Although

the prosecutor's explanation does not have to rise to the level of cause, the

mere denial of a discriminatory motive, or an affirmation of prosecutorial good

faith does not suffice as a neutral explanation. After hearing the state's expla-

nation, the trial court must determine if the defendant has established purposeful

discrimination.

Dunham, 919 F.2d at 1283 (citations omitted). The first element, that the objecting party

be a member of the cognizable group, was altered by the Supreme Court in Edmonson.
Edmondson, 111 S. Ct. at 2088 (to bar petitioner's claim because his race differs from

that of the excluded jurors would be to condone the arbitrary exclusion of citizens from

the duty, honor, and privilege of jury service, thus race is irrelevant to a defendant's

standing to object to the "discriminatory use of peremptory challenges").

127. United States v. Campione, 942 F.2d 429, 432-33 (7th Cir. 1991). Judge Kanne

thus did not reach the larger issue of whether Batson extends to discrimination in jury

selection based on ethnicity.

128. Soler v. McHenry, 771 F. Supp. 252, 254 (N.D. 111. 1991).



1992] FEDERAL CIVIL PROCEDURE 1095

4. A civil litigant satisfied his burden of showing a race-neutral
reason for excluding a prospective black juror where the

litigant explained that the prospective juror was a cardiology

technologist. This satisfied the Batson requirement that the

explanation be clear and reasonably specific without having

to rise to the level of cause because the case involved claims

that the plaintiff's heart condition had been aggravated by

the defendant's conduct.
129

5. The Seventh Circuit affirmed Judge McKinney's ruling bar-

ring purported rebuttal witnesses from testifying at trial,

reasoning in part that the evidence could have been offered

(and even was, in one respect) during the plaintiff's case-

in-chief; the exclusion of rebuttal evidence that could have

been offered during a party's case-in-chief is reversible only

for an abuse of discretion. 130

IX. Rule 58 Judgments, Post-Judgment Motions, and Appeals

Rule 58 mandates that "[e]very judgment shall be set forth on a

separate document." 131 The goal of this maxim is to make it easy for
the parties and others who might have an interest in knowing precisely
what the judgment is and when it was entered. If litigants do not comply

with Rule 58, their appellate rights (particularly the right to appeal that

arises with finality) can be seriously affected. Two decisions from the
Seventh Circuit during the survey period addressed the question of

whether a "minute order" can constitute the "separate document" judg-

ment required by Rule 58, though with slightly different methods.

In Alpine State Bank v. Ohio Casualty Insurance Co., 132 the district
court granted a summary judgment motion in a declaratory judgment
action, issued a minute order, and issued a form prescribed for judgment

in a civil case. None of the three documents, however, actually declared
the rights of the parties. Appeal was taken, and the Seventh Circuit

raised the issue of appellate jurisdiction sua sponte over concern about

whether Rule 58 was satisfied. Judge Ripple explained that neither the

memorandum opinion nor the minute order can satisfy the separate-
document judgment rule. Instead, the judgment "must be self-contained

and complete" and must "describe the relief to which the prevailing

129. Id.

130. Cook v. Navistar Int'l Transp. Corp., 940 F.2d 207, 214 n.5 (7th Cir. 1991).
131. Fed. R. Crv. P. 58.

132. 941 F.2d 554 (7th Cir. 1991).



1096 INDIANA LAW REVIEW [Vol. 25:1073

party is entitled and not simply record that a motion has been granted." 133

Judge Ripple added, "[W]e shall not hesitate to hold that we lack
jurisdiction if the judgment ambiguously declares the rights of the parties

or is unclear or calls into serious question the matter of finality." 134

Despite these strict pronouncements, the Seventh Circuit assumed juris-

diction because "consideration must be given to practicalities," and from

a practical standpoint, there was no question that the district court

intended a final judgment because it clearly determined the parties' rights

in the memorandum opinion, denied a motion to vacate the order, and
indicated that it considered the case closed. 135

Similarly, in American National Bank & Trust Co. v. Secretary, 136

after reciting the litany of Seventh Circuit decisions requiring strict

compliance with Rule 58, Judge Kanne concluded that the minute order
form completed by the court clerk satisfied the separate document re-

quirement. 137 Judge Kanne so held because the minute order set forth

the relief to which the plaintiff was entitled, because it did not incorporate

the court's thirteen pages of reasoning, and because the box on the

minute order indicating "Judgment is entered as follows" was marked. 138

He noted, however, that the exercise to determine whether Rule 58 had
been complied with could have been avoided had the clerk simply followed

proper procedure and entered Judgment Form AO 450. 139
For practitioners, and particularly those who might want to appeal,

this subject poses several problems. Pursuant to Rules 58 and 79, it is

the clerk, not the district judge, who enters judgments. 140 Moreover,
Rule 58 states that forms of judgment are not to be submitted except

upon direction of the court, and such directions shall not be given as

a matter of course. 141 The clerk, of course, is not required to be and

often is not a lawyer, nor are the clerk's many deputy clerks who usually
handle these tasks. In the routine two party, one issue case this ordinarily

causes no problem. The days of dockets with only such "routine" cases,

however, are obviously long since past. Thus, in the first instance, the

rules as presently configured leave an aggrieved party's right to appeal

in the hands of nonlawyer deputy clerks who do not receive training

133. Id. at 558-59 (quoting American Int'l Ins. Exch. v. Occidental Fire & Cas.
Co., 835 F.2d 157, 159 (7th Cir. 1987)).

134. Id. at 559.

135. Id.

136. 946 F.2d 1286 (7th Cir. 1991).

137. Id. at 1289.

138. Id.

139. Id. at 1289 n.4.

140. See Fed. R. Crv. P. 58, 79(a).

141. Fed. R. Crv. P. 58.



1992] FEDERAL CIVIL PROCEDURE 1097

in the many intricacies of final judgments and appellate jurisdiction.
The real burden of scrutinizing entry of judgment thus falls upon

counsel, where it probably belongs anyway. The lesson of the two Seventh

Circuit decisions discussed above is that counsel must be careful to ensure

that a proper Rule 58 separate document final judgment is entered. If

a purported judgment appears improper or not in compliance with Rule

58, counsel should act immediately and in no event later than ten days

after entry of the purported judgment. Indeed, a Rule 59 motion to

alter or amend can only be filed within ten days of the entry of judgment,

and no extension of the ten day time period is permissible. 142

Finally, in the appellate practice arena, related amendments were

made to Rule 77(d) dealing with notice of judgments and Rule 4(a)(6)
of the Federal Rules of Appellate Procedure. Under prior law, if the

clerk recorded the mailing of a judgment, but the parties did not receive

notice of the entry of judgment, that did not excuse the failure to file

a timely notice of appeal. 143 Rule 77(d) and Appellate Rule 4 now allow
a party not receiving such notice to try to establish this fact to the

district court's satisfaction and, if also able to show no "prejudice" to

any other party, to move to reopen the time for appeal. The motion
to reopen the appeal time must be filed within the earlier of seven days

after receipt of notice of the judgment or 180 days after entry of the

judgment. 144 The term prejudice is not defined in Appellate Rule 4(a)(6),

but the legislative history indicates that this means more than just the

cost of having to oppose the appeal; it means some "adverse conse-

quence" such as when the "appellee [has] taken some action in reliance
on the expiration of the normal time period for filing a notice of

appeal." 145

Thus, the harshness of former practice is ameliorated, but with only

a limited window of opportunity for appellants who do not receive
notice. The absolute 180-day ceiling confirms that litigants must continue

to monitor the docket, and if an adverse judgment is possible (i.e., if

a dispositive motion is pending), should do so with regularity. On the
other hand, for those who prevail in district court, Rule 77(d) provides
a mechanism for ensuring that the appeal clock will begin running.

Specifically, Rule 77(d) allows any party to serve a notice of the entry

of judgment, and the drafters encourage winning parties to utilize this

procedure to ensure that the normal time periods for appeal remain

142. Fed. R. Civ. P. 6(b), 59; Winston Network, Inc. v. Indiana Harbor Belt

R.R. Co., 944 F.2d 1351, 1362 (7th Cir. 1991); Varhol v. Nat'l R.R. Passenger Corp.,

909 F.2d 1557 (7th Cir. 1990) (en banc).

143. E.g., Spika v. Village of Lombard, 763 F.2d 282 (7th Cir. 1985).

144. Fed. R. App. P. 4(a)(6).

145. See id. committee notes; 1990 Report, supra note 66.



1098 INDIANA LAW REVIEW [Vol. 25:1073

intact.
146 Thus, prevailing parties are well advised to immediately serve

opposing counsel with notice and copies of adverse judgments and would

be wise to do so by, at the minimum, certified mail with return receipt
requested so that there can be no dispute about receipt of notice.

X. Costs

Pursuant to Rule 54(d), "costs shall be allowed as of course to the

prevailing party unless the court otherwise directs." 147 The courts ad-
dressed costs issues in several decisions which are highlighted below:

1. The costs 148 of enlarging trial exhibits such as a police "mug
shot" are recoverable.

2. In resolving an issue not directly addressed by any circuit

courts, the Seventh Circuit held that when a deposition is
videotaped and transcribed, it is "proper to tax costs for

the videotaping of depositions, but not necessarily for the

transcripts thereof." 149

3. Rule 54(d) creates a presumption that the prevailing party

will recover costs, and it is the losing party's burden to

show affirmatively that the prevailing party is not entitled

to costs.
150

4. The underlying documents generated from deposition or

copying expenses need not be introduced at trial to recover

the expenses as costs — they need only be reasonably nec-
essary. 151

Recoverable costs can be significant, often involving tens of thousands

of dollars. Prevailing parties should thus give careful attention to re-

covering costs after the merits have been decided.

146. See Fed. R. Civ. P. 77(d), 4(a)(6) committee notes; 1990 Report, supra note

66.

147. Fed. R. Civ. P. 54(d).

148. 28 U.S.C. § 1920 provides that the court may tax:

(1) Fees of the clerk and marshall;

(2) Fees of the court reporter for all or any part of the stenographic transcript

necessarily obtained for use in the case;

(3) Fees and disbursements for printing and witnesses;

(4) Fees for exemplification and copies of papers necessarily obtained for use

in the case;

(5) Docket fees under section 1923 of this title;

(6) Compensation of court appointed experts, compensation of interpreters,

and salaries, fees, expenses, and costs of special interpretation services under

section 1828 of this title.

28 U.S.C. § 1920 (1988).

149. Commercial Credit Equip. Corp. v. Stamps, 920 F.2d 1361, 1368 (7th Cir.

1990).

150. M.T. Bonk Co. v. Milton Bradley Co., 945 F.2d 1404, 1409 (7th Cir. 1991).

151. Id. at 1410.



1992] FEDERAL CIVIL PROCEDURE 1099

XL Sanctions

Sanctions continue to generate collateral litigation for advocates and

the courts. The basic Rule 11 standards in the Seventh Circuit are
outlined in a previous survey article, and practitioners are referred to

that article for a review of the fundamentals. 152 The following summary
highlights key decisions during the survey period:

1. In Business Guides, Inc. v. Chromatic Communications En-

terprises,
1 " the Supreme Court held that Rule 11 applies to

any party who signs a pleading, motion, or other court
paper, regardless of whether that party was represented by

counsel."4 Thus, when, for example, corporate officials sign

an affidavit, they can be subjected to Rule 11 sanctions.

2. The Business Guides Court further held that such parties,
whether represented by counsel or not, are held to the same

standard of reasonableness under the circumstances as applies

to attorneys, although the legal inquiry that is expected from

a party may vary from "case to case," and "what is ob-
jectively reasonable for a client may differ from what is
objectively reasonable for an attorney." 155

3. In Chambers v. NASCO, Inc., 156 the Supreme Court held
that the federal courts have the inherent power to impose

attorney's fees and related expenses on a party as a sanction,

even aside from the authority granted by Rule 11 and 28

U.S.C. § 1987.' 57

4. A ruling from Judge McKinney imposing sanctions on debt-
or's counsel for filing a frivolous brief was affirmed. 158 The
brief was objectively frivolous because of its numerous errors

and an unfounded legal argument. The brief was "far below
the standards of practice reasonably expected in this or any

other court," thus causing the district court "to spend ad-

ditional time to insure that a proper decision is reached." 159

5. Rule 11 sanctions cannot be imposed for a frivolous state

court complaint that is removed to federal court. 160

152. Maley, 1989 Developments, supra note 23, at 292-300.

153. 111S. Ct. 922 (1991).

154. Id. at 933.

155. Id.

156. Ill S. Ct. 2123 (1991).

157. Id. at 2133.

158. In re Roete, 936 F.2d 963, 967 (7th Cir. 1991).

159. Id.

160. Maciosek v. Blue Cross & Blue Shield, 930 F.2d 536, 541 (7th Cir. 1991).



1100 INDIANA LAW REVIEW [Vol. 25:1073

6. Sanctions were imposed and affirmed against counsel and

his client for deliberate frustrations of discovery — the thrust
of the misconduct occurred at the client's deposition where

documents were not produced, frivolous objections were

repeatedly made, and the witness was instructed not to answer

questions that counsel deemed irrelevant, notwithstanding

Rule 30(c)'s requirement that evidence objected to shall be

taken subject to objection.
161

7. In confirming that Rule 11 is not intended to thwart creative

arguments, the Seventh Circuit reversed sanctions that had

been imposed on civil rights counsel when a decision that
arguably (but not conclusively) controlled was not cited. 162

XII. Local Rules Changes and Civil Justice Reform Plans

As this Article went to press, two key developments occurred that

significantly impact local federal civil practice. First, the Southern District

of Indiana adopted revised local rules effective February 1, 1992. ,63 The

new rules are completely renumbered to match the corresponding Federal

Rules. Otherwise, the new rules are substantially the same as the prior
rules with a few key changes including:

- No motion need be filed for an enlargement of time to file
responsive pleadings or discovery responses if opposing counsel

does not object; a confirming letter is sent to opposing counsel

and filed with the clerk. 164

- Briefs can be thirty-five pages in length, and leave to file over-

sized briefs requires "extraordinary and compelling reasons." If

leave is granted, the over-sized brief must contain a table of

contents, statement of issues, and table of authorities. 165

Practitioners are well advised to study the new rules.

161. Castillo v. St. Paul Fire & Marine Ins. Co., 938 F.2d 776, 778 (7th Cir. 1991).
The Castillo decision should thus be in every practitioner's deposition notebook for use

against the s.o.b. litigator — if providing a copy of the decision to such a practitioner
and noting the relevant portions of the opinion on the record does not deter the misconduct,

at least the record will be very strong for a sanctions motion.

162. Thompson v. Duke, 940 F.2d 192 (7th Cir. 1991). For practitioners opposing

a sanctions motion, the Thompson opinion contains a wealth of favorable language, for

instance, that "innovative arguments" are "especially important" and are not intended

to be thwarted by Rule 11. Id. at 195.

163. S.D. Ind. L.R. 1.1(b).

164. S.D. Ind. L.R. 6.1.

165. S.D. Ind. L.R. 7.1(b).



1992] FEDERAL CIVIL PROCEDURE 1101

Second, both the Northern and Southern Districts adopted Civil

Justice Expense and Reduction Delay Plans effective December 31, 1991. 166

Although a detailed analysis of each plan is beyond the scope of this

Article, the highlights are as follows:

Southern District:

- Case management plans and scheduling orders should set sum-

mary judgment motions to be briefed as soon as reasonably

feasible. In complex cases, summary judgment motions should
be ripe no less than ninety days prior to trial. In other cases,

sixty days prior to trial. If a summary judgment motion has
not been resolved prior to thirty days before trial, the motion

should be decided by the trial date and the trial should be

rescheduled thirty to ninety days later. 167

- New local rules are recommended to hold trials within six to
eighteen months after filing and to require the parties to meet

informally and adopt a stipulated case management plan. 168

Northern District:

- The court declined to adopt a requirement that counsel submit

a stipulated case management plan, but will consider such a
requirement in appropriate cases and encouraged parties to do

so voluntarily. 169

- Mandatory disclosure of basic information will be tried during

1992 on an experimental basis, with each division of the court

formulating its own standard order mandating what must be
disclosed.

170

These plans will have a dramatic impact on the way federal civil cases
are litigated in Indiana.

XIII. Miscellaneous

Finally, a number of developments occurred that are not easily

pigeonholed into separate categories. For instance, Rule 45 dealing with

166. See Civil Justice Expense and Delay Plan for the United States District Court

for the Southern District of Indiana (Dec. 31, 1991); Civil Justice Expense and Delay

Plan for the United States District Court for the Northern District of Indiana (Dec. 31,

1991).

167. Civil Justice Expense and Delay Reduction Plan for the Southern District of

Indiana 11 (Dec. 31, 1991).

168. Id. at 3-8.

169. Civil Justice Expense and Delay Reduction Plan for the Northern District of

Indiana § 2.07 (Dec. 31, 1991).

170. Id. § 3.03.



1102 INDIANA LAW REVIEW [Vol. 25:1073

subpoenas was completely rewritten and incorporates many common-
sense changes that will save litigants time and money. It is strongly

suggested that new Rule 45 be studied in its entirety given its radical
reform. The key changes are outlined as follows:

1. The clerks shall issue signed subpoenas in blank, which can
be completed and served by attorneys as officers of the

court.
171

2. Attorneys may issue subpoenas on behalf of a court in which
the attorney is authorized to practice, as well as other courts

in which a deposition or production is compelled by the

subpoena, provided the deposition or production relates to

an action pending in a court where the attorney is authorized

to practice. 172

3. Rule 45(c) outlines new protections for persons subject to
subpoenas, including the duty of parties or attorneys re-

sponsible for issuing subpoenas to take reasonable steps to

avoid imposing undue burden or expense on a person subject

to subpoena. 173

4. Persons commanded by subpoena to produce documents may
serve written objections within fourteen days of service of

the subpoena, and if objection is made, no inspection shall

occur without court order. 174

5. New protections are added for disclosure of trade secrets
and disclosure of an unretained expert's opinion or infor-

mation. 175

6. Documents subject to a subpoena shall be produced as kept

in the ordinary course of business or organized to correspond

to the categories in the demand. 176

7. When information subject to a subpoena is withheld on a
claim of privilege or work product, the objection shall be

expressly stated and supported by a description of the doc-

uments sufficient to enable the demanding party to contest

the claim. 177

171. Fed. R. Civ. P. 45(a)(3)(B)(l).

172. Fed. R. Civ. P. 45(a)(3). Thus, it will no longer be necessary to retain local

counsel in foreign districts to get subpoenas issued.

173. Fed. R. Civ. P. 45(c)(1).

174. Fed. R. Civ. P. 45(c)(2)(B). This changes prior law which allowed objection

within 10 days of service, and which resulted in confusion over how to count the 10
days. Fed. R. Crv. P. 45(c)(2)(B) committee notes; 1990 Report, supra note 66.

175. Fed. R. Crv. P. 45(c)(3)(B).

176. Fed. R. Civ. P. 45(d)(1).

177. Fed. R. Civ. P. 45(d)(2).



:i

1992] FEDERAL CIVIL PROCEDURE 1103

Rule 45 thus expands the ease of the use of subpoenas, but imposes

corresponding duties and protections as well.

A number of other miscellaneous decisions or passages of interest
to federal practitioners are noted below:

1

.

Ordinarily, substantive matters raised in footnotes rather than

the text of briefs are disregarded by the Seventh Circuit and

the Northern District of Illinois. 178

2. A litigant who fails to press a point by supporting it with
pertinent authority or by showing why it has merit despite
supporting authority forfeits the point; the court is not

required to do the litigants' research. 179

3. Arguments raised for the first time in a reply brief are

waived. 180

4. Lawyers' attempts "to impugn the integrity of the other

party through unsupported allegations and innuendo irrel-

evant to the resolution of the issues" are frowned upon in

the Seventh Circuit. 181

5. Reliance on "facts" that are outside of the record is of no

effect on the merits and raises the ire of the Seventh Circuit. 182

6. The President issued Executive Order 12778 commanding

federal agencies and their counsel to give prefiling notice of

civil complaints, arrange settlement conferences, use alter-

native dispute resolution, make efforts to streamline and
expedite discovery, present only reliable expert testimony,

seek sanctions against opposing counsel and parties when

appropriate, employ efficient case-management techniques,

and offer to enter into a two-way fee shifting agreement

with opposing parties. 183

7. In Salve Rejina College v. Russell, xu the Supreme Court

held that questions of state law are to be reviewed de novo

by federal appellate courts, rather than under a deferential

standard in which the local district judge is presumed better

able to predict state law. 185

178. Johnston v. Bumba, 764 F. Supp. 1263, 1282 n.21 (N.D. 111. 1991). Ironically,

the decision containing this proposition contains more than 20 footnotes, and this prop-

osition itself is found in a footnote.

179. Heinz v. Frank Lloyd Wright Found., 762 F. Supp. 804, 807 (N.D. 111. 1991).

180. Williams v. Romano Bros. Beverage Co., 939 F.2d 505, 509 (7th Cir. 1991);
Simkunas v. Tardi, 930 F.2d 1287, 1292 (7th Cir. 1991).

181. Boyle v. Chicago Hous. Auth., 946 F.2d 54, 56 n.5 (7th Cir. 1991).

182. Williams v. Leach, 938 F.2d 769, 773 (7th Cir. 1991).

183. Exec. Order No. 12,778, 56 Fed. Reg. 55,195 (1991).

184. Ill S. Ct. 1217 (1991).

185. Id. at 1221.



1104 INDIANA LAW REVIEW [Vol. 25:1073

Finally, in one of this author's favorite passages of the year, a per

curiam panel including Judges Easterbrook and Posner held that a skeletal

argument contained in a single unreasoned paragraph did not preserve

a claim because, in the words of the panel, "Judges are not like pigs,

hunting for truffles buried in briefs." 186 Like other passages that often

emanate from these two scholarly judges, these words show that if

nothing else, Seventh Circuit practitioners can continue to look forward

to anything but rote opinions.

186. United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991).

'