Remember Lucy Lockett? Well, she is still with us. Lockett has filed her Complaint in Federal District Court in the Northern District of Maryland , naming as defendants Tropics North, Inc. and Everglades Environment, Inc. The complaint is filed pursuant to the federal court=s diversity jurisdiction. Lockett is a resident of Washington, D.C., Tropics North is incorporated in and has its principal place of business in Martinsburg, W. Va., and Everglades is incorporated in and has its principal place of business in Florida. The substance of the complaint is identical to the complaint given to you in class during the semester. Lockett has properly served each of the defendants.

Your law firm has been retained by Everglades Environment (EE) to represent it in the Lockett law suit. EE is outraged that it has been sued in this matter and even more outraged that it might have to defend against the suit in Maryland. EE wants to know if there is a quick way to get out of the law suit. The partner in charge of the case has asked you, a lowly first year associate, to write a memo assessing EE=s chances of getting dismissed from the lawsuit on a 12(b) (3) & (4) motion for lack of personal jurisdiction and lack of venue. Additionally, EE insists that it did label the crate the snake came in with a warning to handle with care. EE believes that the company that transported the snake from EE=s Florida warehouse to the Tropics North warehouse in Martinsburg, W.Va., Delta Freight Service, removed the label in transit and is the party responsible for any violations of the labelling laws or for failure to warn. You have been asked to determine if there is any way that EE can bring Delta Freight into the lawsuit. Delta is incorporated in West Virginia and has its principal place of business in Florida. You also need to determine if Lockett will be able to file a claim against Delta if it is brought into the law suit.

Here is additional information about EE which will help with your memo.

EE is one of the seven largest reptile importers in Miami. The firm has grossed more than eight million dollars of sales annually for the last several years. It has about 40 employees.

The firm=s main business is selling at wholesale to pet stores, but it also sells animals to zoos and it sells to collectors, both through long distance orders and through a small retail store attached to the warehouse. The firm is licensed to sell venomous reptiles.

The President of EE is Mitchell Broussard. The Vice-President, who does most of the real work of administering the company is Sandy Carter. The corporation was founded in 1968. The company=s assets include the lot and building on which its warehouse and offices are located (net value $1,000,000), accounts receivable of $800,000 and an animal inventory valued at $1,800,000.

Twenty percent of EE=s sales are of domestic animals; eighty percent are imports. The firm buys domestic reptiles and some exotic mammals from all kinds of Florida characters. It imports reptiles and fish from Mexico, Central America, South America, and Africa. It warehouses these animals for as short a time as possible and then sells them to zoos, pet stores, and collectors. Its regular customers are located in Florida, Georgia, the Carolinas, Virginia, West Virginia, Alabama, and Tennessee. On some occasions, zoos, pet stores, or collectors in other states have placed special orders. For example, the San Diego zoo often orders reptiles from EE. Its other major zoo customers are the zoos in Denver, New Orleans, the Bronx and Baltimore.

EE is willing to sell to any buyer, but time is better spent in developing the market in the Southeast, particularly because more animals die in transit as shipping distances increase. It has only occasionally sold an animal to a private collector or a pet store in Maryland, and these sales have usually come about because the buyer somehow heard about EE and contacted it.

The records for the past four years show the following sales in Maryland. The Baltimore zoo has purchased several animals a year for the past three years at annual sales of approximately $15,000. EE has never sold a Philodryas snake to the Baltimore zoo or to any other Maryland customer. Three years ago EE filled seven orders from Maryland pet stores, four of them from the same store and one each from three other stores. There were no sales to Maryland collectors. The volume of sales to Maryland stores was $30,000. Two years ago, EE filled five orders from Maryland stores and sold three rare snakes to Maryland collectors, for a total of $60,000 in sales. That year, in a one time experiment, EE sent a mailing to past buyers to see if it would boost sales.

Last year, EE filled three orders from Maryland stores. There were no sales to collectors. The dollar amount was $20,000. This year, so far, there have been only two orders from Maryland stores, dollar volume only $16,000.

Over the past three years, dollar volume of revenues from Maryland as a percentage of Everglades= total revenues has been less than 1%.

Tropics North has been a customer since 1982. So far as EE knew, the store was in Martinsburg, WVA, not in Maryland. Only because of this accident did EE learn that Tropics North had a Bethesda Md. store. All shipments and correspondence have always been sent to Martinsburg. Sales to Tropics North amount to about $6,000 to $10,000 annually.

EE did ship the snake in question. The snake was part of a shipment to Tropics North that included the only two philodryas snakes that EE sent to Tropics. The snake was shipped to Martinsburg. Tropics North called or wrote to place the order, EE shipped the merchandise and mailed Tropics North an invoice.

Except for a quarter page ad in the Miami yellow pages and the one-time experiment with sending brochures to past customers, EE does no advertising. It makes new contacts only through personal references. The ad in the yellow pages reads as follows:

We sell to zoos, pet stores, and collectors in

Florida and throughout the nation. Supplier of

Reptiles to the famed

SAN DIEGO ZOO

The company has never had an office in Maryland or an employee based there. However, three years ago, EE was approached by Sea Garden, Inc., a large Florida corporation that owns and operates four large amusement parks (two in Florida, one in California, one in New Jersey). Sea Gardens was seeking a partner to participate in buying a failing golf club on Kent Island, Maryland and turning it into an amusement area called Jungle Garden. EE agreed to invest one seventh of the funds needed for the joint venture; EE would own a one-seventh interest, but would receive one fifth of the profits. EE would supply all of the tropical birds and operate a retail bird and animal store on the grounds.

Mitchell Broussard, EE=s President went to Kent Island for a one-day visit. The land was acquired in the name of Jungle Gardens Associates, but a few months later, Sea Gardens suffered some financial reversals and decided not to build the park in the foreseeable future. EE contributed $200,000 towards the purchase of the land, which is still owned by Jungle Gardens.

With the exception of Broussard=s visit to Kent Island, no one in the company has ever traveled to Maryland on business.

The Maryland long-arm statute gives its courts personal jurisdiction to the limits of the due process clause of the constitution.

Assume that the case of Lucy Lockett v. Tropics North, Inc. (ATN@) and Everglades Environment, Inc. (AEE@) is pending in federal court. Dave Barry, the partner in charge of the Lockett case, usually handles state court cases, so he=s relying heavily on your knowledge of federal civil procedure. Right now he needs your help in handling some early pre-trial issues.

First, Dave would like to pare down the claims against EE. One count of Lockett=s complaint reads as follows: ADefendant EE delivered the snake in question to defendant TN in July 1999. Plaintiff was bitten by said snake in TN=s store in August 1999. Defendant EE is strictly liable as a matter of law because it possessed a wild animal and Lockett suffered harm resulting from the dangerous propensities of wild animals of that class, in that the snake was venomous and she suffered injuries from the snake bite.@ You=ve done some research on this common law doctrine and discovered that a person is only liable if they Aposessed@ the animal at the time that it injured the plaintiff. Now that the disputes about the proper location of the lawsuit have been resolved, Dave wants to know what federal procedural device he should use to try to get the judge to get rid of this claim against EE. EE is a somewhat stingy and demanding client, so Dave would like to know what will get rid of this claim fastest. He=d also like to know if there=s any way to make Lockett pay EE back for the expenses required to get the claim thrown out.

Next, there are some pending discovery disputes. Dave wants to know what to do about the following issues [you may assume that this district has opted out of the automatic initial disclosure provisions of Rule 26(a)(1)]:

1. When Lockett was testifying at her deposition, Dave learned that she had been fired from an earlier job in New York. She refused to answer follow-up questions about the reasons she was fired. Dave wants to know whether that information is discoverable.

2. Dave also learned that Lockett has a home computer, and that e-mail is her primary method of communicating with family, friends (including her boyfriend) and with her attorney. Back in September, EE sent Lockett a request for production of documents that included Aall documents reflecting or constituting discussions about the alleged snake bite, its cause, its consequences, and/or your claims for damages.@ Lockett testified that it is her regular practice to delete all incoming email immediately after reading it and all outgoing email immediately after sending it. She continued this practice despite the existence of the discovery request. She therefore has not produced any e-mails, although she concedes that some of them did relate to the snakebite. Dave has a friend who is a computer whiz who says you could make a Amirror image@ of Lockett=s hard drive and use that to retrieve at least some of the lost e-mail. It would cost about a thousand dollars and require the use of Lockett=s computer for about four to eight hours. Dave wants to know:

a. Is EE entitled to discover the contents of the hard disk?

b. If so, who should pay the cost of copying the hard disk and retrieving the deleted items?

c. Should EE ask the judge to award sanctions against Lucy for deleting the e-mails (and if so, what kind of sanction might EE expect the judge to award)?

3. EE=s internal investigation revealed that a warehouse employee named Agadore Spartacus loaded the shipment to TN that contained the snake that bit Lockett. At his deposition, he testified that he has no recollection of the name or appearance of the snakes that were shipped. He also testified that the shipping documents for that particular shipment have been misplaced and, in any case, are unlikely to have been specific about the type of snake involved. When pressed, he also testified that soon after Lockett was bitten he wrote a memo, at Dave=s request. Dave has showed you a copy of the memo, which reads, in part: AI put two snakes in sacks, as we always do. They were green and about three feet long and came from that supplier in Guyana. One of them was sort of aggressive, and when it opened its mouth really wide I saw an extra set of fangs way back in its throat. I didn=t think about any special label -- it would just be a nuisance when the snakes can=t bite anyone during shipping anyway. So I used the usual label that says Contents: Live Reptiles.@ Lockett=s lawyers have filed a request for production of Agadore=s memo. What objections, if any, can Dave make to production?

4. EE hired Dr. Linda Tripp, Miami=s leading expert on snakes, to help it determine what its exposure might be in this case and to consider whether to discontinue sales of this particular type of snake. Tripp turned out to be the author of an obscure journal article in the Herpetological Review in 1983 about poisonous colubrid snakes. The article claims that it is the presence or absence of Duvernoy=s gland that determines whether colubrids are toxic. A table in the article lists Aphilodryas@ snakes as having the deadly Duvernoy=s gland. The Guyanese exporter told Tripp that the snake that bit Lockett is of the philodryas type. EE is definitely not going to call Tripp to testify. EE also hired a second snake expert, Dr. Monty Python, to testify at trial. Python has consulted extensively with Tripp in preparing himself to testify. His opinion at trial will be that the snake that bit Lockett was not venomous.

Obviously, EE prefers Python=s opinion and is more than willing to produce him for discovery as provided in Rule 26. However, Tripp=s information is more damaging (and, luckily, not generally known in the herpetological community). Does Dave have to disclose Tripp=s identity etc. to Lockett=s lawyers when asked to identify experts? Will Python have to disclose in his report or deposition Tripp=s identity and the information he received from her?

QUESTION THREE

Your work for Everglades Environment brought on an ethical crisis, so you resigned from Dave=s firm, moved to Rhode Island, and went to work as a law clerk for federal district judge Janice Virtue. She has assigned you to advise her regarding pending motions for judgment as a matter of law and, in the alternative, for new trial in a case in her court.

The case was brought by plaintiff Paul Dadurian against his insurer, Lloyd=s of London (LL), to collect on an insurance policy. Dadurian claimed that he purchased 12 pieces of Aspecialty@ jewelry for investment purposes over a period of 30 months. The pieces allegedly ranged in price from $12,000 to $35,000, costing him $233,000 in total. Dadurian then purchased a Ajewelry floater@ policy from LL which insured him against the loss of the 12 items of jewelry up to a maximum of $267,000. He alleged that the jewelry was stolen, but that LL refused to pay under the policy. Dadurian sued LL in federal district court. LL pleaded two affirmative defenses, on which it has the burden of proof: that the claim was fraudulent (because Dadurian never really bought the jewels), and that Dadurian had knowingly made false statements about facts material to his claim.

During Dadurian=s case in chief, he testified that he purchased all the jewelry from James Howe, a jeweler in Rhode Island, and paid for each item in cash. He testified as to specific dates and prices for each purchase. Dadurian did not present any sales slips, receipts or other documents reflecting any of his alleged purchases. Although Dadurian had testified that he got his information about the dates and prices from Howe=s records, Howe testified that he had no such records. Dadurian did offer into evidence eight appraisal certificates for the jewelry, prepared by Howe at Dadurian=s request (these appraisal certificates were used to obtain the insurance coverage). Some certificates were dated on the same day as certain of the alleged purchases, and some were dated months later. Dadurian testified that about six weeks after the insurance policy was issued, armed robbers entered his home and forced him to open the safe, where the jewelry was kept. He was shot in the right shoulder, allegedly by one of the robbers, and was taken to the hospital. He contends that the jewelry was taken during the robbery, and he filed a claim with LL.

James Howe testified as a witness for Dadurian. He testified that he sold each of the pieces to Dadurian at the prices Dadurian claimed. However, he did not have any record of the sales. His employee, Cheryl Cousineau, testified that the store rarely gave receipts for cash purchases of Ainvestment jewelry.@

Dadurian also presented evidence about where he got the cash to pay for the jewelry. He testified that he borrowed the money from the Rhode Island National Bank and produced 13 specific promissory notes, tying them by date and loan amount to the jewelry purchases. He had provided identical information, under oath, to LL when it was investigating his claim. This was done as a formal examination of Dadurian as a required part of the claims process under the insurance contract.

In addition to cross-examining Dadurian, Howe, and Cousineau, LL called as a witness Richard Nelson, an employee of the bank. Nelson testified that the loans that Dadurian had identified as the source of the jewelry purchase money were instead all used for other purposes. Four were merely renewals of earlier loans and could not have generated any cash for Dadurian. Dadurian=s bank statements also showed that the proceeds of other specified loans had been deposited in Dadurian=s accounts and withdrawn in small amounts gradually over time. Another loan=s proceeds had been deposited in the account of AU.S. Enterprises, Inc.@ and used for a real estate deal.

Confronted with this evidence, Dadurian was re-called to the witness stand. He conceded that some, if not most, of the promissory notes he had selected had been the wrong ones, and that his testimony as to the sources of the funds was therefore in part false. (Dadurian said he had 50 to 70 notes in his possession taking up Afiles and files.@) He insisted, however, that he had selected the notes Ato the best of his recollection@ and that he had been honestly mistaken.

At the close of all the evidence, LL moved for judgment as a matter of law. It argued that LL had proved as a matter of law that 1) Dadurian had sworn falsely when he testified to having purchased the jewelry at all; and 2) that he knowingly lied under oath at the formal examination when he swore that certain specific bank loans were the source of the cash he used to buy the jewelry. (All the parties agree that if Dadurian swore falsely and knowingly, he is not entitled to recover under the insurance contract.) Judge Virtue denied the motion and submitted the case to the jury using a special verdict format. The jury found that: Dadurian had been robbed; that he had not knowingly given false answers when he was examined under oath before the commencement of this suit; that he had not knowingly made any false statement as to any of the 12 jewelry items for which he claimed a loss; and that the total fair market value of all the jewelry on the date of the robbery was $267,000.

Following the verdict, LL renewed its motion for judgment as a matter of law and, in the alternative, moved for new trial. Judge Virtue wants you to advise her about whether she should grant either motion. She has told you that she wants you to be specific about what standard she should apply and how she should view the evidence, and she wants you to apply those standards quite specifically to the evidence in the case.