Wednesday, February 1, 2012

Federal Civil Procedure Question from July 2011 Multistate Essay Examination

The National Conference of Bar Examiners probably posted the questions from the July 2011 bar exam some time ago.  I was only reminded to look when Kevin Clermont let me know that the link I’d posted to the February 2011 question no longer worked.  He’s right -- the NCBE has taken down the link to the February exam. 

To avoid such vanishing links in the future, I’ve cut and pasted the Federal Civil Procedure question from the July 2011 bar below. 

Having only read this quickly, I have to ask: am I missing something?  Really, the whole thing leads up to two straightforward appealability issues?     

Anyway, here it is:

Federal Civil Procedure Question (from July 2011 MEE)

OfficeEquip is a U.S. distributor of office machines. It is incorporated in State A, where it has its principal place of business. BritCo is a manufacturer of copiers. It is incorporated in Scotland and has its principal place of business in London, England. OfficeEquip sued BritCo, alleging that BritCo had breached a long-term contract to supply copiers to OfficeEquip.

The suit was filed in the United States District Court for State A, and OfficeEquip properly invoked the court’s diversity (alienage) jurisdiction.

BritCo made a timely motion to dismiss the complaint on the ground that it was filed in violation of a forum-selection clause in the supply contract that required all contract disputes to be adjudicated in London. While its motion to dismiss was pending, BritCo filed an answer to the complaint.

In its answer, BritCo denied breaching the supply contract. BritCo also made a counterclaim seeking damages for OfficeEquip’s alleged breach of a contractual covenant not to compete with BritCo.

OfficeEquip filed a motion for judgment on the pleadings on BritCo’s counterclaim, arguing that the covenant not to compete was unenforceable as a matter of law.

After a short period of discovery, the district judge issued the following two orders:

OfficeEquip’s motion for judgment on the pleadings is granted. The contractual covenant not to compete is void as a matter of public policy and is therefore unenforceable. Given that this is strictly a legal issue and entirely severable from OfficeEquip’s breach of contract claim, there is no just reason for delay, and I accordingly direct that judgment should be entered in favor of OfficeEquip on BritCo’s counterclaim.

BritCo’s motion to dismiss is denied. Enforcement of the forum-selection clause would be unreasonable in this case. OfficeEquip has never done business in London, and it would be extremely inconvenient for it to litigate there.

Trial on the breach of contract claim is scheduled in three months.

1.  Can BritCo immediately appeal the district court’s order granting OfficeEquip’s motion for judgment on the pleadings with respect to BritCo’s counterclaim? Explain.

2.  Can BritCo immediately appeal the district court’s order denying its motion to dismiss? Explain.


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