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Winter 2014 Bar Question 3

Civil Procedure

  Question
 

Paul, a resident of State A, had worked as a manager at the only hotel in State A owned and operated by Hotel, Inc. (Hotel), a large national chain.   Paul’s compensation was $100,000 per year.  Hotel was incorporated in State B, where the majority of its hotels are located.  Hotel’s main corporate offices are located in State C.

Hotel terminated Paul’s five-year employment contract when it had two years remaining.    Paul  immediately  found  new  employment  with  compensation  of
$90,000 per year.

Paul timely sued Hotel in state court in State B, alleging wrongful termination of his employment contract.  In his complaint, he sought reinstatement or, in the alternative, damages of $200,000 for the two years remaining on his employment contract at the time of termination.  In State B, the measure of damages for wrongful termination of an employment contract is the amount a plaintiff would have earned absent the termination, less what the plaintiff actually earned during the post-termination contract period.

After the complaint was served on Hotel at its main corporate offices in State C, Hotel timely removed the case to federal district court in State B.  Paul then filed a motion in federal district court to remand to state court.   The federal district court  denied  the  motion.    Paul  appealed  the  denial  to  the  federal  court  of appeals.

Paul meanwhile filed a motion in the federal district court for an injunction requiring Hotel to reinstate him to his job.   The federal district court granted Paul’s  motion  and  issued  the  injunction.    A  month  and  a  half  later,  Hotel appealed the injunction to the federal court of appeals.

1.  Did the federal district court correctly deny Paul’s motion to remand the case to state court? Discuss.

2.  How should the federal court of appeals rule on Paul’s appeal?  Discuss.

3.  How should the federal court of appeals rule on Hotel’s appeal?  Discuss.

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Answer

Civil Procedure
Question 3, Winter 2014

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