Question

Read the following case: An individual, Sam Rice, was injured while using a survival knife manufactured by the BearArms Knife Company. Sam is a resident of the state of Iowa. He was injured in the state of Iowa, where he was using the knife to whittle a wooden cup. The BearArms Knife Company is located in the State of Delaware. It sells its knives to retail stores throughout the United States. Sam bought his knife at Paul's Discount in Iowa City. Sam’s injuries cost him – in terms of doctor’s bills and missed income from not being able to work – well over $200,000.

Sam sued BearArms Knife Company in Iowa state court for negligence. BearArms Knife Company did not, however, respond to or otherwise contest Sam’s lawsuit, and Sam was awarded $425,000 in damages by the trial court.

Based on the legal information that you learned in this chapter, write a 1-2 sentence answer for each of the following questions.

1. What type of judgment did the trial court award against BearArms Knife Company?

2. Which court(s)--state and/or federal courts--would have jurisdiction over Sam’s lawsuit against BearArms Knife Company?

3. Explain the reasoning for your answer to question “2”.

4. What state law would Rice have invoked in trying to show that the Iowa state court had personal jurisdiction over BearArms Knife Company?

Answer 1

1. The trial court awarded 'default judgement'. This judgement is given when the party other than plaintiff (i.e., the defendant) does not report to summons and/or doesnt appear in the court. Since BearArms knife company didnt respond to Sam's lawsuit, he was awarded a default judgement.

2. Both State and Federal courts would have jurisdiction over Sam's lawsuit against BearArms knife company.

3. When a case falls under 'concurrent federal jurisdiction', both the state and federal courts have jurisdiction over such cases. There are two categories of cases which fall under 'concurrent federal jurisdiction'- A. Federal Question cases and B. Diversity of citizenship cases. Our case is a 'Diversity of citizenship' case. Why? Because it fulfills the 2 criterias required to be a 'Diversity of citizeship' case. These are-

• The plaintiff doesnt reside in the same state as the defendant. Our plaintiff is in Iowa while the company is in Delaware.
• The amount concerned is more than 75000 USD. Ours is more than 200000 USD.

Now since Sam put the case in a state court, the state court is hearing it. Later on both the company and Sam have the right to move the case to a Federal court, if they wish to.

4. Rice would invole 'Iowa long arm statute' in trying to show that the Iowa state court had personal jurisdiction over BearArms Knife Company.