A certain corporation is a nonprofit entity that provides job training for people who are changing careers. The corporation owns a small campus, which includes a building for training people in auto-body repair and painting. This building is immediately adjacent to a neighboring tract of land owned by a farmer.
The farmer’s principal business is raising fish for sale to wholesalers and restaurants. The fish are cultivated in a series of interconnected ponds running along the line between the farmer’s land and the corporation’s land. Both parcels are in State A. The farmer is a citizen of State A, while the corporation is a citizen of State B.
Over a period of several weeks, most of the farmer’s fish sicken and die. The farmer traces the problem to chemicals used in auto body work, which have been leaking from the corporation’s building into the farmer’s ponds, poisoning the fish.
Meanwhile, for the past two years, the farmer and the corporation have had a separate, ongoing dispute over a different part of the property line between their respective tracts. Approximately 500 yards from the fish ponds, the farmer has built a fence, which the corporation believes encroaches on its property. The corporation wants to place another building in that area. However, the fence is in the way, and the farmer refuses to move it.
The farmer sues the corporation in the United States District Court for the District of State A, seeking to recover for the loss of the fish. The farmer relies on State A’s common law of trespass, seeking $300,000 in damages. The corporation counterclaims against the farmer for trespass, claiming that the farmer’s fence encroaches on its property. The corporation seeks an injunction ordering the farmer to move the fence, or alternatively, damages of $50,000 to compensate for the encroachment. Moving the fence would cost the farmer approximately $20,000.
One State A statute reads as follows: “In any civil action under the laws of this State, the liability of a nonprofit corporation for damage to property shall be limited to $100,000.”
At trial, the jury returns a verdict in favor of the farmer on the farmer’s claim, awarding damages of $300,000. The jury finds in favor of the corporation on the corporation’s counterclaim. Accordingly, the judge enters judgment for $300,000 against the corporation and in favor of the farmer, while also entering an injunction ordering the farmer to move the fence.
The corporation then files a motion under Fed. R. Civ. P. (Rule) 59, asking the judge to amend the judgment by reducing the damage award to $100,000, per the State A statute. The farmer opposes the motion, arguing that the state statute does not apply to common-law actions in the federal courts. The farmer also files a Rule 60 motion for relief from the judgment against him. The farmer asks the court to vacate the judgment and lift the injunction for lack of subject-matter jurisdiction over the corporation’s counterclaim.
Assume the court has diversity jurisdiction over the farmer’s claim against the corporation. Also assume that the parties’ motions are timely, and that they have relied on the appropriate Federal Rules of Civil Procedure.
- How should the judge rule on the corporation’s motion to amend the judgment? Explain.
- How should the judge rule on the farmer’s motion to vacate the judgment and lift the injunction? Explain.