Civil Procedure AMP - Diversity Jurisdiction

Question 1

For purposes of diversity jurisdiction, a corporation is considered to be a citizen of:

A Every state in which it is incorporated and every state in which it does substantial business

B Every state in which it is incorporated and the one state in which it has its principal place of business

C The first state in which it was incorporated and the one state in which it has its principal place of business

D The first state in which it was incorporated and every state in which it does substantial business

Answer 1

B

For purposes of diversity jurisdiction, a corporation is deemed to be a citizen of every state in which it is incorporated and the one state in which it has its principal place of business. Thus, it is possible for a corporation to have two or more state citizenships for diversity purposes. The rule for a corporation is that, in addition to its states of incorporation, a corporation is a citizen of the one state in which it has its principal place of business. It is not a citizen of every state in which it does substantial business. Likewise, in addition to the principal place of business, a corporation is deemed to be the citizen of every state in which it is incorporated, not just the first state in which it was incorporated. Thus, the choices incorporating those standards are incorrect statements of a corporation’s citizenship for diversity purposes. J0205 Additional Learning

Question 2

Which of the following will satisfy the amount in controversy requirement for diversity jurisdiction if the aggregate amount of the claims exceeds $75,000?

A A single plaintiff aggregates unrelated claims against several defendants

B Several plaintiffs bring unrelated claims against a single defendant

C A single plaintiff aggregates unrelated claims against a single defendant

Answer 2

C

The amount in controversy requirement for diversity jurisdiction can be satisfied when a single plaintiff aggregates unrelated claims against a single defendant. The amount in controversy requirement for diversity jurisdiction is not satisfied when a single plaintiff aggregates unrelated claims against several defendants. The amount in controversy requirement for diversity jurisdiction is also not satisfied when several plaintiffs bring unrelated claims against a single defendant; they must be seeking to enforce a single title or right in which they have a common or undivided interest (e.g., joint owners of real estate). J0213A Additional Learning

Question 3

Select the statement that best describes the Erie doctrine:

A A federal court exercising federal question jurisdiction applies federal substantive law and state procedural law

B A federal court exercising federal question jurisdiction applies state substantive law and federal procedural law

C A federal court exercising diversity jurisdiction applies federal substantive law and state procedural law

D A federal court exercising diversity jurisdiction applies state substantive law and federal procedural law

Answer 3

D

Under the Erie doctrine, a federal court exercising diversity jurisdiction applies state substantive law and federal procedural law. Federal procedural laws are found in federal statutes and the Federal Rules of Civil Procedure. If there is no federal statute or rule on point, the court must determine whether an issue is substantive or procedural. The Erie doctrine does not apply to courts exercising federal question jurisdiction; in those cases, a federal court will apply federal substantive and procedural law. J0214A Additional Learning

Question 4

If one plaintiff properly invokes diversity jurisdiction in federal court, another plaintiff may invoke supplemental jurisdiction to have his claim heard in federal court if _______ as the claim properly invoking diversity jurisdiction, and _______.

A The claim arises from the same nucleus of operative fact; complete diversity is not destroyed

B The claim satisfies diversity jurisdiction to the same extent; complete diversity is not destroyed

C The claim arises from the same nucleus of operative fact; the amount in controversy for diversity is met

Answer 4

A

A plaintiff may permissively join his claim with the claim of another plaintiff and invoke supplemental jurisdiction in bringing his claim if the claim arises from the same nucleus of operative fact as the claim properly invoking diversity jurisdiction. (This is the basic requirement for supplemental jurisdiction. The supplemental jurisdiction statute permits a federal court to exercise jurisdiction over claims that are part of the same case or controversy as the original claim. Claims form part of the same case or controversy if they derive from a common nucleus of operative fact.) Another requirement is that complete diversity is not destroyed. (Complete diversity requires that every plaintiff be of diverse state citizenship from each defendant.) The claim invoking supplemental jurisdiction need not satisfy diversity jurisdiction to the same extent as the original claim or meet the amount in controversy for diversity jurisdiction (more than $75,000). J0218A Additional Learning

Question 5

The diversity jurisdiction statute grants subject matter jurisdiction over cases between _______, assuming the amount in controversy requirement has been satisfied.

A Citizens of foreign countries

B A citizen of a state and a citizen of a foreign country

C A citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen

Answer 5

B

Assuming the amount in controversy has been satisfied, the diversity statute grants subject matter jurisdiction over cases involving a citizen of a state and a citizen of a foreign country. However, jurisdiction is denied in a case between a citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen. Subject matter jurisdiction is not granted in cases between citizens of foreign countries. There must be a U.S. citizen in the case either as a plaintiff or a defendant. J0203 Additional Learning

Question 6

Federal courts will exercise jurisdiction over _______, but not _______ or _______.

A Domestic relations proceedings; criminal proceedings; probate proceedings

B Probate proceedings; criminal proceedings; domestic relations proceedings

C Criminal proceedings; domestic relations proceedings; probate proceedings

Answer 6

C

For historical reasons, even though the requirements for diversity of citizenship jurisdiction are satisfied, federal courts will not exercise jurisdiction over domestic relations or probate proceedings. Subject matter jurisdiction based on diversity of citizenship is used for civil cases only, and it is not a basis for exercising subject matter jurisdiction over state criminal proceedings. However, federal courts do hear criminal proceedings based on violations of federal criminal statutes. J0215A Additional Learning

Question 7

For purposes of diversity jurisdiction, a corporation is a citizen of __________ and __________.

A Every state in which it is incorporated; every state in which it does substantial business

B The first state in which it was incorporated; the one state in which it has its principal place of business

C Every state in which it is incorporated; the one state in which it has its principal place of business

D The first state in which it was incorporated; every state in which it does substantial business

Answer 7

C

For purposes of diversity jurisdiction, a corporation is deemed to be a citizen of every state in which it is incorporated and the one state in which it has its principal place of business. Thus, it is possible for a corporation to have two or more state citizenships for diversity purposes. The rule for a corporation is that, in addition to its states of incorporation, a corporation is a citizen of the one state in which it has its principal place of business. It is not a citizen of every state in which it does substantial business. Likewise, in addition to the principal place of business, a corporation is deemed to be the citizen of every state in which it is incorporated, not just the first state in which it was incorporated. Thus, the choices incorporating those standards are incorrect statements of a corporation’s citizenship for diversity purposes. J0205B Additional Learning

Question 8

The “amount in controversy” requirement for purposes of diversity jurisdiction is not satisfied unless the complaint contains:

A An assertion that the amount exceeds $75,000, whether in good faith or not

BProof that the amount exceeds $75,000

C A good faith claim that the amount exceeds $75,000, exclusive of interest and costs of the lawsuit

D A good faith claim that the amount exceeds $75,000, including interest and costs of the lawsuit

Answer 8

C

In order to satisfy the amount in controversy requirement, a good faith claim that the amount exceeds $75,000, exclusive of interest and costs of the lawsuit, is required. Consequently, the choice including interest and costs of the lawsuit is incorrect. Proof that the amount exceeds $75,000 is not needed. However, the claim must be made in good faith. Hence, an assertion that the amount exceeds $75,000, whether in good faith or not does not satisfy the requirement. J0212 Additional Learning

Question 9

For purposes of a class action lawsuit, the citizenship of __________ is reviewed by the court to determine whether diversity jurisdiction exists.

A The named members of the class

B Both the named and unnamed members of the class

C The unnamed members of the class

Answer 9

A

In a class action lawsuit, the citizenship of the named members of the class is reviewed by the court to determine whether diversity jurisdiction exists. Thus, there is considerable room for maneuvering to create diversity if the class has members who are citizens of several different states. The citizenship of the unnamed members of the class is irrelevant for diversity jurisdiction purposes.J0208B Additional Learning

Question 10

Which of the following lawsuits can be brought under the diversity jurisdiction statute, assuming the amount in controversy requirement has been satisfied?

A A suit between a citizen of a state and a citizen of a foreign country

B A suit between a citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen

C A suit between citizens of foreign countries

Answer 10

A

Assuming the amount in controversy has been satisfied, the diversity statute grants subject matter jurisdiction in suits between a citizen of a state and a citizen of a foreign country. However, jurisdiction is denied in suits between a citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen. Subject matter jurisdiction is not granted in suits between citizens of foreign countries. There must be a U.S. citizen in the case either as a plaintiff or a defendant. J0203A Additional Learning

Question 11

Under the Erie doctrine, a federal court exercising diversity jurisdiction applies:

A State substantive and procedural law

B State substantive law and federal procedural law

C Federal substantive law and state procedural law

D Federal substantive and procedural law

Answer 11

B

A federal court, in the exercise of its diversity jurisdiction, is required to apply the substantive law of the state in which it is sitting, including that state’s conflict of law rules. However, the federal courts must apply federal procedural law. Federal procedural laws are found in federal statutes and the Federal Rules of Civil Procedure. If there is no federal statute or rule on point, the court must determine whether an issue is substantive or procedural. J0214 Additional Learning

Question 12

For purposes of diversity jurisdiction, the term “complete diversity” means that __________ must be a citizen of a different state from __________.

A Every plaintiff; each defendant

B One plaintiff; one defendant

C Every party; every other party

Answer 12

A

For purposes of diversity of citizenship jurisdiction, complete diversity means that every plaintiff must be a citizen of a different state from each defendant. Complete diversity does not require complete diversity among all parties; multiple plaintiffs may be citizens of the same state, as may multiple defendants, as long as no plaintiff is a co-citizen with any defendant. Thus, it is not correct to state that every party must be a citizen of a different state from every other party. The statement that one plaintiff must be a citizen of a different state from one defendant describes minimal diversity and is incorrect for purposes of diversity of citizenship jurisdiction. (Minimal diversity is all that is constitutionally required, and Congress has granted subject matter jurisdiction based on minimal diversity in some classes of cases such as those falling under the federal interpleader statute. However, Congress has not granted a broad subject matter jurisdiction based on minimal diversity.) J0202B Additional Learning

Question 13

A plaintiff __________ satisfy the “amount in controversy” requirement for purposes of diversity jurisdiction with __________ that the amount in controversy exceeds $75,000, exclusive of interest and costs of the lawsuit.

A Can; a good faith allegation

B Cannot; merely a good faith allegation

C Can; even an allegation in bad faith

D Must; proof

Answer 13

A

A plaintiff can satisfy the amount in controversy requirement with a good faith allegation that the amount of the damages or injuries in controversy exceeds $75,000, exclusive of interest and costs of the lawsuit. As stated, a good faith allegation is required. Thus, it is not correct that a plaintiff can satisfy the amount in controversy requirement even with an allegation in bad faith. It is also not correct that the plaintiff must satisfy the amount in controversy with proof; a good faith allegation is sufficient. J0212B Additional Learning

Question 14

The “common nucleus” test is used to determine whether a claim can be brought under __________ jurisdiction.

A Diversity

B Personal

C Federal question

D Supplemental

Answer 14

D

The “common nucleus” test is used to determine whether a claim can be brought in federal court under supplemental jurisdiction. The supplemental jurisdiction statute permits a federal court to exercise supplemental jurisdiction over claims that are so related to the claim involving original jurisdiction that they form part of the same case or controversy. Claims form part of the same case or controversy if they derive from a common nucleus of operative fact. Supplemental jurisdiction may allow a claim to be brought that does not meet the standards of either federal question or diversity jurisdiction. The common nucleus test, however, does not refer to either of those types of subject matter jurisdiction. The common nucleus test has no relation to personal jurisdiction; it involves the subject matter of the claim. J0209 Additional Learning

Question 15

The state in which a person ______________ is his state of citizenship for purposes of diversity jurisdiction

A Votes

B Is currently residing, even if temporarily

C Has a valid driver’s license or state identification card

DHas his permanent home and to which he intends to return

Answer 15

D

For purposes of diversity jurisdiction, the state citizenship of an individual is the state in which he has his permanent home and to which he intends to return. The state in which a person is currently residing, even if temporarily, is not his home state for diversity purposes. Although voting or holding some sort of state identification will be considered as evidence of an individual’s true permanent home, the state in which the person votes or the state in which the person has a valid driver’s license or state identification card are not generally considered to be determinative of the person’s state citizenship. J0204B Additional Learning

Question 16

For diversity of citizenship jurisdiction, what does the term “complete diversity” mean?

A One plaintiff must be a citizen of a different state than any defendant

B All plaintiffs must reside outside of the chosen venue

C No plaintiff may be a citizen of the same state as any defendant

D Every party must be a citizen of a different state than every other party

Answer 16

C

For purposes of diversity of citizenship jurisdiction, complete diversity means no plaintiff may be a citizen of the same state as any defendant. Complete diversity does not require complete diversity among all parties. Thus, stating that every party must be a citizen of a different state from every other party is incorrect. The statement that one plaintiff must be a citizen of a different state than any defendant describes minimal diversity and is incorrect for purposes of diversity of citizenship jurisdiction. (Minimal diversity is all that is constitutionally required, and Congress has granted subject matter jurisdiction based on minimal diversity in some classes of cases, such as those falling under the federal interpleader statute. However, Congress has not granted a broad subject matter jurisdiction based on minimal diversity.) “All plaintiffs must reside outside of the chosen venue” is an incorrect statement of the law. J0202 Additional Learning

Question 17

A claim brought under diversity jurisdiction must involve an amount in controversy:

A In excess of $75,000

B Of $75,000 or more

C Of at least $100,000

D In excess of $100,000

Answer 17

A

For claims brought under diversity jurisdiction, the amount in controversy must be in excess of $75,000, exclusive of interest and costs, making the answers with at least $100,000 and in excess of $100,000 incorrect. It is not enough for the claim to involve exactly $75,000; it must be in excess of that amount. Thus, the answer with $75,000 or more is incorrect. J0211 Additional Learning

Question 18

Subject matter jurisdiction based on diversity of citizenship was founded on the premise that a federal court could:

A Relieve overcrowding on state court dockets

B Grant relief that a state court could not

C Protect an out-of-state party from possible bias in state court

Answer 18

C

Diversity jurisdiction was founded on the premise that a federal court could protect an out-of-state party from possible bias in state court. Relieving overcrowded state dockets and granting relief that a state court could not were not purposes for the creation of federal diversity of citizenship jurisdiction. J0201 Additional Learning

Question 19

The Supreme Court has held that a corporation’s principal place of business for purposes of diversity of citizenship is:

A The state from which the corporation’s high-level officers direct, control, and coordinate the corporation’s activities (i.e., its nerve center)

B The state in which the corporation has its main physical operations

C The state from which the corporation derives the majority of its revenue

Answer 19

A

The United States Supreme Court has ruled that a corporation’s state citizenship for diversity purposes is the state from which the corporation’s high-level officers direct, control, and coordinate the corporation’s activities (i.e., its nerve center). Prior to the Supreme Court’s decision, some courts looked to the state in which the corporation has its main physical operations. This test is no longer used, however, and is therefore incorrect. The state from which the corporation derives the majority of its revenue is also an incorrect choice. J0206A Additional Learning

Question 20

For purposes of diversity jurisdiction, the state citizenship of an individual is determined by:

A The state in which the person has a valid driver’s license or state identification card

B The state in which the person votes

C The state in which the person is currently residing, even if temporarily

D The state in which the person has his permanent home and to which he intends to return

Answer 20

D

For diversity purposes, the state citizenship of an individual is the state in which he has his permanent home and to which he intends to return. The state in which the person is currently residing, even if temporarily, is not the person’s home state for diversity purposes. Although voting and holding some sort of state identification will be considered as evidence of an individual’s true permanent home, the state in which the person votes and the state in which the person has a valid driver’s license or state identification card are not generally determinative of the person’s state citizenship. J0204 Additional Learning

Question 21

Federal jurisdiction based on diversity of citizenship is defined in terms of “complete diversity,” which means:

A All plaintiffs must reside outside of the chosen venue

B No plaintiff may be a citizen of the same state as any defendant

C One plaintiff must be a citizen of a different state from one defendant

D Every party must be a citizen of a different state from every other party

Answer 21

B

For purposes of diversity of citizenship jurisdiction, complete diversity means that no plaintiff may be a citizen of the same state as any defendant. Complete diversity does not require complete diversity among all parties. Thus, stating that every party must be a citizen of a different state from every other party is incorrect. The statement that one plaintiff must be a citizen of a different state from one defendant describes minimal diversity and is incorrect for purposes of diversity of citizenship jurisdiction. (Minimal diversity is all that is constitutionally required, and Congress has granted subject matter jurisdiction based on minimal diversity in some classes of cases such as those falling under the federal interpleader statute. However, Congress has not granted a broad subject matter jurisdiction based on minimal diversity.) “All plaintiffs must reside outside of the chosen venue” is an incorrect statement of the law. J0202A Additional Learning

Question 22

Under the concept of __________, when the intervenor’s action and the main action have a claim or defense involving a common question of law or fact, intervention may be permitted in the court’s discretion.

A Supplemental jurisdiction

B Permissive intervention

C Intervention as a matter of right

Answer 22

B

Under the concept of permissive intervention, intervention may be permitted in the court’s discretion when the intervenor’s action and the main action have a claim or defense involving a common question of law or fact. Intervention as a matter of right occurs when the intervenor claims an interest relating to the property or transaction that is the subject of the action and the disposition of the action may adversely affect that interest. Supplemental jurisdiction allows a claim to be joined that could not, by itself, invoke federal question jurisdiction or diversity jurisdiction (because, for example, it is a state claim between parties who are citizens of the same state). In contrast, for intervention as a matter of right and permissive intervention claims, the intervenor must invoke diversity or federal question jurisdiction. J0210A Additional Learning

Question 23

Supplemental jurisdiction allows a party to bring a claim that could not otherwise be brought under __________.

A Diversity jurisdiction or federal question jurisdiction

B Federal question jurisdiction only

C Diversity jurisdiction only

Answer 23

A

Supplemental jurisdiction allows a claim to be brought that does not meet the standards of either diversity jurisdiction or federal question jurisdiction. The test that determines whether a claim can be brought in federal court under supplemental jurisdiction is called the “common nucleus” test. The supplemental jurisdiction statute permits a federal court to exercise supplemental jurisdiction over claims that are so related to the claim involving original jurisdiction that they form part of the same case or controversy. Claims form part of the same case or controversy if they derive from a common nucleus of operative fact. J0209A Additional Learning

Question 24

For diversity of citizenship purposes, a corporation’s principal place of business is:

A Either the state from which the corporation’s high-level officers direct, control, and coordinate the corporation’s activities (i.e., its nerve center) or the state in which the corporation has its main physical operation

B The state in which the corporation has its main physical operation

C The state from which the corporation’s high-level officers direct, control, and coordinate the corporation’s activities (i.e., its nerve center)

D The state from which the corporation derives the majority of its revenue

Answer 24

C

The United States Supreme Court has ruled that a corporation’s state citizenship for diversity purposes is the state from which the corporation’s high-level officers direct, control, and coordinate the corporation’s activities (i.e., its nerve center). The state in which the corporation has its main physical operations is no longer used as the test for principal place of business. Hence, the choices with that test, whether alone or combined with the nerve center test, are incorrect. The state from which the corporation derives the majority of its revenue is also not the basis for determining the corporation’s principal place of business. J0206 Additional Learning

Question 25

The diversity jurisdiction statute grants subject matter jurisdiction over cases involving “alienage” jurisdiction, which refers to:

A A suit between a citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen

B A suit between citizens of foreign countries

C A suit between a citizen of a state and a citizen of a foreign country

Answer 25

C

Alienage jurisdiction refers to subject matter jurisdiction over a suit between a citizen of a state and a citizen of a foreign country. The diversity statute does not grant jurisdiction in a suit between a citizen of a state and a citizen of a foreign country who has been admitted to the United States for permanent residence and who is domiciled in the same state as the U.S. citizen. The diversity statute also does not grant jurisdiction in a suit between citizens of foreign countries. There must be a U.S. citizen in the case either as a plaintiff or a defendant. J0203B Additional Learning

Question 26

In a typical class action lawsuit, diversity jurisdiction is determined based on the citizenship of:

A All the members of the class

B The named members of the class only

C The unnamed members of the class only

D Neither the named nor unnamed members; class action lawsuits cannot be brought based on diversity jurisdiction

Answer 26

B

In a typical class action lawsuit, diversity is determined on the basis of the citizenship of the named members of the class who are suing. Thus, there is considerable room for maneuvering to create diversity if the class has members who are citizens of several different states. Diversity is not determined by all members of the class; as stated above, just the named members of the class are relevant. Accordingly, the citizenship of the unnamed members of the class is irrelevant for diversity jurisdiction purposes. It is also incorrect to say that class action lawsuits cannot be brought based on diversity jurisdiction; they can be brought as long as diversity is present for named members of the class. J0208 Additional Learning

Question 27

If one plaintiff properly invokes diversity jurisdiction in federal court, what is required for another plaintiff to invoke supplemental jurisdiction to have his claim heard in federal court?

A That the claim arise from the same nucleus of operative fact as the claim properly invoking diversity jurisdiction, and that complete diversity not be destroyed

B Only that complete diversity not be destroyed

C Only that the claim independently satisfy the requirements for diversity jurisdiction

D Only that the claim arise from the same nucleus of operative fact

Answer 27

A

A plaintiff may use permissive joinder to join his claim with the claim of another plaintiff and invoke supplemental jurisdiction in bringing his claim if the claim arises from the same nucleus of operative fact as the claim properly invoking diversity jurisdiction. (This is the basic requirement for supplemental jurisdiction. The supplemental jurisdiction statute permits a federal court to exercise jurisdiction over claims that are part of the same case or controversy as the original claim. Claims form part of the same case or controversy if they derive from a common nucleus of operative fact.) Another requirement is that complete diversity not be destroyed. (Complete diversity requires that every plaintiff be of diverse state citizenship from each defendant.) Thus, the choices that state only one of the requirements are incorrect. If the claim independently satisfies the requirements for diversity jurisdiction, it may be heard in federal court, and supplemental jurisdiction is not needed. However, as described above, the claim need not have this independent basis for subject matter jurisdiction; supplemental jurisdiction is available to have the claim heard in federal court. J0218 Additional Learning