Diversity Jurisdiction

Question 1

Federal District Courts Have Original Jurisdiction over matters involving: (4 conditions)

Answer 1

(1) Citizens of different states
(2) U.S. citizens and citizens of a foreign country
(3) A foreign state and a U.S. citizen

and

(4)If the amount in controversy is more than $75,000
(28 U.S.C. Sect. 1332)

Question 2

T or F? The amount in controversy between the litigants must exceed $75,000 including costs and expenses associated with litigation in order to satisfy the diversity jurisdiction requirement.

Answer 2

False. The amount in controversy between the litigants must exceed $75,000 exclusive the costs and expenses associated with litigation. (28 U.S.C. Sect. 1332)

“Exception”: if the suit is based on a contract or statute that allows a winning party to collect attorney’s fees the amount in controversy includes the likely amount of those fees.

Question 3

Does a suit in which the amount in controversy is exactly $75,000 meet the diversity jurisdiction requirement?

Answer 3

No.

Question 4

Does the burden fall on the plaintiff or the defendant to prove that the amount in controversy is not more than $75,000 under the diversity jurisdiction requirement.

Answer 4

Defendant.

Question 5

Majority Rule: How is the Amount in Controversy determined under the diversity jurisdiction requirement?

Answer 5

Amount sought by plaintiff. “Plaintiff’s Viewpoint Rule”.

Question 6

Plaintiff’s Viewpoint Rule

Answer 6

Amount sought by the plaintiff. How the Amount in Controversy determined under the diversity jurisdiction requirement in the majority of jurisdictions.

Question 7

The Either Viewpoint Rule is the majority or minority rule for how the amount in controversy is calculated under the diversity jurisdiction requirement?

Answer 7

Minority.

Question 8

What is the either viewpoint rule?

Answer 8

the minority rule for how the amount in controversy is calculated under the diversity jurisdiction requirement. The amount is not necessarily the amount sough or recovered, but is the value of the consequences which may result from the litigation.

Question 9

Under the controversy requirement, can plaintiff meet the amount in controversy requirement by combining or aggregating the total claims against the defendant?

Answer 9

Yes.

Question 10

Under the controversy requirement, can claims against multiple defendants be aggregated to meet the the threshold for amount in controversy?

Answer 10

No, unless the claims are common and undivided.

Question 11

In a suit seeking an injunction, how is the amount in controversy calculated?

Answer 11

The injunctions worth the plaintiff, or the cost to the defendant.

Question 12

Is diversity jurisdiction established if there are multiple defendants and a plaintiff and one of the defendants share citizenship of the same state?

Answer 12

No. Diversity jurisdiction requires complete diversity, meaning a dispute involving citizens of different states. No diversity jurisdiction if any plaintiff and any defendant share citizenship of the same state.

Exception: Class Actions where the class contains over 100 persons

and

The amount in controversy exceeds $5,000,000

Diversity only has to be “minimal,” which means the federal jurisdiction exists if any single member of the class is diverse from any single defendant.

Question 13

If a complaint is amended to add or dismiss a party, can this affect diversity jurisdiction?

Answer 13

Yes.

Question 14

When must diversity of citizenship be satisfied?

Answer 14

At the time the suit is filed.

Question 15

A party is considered to be a citizen of her state of domicile or residence?

Answer 15

Domicile.

Question 16

Describe the difference between domicile and residence.

Answer 16

Domicile is the requirement of diversity jurisdiction and requires a physical presence in the state and the intent to remain in the state indefinitely.

Question 17

Alien

Answer 17

A citizen of a foreign country

Question 18

For diversity purposes, if an alien is admitted to permanent resident in the United States, she is a citizen of ____?

Answer 18

Where she is domiciled.

Question 19

Where are corporations domiciled (2)?

Answer 19

(1) principal place of business. There can only be one. Nerve center, or where the corporation’s high-level officers direct, control, and coordinate the corporation’s activities.

and

(2) the state of incorporation.

Question 20

If ABC corporation is incorporated in Delaware, but has its principal place of business in New York. If ABC brings a suit against a competitor, XYZ, which has its principal place of business in New Jersey, but is also incorporated in Delaware - Is there diversity?

Answer 20

No.

Question 21

How is citizenship of an unincorporated association determined (e.g. partnership of LLC)?

Answer 21

It is the citizenship of all the members of the association.

For class actions: An unincorporated association is a citizen of the state under whose laws the association is organized, and the state in which it has its principal place of business.

Question 22

What is the exception to the complete diversity requirement?

Answer 22

Class Actions where the class contains over 100 persons

and

The amount in controversy exceeds $5,000,000

Diversity only has to be “minimal,” which means the federal jurisdiction exists if any single member of the class is diverse from any single defendant.