Jurisdiction and Venue - Subject Matter Jx

Question 1

As to the amount-in-controversy requirement, will court accept amount quoted in the complaint?

Answer 1

YES, unless the allegation was made in bad faith or it appears to a legal certainty that the plaintiff cannot recover that amount.

Question 2

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

Answer 2

the corporation’s “nerve center” (i.e., “the place where a corporation’s officers direct, control, and coordinate the corporation’s activities”).

Ordinarily, this will be “the place where the corporation maintains its headquarters,” unless the facts indicate that the corporation’s designated “headquarters” is not really its “nerve center” but is simply an office for occasional meetings.

Question 3

Supplemental Jx will exist if the claim

Answer 3

if it is part of the same constitutional “case or controversy” as the woman’s discrimination claim against MedForms.

Claims form part of the same case or controversy if they arise out of a common nucleus of operative facts.

Supplemental Jx = same case or controversy = arise out of common nucleus of operative facts

Question 4

To decide a case before it, a federal court must have

Answer 4

A federal court MUST have SMJ in order to decide cases before it.

SMJ = FEDERAL QUESTION OR DIVERSITY

Question 5

A federal court has SMJ under federal question jurisdiction if

Answer 5

the complaint alleges a claim that arises under federal law.

Question 6

Well-Pleaded Complaint Rule. The federal question MUST be presented

Answer 6

on the face of the plaintiff’s complaint. Raising a defense or filing a counterclaim under federal law does NOT trigger federal question jurisdiction.

Question 7

A federal court has SMJ under diversity jurisdiction if:

Answer 7

Complete Diversity is present – every citizenship represented on the plaintiff’s
side of the case must be different than EVERY citizenship represented on the D’s side of the case

AND

The amount in controversy (AIC) exceeds $75,000.

Question 8

As to complete diversity for Div Jx, can two P’s or two D’s be from same state?

Answer 8

YES. But no D can be same as P in citizenship.

Question 9

As to AIC, A claim for injunctive relief may be

Answer 9

valued by the benefit to the plaintiff or the cost of compliance for the defendant.

Question 10

As to AIC, One plaintiff can

Answer 10

aggregate all of her claims against one defendant to meet the AIC requirement, whether or not the claims are transactionally related.

One plaintiff can also aggregate all of her claims against multiple defendants if the defendants are jointly liable.

Question 11

As to AIC, If there are multiple plaintiffs

Answer 11

generally, each plaintiff’s claim must meet the AIC requirement separately (unless supplemental jurisdiction applies).

Question 12

A federal court does NOT have diversity jurisdiction for

Answer 12

probate actions and domestic relation matters (e.g., divorce, child support/custody, etc.)

Question 13

The citizenship of each party to the action must be

Answer 13

considered in order to decide whether complete diversity is present.

Question 14

The rules for determining citizenship of individuals

Answer 14

For individuals, citizenship is determined by the individual’s state or country of domicile (i.e., the place of residence where the individual intends to remain indefinitely). An individual can only have one domicile at a time.

Question 15

The rules for determining citizenship corporations

Answer 15

Corporations hold dual citizenship for diversity purposes:

The state or country of incorporation;

AND

The state or country of its principal place of business (i.e., the “nerve center” – usually where corporate headquarters are located).

Question 16

The rules for determining citizenship unincorporated associations

Answer 16

Unincorporated associations and partnerships (e.g., unions, trade associations, partnerships, and limited partnerships) are considered a citizen of every state of which its members are citizens.

Question 17

The rules for determining citizenship class actions

Answer 17

For class actions, the citizenship of each named party in the class who are suing count for diversity purposes.

Class members that are not named may join without regard to citizenship.

Question 18

Supplemental jurisdiction

Answer 18

allows a federal court with valid SMJ over a case to hear additional claims over which the court would NOT independently have jurisdiction if ALL the claims constitute the same case or controversy.

NOTE: there are exclusions when anchor claim based in diversity (P cannot sue 3P D through supp Jx if inital claim is in diversity Jx)

Question 19

Claims constitute the “same case or controversy” if

Answer 19

they arise out of a common nucleus of operative fact (meaning all the claims arise out of the same transaction or occurrence).

Question 20

Supplemental Jx for Federal Question Cases.

Answer 20

A federal court sitting in federal question jurisdiction may hear a pendent state law claim under supplemental jurisdiction if the state law claim arises out the same transaction or occurrence as the federal law claim.

Question 21

Example of Supplemental Jx for Federal Question Cases.

Answer 21

P sues D for copyright infringement (federal law) and breach of contract (state law). A federal court may hear the breach of contract claim IF the breach arose out of the same transaction or occurrence as the copyright infringement claim. This holds true if the state and federal claims are spread out against multiple defendants (called “pendent party” jurisdiction – P can sue D1 for CR infringement and D2 for breach of K if same transaction/occurrence as CR claim)

Question 22

When P sues D in federal court based on diversity Jx, and D cross claims 3p, can P sue 3p using supplemental Jx?

Answer 22

No. Cannot use supp Jx, but could bring claim if had other SMJx grounds.

When the anchor claim is grounded in diversity jurisdiction, federal law withholds supplemental jurisdiction over any claim “ .. . by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules

Question 23

three types of claims where supplemental jurisdiction is commonly tested in diversity cases:

Answer 23

Compulsory Counterclaims

Permissive Counterclaims

Cross-claims

Question 24

Compulsory Counterclaims and Supp Jx

Answer 24

A compulsory counterclaim is a counterclaim (usually the defendant countersuing the plaintiff) that arises out of the same transaction or occurrence as the original claim filed. A federal court sitting in diversity jurisdiction has supplemental jurisdiction over a compulsory counterclaim.

Question 25

Permissive Counterclaims and Supp Jx

Answer 25

A permissive counterclaim is a counterclaim (usually the defendant countersuing the plaintiff) that does NOT arise out of the same transaction or occurrence as the original claim filed. A permissive counterclaim can only be heard if it independently satisfies diversity jurisdiction (e.g., complete diversity is present + amount in controversy exceeds $75,000).

Question 26

Cross-claims and Supp Jx

Answer 26

A cross-claim is a claim filed by a plaintiff against another plaintiff or by a defendant against a co-defendant. A federal court sitting in diversity jurisdiction has supplemental jurisdiction over a cross-claim if the cross-claim arises out of the same transaction or occurrence as the original claim.

Question 27

Even when Supp Jx exists, the court may decline to exercise if claim involves

Answer 27

a novel or complex state law issue, if the state-law claim “substantially predominates” over the federal claim, if the federal claim is dismissed, or “in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

Question 28

Removal allows:

Answer 28

the defendant to move a case from state court to federal court if the case could have been brought originally in federal court.

Question 29

Removal MUST be sought

Answer 29

By the Defendant;

AND

Within 30 days of learning the grounds for removal (however, the defendant cannot remove his case after one year from the commencement of the action, unless the plaintiff acted in bad faith to try to make the case non-removable).

Question 30

Removal of Federal Question Cases.

Answer 30

The defendant may remove the case to federal court if the well-pleaded complaint discloses that the claim is based on federal law.

Question 31

Removal of Diversity Cases.

Answer 31

The defendant may remove the case to federal court if:

Complete diversity is present;

The amount in controversy exceeds $75,000;

AND

The action is brought in a state of which no defendant is a citizen.

Question 32

While a removal from state to federal venue can only be sought by D, a change of venue may be sought by

Answer 32

either party.

If the action was filed in a correct venue, then the transfer mechanism to be used is 28 U.S.C. § 1404, which looks to “the convenience of parties and witnesses, in the interest of
justice,” and limits transfer to a district “where it might have been brought” or upon the parties’ consent. The statutory language “where it might have been brought” has been interpreted to mean a district in which defendant could have been served at the commencement of the suit.

Question 33

Procedural nuance: if case removed from stte to federal, then feds decide no juris, what is correct procedure: remand or dismiss?

Answer 33

REMAND

Dismissal would be if originally and wrongfully filed in federal court

Question 34

As to AIC, what if P pleads more than $75k but then damages awarded end up being less than $75K?

Answer 34

may impose costs on the P

does not affect Jx, which is determined at outset of suit, but can impose costs on P

Usually only happens where then there is bad faith on P’s part

Question 35

In diversity cases, if there are multiple states each of which has some relation to the controversy, the federal court must identify which state’s substantive law to apply by

Answer 35

following the conflict-of-laws principles of the state in which the federal court hearing the action sits.

so it’s not that federal cts use all substantive state law where it sits, but uses the laws that state would use had it been filed in that state (ie, whatever the choice of law of that state would have been, which in some cases could be the laws of a different state)

(Rationale: That’s the only way to assure that the same state’s underlying substantive law applies regardless of whether the suit is pending in State X state court or State X federal court.)

Example: If P sued D on a contract in the State A state courts, then under State A’s conflict-of-laws rules, which state’s law of damages would the State A court apply? If the federal court concludes, say, that under State A conflicts principles State A would apply the damages law of the state where the designed building is to be built (State C), then the federal court must similarly apply the damage-computation rules of State C.

ie, CHIOCE OF LAW IS A SUBSTANTIVE LAW QUESTION AND LIKE OTHER APPLICATION OF SUBSTANTIVE LAW IN FEDERAL CASES, MUST APPLY STATE COURT’S SUBSTANTIVE LAW (AND FEDERAL PROCEDURAL LAW)

Question 36

What are some areas where state law would be applied, though seemingly procedural and would otherwise apply federal law?

Answer 36

First, look to confirm If the state rule in question seems to reflect a strong state policy interest regarding the parties’ conduct, and having the federal court follow that policy would not lead to an important loss of procedural uniformity across the federal system. If this is the case, then you should treat these state rule as being “substantive” and thus binding on the federal court. Examples:

Remittur/Additur (though additur generally barred by federal rules, if Q says state has a policy to encourage additurs, etc, then would apply the state addituor as substantive law. if there was genuine dispute as to the amount of damages, may be able to make a 7th amendment invading province of jury argument, but otherwise just use the state additur law if they have strong pub policy)

notice of claim requirement

issue preclusion/collateral estoppel