Jurisdiction and Venue - Subject Matter Jx Flashcards
As to the amount-in-controversy requirement, will court accept amount quoted in the complaint?
YES, unless the allegation was made in bad faith or it appears to a legal certainty that the plaintiff cannot recover that amount.
For purposes of citizenship, a corporation’s principal place of business is
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.
Supplemental Jx will exist if the claim
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
To decide a case before it, a federal court must have
A federal court MUST have SMJ in order to decide cases before it.
SMJ = FEDERAL QUESTION OR DIVERSITY
A federal court has SMJ under federal question jurisdiction if
the complaint alleges a claim that arises under federal law.
Well-Pleaded Complaint Rule. The federal question MUST be presented
on the face of the plaintiff’s complaint. Raising a defense or filing a counterclaim under federal law does NOT trigger federal question jurisdiction.
A federal court has SMJ under diversity jurisdiction if:
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.
As to complete diversity for Div Jx, can two P’s or two D’s be from same state?
YES. But no D can be same as P in citizenship.
As to AIC, A claim for injunctive relief may be
valued by the benefit to the plaintiff or the cost of compliance for the defendant.
As to AIC, One plaintiff can
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.
As to AIC, If there are multiple plaintiffs
generally, each plaintiff’s claim must meet the AIC requirement separately (unless supplemental jurisdiction applies).
A federal court does NOT have diversity jurisdiction for
probate actions and domestic relation matters (e.g., divorce, child support/custody, etc.)
The citizenship of each party to the action must be
considered in order to decide whether complete diversity is present.
The rules for determining citizenship of individuals
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.
The rules for determining citizenship corporations
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).
The rules for determining citizenship unincorporated associations
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.
The rules for determining citizenship class actions
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.
Supplemental jurisdiction
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)
Claims constitute the “same case or controversy” if
they arise out of a common nucleus of operative fact (meaning all the claims arise out of the same transaction or occurrence).
Supplemental Jx for Federal Question Cases.
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.
Example of Supplemental Jx for Federal Question Cases.
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)
When P sues D in federal court based on diversity Jx, and D cross claims 3p, can P sue 3p using supplemental Jx?
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
three types of claims where supplemental jurisdiction is commonly tested in diversity cases:
Compulsory Counterclaims
Permissive Counterclaims
Cross-claims
Compulsory Counterclaims and Supp Jx
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.
Permissive Counterclaims and Supp Jx
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).
Cross-claims and Supp Jx
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.
Even when Supp Jx exists, the court may decline to exercise if claim involves
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.
Removal allows:
the defendant to move a case from state court to federal court if the case could have been brought originally in federal court.
Removal MUST be sought
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).
Removal of Federal Question Cases.
The defendant may remove the case to federal court if the well-pleaded complaint discloses that the claim is based on federal law.
Removal of Diversity Cases.
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.
While a removal from state to federal venue can only be sought by D, a change of venue may be sought by
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.
Procedural nuance: if case removed from stte to federal, then feds decide no juris, what is correct procedure: remand or dismiss?
REMAND
Dismissal would be if originally and wrongfully filed in federal court
As to AIC, what if P pleads more than $75k but then damages awarded end up being less than $75K?
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
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
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)
What are some areas where state law would be applied, though seemingly procedural and would otherwise apply federal law?
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
