Jurisdiction of Federal Court Flashcards
Federal question—arising under federal law
(1) When federal law specifically creates the cause of action or claim, or the cause of action can be implied from the federal law or the constitution, federal question jurisdiction exists.
(2) When state law creates the cause of action or claim, federal question jurisdiction exists, provided a federal issue is an essential element of the claim under state law and must be resolved for the state claim to be determined, unless the federal issue is one for which there is neither an express nor an implied private right of action. The absence of a federal cause of action is not dispositive against federal jurisdiction—the key is whether federal jurisdiction over the embedded issue in a state cause of action will open the floodgates to federal courts for state claims.
Diversity
The district courts shall have original jurisdiction over all civil actions where the matter in controversy exceeds $75,000, exclusive of interest and costs, and is between citizens of different states. § 1332.
2) Diversity measured when action is commence d : the only citizenship determination that matters is at the time the action is commenced.
Complete Diversity
1) Complete diversity required
a. all parties of opposing sides must be diverse
b. each plaintiff and each defendant must be diverse
c. interpleader exception
i. Interpleader statute: minimal diversity, only
requires diversity between any two claimants
ii. Federal rules require complete diversity.
Determining Diversity
(3) Determining citizenship
a. Individual citizenship is determined by where the party
is domiciled, evidenced by physical presence and an
intention to remain there indefinitely.
b. Corporations
i. Deemed to be citizens of every state of
incorporation and
ii. the state that houses its principal place of
business
- muscle test: where a corporation has its executive offices in one state and its physical operation wholly or
predominately in another state, the principal place of business is the state where physical operations are
conducted - nerve center/home office test: where the corporation performs its operational activities in many state, the principal place of business is the state where the executive offices are located
c. Unincorporated associations, partnerships: Citizenship
is that of each and every one of its members
Determining Diversity: Class Actions
d. Class actions
i. Diversity is determined based on citizenship
of the named representatives.
ii. Post-Exxon Mobile v. Allopattah, absent class
members and additional named plaintiffs
need not independently satisfy the
jurisdictional amount, provided that at least
one named plaintiff satisfies the amount.
Determining Diversity: Legal Representatives, Nonresident US Citizens and Aliens
e. Suits brought by legal representatives: Deemed citizens of the same state as the represented person
f. Nonresident US citizens: There is no diversity
jurisdiction, because the person is not a citizen of any
state and is not an alien.
g. Aliens: may sue and be sued based on diversity, but no two aliens or LPRs can be opposing parties under
diversity jurisdiction.
Collusion and Devices to Create or Defeat Diversity
§ 1359 deprives federal courts of jurisdiction where a
party by assignment or otherwise has been improperly
or collusively made or joined to invoke diversity
A plaintiff can create diversity by changing his domicile
after the cause of action accrues but before the suit is
commenced if the change is genuine.
Subsequent addition of parties: Complete diversity
Complete diversity must be maintained throughout the addition of new parties, unless supplemental jurisdiction is used to hear claims that do not support the diversity requirements.
(6) Jurisdictional amount in controversy
This is determined from the plaintiff’s perspective. Usually all that is required is a good faith allegation that the amount of the damages or injuries in controversy exceeds, exclusive of interest and costs, $75K.
a. What is in controversy?
i. collateral effects of a judgment are not to be
considered
ii. interests and costs are not to be considered
iii. for injunctions, the amount in controversy is the value of the right to be protected or the extent of the injury to be prevented
iv. punitive damages may be used if permitted if applicable under the state substantive law in question
Aggregation of Separate Claims
i. one plaintiff v. one defendant: the plaintiff may aggregate all claims against one defendant
ii. one plaintiff v. several defendants: the plaintiff may aggregate all claims against the defendants only if they are all jointly liable to the plaintiff.
iii. several plaintiffs v one defendant: when complete diversity is present and at least one named plaintiff meets the jurisdictional amount, a federal district court has supplemental jurisdiction over other named plaintiffs or absent class members in a class action who do not meet the jurisdictional amount requirement, so long as they arise from a common nucleus of operative facts.
Counterclaims
i. Compulsory counterclaims, arising out of the same transaction or occurrence, need not meet the jurisdictional amount, as ancillary jurisdiction.
ii. Permissive counterclaims must independently meet the jurisdictional amount.
iii. Removal from state courts
1. A plaintiff in state court may not remove if met with a counterclaim of > $75
2. A defendant may be able to remove in contract actions but not in tort
Class Action Fairness Act
a. Subject matter jurisdiction
i. any class member is of diverse citizenship from any defendant
ii. amount in controversy in the aggregate exceeds $5M
iii. >100 class members in the class
b. Removal: any defendant may remove the case without
the approval of any other defendant
c. Actions are excluded from CAFA jurisdiction where the
primary defendants are states or governmental entities
or the claims are based on securities laws or regarding
corporate governance.
d. Local considerations as a bar to jurisdiction
i. Mandatory bar: A federal court must decline
jurisdiction if
1. more than 2/3 of the class members are members of the state in which the action is filed
2. a defendant from whom significant relief is sought is a citizen of that state
3. the principal injuries occurred in the
sate in which the action is filed.
ii. Discretionary: A federal court may decline if more than 1/3 but fewer than 2/3 of the class are citizens of the state in which the action is filed AND the primary defendants are also citizens of that state. Here the court considers whether the state has a significant interest in retaining the case.
Supplemental Jurisdiction
Generally—§ 1367
The district courts have supplemental jurisdiction over all claims that are so related to claims in the action within original jurisdiction that they form part of the same case or controversy—use the Gibbs “common nucleus of operative facts” test.
Cases Heard Solely on Diversity
The district court does not have supplemental jurisdiction over claims by plaintiffs against persons made parties under
(1) Rule 14 impleader
(2) Rule 19 joinder of indispensable additional parties
(3) Rule 20 permissive joinder of additional parties
(4) Rule 24 intervention
nor over claims by persons proposed to be joined as plaintiffs under rule 19 or seeking to intervene as plaintiffs under Rule 24 if allowing supplemental jurisdiction over such claims would defeat diversity.
Discretion Over Exercising Supplemental Jurisdiction
Federal courts may decline to exercise supplemental jurisdiction over a claim if
(1) the claim raises a novel or complex issue of state law
(2) the claim substantively predominates over the claim for which the federal court has jurisdiction
(3) the district court has dismissed all claims over which it has original jurisdiction
(4) when exceptional circumstances present other compelling reasons for declining jurisdiction.
If a state claim is dismissed from a federal action for lack of supplemental jurisdiction, the claimant has at least 30 days to file the state action in state court, regardless of whether the state’s statute of limitation has expired.
