Personal Jurisdiction & SMJ

Question 1

How is personal jurisdiction assessed in federal court?

Answer 1

The same way it is assessed in state court

Question 2

What are the two main kinds of cases that can be filed in federal court?

Answer 2

1- Diversity & Alienage Cases

2- Federal Questions

Question 3

Diversity & Alienage Cases: Two Requirements

Answer 3

1- the case is either between citizens of different states (diversity) OR between a citizen of a state and a citizen of a foreign country (alienage); AND
2- the amount in controversy EXCEEDS $75,000 (at least $75,000.01)

Question 4

Complete Diversity Rule

Answer 4

No diversity of citizenship if ANY P is a citizen of the same state as any D

Question 5

P (U.S. Citizen domiciled in France) v. D (NY)

Diversity/Alienage?

Answer 5

• no alienage b/c P is a U.S. citizen

- no diversity b/c P is not a citizen of a state b/c not domiciled in a U.S. state

Question 6

For a natural person, who is a U.S. citizen, what is her state of citizenship?

Answer 6

State of Domicile – physical presence & intent to remain

Question 7

When do you test for diversity?

Answer 7

You test for diversity when the case is FILED. Any moves AFTER filing are irrelevant. It’s also irrelevant what the citizenships were when the claim arose. CITIZENSHIP AT FILING IS ALL THAT MATTERS.

Question 8

What is the citizenship of a corporation?

Answer 8

(1) State or Country where incorporated; AND
(2) State or Country where it has its PPB

2 citizenships for a corporation, unlike a person!

Question 9

What is the corporation’s PPB?

Answer 9

Nerve center test– usually the headquarters; where managers direct, coordinate, and control corporate activities

Question 10

What is the citizenship of unincorporated associations (partnerships, LLCs, etc.)

Answer 10

Unincorporated associations are citizens of all the places that its members (general and limited partners) are citizens of.

Question 11

Citizenship when a case is brought by a representative of a decedent/minor/incompetent:

Answer 11

The relevant citizenship is that of the decedent/minor/incompetent, NOT of their representative.

Question 12

Does amount in controversy include interest on the claim or litigation costs?

Answer 12

NO– the claim itself, in good faith

Question 13

Is amount in controversy met so long as P claims more than $75,000?

Answer 13

Whatever the P claims in good faith is okay, UNLESS it is CLEAR TO A LEGAL CERTAINTY that P cannot recover more than $75,000.

ex- P sues D for $40,000 breach of K and $70,000 punitive damages. Legally, punitive damages cannot be recovered for breach of contract. Amount in controversy not met.

Question 14

What happens if P sues for more than $75,000 but wins less than $75,000?

Answer 14

Jurisdiction is okay, but if P actually recovers less than $75,000, P might have to pay the defendants litigation costs.

Question 15

Aggregation

• Rule
• Exception

Answer 15

When P must add two or more claims against D to meet the amount in controversy. We aggregate the claims of 1P v. 1D and it doesn’t matter if the claims are unrelated. However, we only add the claims of one P against one D, so P can’t sue D1 for $70,000 and D-2 for $6,000 in the same case.

EXCEPTION– joint tortfeasors. With joint claims we use the total value of the claim. The number of parties is irrelevant on joint claims.

Question 16

How do we figure the value, for amount in controversy purposes, of an injunction?

Answer 16

If either of two tests yields over $75,000, the amount requirement is deemed satisfied:

(1) Does this encroachment decrease the value of Ps property by more than $75,000?
(2) Would it cost the D more than $75,000 to comply with the injunction?

Question 17

EXCLUSIONS: Cases a federal court will refuse to exercise SMJ over?

Answer 17

• divorce
• alimony or child custody decree
• probate of a decedent’s estate

Question 18

Federal Question Cases– what are they?

Answer 18

The complaint must show a right or interest founded substantially on federal law. The claim must arise under federal law.

Question 19

Well-pleaded complaint rule

Answer 19

Test for federal question jurisdiction. Ask:
“Is the P enforcing a federal right?
yes –> FQ case
no –> no FQ jur

Question 20

What happens if a case has gotten into federal court (either on diversity or FQ) but it contains some claims that do not meet diversity or FQ requirements?

Answer 20

Try for supplemental jurisdiction!

Question 21

Test for Supplemental Jurisdiction

Answer 21

The claim must share a “COMMON NUCLEUS OF OPERATIVE FACT” with the claim that invoked federal SMJ.

There will ALWAYS be a common nucleus of operative fact when the claim ARISES FROM THE SAME T/O OR SERIES OF T/O as the claim that invoked federal SMJ.

Compulsory counterclaims & all crossclaims will ALWAYS meet the test of supplemental jurisdiction.

2d Cir has even upheld supplemental jurisdiction over a Permissive counterclaim if it has a “loose factual connection” with Ps claim.

Question 22

Limitation on Supplemental Jurisdiction

Answer 22

In a DIVERSITY/ALIENAGE case, the PLAINTIFF cannot use supplemental jurisdiction to overcome a LACK OF DIVERSITY.

But P can use suppJur to overcome lack of diversity for a claim in a federal question claim. The limitation only applies in cases that got to federal court based on diversity.

And P can use suppJur to overcome a lack of amount in controversy for a claim in a diversity case.

Question 23

Summary of Supplemental Jurisdiction

Answer 23

A non-federal, non-diversity claim can be heard in federal court if it shares a common nucleus of operative fact with the claim that invoked federal SMJ by arising from the T/O as the claim that invoked federal SMJ, UNLESS it is:

• asserted by a P
• in a diversity of citizenship (not FQ) case; AND
• is against a citizen of the same state as the P

Question 24

When does the federal court have discretion NOT to hear the supplemental claim?

Answer 24

• if the FQ is dismissed early in the proceedings; or
• if the state law claim is complex; or
• if state law issues would predominate