SMJ Flashcards
Can parties consent to SMJ?
No
Court must address sua sponte and dismiss if lacking
Exceptions to Diversity Jxd
What Types of Cases Will Fed Court’s Not Exercise Diversity JXD over?
Domestic Relations
& Probate / Estate Proceedings
Domestic Relations
- Actions “involving the issuance of a divorce, alimony or child custody decree.”
Probate Proceedings
- Cases to probate a decedent’s estate
- If claim asserted
- involves actual probate or annulment of a will, or
- seeks to reach property in the custody of a state probate court
Example:
The federal court had Jxd over a claim for damages for alleged tortious interference with testator’s efforts to create a trust benefiting the P (who was Anna Nicole Smith). [Marshall v. Marshall]
“Complete Diversity”
Defined
Every P must be of diverse citizenship from every D
- No diversity if any P is citizen of same state as any D — no same state on either side of the V
- Does not require that all parties be citizens of different states — just no P and no D can be from same state
- Two Ps can be from Utah, as long as no D is from Utah
Determined at Time of Filing
- Diversity need not exist when claim arose
- Diversity is not defeated if, after commencement of the action, a party later becomes a citizen of the same state as one of his opponents
When must (Complete) Divsersity exist?
Determined at Time of Filing
- Diversity need not exist when claim arose
- Diversity is not defeated if, after commencement of the action, a party later becomes a citizen of the same state as one of his opponents
Exceptions to Complete Diversity Rule
(1) Federal Interpleader
-
Federal Interpleader Act — permits SMJ in interpleader actions whenever
- (a) any two or more adverse parties are of diverse citizenship, and
- (b) the money or property at issue be valued at $500 or more
-
Interpleader Under Federal Rules — Complete Diversity
- Interpleader pursuant to FRCP 22, on the other hand, requires the usual diversity between all
- Ps (stakeholders) and
- Ds (claimants)
- Interpleader pursuant to FRCP 22, on the other hand, requires the usual diversity between all
(2) Class Actions
- For class actions, diversity is determined on the basis of the citizenship of the named members of the class who are suing.
- Only minimal diversity required
(3) Accidents with 75+ people dead
- The Multiparty, Multiforum Jxd Trial Act – SMJ if minimal diversity between adverse parties
Citizenship of
Natural Persons (US Citizens)
Citizen = State Where Domiciled at Time Suit is Filed
Domicile — where a person maintains permanent home
- (1) Physical — actual presence in the state
- (2) Intent — intent to remain / make state permanent home for foreseeable future — no present intent to go elsewhere
- Relevant factors — taking a job, buying a house, joining civic orgs, registering to vote, licensed to drive, qualifying for in-state tuition
- Cannot have more than one domicile / citizenship
- Everyone has a domicile — impossible to lack one
- You retain your last domicile until you gain a new one
US National Living Abroad
- American citizen permanently living abroad has no domicile within the US – and is not a citizen of any state
- Such a person cannot be an original party to a Diversity action in Fed Court
Decedents, Minors, Incompetents, etc.
i.e., people who must sue or be sued through a legal representative
- look to citizenship of decedent, minor, etc.,
- i.e., one being represented
- not citizenship of their legal representative / guardian / executor — their citizenship is irrelevant
Citizenship of
US National Living Abroad
American citizen permanently living abroad
- has no domicile within the US – and is not a citizen of any state
- cannot be an original party to a Diversity action in Fed Court
Rules to Remember
- Citizen = State Where Domiciled at Time Suit is Filed
- Domicile — where a person maintains permanent home
- Cannot have more than one domicile / citizenship
- Everyone has a domicile — impossible to lack one
- Retain last domicile until you gain a new one
Decedents, Minors, Incompetents, etc.
i.e., people who must sue or be sued through a legal representative
- look to citizenship of decedent, minor, etc.,
- i.e., one being represented
- not citizenship of their legal representative / guardian / executor — their citizenship is irrelevant
Citizenship of
Decedents, Minors, Incompetents, etc.
i.e., people who must sue or be sued through a legal representative
- look to citizenship of decedent, minor, etc.,
- i.e., one being represented
- not citizenship of their legal representative / guardian / executor — their citizenship is irrelevant
But - Class Action
- citizenship of a class in a (non-CAFA) class action lawsuit is determined by citizenship of the Reps
Citizenship of
Business Trusts
- The Trustees of a business trust are the real parties in interest — their citizenship determines whether there is diversity
- not that of the individual SHs
Citizenship of
Corporations
-
(1) Incorporated
- Every US State or Country where incorporated
- Can be multiple — but rare (MBE will tell you)
- Every US State or Country where incorporated
-
(2) PPB
- Only one
- Where managers direct, coordinate, and control corporate activities
- usually corp HQ
__________________________________
Special Issues:
Alienage — Incorporation or PPB in Foreign Country
Bcas of potential of multiple citizenships for a Corp:
- Can simultaneously be an Alien & Citizen of a US state
- If Corp is an Alien — will defeat Jxd in a suit against another Alien — even though Corp may also have US state citizenship
SH Derivative Suits
- Court will realign Corp as a D to determine diversity
Citizenship of
Unincorporated Association
(i.e., Non-Corp Business) — Partnership, LLP, LLC
Citizen of ALL states
in which ANY Partner / Member is a citizen
- If LLP, etc. — we count limited & general partners
- Don’t look to PPB
Diversity of Citizenship
Realignment According to Interest & Collusion
- In determining whether diversity exists, court will look beyond the nominal designation of the parties in pleadings and realign them according to their true interests in the dispute. Thus, realignment may create diversity or destroy it.
SH Derivative Actions
- Court will realign Corp as a D to determine diversity
Assignment of Claims
- Where the assignment of a claim to another party is for collection only, the assignment will be ignored in determining whether diversity exists. But, assignee’s citizenship will be used if there is an absolute assignment of the claim made and the assignor retains no interest in the assigned claim.
Diversity of Citizenship
Assignment of Claims
Realignment According to Interest & Collusion
- Where the assignment of a claim to another party is for collection only, the assignment will be ignored in determining whether diversity exists.
- But, assignee’s citizenship will be used if there is an absolute assignment of the claim made and the assignor retains no interest in assigned claim
Diversity of Citizenship
Suing Insurers
When P sues an insurer on a policy or contract of liability insurance, and does not also join the insured, the insurer (whether Corp or not) is treated as a citizen of all of the following — the state or foreign country in which
- (1) Insurer is a citizen
- (a) is incorporated (if it is)
- (b) has its PPB, and
- (3) the insured is a citizen
Alienage Jxd
US National Living Abroad
No Alienage for US Nationals
— i.e., US citizen permanently living abroad
American citizen permanently living abroad
- has no domicile within the US – and is not a citizen of any state
- cannot be an original party to a Diversity action in Fed Court
Rules to Remember
- Citizen = State Where Domiciled at Time Suit is Filed
- Domicile — where a person maintains permanent home
- Cannot have more than one domicile / citizenship
- Everyone has a domicile — impossible to lack one
- Retain last domicile until you gain a new one
Decedents, Minors, Incompetents, etc.
i.e., people who must sue or be sued through a legal representative
- look to citizenship of decedent, minor, etc.,
- i.e., one being represented
- not citizenship of their legal representative / guardian / executor — their citizenship is irrelevant
Alienage Jxd
Alien Defined
- citizen / subject of a foreign country
- not a “citizen” of a US State
Alienage / Diversity Exists When
(I) Case is Btwn:
- (1) Citizen of a US State
- (2) Citizen of a Foreign Country
(II) Aliens are Additional Parties
- Case is btwn US citizens of different states (i.e., completely diverse) — Aliens are Additional Parties
- Example
- P1 — citizen & resident of NY
- P2 — citizen & resident of France
- D — citizen & resident of CA
NO Alienage / Diversity Where:
(I) Case Btwn
- (1) Citizen of US State VS
- (2) Alien Resident domiciled in Same State
(II) Alien vs Alien
- Can’t have Aliens on both sides of V
- Example
- P1 — citizen & resident of NY
- P2 — citizen & resident of France
- D — citizen & resident of Germany
Aliens are not permitted to be on both sides of the “v” unless they each have U.S. state citizen coparties on both sides.
- alien —v— alien
- alien —v— alien + state citizen
- state citizen + alien —v— alien
- state citizen —v— permanent resident alien from same state
- state citizen —v— US citizen domiciled abroad
Diversity JXD
Amount in Controversy Req
P’s complaint must make a good faith allegation that amount of damages / injury exceeds $75,000
at least 1 cent higher than 75k
_______________________________________
Not Including — Interest on Award Amount & Costs
-
But following are included:
- Attorneys’ Fees recoverable by K or statute
- Interest that constitutes a part of the claim itself, as distinguished from interest payable by virtue of a delay in payment
Legal Certainty Test
- To dismiss for insufficient amount — there must be no legal possibility that recovery will exceed $75k
- Must be legal certainty it will be less — matter of law
Time Calculated — Date of Filing
- Subsequent events do not defeat Jxd
- Irrelevant:
- Part payment by D
- Amount P actually awarded
Equitable Relief Claims
- court looks at value of harm caused — can look from either P or D perspective
- P — cost of harm if not granted
- D — cost of complying w/ injunction
_______________________________________
AGGREGATING CLAIMS
(Combining 2+ Claims to Meet 75k)
(A) 1 P vs 1 D
- Single P can aggregate all claims against Single D
- Claims don’t need to be factually related
(B) Other i.e., Not — 1 P vs 1 D
-
(a) Single P vs Multiple Ds
- Joint Tortfeasors / Joint Liability Claim
- This is ok
- If P has joint liability claims against multiple Ds — use total value of the claim
- Not ok if — claims based on separate liabilities
- Joint Tortfeasors / Joint Liability Claim
-
(b) Multiple Ps vs Single D
- Multiple Ps seek to enforce a single title or right in which they have a common, undivided interest (rare)
- EX — several Ps jointly own real estate and sue D to quiet title — undivided interest, so aggregation OK
- Examples where not ok
- Multiple victims of the same accident suing for personal injuries — their claims are separate and distinct from one another.
- In Class Actions — claims of class members cannot be aggregated if their rights are “separate” rather than “joint” / “common.” One class Rep’s claim must exceed $75k, and then court will have Supp Jxd over the claims that don’t
- Multiple Ps seek to enforce a single title or right in which they have a common, undivided interest (rare)
Diversity JXD
Amount in Controversy Req
AGGREGATING CLAIMS
Combining 2+ Claims to Meet 75k
(A) 1 P vs 1 D
- Single P can aggregate all claims against Single D
- Claims don’t need to be factually related
_________________________________________
(B) Other i.e., Not — 1 P vs 1 D
-
(a) Single P vs Multiple Ds
- Joint Tortfeasors / Joint Liability Claim
- This is ok
- If P has joint liability claims against multiple Ds — use total value of the claim
- Not ok if — claims based on separate liabilities
- Joint Tortfeasors / Joint Liability Claim
-
(b) Multiple Ps vs Single D
- Multiple Ps seek to enforce a single title or right in which they have a common, undivided interest (rare)
- EX — several Ps jointly own real estate and sue D to quiet title — undivided interest, so aggregation OK
- Examples where not ok
- Multiple victims of the same accident suing for personal injuries — their claims are separate and distinct from one another.
- In Class Actions — claims of class members cannot be aggregated if their rights are “separate” rather than “joint” / “common.” One class Rep’s claim must exceed $75k, and then court will have Supp Jxd over the claims that don’t
- Multiple Ps seek to enforce a single title or right in which they have a common, undivided interest (rare)
Federal Question JXD
Fed Courts have Jxd over
- (1) properly-pleaded claims
- (2) that arise under Fed Law
- statute, regulation, Const., etc.
Claim Arising Under?
- Claim must show a right / interest founded substantially on Federal Law
- requires interpretation / right created by
Well Pleaded Complaint
- FQ must appear on the face of complaint
- Ask if P is enforcing a Fed right
- Following are Insufficient
- Potential Defenses by D???
- Extraneous Allegations
- Complaint raises a federal law or issue, but P is not enforcing a federal right
- e.g., dispute over who owns a copyright that raises only state law K questions doesn’t require
interpretation of Copyright Act
- e.g., dispute over who owns a copyright that raises only state law K questions doesn’t require
- Complaint raises a federal law or issue, but P is not enforcing a federal right
Exclusive FQ Jxd
Fed Courts have exclusive Jxd over certain types of claims, which must be heard by them, including
- (1) Bankruptcy
- (2) Patent & Copyright
- (3) Federal Antitrust Claims
- (4) Postal Matters
Supplemental JXD
Diversity Cases
- Each additional claim must share CNOF (factual connection) with an existing claim that invoked SMJ — (FQJ or Diversity Jxd)
-
Same T/O
- CNOF Req always satisfied if Supp claims arise from Same T/O as underlying claim
- CNOF is broader than Same T/O
- CNOF Req always satisfied if Supp claims arise from Same T/O as underlying claim
-
Same T/O
Diversity Case — Limitation, etc.
(A) Claims by Ps cannot invoke Supp Jxd
Exceptions
- Multiple Ps, and the claim by one P against (original) D doesn’t meet Amount in Controversy req
- P1 and P2 (both CA) sue D (NY) on state-law claims in Fed Court. P1’s claim is for $100k. P2’s is for $50k. P2’s claim arises from the same T/O as P1’s. P1’s claim gets Supp Jxd.
- Ps joined either under
- Rule 23 (class action) or
- Rule 20 (permissive party joinder),
- so long as Complete Diversity is not destroyed.
(B) Claims by Ds (can use)
- Can Use to Overcome Amount in Controversy
- Ds can use to overcome 75k Amount in Controversy Req if CNOF satisfied
- But NOT Complete Diversity Req
- Supp Jxd cannot be used to override the Complete Diversity req
ALSO - Discretionary Factors to Decline Supp
Court may refuse supplemental claim (even if reqs met) if:
- (1) Original Jxd claims are dismissed early in the proceeding
- e.g., by 12(b)(6) Failure to State a Claim
- (2) State Law Grounds — the Supp (state) claims
- (a) raise novel or complex state law issue, or
- (b) substantially predominate over original Jxd claims
Supplemental JXD
- Supp Jxd allows a Fed Court to hear additional claims — which on their own don’t meet Diversity or FQ Jxd reqs
- counterclaims
- crossclaims
- impleader
- intervention
- Cannot use to get a Case into Fed Court
- Case must already be in (from Div or FQ)
- Just brings in additional claims into a pending case already in Fed Court
Must Share CNOF
Common Nucleus of Operative Fact
- Each additional claim must share CNOF (factual connection) with an existing claim that invoked SMJ — (FQJ or Diversity Jxd)
-
Same T/O
- CNOF Req always satisfied if Supp claims arise from Same T/O as underlying claim
- CNOF is broader than Same T/O
- CNOF Req always satisfied if Supp claims arise from Same T/O as underlying claim
Diversity Case — Limitation, etc.
(A) Claims by Ps cannot invoke Supp Jxd
Exceptions
- Multiple Ps, and claim by one of P against (original D) doesn’t meet the Amount in Controversy req
- P1 and P2 (both CA) sue D (NY) on state-law claims in Fed Court. P1’s claim is for $100k. P2’s is for $50k. P2’s claim arises from the same T/O as P1’s. P1’s claim gets Supp Jxd.
- Ps joined either under
- Rule 23 (class action) or
- Rule 20 (permissive party joinder),
- so long as Complete Diversity is not destroyed.
(B) Claims by Ds (can use)
- Can Use to Overcome Amount in Controversy
- Ds can use to overcome 75k Amount in Controversy Req if CNOF satisfied
- But NOT Complete Diversity Req
- Supp Jxd cannot be used to override the Complete Diversity req
Discretionary Factors to Decline Supp
Court may refuse supplemental claim (even if reqs met) if:
- (1) Original Jxd claims are dismissed early in the proceeding
- e.g., by 12(b)(6) Failure to State a Claim
- (2) State Law Grounds — the Supp (state) claims
- (a) raise novel or complex state law issue, or
- (b) substantially predominate over original Jxd claims
Discretionary Factors to Decline
Supplemental JXD
(even when orig jxd is FQ)
Court may refuse supplemental claim (even if reqs met) if:
- (1) Original Jxd claims are dismissed early in the proceeding — and only slate claims left
- e.g., by 12(b)(6) Failure to State a Claim
- (2) State Law Grounds — the Supp (state) claims
- (a) raise novel or complex state law issue, or
- (b) substantially predominate over original Jxd claims
Removal JXD
D can remove a case originally filed in state court to Fed Court
__________________________________________
RULES; GENERALLY
(A) Only D Can Remove (if all Ds join)
- All Ds must agree to removal
- Ds who have been properly joined and served must join in the petition for removal
(B) Original Jxd Necessary — Can only remove if case if P could have filed in Fed Court — i.e., there is FQ / Div + Supp
(i) D may remove separate & independent FQ claim
- If a case filed in state court contains a claim that would arise under Fed law, and it is joined with state law claims that do not invoke Div or Supp Jxd, the entire case can be removed to federal court.
- But— Fed Court must sever and remand state law claims to state court.
- Only those Ds against whom a Fed claim is asserted must join in the removal.
(C) Waiver — if D files Permissive Counterclaim
- D who filed permissive counterclaim in state court waives right to remove
(D) Limits in Diversity Jxd Case
(i) Can’t remove if — Any In-State D
- D cannot remove if P filed suit in any D’s home state
- i.e., no removal if any D is a citizen of the forum state
(ii) Max - Within Year of Filing
- No removal more than one year after case filed in state court
- Occurs when
- Dismissal of Non-Diverse D — case becomes removable by D1 if P voluntarily dismisses the claim against non-diverse D (D2)
- Exception to 1 yr rule — Bad Faith
- D1 shows that P acted in bad faith by originally joining D2 to prevent removal
(E) Timing — 30 days of service of first doc showing removable
- D must remove within 30 days of service of the first doc that shows that case is removable
- usually service of process
- 30 day clock resets if a new D is served
(F) Vene — Removal to that District
- Can only remove to federal district embracing state court in which case was originally filed
__________________________________________
PROCEDURE
- (1) D files “Notice of Removal” in Federal court
- Notice must be
- (i) signed
- (ii) contain grounds for removal – i.e., SMJ (FQ / Diversity)
- (iii) documents that were served on D in state action must be attached
- Notice must be
- (2) D “promptly” serves a copy of the “notice of removal” on all adverse parties
- (3) D files a copy of the “notice of removal” in State court
- Note — Don’t need approval from either state or federal court before removing — i.e., D doesn’t file motion
__________________________________________
IF REMOVAL IMPROPER — FED COURT (CAN) REMAND TO STATE COURT
- (1) Improper Procedure
- P can move to remand within 30 days of D’s filing of the notice of removal — if fails to meet time limit, P waives right to remand
- EX — if there is an in state D
- P can move to remand within 30 days of D’s filing of the notice of removal — if fails to meet time limit, P waives right to remand
- (2) Lack of SMJ — P can move to remand at any time
Removal JXD
Procedure
(1) D files “Notice of Removal” in Fed Court
- Notice must be
- (i) signed
- (ii) contain grounds for removal – i.e., SMJ (FQ / Diversity)
- (iii) documents that were served on D in state action must be attached
(2) D “promptly” serves a copy of the “notice of removal” on all adverse parties
(3) D files a copy of the “notice of removal” in State court
Note — Don’t need approval from either state or federal court before removing — i.e., D doesn’t file motion
__________________________________________
IF REMOVAL IMPROPER — FED COURT (CAN) REMAND TO STATE COURT
- (1) Improper Procedure
- P can move to remand within 30 days of D’s filing of the notice of removal — if fails to meet time limit, P waives right to remand
- EX — if there is an in state D
- P can move to remand within 30 days of D’s filing of the notice of removal — if fails to meet time limit, P waives right to remand
- (2) Lack of SMJ — P can move to remand at any time
Removal JXD
Timing
30 days of service of first doc showing removable
- D must remove within 30 days of service of the first doc that shows that case is removable
- usually service of process
- 30 day clock resets if a new D is served
In Diversity Cases: Max - Within Year of Filing
- No removal more than one year after case filed in state court
- Occurs when
- Dismissal of Non-Diverse D — case becomes removable by D1 if P voluntarily dismisses the claim against non-diverse D (D2)
- Exception to 1 yr rule — Bad Faith
- D1 shows that P acted in bad faith by originally joining D2 to prevent removal
__________________________________________
PROCEDURE
- (1) D files “Notice of Removal” in Federal court
- Notice must be
- (i) signed
- (ii) contain grounds for removal – i.e., SMJ (FQ / Diversity)
- (iii) documents that were served on D in state action must be attached
- Notice must be
- (2) D “promptly” serves a copy of the “notice of removal” on all adverse parties
- (3) D files a copy of the “notice of removal” in State court
- Note — Don’t need approval from either state or federal court before removing — i.e., D doesn’t file motion
