Subject Matter Jurisdiction Flashcards
SMJ Definition
Subject matter jurisdiction refers to the court’s power over a particular case
- federal courts have limited subject matter jurisdiction
- state courts have general subject matter jurisdiction (can hear almost any case)
NOTE: state courts cannot hear patent infringement, bankruptcy, some federal securities, antitrust claims
Lack of Subject Matter Jurisdiction
A lack of subject matter jurisdiction, unlike personal jurisdiction, cannot be waived. If the case does not invoke federal SMJ, the federal court cannot hear the case. If the court does, the judgment is void.
Four categories of federal SMJ
1- diversity/alienage jurisdiction
2- federal question jurisdiction
3- removal jurisdiction
4- supplemental jurisdiction
Diversity/Alienage Jurisdiction
The requirements of diversity jurisdiction are:
1- the case is either between (a) citizens of different states (diversity) or (b) a citizen of a US state and a citizen of a foreign country; and
2- the amount in controversy exceeds $75,000
Complete Diversity Rule
No plaintiff may be a citizen of the same state as any defendant - if one defendant and one plaintiff are co-citizens, diversity is lacking
Alienage Juridiction Exception
Alienage jurisdiction requires the action be between a US citizen and a foreign country
However, jurisdiction is denied if the case is between a citizen of a state and a green card holder who is domiciled in the state state as the US citizen
Diversity when Action is commenced
Diversity or alienage must exist at the time the suit is filed
- it need not exist at the time the cause of action arose
- it is not defeated if after commencement a party later becomes a citizen of the same state as one of his opponents
Citizenship of a Natural Person
the citizenship of a person who is a US citizen is the one US state in which he is domiciled
Establishing a new domicile
domicile may be changed by (1) physical presence in a new place and (2) the intent to make that place your home for the indefinite future
Intent - courts will look to things like a job, buying a house, joining organizations, registering to vote, qualifying for instate tuition
NOTE - domicile is retained until it is changed by meeting both requirements
Citizenship of a Corporation
A corporation is deemed to be a citizen of every state and foreign country in which it is incorporated and the one state or foreign country in which it has its principal place of business
Principal Place of Business
the state from which the corporation’s high level officers direct, control, and coordinate the corporations activities (known as the nerve center)
Citizenship of an Unincorporated Association
an unincorporated association takes on the citizenship of all its members
if its a limited partnership, you include the citizenship of general and limited partners
Citizenship of decedents, minors, and incompetent
the citizenship of the decedent, minor, or incompetent is determinative (not the representative)
Citizenship of Class Actions
The citizenship of class actions is that of the named representative of the class
Nonresident US Citizen
a US citizen domiciled abroad is not a citizen of any state and also not an alien
Amount in Controversy Requirement
The matter in controversy must exceed $75,000, exclusive of interests and costs
The amount is determined from what is complained in the complain, disregarding potential defenses and counterclaims
All that is required is a good faith allegation in the complaint that the amount of damages or injuries in controversy exceeds the sum of $75,000
Legal impossibility (amount in controversy)
the complaint can be dismissed for failing the amount in controversy requirement only if it appears there is no legal possibility of recovery exceeding the jurisdictional amount
NOTE - jurisdiction is not defeated retroactively by the fact the amount actually recovered is less than the jurisdictional amount
Aggregation of Claims
For the purposes of meeting the jurisdictional amount, any single plaintiff may aggregate all of her claims against a single defendant (regardless of whether the claims are related)
A plaintiff who has an action against several defendants cannot aggregate claims based on separate liabilities
If the plaintiff asserts a joint claim against multiple defendants, the court looks to the claim’s total value to determine whether the amount in controversy is met
Equitable Relief (amount in controversy)
If a claim is seeking equitable relief, the court will determine whether the amount in controversy requirement is met through one of the following tests
Plaintiff’s Viewpoint - if granted, does the relief requested have a value of more than $75,000 to the plaintiff?
Defendant’s viewpoint - if granted, will the relief requested by the plaintiff cost the defendant more than $75,000?
Exclusions from Diversity Jurisdiction
Even if the requirements for diversity or alienage jurisdiction are met, federal courts decline to hear actions for (1) divorce, (2) alimony, (3) child custody, (4) actions to probate an estate.
Creation of Diversity
Diversity cannot be created improperly or collusively by assigning a claim or joining a party to merely create diversity
A plaintiff can create diversity by changing state citizenship after the cause of action occurred but before suit is commenced, if it is a genuine change of citizenship
Federal Question Jurisdiction
Federal question jurisdiction exists when a plaintiff’s claim arises under federal law
Well Pleaded Complaint Rule
The federal question must appear as part of the plaintiff’s cause of action as set out in a well pleaded complaint
- it is not enough that some federal issue is raised by the complaint
The plaintiff must be enforcing a federal right
a complaint does not create federal question jurisdiction if it alleges federal issues only in anticipation of some defense
Answer and Defense in Federal Question
the contents of the defendant’s answer and defense are irrelevant
the court may not look to a counterclaim to determine whether the plaintiff’s complaint states a federal question
Removal Jurisdiction
a DEFENDANT may sometimes remove an action that was brought by the plaintiff in state court when the action could have originally been brought in the federal courts (plaintiffs can never remove even if a counterclaim is filed)
Remand - if removal is improper, the federal court can remand the case to the state court
SMJ in Removal
for removal to be available, the federal court must have subject matter jurisdiction - either diversity or federal question
State court jurisdiction in Removal
Even when the state court has no jurisdiction because the action is exclusively federal, the federal court may hear and decide the case under its removal jurisdiction
Notice of Removal
The defendant must file a notice of removal - containing a short and plain statement of the grounds for removal and signed under Rule 11 - in federal district court where the action is pending
- a copy must then be sent to adverse parties and to the state court
Thirty Day Removal Rule
The defendant must file a notice of removal within 30 days after receipt/service of the first paper that shows the case is removable
Who must Join Removal
all defendants who have been served with process must join the removal
Multiple Defendants and 30 day rule - If defendants are served at different times, and a later served defendant initiates timely removal, the earlier served defendant may join in the removal even though his 30 day period may have expired
Limitations on Removal in DIVERSITY CASES
In State Defendant Rule - the case should not be removed if any defendant is a citizen of the forum state
One Year Rule - a case may not be removed on the basis of diversity more than one year after it was commenced in state court
Removal Venue
Venue for an action removed is the federal court embracing the state court where the case was filed (even if the venue would be improper had the plaintiff originally filed in federal court)
Remand to State Court
Based on Procedural Defects - if remand is based on reasons other than lack of subject matter jurisdiction (Ex: one year or in state rule), the plaintiff must move to remand no later than 30 days after the filing of the notice of removal (if not plaintiff waives right to remand)
Based on lack of subject matter jurisdiction - a motion to remand based on lack of subject matter jurisdiction may be made at any time
Supplemental Jurisdiction
Supplemental jurisdiction allows a federal court to hear certain CLAIMS over which it would not have an independent basis of subject matter jurisdiction
NOTE: to exercise supplemental jurisdiction, there must be a case that is already in federal court based on diversity or federal question
Process for testing Supplemental Jurisdiction
When there are additional claims:
1) check to see if the claim falls within diversity or federal question jurisdiction
2) if not, check to see whether the court may invoke supplemental jurisdiction
Common Nucleus Test
for the court to exercise supplemental jurisdiction, the claim must arise from a common nucleus of operative fact with the claim that satisfied federal subject matter jurisdiction
The common nucleus test is always met when the claim arises from the same transaction or occurrence of the underlying claim (but common nucleus is broader)
Supplemental Limitation in Diversity Cases
For cases that are in federal court based solely on diversity jurisdiction, claims by plaintiffs generally cannot invoke supplemental jurisdiction
EXCEPTION - when there are multiple plaintiffs, and the claim by one of them does not meet the amount in controversy requirement (must still satisfy diversity)
Supplemental Discretionary Factors
The exercise of supplemental jurisdiction is up to the discretion of the federal court
It can decline to hear the claim if:
1) it presents a complex issue of state law that would predominate the case
2) the claim on which federal subject matter jurisdiction is based is dismissed early in the case
Law applied under diversity jurisdiction (Erie Doctrine)
A federal court, in the exercise of diversity jurisdiction, is required to apply the substantive law of the state in which it is sitting, including the state’s conflict of law rules
However, federal courts will apply federal procedural law
Erie Question Step 1
The first question is whether there is a federal law on point that directly conflicts with state law.
- if yes, the federal law applies so long as it is valid
Valid - a federal rule of civ pro or evidence is presumptively valid if it is arguably procedural
Erie Question Step 2
If there is no federal statute or rule on point, decide whether the issue is substantive or procedural (if substantive apply state law)
Five Substantive Issues (require state law)
1- conflict or choice of law rules
2- elements of a claim or defense
3- statutes of limitations
4- rules for tolling statutes of limitations
5- the standard for granting a new trial because the jury’s damages aware was excessive or inadequate
Erie Question Step 3
If there is no federal law on point and the issue is not one of the five in step 2, the judge must determine whether the issue is substantive or procedural
Factors the judge must weigh:
Outcome determinative - would applying or ignoring the state rule affect the outcome of the case
balance of interests - does either the federal or state system have a strong interest in having its rule applied
forum Shopping - if the federal court ignores state law on this issue, will it cause parties to flock to federal court
Federal Common Law
There is no general federal common law - common law of torts, contract, and property is state law which must be applied in a diversity case
federal courts are free to make federal common law on certain issues (international relations, admiralty, disputes between states, right to sue a federal officer)
IMPORTANT - can create federal common law on preclusion, HOWEVER in a diversity case federal courts apply state law on preclusion
