Subject Matter Jurisdiction Flashcards
Subject matter jurisdiction
The term “subject matter jurisdiction” refers to a court’s competence to hear and determine cases of the general class and subject to which the proceedings in question belong. The five most common congressional grants of subject matter jurisdiction are (i) federal question jurisdiction, (ii) diversity jurisdiction, (iii)supplemental jurisdiction, (iv) removal jurisdiction, and (v) legislative jurisdiction.
Waiver fo SMJ
Subject matter jurisdiction cannot be waived or agreed to by the parties, unlike personal jurisdiction
objection to subject matter jurisdiction
An objection to subject matter jurisdiction can be presented by any party at any stage of a proceeding, including on appeal, or may be raised by the court. If, however, the issue of subject matter jurisdiction was not contested, then a judgment ordinarily may not be challenged collaterally on that basis.
Abstention of federal court from trying a case
In general, a federal court with subject matter jurisdiction is required to adjudicate the controversy despite the pendency of a similar action in a state court.
When is the federal court permitted to abstain from hearing a case?
A federal court may abstain from hearing a case or stay the matter pending the outcome of the state court action under the following limited circumstances:
i) Resolution of a state law issue by the state court would eliminate the need for the federal court to decide a federal constitutional issue
ii) Avoidance of federal involvement with a complex state regulatory scheme or matter of great importance to the state
iii) The state action involves punishment of an individual for criminal activity or for contempt of court, or the imposition of a civil fine, and the federal court is asked to enjoin such activity
iv) Parallel proceedings that go beyond mere waste of judicial resources, such as when there is a federal policy of unitary adjudication of the issues
When is federal intervention is appropriate?
There are limited circumstances when federal intervention is appropriate. If a plaintiff can demonstrate unusual circumstances calling for federal equitable relief, significant and dire irreparable injury, or prosecutorial bad faith, then a federal court may intercede.
Federa Question Jurisdiction
Article III, Section 2 of the U.S. Constitution provides that federal judicial power shall extend to all cases “arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority.” This constitutional provision authorizes Congress to give federal courts such jurisdiction.
Concurrent versus Exclusive Jurisdiction
State and federal courts have concurrent jurisdiction of federal question claims, except when Congress expressly provides that the jurisdiction of the federal courts is exclusive, as it has with cases under the Securities and Exchange Act of 1934, patent trademark, and copyright cases, and bankruptcy proceedings
What are considered to be federal laws?
Federal law includes the U.S. Constitution, federal statutes, federal administrative regulations, and U.S. treaties. State laws incorporating standards of federal law are not considered laws of the United States for the purposes of § 1331.
Well-Pleaded Complaint
Federal question jurisdiction exists only when the federal law issue is presented in the plaintiff’s complaint. This is the “well-pleaded complaint.”
Can defenses be considered to establish federal question jurisdiction?
Under the well-pleaded complaint rule, the determination of jurisdiction must be made by considering only the necessary elements of the plaintiff’s cause of action and not potential defenses.
Original and removal jurisdiction
The well-pleaded complaint rule applies both to the original jurisdiction of the federal court and to removal jurisdiction
Diversity Jurisdiction
Article III, Section 2 of the U.S. Constitution permits Congress to extend federal judicial power to controversies “between citizens of different states … and between a state or the citizens thereof, and foreign states, citizens or subjects.”
What cases can the federal court have DJ over?
Under § 1332, Congress gave the U.S. district courts jurisdiction over actions when:
i) The parties to an action are:
a) Citizens of different states;
b) Citizens of a state and citizens or subjects of a foreign state;
c) Citizens of different states and citizens or subjects of a foreign state are additional parties; or
d) A foreign state as plaintiff and citizens of a state or different states; and
ii) The amount in controversy in the action exceeds $75,000.
State law exclusions
Two areas of state law are generally excluded from diversity jurisdiction: probate matters (probate of a will or administration of an estate) and domestic relations actions (divorce, alimony, custody disputes). Note, though, that these exceptions apply only to cases that are primarily probate or marital disputes.
Complete diversity
Diversity jurisdiction requires complete diversity between opposing parties in a case. There is no diversity of citizenship if any plaintiff in the case is a citizen of the same state as any defendant in the case or if any plaintiff and any defendant are aliens (i.e., citizens of a foreign country).
Federal Interpleader Act
Under 28 U.S.C. § 1335, the Federal Interpleader Act, the holder of property that is claimed by two or more persons may deposit the property with a court to determine ownership. Under the Act, there need be only two adverse claimants of diverse citizenship to establish federal jurisdiction.
Class actions greater than $5,000,000
For certain class actions in which the amount at issue totals more than $5,000,000, diversity will be met if any member of the plaintiff class is diverse with any defendant. § 1332(d)(2)(A).
Multiparty, Multiforum Trial Jurisdiction Act of 2002
Under § 1369(a), for a civil action that “arises from a single accident, where at least 75 natural persons have died in the accident at a discrete location,” only one plaintiff need be of diverse citizenship from one defendant for a federal court to have diversity jurisdiction, if:
i) A defendant resides in a state and a substantial part of the accident took place in another state or other location, regardless of whether that defendant is also a resident of the state where a substantial part of the accident took place;
ii) Any two defendants reside in different states, regardless of whether such defendants are also residents of the same state or states; or
iii) Substantial parts of the accident took place in different states.
Multiparty, Multiforum Trial Jurisdiction Act of 2002 exceptions
Even if those requirements are met, however, under § 1369(b), the district court must abstain from hearing the case if:
i) The substantial majority of all plaintiffs are citizens of a single state of which the primary defendants are also citizens; and
ii) The claims asserted will be governed primarily by the laws of that state.
The Act also provides:
i) That anyone involved in the accident is permitted to intervene as a plaintiff; and
ii) Nationwide service of process.
Citizenship of Individuals
To be a citizen of a state for the purposes of § 1332, an individual must be a citizen of the United States and a domiciliary of the state.
Domicile
In general, an individual is a domiciliary of the state in which she is present and intends to reside for an indefinite period
When is domicile determined
Domicile is determined at the time the action is commenced. Once subject matter jurisdiction has been established, it will not be affected by a party’s change of domicile.
Factors considered to determine domicile
Some factors used in determining domicile include whether a party exercises civil and political rights (e.g., registration to vote), pays taxes, owns real and personal property, and is employed in the state.
When does Diversity jurisdiction based on alienage exist?
Diversity jurisdiction based on alienage exists when there are one or more citizens or subjects of a foreign country (i.e., aliens) on one side of the lawsuit and one or more citizens of a state on the other. There is no diversity jurisdiction in an action by one foreign citizen or subject against another, nor is there jurisdiction when an action is between a citizen of a state and an alien admitted into the United States for permanent residence who is domiciled in the same state as the citizen. § 1332(a)(2).
Stateless Citizens
Diversity jurisdiction does not exist if a party is an alien who is present in the United States and is not a citizen or subject of a foreign country, or if a party is a U.S. citizen whose domicile is a foreign country. Such persons are neither citizens of the United States nor citizens or subjects of a foreign country for the purposes of diversity jurisdiction.
Citizenship when theres a representative
The legal representative of a minor, an incompetent, or an estate of a decedent will be deemed a citizen of the same state as that minor, incompetent, or decedent. § 1332(c)(2). As to trusts, the old rule was that they were deemed to be a citizen of the same state as the trustee.
Diversity in a class action
Diversity in a class action brought pursuant to Rule 23 will generally be determined by the citizenship of the named members of the class bringing the lawsuit. (See § VI.E. Class Actions, infra, for a discussion of class actions under Rule 23.)
Citizenship of a corporation
A corporation may be a party to a diversity action. Under § 1332(c), for the purposes of diversity jurisdiction, “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.” Thus, corporations, unlike individuals, may be citizens of more than one state for diversity purposes, and diversity jurisdiction will be destroyed if any opposing party is a citizen of any of the states in which the corporation has citizenship.
Can the pleader challenge wither the PPB or the state of inc. should be applied?
A pleader does not have the option of alleging that a corporation’s citizenship is either its state of incorporation or the state where the principal place of business is located; both states must be listed in the pleading.
A corporations state of incorporation
A corporation’s state of incorporation is the state in which the corporate entity is legally established. Every corporation has at least one state of incorporation, and some have multiple states of incorporation. If a corporation is incorporated in more than one state or foreign country, then it is considered a citizen of each state and foreign country in which it is incorporated.
A corporations principle place of business
Determining where a corporation maintains its principal place of business is a question of fact more complicated than determining where a corporation is incorporated. A “principal place of business” refers to the “nerve center” of the corporation.
The nerve center
The nerve center is generally the location from which the high-level officers direct, control, and coordinate the activities of the corporation. Typically, the nerve center is the corporate headquarters.
Foreign corporations
A foreign corporation will be deemed a citizen of the country in which it is incorporated. In addition, if the foreign corporation also has its principal place of business in the United States, then it will have citizenship in the state where the principal place of business is located.
Partnerships and other unincorporated associations
Generally
An unincorporated association, such as a partnership, is considered a citizen of each state in which each of its members is domiciled. Thus, it is possible that a partnership could be a citizen of all 50 states, if it had partners domiciled in every state. This rule holds for both general and limited partnerships; a limited partnership will therefore be a citizen of every state in which its general and limited partners are domiciled
Exceptions for Partnerships and other unincorporated associations
Generally
An unincorporated association, such as a partnership, is considered a citizen of each state in which each of its members is domiciled. Thus, it is possible that a partnership could be a citizen of all 50 states, if it had partners domiciled in every state. This rule holds for both general and limited partnerships; a limited partnership will therefore be a citizen of every state in which its general and limited partners are domiciled
Failure to name indispensable parties
The parties may not manufacture diversity jurisdiction by failing to join a nondiverse indispensable party.
Changing citizenship
A party may voluntarily change state citizenship after the accrual of a cause of action, but before the commencement of a lawsuit, and therefore establish or defeat diversity jurisdiction.
A party’s motive for changing citizenship is irrelevant, but the change of state citizenship must be genuine to be recognized. In determining whether a party’s change of state citizenship is genuine, a court may consider whether the party changed her domicile specifically to create or destroy diversity.
Injunctive relief and the amount in controversy
In the case of injunctive relief, when it is difficult to assess a dollar amount, the court determines both the value of the plaintiff’s harm if an injunction is not imposed and the defendant’s cost of complying with an injunction. If the amount of either exceeds $75,000, then the amount-in-controversy requirement is satisfied. § 1332(a).
What costs can be included in the amount?
Although interests and costs are excluded from the amount in controversy, attorney’s fees may be made part of the amount in controversy if the fees are recoverable by contract or statute. Punitive damages, as well, may be permitted to be made part of the amount in controversy.
How does the court determine the validity of the amount?
In general, a plaintiff’s good-faith assertion in the complaint that the action satisfies the amount-in-controversy requirement is sufficient, unless it appears to be a legal certainty that the plaintiff cannot recover the amount alleged
Aggregation of claims by a single plaintiff against a single defendant
If the action involves only one plaintiff and one defendant, then the total value of the plaintiff’s claims is calculated to determine the amount in controversy.
Aggregation of claims by multiple plaintiffs
If the action involves multiple plaintiffs, then the value of their claims may be aggregated only if the multiple plaintiffs are enforcing a single title or right in which they have a common or undivided interest.
Aggregation of multiple plaintiffs each having separate and distinct claims
If the aggregate claims of at least one plaintiff separately meet the amount-in-controversy requirement, then the court has diversity jurisdiction over that plaintiff’s claims, provided the diversity-of-citizenship requirement is met. The court may also have supplemental jurisdiction over the claims of any other plaintiff, even though that plaintiff’s claims do not meet the amount-in-controversy requirement
Aggregation by a single plaintiff against multiple defendants
The value of a single plaintiff’s claims against each defendant may not be aggregated if the claims are separate and distinct. If the defendants are jointly liable to the plaintiff, then aggregation to meet the amount-in-controversy requirement is permissible.
Aggregation in class action suits
In general, if any member of the putative class does not have a claim that meets the statutory jurisdictional amount, then the amount-in-controversy requirement will not be met. Though, that the Class Action Fairness Act of 2005 amended § 1332(d) to permit aggregation of claims in certain class actions.
If plaintiff in a putative class has a claim that meets the statutory amount, can the court hear claims of those who don’t meet the amount?
When at least one representative plaintiff in a putative class action has a claim that meets the statutory jurisdictional amount, other persons with claims that do not meet the jurisdictional amount can be made part of the class under the doctrine of supplemental jurisdiction.
Does a counter claim need to meet the statutory amount?
Generally, a counterclaim by a defendant against a plaintiff is not counted for the purposes of determining whether the plaintiff has met the statutory jurisdictional amount.
Compulsory counterclaims
A compulsory counterclaim, which is generally a claim arising out of the same transaction or occurrence as the plaintiff’s claim, does not have to meet the statutory jurisdictional amount requirement to be considered by the court. The court will have supplemental jurisdiction over the compulsory counterclaim
Permissive counterclaims
A permissive counterclaim, which is a claim arising out of a transaction that is unrelated to the plaintiff’s claim has to meet the statutory jurisdictional amount requirement.
What if the counterclaim meets the amount but the original did not?
When a diverse defendant makes a permissive counterclaim under state law for more than the federal statutory jurisdictional amount, and the plaintiff’s claim is for less than the federal statutory jurisdictional amount, the defendant is not permitted to remove the case to federal court.
Supplemental jurisdiction
A district court with jurisdiction over a claim may exercise “supplemental jurisdiction” over additional claims over which the court would not independently have subject matter jurisdiction (usually state law claims against a nondiverse defendant) but that are so related to the original claim that the additional claims form part of the same case or controversy.
How does a court determine whether SJ exists?
In judging whether the claims are related, the test is whether they arise out of a “common nucleus of operative fact” such that all claims should be tried together in a single judicial proceeding
Federal question claim as the original claim and SJ
When the district court’s subject matter jurisdiction for a claim is based on the existence of a federal question, additional claims against the same party can be heard by the court through the exercise of supplemental jurisdiction if the common-nucleus-of-operative-fact test is met.
Pendent party jurisdiction
Joinder and intervention
A district court may have supplemental jurisdiction over claims that involve the joinder or intervention of additional parties over which the court would not otherwise have jurisdiction if the claims involving the additional parties satisfy the common-nucleus-of-operative-fact test.
What happens to the state claim if the federal question claim was dismissed?
Dismissal of a federal claim on the merits does not preclude a federal court from exercising pendent-party jurisdiction over the state claim.
Diversity jurisdiction as claim as the original claim and SJ
When a district court has diversity jurisdiction over a claim, the common-nucleus-of-operative-facts rule also applies to determine whether the court can exercise supplemental jurisdiction over an additional claim.
Can the court hear the additional claim if it does not meet the amount in controversy?
Although the additional claim is not required to satisfy the amount-in-controversy requirement for purposes of supplemental jurisdiction, when the additional claim is asserted by a plaintiff seeking to join the action under Rule 20 (permissive joinder), the addition of that party cannot result in a violation of the requirement for complete diversity of citizenship.
Counter claims under diversity jurisdiction and how it effects SJ
A counterclaim may be asserted by a defendant against a plaintiff without satisfying the jurisdictional amount when the counterclaim is compulsory. A permissive counterclaim does not qualify for supplementary jurisdiction and therefore must satisfy the jurisdictional amount and the rule of complete diversity.
Cross claims under diversity jurisdiction and how it effects SJ
A cross-claim may be asserted by a defendant against another defendant or by a plaintiff against another plaintiff if the cross-claim arises out of the same transaction or occurrence as the initial claim, without regard to the amount in controversy or the citizenship of the parties to the cross-claim as long as the court has subject matter jurisdiction.
Precluded claims in diversity cases
Under § 1367(b), in actions in which the original jurisdiction of the federal court is based solely on diversity jurisdiction, supplemental jurisdiction is precluded for:
i) Claims by existing plaintiffs (but not defendants) against persons made parties under one of the following Federal Rules of Civil Procedure: Rule 14 (impleader), Rule 19 (compulsory joinder), Rule 20 (permissive joinder), or Rule 24 (intervention);
ii) Claims by persons to be joined as plaintiffs pursuant to Rule 19; and
iii) Claims by persons seeking to intervene as plaintiffs pursuant to Rule 24, when the exercise of supplemental jurisdiction over such claims would be inconsistent with the requirements for diversity jurisdiction under 28 U.S.C. § 1332.
When can a district court decline to exercise supplemental jurisdiction over a claim that would otherwise qualify for supplemental jurisdiction?
i) The supplemental claim raises a novel or complex issue of state law;
ii) The supplemental claim substantially predominates over the claims within original federal jurisdiction;
iii) All of the claims within the court’s original jurisdiction have been dismissed; or
iv) In exceptional circumstances, if there are other compelling reasons for declining jurisdiction.
Removal jurisdiction
Any civil action commenced in a state court that is within the original jurisdiction of a U.S. district court may generally be removed by the defendant to the district court for the district and division in which the state court action is pending
Remanding a case that has been removed
The removal statute specifically requires the case to be removed to the district court for the district and division in which the state court action is pending. Consequently, a case that is removed to a district court that is within the state but outside the district or division of the original state court is subject to a motion to remand.
Removal of Separate and Independent Claims in a Federal Question Jurisdiction Case
If removal is sought on the basis of federal question jurisdiction, and the federal question claims in the state action are joined with claims that are not independently removable, then the entire case may be removed. The district court must then sever and remand to the state court any claims in which state law predominates.
Remand for lack of subject matter jurisdiction
If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, then the case must be remanded to the state court from which it came. § 1447(c).
For the purposes of § 1447(c) and (d), however, when a case is remanded to a state court because the federal district court declines to exercise supplemental jurisdiction, the remand is not based on a lack of subject matter jurisdiction.
