Subject Matter Jurisdiction (continued), Diversity of Corporate Citizenship and Other Legal Entities), and Amount in Controversy Flashcards
28 U.S.C. § 1332 (c) (1) corporations business diversity jurisdiction
(1) 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, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of–
(A) every State and foreign state of which the insured is a citizen;
(B) every State and foreign state by which the insurer has been incorporated; and
(C) the State or foreign state where the insurer has its principal place of business; and
Hertz v Friend 2010 principal business diversity jurisdiction
Issue
The primary issue was how to determine a corporation’s “principal place of business” for the purposes of establishing diversity jurisdiction under 28 U.S.C. § 1332(c)(1). Specifically, the case sought to resolve the conflicting interpretations among the Circuit Courts regarding whether a corporation’s principal place of business should be identified based on the volume of business activities in a state or the location of its corporate decision-making center (“nerve center”).
Holding
The U.S. Supreme Court held that a corporation’s “principal place of business” is the location where its high-level officers direct, control, and coordinate the corporation’s activities, often referred to as the corporation’s “nerve center.” Typically, this will be the corporation’s headquarters, as long as it is the actual center of direction, control, and coordination, and not merely an office where the corporation holds board meetings.
corporation citizen of a state
if more than half of its gross income
Hertz test
nerve center is the corporation headquarters test for principle place of business
Diefenthal v CAB 1982 corporation diversity jurisdicition
Issue
The primary issue was whether the CAB had the statutory authority under the Federal Aviation Act to regulate smoking on aircraft. Secondary issues involved whether the Diefenthals had a right to injunctive relief against Eastern Airlines for its alleged breach of contract and tortious conduct, and whether their claims met the jurisdictional requirements for federal court.
Holding
The Fifth Circuit Court affirmed the district court’s decision, holding that the CAB did indeed have the statutory authority under the Federal Aviation Act to regulate smoking on aircraft. Furthermore, the court affirmed the dismissal of the Diefenthals’ claims against Eastern Airlines for lack of jurisdiction, concluding that the plaintiffs failed to demonstrate the required jurisdictional amount for federal court.
75,000 Diversity Defendants
The plaintiff must prove each defendant has a claim of $75,000. It can not add up tp $75000 among defendants
what is the well pleaded rule
determines if a federal court has jurisdiction over a case focusing on the plaintiff’s complaint
Determines whether a federal court has jurisdiction over a case, focsuing on the plaintiff’s cmplaint.
1. Federal question jurisdiction
2. Complaint must explicity or implicity raise a federal issue
3. Courts consider only the plaintiff’s allegations. not defense
demurred
means the defendant can claim that legally sufficient a law doesn’t provide a remedy for the conduct alleged.
42 § USC 1983
Violation of civil rights
Justice Holmes Creation Test
looks at a case arises under law that create a cause of action
or
In Motley case Justice Holmes looks at cause of law of action was contract law
Determines the court that personal jurisdiction over an out of state defendant.
Louisville & Nashville Railroad v Motley
The Mottleys, a married couple, were injured in a train accident in Jefferson County, Kentucky, on September 7, 1871. In response to the accident, the Louisville and Nashville Railroad Company granted the Mottleys annual free passes for railroad transportation as part of a settlement agreement with the Mottleys for the injuries they sustained. Many years later, Congress passed the Hepburn Act, which took effect on January 1, 1907. This federal law prohibited certain types of free rail passes. Consequently, the railroad discontinued the Mottleys’ free passes in 1907. In response, the Mottleys filed a lawsuit in federal court, seeking to enforce the settlement agreement for their annual passes. The Mottleys argued that the federal law did not apply to their passes, which were issued as part of a contract before the law was enacted.
The primary issue was whether the federal court had jurisdiction to hear the dispute. Specifically, the question was whether a suit that involves a federal law as a defense to a contract claim qualifies as a “suit arising under the Constitution and laws of the United States,” thereby granting federal courts jurisdiction.
The U.S. Supreme Court held that the federal courts did not have jurisdiction over the Mottley’s claim. The Court ruled that a lawsuit only “arises under” federal law, thus granting federal jurisdiction, if the plaintiff’s original cause of action is based on that federal law. The anticipation of a defense based on federal law is insufficient to establish federal jurisdiction.
