Subject Matter Jurisdiction - Diversity in the Federal Courts

Question 1

US Constitution Article III, Section 1

Answer 1

The power of the federal government rests in the Supreme Court and whatever inferior courts Congress makes

Question 2

Diversity

28 U.S.C. § 1332(a)

Answer 2

(a) federal district courts may hear cases where the matter in controversy is above $75,000 and is between

1. citizens of different states
2. citizens of a state and citizens or subjects of a foreign state, except between citizens of a state and foreigners who are legally in the United States and are domiciled in the same state
3. citizens of different states and in which citizens or subjects of a foreign state are additional parties; and
4. a foreign state as a plaintiff and citizens of a state or different states.

Question 3

Gordon v. Steele

District Court of Western Pennsylvania 1975

Answer 3

A person must have residence in a state and must intend to stay there indefinitely to have domicile. A vague possibility of leaving in the future does not defeat domicile. You don’t lose an old domicile until you establish a new one.

Domicile is decided by the date of filing.

Question 4

The Complete Diversity Rule

Strawbridge v. Curtiss 7 U.S. 267 (1806)

Answer 4

No plaintiff can have the same domicile as a defendant

Question 5

Domicile

Mas v. Perry

5th Circuit - 1974

Answer 5

A person’s domicile is the place of “his true, fixed, and permanent home and principal establishment” which he intends to return to. A change in domicile only happens if (1) the person moves to a different domicile and (2) intends to stay there.

Question 6

Domestic Disputes and Diversity

Akenbrandt v. Richards

SCOTUS - 1992

Answer 6

The diversity statute does not give jurisdiction over most domestic disputes

Question 7

Corporation as a Citizen

28 U.S.C. § 1332(c)(1)

Answer 7

A corporation is 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.”

Question 8

Principle Place of Business

Hertz Corp. v. Friend

SCOTUS 2010

Answer 8

A corporation’s “principle place of business” is where its high level officers control, direct and coordinate its activities – its headquarters.

Question 9

Non Incorporated Companies

Answer 9

For companies that are not incorporated, the domicile for each member is counted for diversity jurisdiction

Question 10

Demurrer

Answer 10

A demurrer is a defendant’s motion to dismiss the complaint for failure to state a claim

Question 11

Good Faith for Damages Under Diversity Jurisdiction

St. Paul Mercury Indemnity Co. v. Red Cab Co.,

SCOTUS 1938

Answer 11

If a plaintiff claims she could receive $75,000 in damages and the claim seems to be in good faith, the court will give her the benefit of the doubt. Cases will only be dismissed if the facts clearly show a jury could not award over $75,000.

Question 12

Unsupported Amount-in-Controversy Claims

Diefenthal v. C.A.B.

5th Circuit - 1982

Answer 12

Although the damage amount claimed by the plaintiff in good faith will generally control in a diversity jurisdiction assessment, the amount in controversy requirement will not be satisfied by an unsupported claim for damages.

Question 13

Assessing Intangible Damages for the Amount-in-Controversy Requirement

Answer 13

When the damages are intangible – like emotional distress or pain and suffering – the judge looks at the plaintiff’s injuries to estimate an amount

Question 14

Aggregating Claims to Meet the Amount Requirement - Single Plaintiff

Answer 14

A plaintiff may add together every claim she has against a signal defendant to meet the amount-in-controversy requirement

Question 15

Aggregating Claims to Meet the Amount Requirement - Co-Plaintiffs

Answer 15

Co-plaintiffs cannot add their claims together to meet the amount-in-controversy requirement. They each must have a claim of over $75,000 against the defendant

Question 16

Aggregating Claims to Meet the Amount Requirement - Co-Plaintiffs Exception

Answer 16

If the first plaintiff exceeds the amount-in-controversy requirement, a second plaintiff can tag onto it even if his claim doesn’t met the requirement.

Question 17

Aggregating Claims to Meet the Amount Requirement - Joint Plaintiffs

Answer 17

Plaintiffs may sue in a joint claim if it’s indivisible in some way ex. tenancy by the entirety

Question 18

Aggregating Claims to Meet the Amount Requirement - Counterclaims

Answer 18

Counterclaims cannot be aggregated to meet the amount-in-controversy requirement.

Question 19

Aggregating Claims to Meet the Amount Requirement - Multiple Defendants

Answer 19

A plaintiff cannot add her suits against multiple defendants; each case must meet the amount requirement, except if the defendants represent an undivided interests.

Question 20

Federal Interpleader Act

Answer 20

The Federal Interpleader Act authorizes jurisdiction over certain cases involving multiple claimants to the same property and allows federal district courts to hear actions as long as at least two of the claimants are diverse.

Question 21

Class Action Fairness Act

Answer 21

The Class Action Fairness Act allows nationwide class actions to be brought in federal court or removed to federal court if any member of the plaintiff class is diverse from any defendant, and the amount in controversy (for the entire class) exceeds $5 million.