Subject matter jurisdiction (SMJ)

Question 1

Generally

Answer 1

A court’s competence to hear and determine cases of general class and subject to which proceedings in question belong

Question 2

Federal Question

Answer 2

District courts have original jurisdiction (JX) of all civil actions arising under the Constitution, laws, or treaties of the U.S.

Concurrent/exclusive JX—state courts and federal courts have concurrent JX of FQ claims, except when Congress expressly provides that JX of the federal courts is exclusive

Scope
• Express—FQ exists if cause of action (c/a) in question is expressly created by federal law and federal law provides the underlying right
• Implied—FQ likely to be found if right is created by federal law, and a c/a can be fairly implied and was intended by Congress
• Not express/implied—complaint must involve real and substantial issue of federal law and its determination must necessarily depend on resolution of federal issue

Well-pleaded complaint—FQ exists only when federal issue is presented on the face of the complaint (P’s c/a—not defenses, answers or counterclaims)

No amount-in-controversy requirement

Question 3

Diversity jurisdiction

Answer 3

Federal courts have JX when parties are citizens of different states or citizens of a state and citizens of a foreign state, and amount in controversy exceeds $75,000.

Complete diversity—no diversity if any P is a citizen of the same state or citizen of the same foreign country as any D in the case

Citizenship of parties
• Individuals—domicile is state in which person is present and intends to reside for an indefinite period; person can only have one domicile at a time; and domicile determined when action is commenced
• Corporations—citizenship is state of incorporation and state where it has its principal place of business (“nerve center” from which the high-level officers direct, control, and coordinate the activities of the corporation)

Creating/destroying diversity—assignment of claims, failure to name indispensable parties, voluntary change of state citizenship, and replacement of parties

Amount in controversy
• Standard of proof—P’s good-faith assertion in complaint is sufficient unless there is legal certainty that P cannot recover alleged amount
• Aggregation of claims—permitted for multiple Ps with common/undivided interest (counterclaims generally not counted in determining whether P has met amount)
• Permissive counterclaim must meet jurisdictional amount requirement; compulsory counterclaim need not

Question 4

Supplemental jurisdiction

Answer 4

1. Federal court with JX may exercise SJ over additional claims which court would not independently have SMJ (usually state law claims against a nondiverse D), but that arise out of a “common nucleus of operative fact” such that all claims should be tried in a single judicial proceeding
2. FQ—additional claims against same party can be heard through SJ if common nucleus of operative fact test is met (same requirements for pendent JX over claims involving joinder or intervention of additional parties)
3. DJ
   • Permissive joinder—addition of a plaintiff asserting additional claim cannot violate complete diversity rule (and not required to satisfy jurisdictional amount)
   • Counterclaims—compulsory counterclaims need not satisfy jurisdictional amount, but permissive counterclaims must satisfy both DJ requirements
   • Cross-claims—okay if they arise out of same transaction/occurrence as long as court has SMJ (and do not need to satisfy either DJ requirement)

Question 5

Removal jurisdiction

Answer 5

1. D may generally remove case from state court to federal district court having SMJ
2. Determination
   • Generally—right to remove determined by pleadings filed when petition to remove is filed
   • DJ—diversity must exist at time of filing of original action as well as at time notice of removal is filed
3. DJ—if removal based solely on DJ, claim may be removed only if no D is a citizen of the state in which the action was filed
4. FQ—if FQ claims are joined with claims that aren’t independently removable, entire case may be removed
5. Notice
   • D must file notice within 30 days after receipt by or service on the D of the initial pleading
   • FQ—only Ds against whom federal claim is filed must consent/join in removal
   • Removal based on DJ—cannot occur more than one year after action is commenced (unless P acted in bad faith)
6. Remand
   • Lack of SMJ—any time before final judgment is rendered
   • Other reasons—motion to remand for any defect other than SMJ must be within 30 days after filing of notice of removal