basics Flashcards
(13 cards)
Four investors, all of whom are American citizens, own as a partnership a chain of 15 car dealerships in a number of states. Two of the investors live in State A, one lives in State B, and one lives in State C. The investors leave the day-to-day operation of each dealership to a manager that the partnership employs. The investors leave the management of the entire chain of dealerships and the day-to-day operation of the partnership to several key officers that it employs. The officers operate out of the partnership’s largest dealership, which is in State D. A customer of the State D dealership sued the partnership in federal district court in State D, alleging fraud and breach of contract arising from her purchase of a car, and claiming, in good faith, damages exceeding $75,000. The customer is a citizen of State D.
Does the federal district court in State D have subject matter jurisdiction over the customer’s action against the partnership?
A) Yes, because the federal district court is located in State D and not another state.
B) Yes, because the plaintiff customer is a citizen of State D while the defendant partnership is a citizen of State A, State B, and State C.
C) No, because the plaintiff customer is a citizen of State D and the defendant partnership is also a citizen of State D, the state where its principal place of business is located.
D) No, because federal courts do not have subject matter jurisdiction over local transactions that take place entirely in one state.
The court has subject matter jurisdiction. Diversity of citizenship jurisdiction is available when (i) there is complete diversity of citizenship, meaning that each plaintiff is a citizen of a different state from every defendant; and (ii) the amount in controversy exceeds $75,000. A natural person’s citizenship is the state that is the person’s permanent home. A partnership is a citizen of each state of which one of its partners is a citizen, both limited and general. Here, the plaintiff is a citizen of State D, and the partners are citizens of State A, State B, and State C. Thus, complete diversity exists, and the amount in controversy is stated to exceed $75,000. As a result, diversity of citizenship jurisdiction exists. (A) is incorrect because diversity would be present in any federal court. Subject matter jurisdiction would thus exist in any federal court. (C) is also incorrect. A corporation’s principal place of business is one of its possible citizenships-every state in which the corporation was incorporated being the other possible citizenships. The same rule does not apply to partnerships; a partnership takes on the citizenships of its partners. (D) is an incorrect statement of the law. The fact that the transaction was local does not preclude subject matter jurisdiction founded on diversity of citizenship jurisdiction.
A party’s state citizenship for purposes of diversity jurisdiction is determined:
A) When the lawsuit is filed
B) When the cause of action accrues
C) When the lawsuit is filed, but if a party changes his state citizenship after the lawsuit is filed, the new state citizenship controls
D) When the lawsuit is filed (for a claimant) or when process is served (for a defendant)
Diversity of citizenship is determined when the lawsuit is filed. Diversity need not exist when the cause of action accrues, and it is not defeated if a party changes his state citizenship after the lawsuit is filed. Hence, those choices are incorrect. State citizenship for diversity purposes is not controlled by service of process. Thus, the choice that includes “when process is served (for a defending party)” is incorrect.
While working on a site in State A, a State B construction worker was standing near a steel crane when the crane’s boom swung near a high tension power line. The worker was electrocuted and severely injured. The worker filed an action in federal district court against the power company that owns the power lines. The action seeks $500,000 and alleges that the power company’s negligent construction, maintenance, and operation of the power lines caused the injury. The power company is a State A corporation and all its operations are in State A. The power company filed a third-party complaint against the owner-operator of the crane, a State B citizen. The third-party claim is based on state law and alleges that the crane’s owner-operator is liable to the power company for any liability the power company has to the injured worker. The worker amended his complaint to add a state law negligence claim for $500,000 against the crane’s owner-operator.
Does the federal court have subject matter jurisdiction over the worker’s claim against the owner-operator of the crane?
A) No, because the court does not have supplemental jurisdiction over the worker’s claim against the owner-operator of the crane.
B) Yes, because the claim arose from the same transaction or occurrence as the worker’s claim against the power company.
C) Yes, because all claims asserted arose from a common nucleus of operative fact.
D) Yes, because the State B worker has sufficient contacts with State A.
The court does not have subject matter jurisdiction over the worker’s claim against the owner-operator of the crane. Diversity of citizenship jurisdiction is available when (i) there is complete diversity of citizenship, meaning that each plaintiff must be a citizen of a different state from every defendant; and (ii) the amount in controversy exceeds $75,000. The citizenship of an individual is his domicile, and a corporation is a citizen of every state in which it is incorporated and the one state in which it has its principal place of business. Here, the worker is from State B and the power company is a State A corporation with all its operations (and therefore its principal place of business) in State A. The plaintiff’s claim is for $500,000, satisfying the amount in controversy requirement. Accordingly, there is diversity of citizenship jurisdiction over this claim. Once one claim satisfies the requirements for original federal subject matter jurisdiction, the court has discretion to exercise supplemental jurisdiction over related claims that derive from the same common nucleus of fact and are such that a plaintiff would ordinarily be expected to try them in a single judicial proceeding. However, for cases based solely on diversity, supplemental jurisdiction is not available for claims by the plaintiff against persons made parties under the impleader rules when use of supplemental jurisdiction would be contrary to the requirements of diversity jurisdiction. In the instant case, the owner-operator shares state citizenship with the worker and was made a party when the power company impleaded him on a claim for indemnity. Because a claim by the worker against the owner-operator would circumvent the complete diversity requirement, supplemental jurisdiction is not available for that claim. Hence, (A) is correct. (B) and (C) are incorrect because supplemental jurisdiction cannot be used to override the requirements of diversity jurisdiction for claims by a plaintiff against an impleaded party (as is the case in this question). (D) is an incorrect statement of law, and irrelevant. First, subject matter jurisdiction (the power to hear a case) must be distinguished from personal jurisdiction (the power over a particular defendant). A court technically may have subject matter jurisdiction (for example, when diversity jurisdiction is satisfied) without having personal jurisdiction over one of the defendants because the defendant has insufficient contacts with the jurisdiction. Furthermore, a plaintiff consents to the personal jurisdiction of the court by filing suit. Here, that means the State B worker submitted to personal jurisdiction in State A by filing suit.
What does supplemental jurisdiction do?
gets additional claims into federal court even though those claims cannot invoke diversity or federal question jurisdiction; it does not get a case into federal court
A case is in federal court based on federal question jurisdiction. If the defendant files a counterclaim that meets requirements of diversity or federal question jurisdiction, does the defendant need to invoke supplemental jurisdiction?
HELL NOOO
What are the steps for seeing if there is supplemental jurisdiction?
1) Is the case properly in federal court (does federal question or diversity jurisdiction exist)?
2) Does additional claim being asserted satisfy either of the above (2) subject matter jurisdictional requirements? If so, no supplemental jurisdiction necessary.
3) Does the claim arise from common nucleus of operative fact as the claim already existing in federal court case? (when a claim arises from the same transaction/occurrence as the claim in federal court [test] always satisfies common nucleus test)
3) Does an exception to claims that satisfy the common nucleus test exist?
The exception only applies to cases that got into federal court based on diversity jurisdiction!
4) If the party attempting to join an additional claim is the plaintiff, and the existing federal case invokes diversity jurisdiction, see if the exception to the rule prohibiting this applies:
Are there are multiple plaintiffs & one of the plaintiffs’ claims does not meet the amount in controversy requirement?
Is the case properly removable?
A) No, because the defendant is a citizen of the forum state.
B) No, because the state court has concurrent jurisdiction, making removal improper.
C) Yes, because diversity of citizenship exists and the amount in controversy is more than $75,000.
D) Yes, because a federal question has been presented.
(D) The motion should be granted. The case may be removed because the federal court has federal question jurisdiction over the plaintiff’s action, because it is based on the Civil Rights Act. (A) is incorrect. The limitation on removal by defendants who are citizens of the state in whose court the action was brought applies only to diversity actions. (C) is incorrect. Although diversity of citizenship appears to be present in this action, it is only incidental. The removal statute provides that “any civil action of which the district courts have [federal question jurisdiction] shall be removable without regard to the citizenship or residence of the parties.” [28 U.S.C. §1441(b)] When both a federal question and diversity jurisdiction exist, the federal question jurisdiction normally “trumps” diversity jurisdiction. In any event, if this case were to be solely based on diversity, the defendant could not remove because she is a citizen of the forum state. (B) is incorrect because, although a state court may have concurrent jurisdiction, this jurisdiction, by itself, would not prevent removal.
For venue purposes, a business entity defendant is deemed to reside in:
A) Any judicial district in which the defendant is subject to the court’s personal jurisdiction
B) The judicial district in which the business entity is incorporated
C) The judicial district in which the business entity’s owner is domiciled
D) Any judicial district in which the defendant is subject to the court’s personal jurisdiction with respect to the action in question
A business entity defendant is deemed to reside in any judicial district in which the defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.
The judicial district in which the business entity is incorporated is too narrow an answer. Not all business entities are incorporated.
Any judicial district in which the defendant is subject to the court’s personal jurisdiction is too broad an answer; the entity must be subject to the court’s personal jurisdiction with respect to the particular civil action in question.
The domicile of the business entity’s owner is irrelevant for venue purposes.
Which of the following statements is correct?
A) Objection cannot be made to improper venue
B) Venue is considered to be objected to unless expressly waived
C) Venue objections cannot be waived
D) Venue is considered to be waived unless a timely objection is made
Venue is considered to be waived unless a timely objection (in a pre-pleading motion or, where no such motion is made, in the answer) is made to the improper venue.
There is no presumed objection to venue. However, unlike jurisdiction over the subject matter, venue may be waived by the parties.
When he turned 21, a young man who lived in State A decided to move to a city in State B. He loaded all his possessions in his truck and trailer and set out for State B. While en route, he was involved in a serious accident in State C with a woman driving an SUV, injuring both parties. Because of his injuries, the man has remained in State C for several months. However, he still intends to relocate to the city in State B as soon as he has recuperated and is able to travel. The woman, a citizen and resident of State D, is preparing to file a negligence action in federal district court against the man for the injuries she suffered in the State C accident.
If the woman files the action before the man proceeds to State B, in what federal district or districts is venue proper?
A) The District of State C only.
B) The District of State C and the District of State A.
C) The District of State C and the District of State B.
D) The District of State C, the District of State A, and the District of State B.
Venue is proper in the District of State C and the District of State A. Federal venue in civil actions is proper in (1) the district where any defendant resides, if all defendants are residents of the state in which the district is located; and (2) the district in which a substantial part of the events or omissions giving rise to the claim occurred. If there is no district anywhere in the United States that satisfies (1) or (2), the action may be brought in a judicial district in which any defendant is subject to the court’s personal jurisdiction with respect to such action.
Here, the District of State C is a proper venue because a substantial part of the events giving rise to the claim occurred there. Additionally, at the time of the accident, the man’s domicile was in State A. It remains his domicile until he acquires a new one by being physically present in a new place while intending to make that new place his permanent home. The man did not acquire a new domicile in State B because he has yet to be physically present there (although he does intend to make it his permanent home). As a result, (B) is the correct answer.
(A) is not correct because the answer does not discuss the possibility of venue being based on the man’s domicile. State C was not his domicile, because he does not intend to live indefinitely in State C. As stated above, State A remains his domicile. (C) and (D) are not correct because, as discussed above, the man has not made either place his domicile.
An oil company incorporated in State A has its principal place of business in State B. It drills for oil in several eastern European countries. One of its wells in Latvia malfunctioned, causing an explosion. The explosion severely injured a number of nearby residents and damaged their homes. A number of the injured Latvians filed an action against the oil company in the United States District Court for the District of State B. Nearly all of the relevant witnesses and tangible evidence are in Latvia.
If the oil company wishes to move the case away from the District of State B, which of the following grounds is likely to prove most successful?
A) Dismissal for lack of subject matter jurisdiction.
B) Dismissal for forum non conveniens.
C) Dismissal for improper venue.
D) Dismissal for lack of personal jurisdiction.
The ground most likely to be successful is forum non conveniens. Even if the court has personal jurisdiction over the defendants, subject matter over the action, and venue is proper, the court has discretion to decline to hear the case in deference to a court in another country if it determines that the other country provides a substantially more efficient, convenient, and fair forum (a.k.a., if another court is the center of gravity in the case).
Here, the court might make that determination since the key evidence is in Latvia and since a trial in State B would require extensive translation. In any event, (B) represents the most likely scenario for not having trial in State B because the other choices can be eliminated.
(A) is not correct because the federal court has subject matter jurisdiction over claims by citizens of other countries against citizens of U.S. states, provided the amount in controversy exceeds $75,000. Here, the oil company is a citizen of State A (the state in which it is incorporated) and State B (the state in which it has its principal place of business), and the plaintiffs are from Latvia. Due to the damage caused by the explosion and the number of severe injuries, the amount in controversy requirement is very likely satisfied. Thus, the court has subject matter jurisdiction.
(C) is not correct. Federal venue in civil actions is proper in (1) the district where any defendant resides, if all defendants are residents of the state in which the district is located; and (2) the district in which a substantial part of the events or omissions giving rise to the claim occurred. A corporate defendant is deemed to reside in each district with which it has sufficient contacts to justify personal jurisdiction with respect to the action. As explained below, the oil company is subject to personal jurisdiction in State B. Thus, the oil company resides in the District of State B for venue purposes, making (C) an incorrect answer choice.
(D) is not correct because the court in State B has general personal jurisdiction (that is, jurisdiction for all causes of action) over the oil company because the oil company’s principal place of business is there and thus is “at home” there.
A plaintiff from State A filed a diversity action in the federal court for State B against the defendant from State B, alleging that, 28 months before, the defendant’s negligence committed in State A caused the plaintiff’s damages.
The statute of limitations in State A is two years, whereas the statute of limitations in State B is three years. Each state would apply its own statute of limitations under its own choice of law principles.
The defendant timely moved the federal court for State B to transfer the case to the federal court for State A, alleging that it would be more convenient to the parties and witnesses if trial were held in State A.
If the court grants the motion, which statute of limitations should the court apply?
A) The statute of limitations for State B, because the case was properly filed in the federal court for State B.
B) The statute of limitations for State B, because a statute of limitations is substantive for Erie purposes.
C) The statute of limitations for State A, because the accident occurred there.
D) The statute of limitations for State A, because a federal court is required to apply the statute of limitations of the state in which it sits.
A is Correct. Under 28 U.S.C. section 1391, venue is proper in (i) a judicial district in which any defendant resides, if all defendants reside in the same state in which the district is located; or (ii) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or where a substantial part of the property that is the subject of the action is located. (Note that there is a fallback provision when (i) or (ii) do not apply.) Here, venue was proper either in State B (the domicile of the sole defendant) or in State A (the place of the accident). Under 28 U.S.C. section 1404(a), when a case is properly filed in federal court, the federal district court may nonetheless transfer the case, for the convenience of the parties and witnesses, to another district or division where it might have been brought or to which the parties have consented. When transfer is made under section 1404(a), the law of the transferring court ordinarily applies. (There is an exception when transfer is based on a forum selection clause, but that exception is not applicable under these facts.) Thus, (A) is the correct answer. (B) is incorrect because the fact that a statute of limitations is substantive for Erie purposes is largely irrelevant. There are two questions that might arise in an Erie situation: (i) whether federal or state law applies; and (ii) which state law applies. For the first prong, a statute of limitations is “substantive,” meaning that the federal court must apply a state statute of limitations. (C) is incorrect because the facts state that a State B court would apply its own statute of limitations regardless of where the accident occurred. (D) is incorrect because, although a very superficial correct statement of law that applies when a case is not transferred, the rules on which state law applies change when a case is filed in a correct venue and is transferred for convenience.
A resident of the District of State A properly brought a diversity action in federal court against a resident of the District of State B and a resident of the District of State C for a cause of action that arose from events that occurred in the District of State D.
In which judicial districts is venue proper?
A) Only in the District of State B and in the District of State C.
B) Only in the District of State D.
C) Only in the District of State A.
D) In the District of State B, the District of State C, and the District of State D.
Venue is proper only in the District of State D, where the events giving rise to the claim occurred. (A) and (D) are incorrect because venue is not proper in the judicial district of either defendant’s residence; the rule states that venue is proper in “a judicial district where any defendant resides, if all defendants reside in the same state.” Since the defendants reside in different states, neither of their judicial districts of residence is proper in a single action. (C) is incorrect because State A is not a proper venue because a plaintiff’s residence is not a valid basis for fixing venue.
