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Flashcards in Federal Subject Matter Jurisdiction Deck (42):
1

4 Most Common Grants of Subject Matter Jurisdiction:

1) Diversity jurisdiction

2) Federal question jurisdiction

3) Removal jurisdiction

4) Supplemental jurisdiction

2

Waiver

Subject matter jurisdiction cannot be waived or agreed to by the parties, unlike personal jurisdiction.

3

Objection to Jurisdiction

An objection to subject matter jurisdiction can be presented at any stage of a proceeding, including appeal.

4

U.S. Constitution: Article III, Section 2

  1. Diversity Jurisdiction: "between citizens of different states...and between a state or the citizens thereof, and foreign states, citizens or subjects."
  2. Federal Question: "arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority."

5

Diversity Jurisdiction: 28 U.S.C. § 1332

Congress gives U.S. district courts jurisdiction over actions when (i) the parties to an action are citizens of different states or citizens of a state and citizens or subjects of a foreign state AND (ii) the amount in controversy in the action exceeds $75,000.

6

Complete Diversity Requirement

Diversity jurisdiction requires complete diversity between the parties on different sides of the case. There can be no diversity of citizenship if any Π in the case is a citizen of the same state or is a citizen or subject of the same foreign country as any Δ in the case.

7

Exceptions to Complete Diversity

1) Interpleader

2) Class actions greater than $5 million

3) Multiparty, Multiforum Trial Jurisdiction Act of 2002

8

Interpleader

The Federal Interpleader Act, 28 U.S.C. § 1335, allows the holder of property that is claimed by two or more persons to 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 (i.e., any Δ is diverse from any Π).

9

Class actions greater than $5 million

For certain class actions in which the amount at issue totals more than $5 million, diversity will be met if any member of the Π class is diverse with any Δ. § 1332(d)(2)(A).

10

Multiparty, Multiforum Trial Jurisdiction Act of 2002

Under the Multiparty, Multiforum Trial Jurisdiction Act of 2002, 28 U.S.C. § 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 Π need be of diverse citizenship from one Δ for a federal court to have diversity jurisdiction.

11

Date of determination of diversity

Diversity is determined at the time the case is filed.

12

Determining Party Citizenship

According to § 1332, a person must be:

  1. a citizen of the U.S. and
  2. a domiciliary of the state, entailing that
    • a person is present in the place and
    • intends to remain there indefinitely
  3. EXCEPT in cases of compulsory domicile, such as military or jail.

13

Stateless Persons

Under § 1332, diversity jurisdiction precludes any stateless person such as (A) an alien who is present in the U.S. and who is not a citizen of a foreign state, or (B) a U.S. citizen residing abroad.

14

Corporate Citizenship for Diversity Jurisdiction §1332(c)(1):

  1. It’s place of Incorporation AND
  2. It’s principal place of business

15

3 Tests for Principal Place of Business for subject matter jurisdiction:

  1. Nerve Center Test – (dominant test) Where executive and administrative functions are controlled
  2. Muscle test – Where everyday business activities occur or the business conducts the bulk of its activities
  3. Synthesis of the two – Corporate activities as well as total activities test

16

Factors that can determine citizenship:

  • Where you live and keep clothes/memorabilia
  • Where you vote, pay taxes, have driver's license and other licenses
  • Where work/have offices

17

Domicile for Minors

Takes the domicile of parent(s)/guardian(s) at time of birth and maintains until age of majority.

18

Excluded from Amount in Controversy

No (i) interest, (ii) costs, and (iii) collateral effects of a judgment.

19

Included in Amount in Controversy

a) c/a
b) Punitive damages
c) Attorney's fees IF fees are recoverable by contract or statute

20

What happens if the amount in controversy, for whatever reason, is reduced below the minimum after the action is filed? 

Nothing, as long as the original claim was made in good faith. Even if the amount Π eventually recovers is less than the statutory jurisdictional amount, that fact will not render the verdict subject to challenge on appeal for lack of jurisdiction.

21

Aggregation of claims for Multiple Π:

A) If multiple Πs are enforcing a signle title/right in which they have a common/undivided interest, then the value of their claims are aggregated.
B) If multiple Πs each have separate and distinct claims, united for convenience or economy, then each Π must separately meet the amount-in-controversy requirement.

 

 

22

Aggregation of claims for a single Π against multiple Δ:

A) If the Δs are jointly liable, then YES.

B) If the claims against each Δ are separate and distinct, then NO.

23

Aggregation of claims for class actions:

Generally, EVERY MEMBER must have a claim that meets the statutory jurisdictional amount. Snyder v. Harris, 394 U.S. 332 (1969); Zahn v. International Paper, 414 U.S. 291 (1973).

**EXCEPTION: Class Action Fairness Act of 2005 amended § 1332(d) to permit aggregation of claims in certain class actions.

24

Federal Court can refuse to exercise juridiction when:

  • a case invoving the same parties is currently pending in another court
  • the case involves issues of state law that the states should rule upon first
  • the state court may have a greater understanding in a complex area of law
  • parallel litigation is pending in another court

25

Federal Question: 28 U.S.C. § 1331

The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the U.S.

26

Exclusive Federal Jurisdiction Prerequisites:

  1. The Constitution must confer the federal court with subject matter jurisdiction (Art. III § 2) AND
  2. Congress must provide subject matter jurisdiction by statute. Congress does NOT need to confer subject  to the full extent the Constitution allows.

27

The presumption against federal jurisdiction requires:

  1. Π must plead properly that fed ju exists under Rule 8(1)(a)
  2. If Δ challenges Π, Π has burden of proving

28

Not considered in Federal Questions:

  1. Defenses ("well-pleaded complaint" rule)
  2. Answers & Counterclaims
  3. Original & Removal Jurisdiction (again, "well-pleaded complaint rule)
  4. Amount-In-Controversy

29

"Well-Pleaded Complaint" Rule

Federal question juridiction exists only when the federal law issue is presented in Π's complaint. Louisville & Nashivile Railroad v. Mottley, 211 U.S. 149 (1908).

30

Removal Jurisdiction: 28 U.S.C. § 1441(a)

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 Δ to the district court for the district in which the state court action was commenced. This right is not available to a Π, even in the case of a Π defending a counterclaim that could have originally been brought in federal court.

31

General Requirements for Removal:

  • Requirements for federal court to have subject matter jurisdiction must exist at the time of the filing of the petition of removal.
  • In diversity cases, diversity must have existed at the time of filing the original action, unless a Π dismisses a party who would have destroyed diversity jurisdiction.

32

Specific statutes authorizing removal:

  • Suits against the U.S., any federal agency, or federal officers for acts under color of office (§ 1442)
  • Suits against federal employees for injuries caused from their operation of a motor vehicle within the scope of their employment (§ 2679(d)
  • Actions involving international banking (12 U.S.C. § 632)

33

Limitation on removal in diversity cases:

If removal is sought solely based on diversity jurisdiction, then the claim may be removed only if no Δ is a citizen of the state in which the action was filed. § 1441(b).

34

If a Texas corporation sues Florida Δs in Florida state court, can the Florida Δs remove the action to a federal court based on diversity jurisdiction?

No. The claim may be removed only if no Δ is a citizen of the state in which the action was filed. § 1441(b).

35

What will a federal district court do if a case is removed for federal question jurisdiction, but the federal question claims in the state action are joined with claims that are not independantly removable?

Once the entire case may be removed, the district court must sever and remand to the state court any claims in which state law predominiates. § 1441(c).

36

Removal Jurisdiction Procedure:

  1. Notice of removal (consented to by all Δs, except in class actions)
    1. must be filed within 30 days after receipt by or service on that Δ of the initial pleading or summons, including
      1. signature and statement of grounds
      2. filed in the district court in the state forum
      3. accompanied by compies of all process, pleadings, and orders served
    2. within a year after the action is commenced in the case of diversity of citizenship (as long as the Π acted in good faith).​
  2. Δ must give written notice of the filing to all adverse parties and file a copy of the notice of removal with the state court clerk.

37

Notice of removal may be assert that the amount in controversy exceeds $75,000 if...

...removal is based on diversity and Π

  • seeks nonmonetary relief,
  • is not required under state law to demand a specific sum, or
  • is permitted by state law to recover more than the amount demanded

38

Supplemental Jurisdiction

The federal court can hear a state claim if it’s sufficiently connected to a federal claim brought in the suit ("common nucleus of operative fact"), despite not independently having subject matter jurisdiction. United Mine Workers v. Gibbs, 383 U.S. 715 (1986).

39

Factors for common nucleus of operative fact:

  • Compare the facts necessary to prove the federal claim with those necessary to prove the state claim (e.g. "pendent party jurisdiciton").
  • Look at whether the state claims can be resolved or dismissed without affecting the federal claim.
  • When they can’t provide full relief if they don’t handle the state claims, then they try the state and federal claims together.

40

Supplemental Jurisdiction: 28 USC § 1367

  1. Whether the claims are so related that they form part of the same constitutional case governed by § 1367(a). See Gibbons, Ameriquest.
  2. The mandatory exceptions to the exercise of juridiction in § 1367(b) are applicable when subject matter is based on diversity jurisdiction.
  3. The discretionary exceptions to the exercise of jurisdiction. § 1367(c). See Szendrey.

41

Supplemental claims precluded from diversity cases:

  • ​Claims by existing Π (but not Δ) against persons made parties under one of the following FRCP:
    • 14 – impleader
    • 19 – compulsory joinder
    • 20 – permissive joinder
    • 24 – intervention
  • Claims by persons to be joined as Πs pursuant to Rule 19 or claims by persons seeking to intervene as Πs pursuant to Rule 24, in which the exercise of supplemental jurisdiction over such claims would be inconsistent with the requirements for diversity jurisdiction under 28 U.S.C. § 1332.

42

Discretionary rejection of supplemental jurisdiction:

Under § 1367(c) a district court can decline to use supplemental jurisdiction over a qualifying claim when the supplemental claim

  • raises a novel/complex issue of state law;
  • substantially predominates over the claims within original federal jurisdiction;
  • all of the claims within the court's original jurisdiction have been dismissed; or
  • exceptional circumstances, when there are other compelling reasons for declining jurisdiction.