Subject Matter Jurisdiction

Question 1

Exclusive Federal Jurisdiction Cases

Answer 1

1. Patent Infringement
2. Bankruptcy
3. Some federal securities and antitrust claims
   * Federal Courts = Limited SMJ
   * State Courts = General SMJ
   * A **lack of SMJ **(unlike a lack of PJ) cannot be waived. If a case does not invoke federal SMJ, the federal court cannot hear the case. If it does, the judgment is void.

Question 2

Diversity Requirements

Answer 2

1. The case is either (a) between citizens of different U.S. states (diversity); or (b) between a citizen of a U.S. state and a citizen of a foreign country (alienage); and
2. The amount in controversy exceeds $75,000.

No SMJ if any P is citizen of same state as any D
* Determined when the case is filed
* A permanent resident (green card holder) is not a citizen of a state for diversity purposes

Question 3

How to Change Domicile*

Answer 3

1. Physical presence in new place; and
2. Subjective intent to make new place domicile for forseeable future
   * For intent, courts look to all relevant factors—like taking a job, buying a house, joining civic organizations, registering to vote, qualifying for in-state tuition, etc.

Question 4

Citizenship of Corporation

Answer 4

A corporation is a citizen of any state or country in which it is incorporated and of the one state or country in which it has its principal place of business (“PPB”)
* PPB = The state from which the corporation’s managers direct, coordinate, and control business activities. We also call this the “nerve center.” It is usually the site of the corporate headquarters.
* Corp can be citizen of more than one state

Question 5

Citizenship of an Unincorporated Association (Partnership, Limited Liability Company (“LLC”), Etc.)

Answer 5

• Unincorporated Association = citizenships of all of its members.
• Limited Partnership = citizenships of general and limited partners.

Question 6

Citizenship of Decedents, Minors, and Incompetents

Answer 6

• Decedents, minors, and incompetent persons must sue or be sued through a representative.
• The representative’s citizenship is irrelevant.
• You use the citizenship of the decedent, minor, or incompetent.

Question 7

Class Actions (Citizenship)

Answer 7

For class actions, the citizenship of the named representative(s) of the class is used.

Question 8

Interest ($75,000 Requirement)

Answer 8

• Prejudgment interest not included
• Interest as part of claim inlcuded (Ex: loan agreement with interest)
• Must be clear to a legal certainty that the claim exceeds $75,000

Question 9

Aggregation of Claims ($75,000 Requirement)

Answer 9

Aggregation means adding two or more claims to meet the amount in controversy requirement.
* Any single plaintiff may aggregate all of her claims against a single defendant.
* No limit to the number of claims a single plaintiff may aggregate against a single defendant
* Claims don’t have to be related

Question 10

Joint Claims

Answer 10

• You use the total value of the claim.
• Number of parties is irrelevant.

Question 11

Equitable Relief

Answer 11

Equitable relief includes the issuance of an injunction, specific performance, rescission of a contract, etc. There are two tests; if either is met, most courts find that the amount in controversy is satisfied.
* One test looks at the plaintiff’s viewpoint. If granted, does the relief requested have a value of more than $75,000 to the plaintiff?
* The other test looks at the defendant’s viewpoint. If granted, will the relief requested by the plaintiff cost the defendant more than $75,000?

Question 12

Exclusions from Diversity SMJ

Answer 12

Even if the requirements for diversity or alienage jurisdiction are met, federal courts decline to hear actions for
* Divorce
* Alimony
* Child Custody
* Actions to Probate an Estate.

These can be called “excluded” cases.

Question 13

Collusive Creation of Diversity

Answer 13

If a party attempts to create diversity by a sham transaction, such as assigning a claim for collection purposes merely to create diversity SMJ, the courts ignore the transaction and declare that diversity does not exist.
* Genuine change of citizenship before action commenced creates diversity even if that was motive

Question 14

Federal Question Jurisdiction*

Answer 14

For there to be federal question (“FQ”) jurisdiction, the plaintiff’s claim must “arise under” federal law (for example, the claim must arise under the federal constitution or federal legislation). For FQ cases:
* The citizenship of the parties is not relevant;
* The amount in controversy is not relevant; and
* The pleader must follow the “well pleaded complaint” rule. That is, it is not enough that some federal issue is raised by the complaint. The plaintiff’s claim itself must “arise under” federal law. So we look at the claim and ignore other material that the plaintiff may have included in the complaint.
* Ask if the plaintiff is enforcing a federal right.
* If the answer to that question is yes, the case can go to federal court under FQ jurisdiction.
* If the answer to that question is no, the case cannot go to federal court under FQ jurisdiction.

Unless the exam question says the claim is based on a federal law, regular tort, contract, and property claims are not federal. They are created (and arise under) state law, not federal law.

Question 15

Removal

Answer 15

• Removal = Moving case from State court to Federal Court
• Remand = Federal Court moving the case back to State Court
• Generally, an action originally filed in a state court may be removed by a defendant to federal court when the case could have been filed in a federal court (that is, federal question or diversity jurisdiction exists).

Question 16

How case is Removed

Answer 16

Notice of Removal
* Grounds for removal stated
* Court permission not required
* Served on adverse parties
* Filed in federal court, copy in state court

Question 17

Timing of Removal

Answer 17

• The defendant must remove no later than 30 days after service (not filing) of the first paper that shows the case is removable.
• Usually, that means no later than 30 days of service of process.

Question 18

Who joins in Removal

Answer 18

• All D’s served with process must join
• Earlier-served D may join later-served D’s removal even if 30-day period expired (30 days starts anew with service on D2)
• Plaintiff can NEVER remove a case

Question 19

What cases cannot be Removed

Answer 19

Assuming their is SMJ there are two limitations, though, to removing a case based solely on diversity of citizenship:
1. The case should not be removed if any defendant is a citizen of the forum state (the “in-state defendant rule”); AND
2. The case should not be removed more than one year after the case was filed in state court.

Question 20

Removal Venue

Answer 20

• The defendant removes to the federal district court “embracing” the state court where the case was filed.
• It does not matter if this venue would have been proper under the venue statutes.

Question 21

Remand

Answer 21

• P must move to remand within 30 days of the notice of removal being filed if defect other than lack of SMJ
• 30-day limit does not apply if federal court has SMJ
• Lack of SMJ is never waived