Fall 2010 Civil Procedure Outline (Greiner)

**Subject Matter Jurisdiction**

Any matter of SMJ can be raised at any time.

“ARISING UNDER” JURISDICTION

For a federal court to have the power and jurisdiction over a case it must:

1)Have a grant of power under the US Constitution (Article III)

2)Have a statute to realize given power over subject matter jurisdiction (§ 1331)

§ 1331 is much narrower than Constitutional power (Article III)

For SCOTUS to hear case through the federal court system

1)District Court must have had proper SMJ

2)Proper appellate jurisdiction in Appellate Court

SCOTUS can hear any case on federal issues that make it up through state courts; but only through federal courts by way of 2 requirements mentioned above

Any party can present a question of SMJ at any time (Mottley).

Concurrent Jurisdiction

State courts can hear any type of SMJ as long as the Federal courts do not have “exclusive” jurisdiction (rare). State courts have concurrent jurisdiction over federal cause of action suits.

Well-Pleaded Complaint Rule:

For SMJ, you must look at the plaintiff’s cause of action to determine whether it falls under a particular courts jurisdiction
Plaintiff’s cause of action determines SMJ…if cause of action is federal then federal courts have “arising under” jurisdiction

Cannot define SMJ based on the proposed or actual defense of the defendant, but rather must completely rely on the plaintiff’s cause of action to determine SMJ

Exceptions to Well-Pleaded Complaint Rule

1)Congress provides federal cause of action, but rule of law to decide dispute is state law (ShoShone) (very rare)

2)Cause of action is state law, but is held to be “arising under” the constitution (Smith)

State law claim raises a significant federal issue (requires interpretation/application of Constitution or federal law), AND
Clarifications (Grable and Empire Healthcare)
Must not upset fed/state court balance
Issue of law, not fact
Uniformity
Fair number of cases-but not too many
*Note: not an all inclusive list

Policy Reasons for Smith/Grable Exception

Experience of federal courts dealing with these issues
Uniformity in federal system
Interests of federal government may override
Too important to trust states

Declaratory Judgment:

Typically a preemptive move by a defendant to have the court declare its rights which is usually to say plaintiff does not have claim against defendant
Declaratory judgment does not expand subject matter jurisdiction. It does not, on its own, make a case eligible to be heard by district court
To bring declaratory judgment in a certain jurisdiction, the real plaintiff (party bringing declaratory judgment action; imaginary defendant) must prove the real defendant (imaginary plaintiff) has “minimum contacts” with that jurisdiction

Imaginary Lawsuit Rule or Coercive Action:

Used to seize the power to determine the forum of the case
The party bringing the declarative judgment must hypothesize what the plaintiff would sue upon to determine SMJ
**Court will ponder, if there had not been a declaratory judgment, would the underlying case fall under federal SMJ
**A declarative judgment on its own does not put a suit under federal SMJ

DIVERSITY JURISDICTION

Constitution (any diversity) is broader than § 1332 (only complete diversity)
Under § 1332, must have COMPLETE diversity(Strawbridge)
Every plaintiff must be completely diverse from every defendant
Determined at time of filing
Can be raised @ any time

§ 1332 Requirements:

1)Complete Diversity of Parties

2)Amount in Controversy

What is citizenship? (In federal terms)

Taking up residence in a domicile, AND
Intention to remain there
i.e. no definite leaving date
Look to permanency (i.e. drivers license, voting registration, purchase of a home, etc.)

Corporations:

Corporation is a citizen of
1) The state(s) in which it is incorporated
2) The state in which it has its principle place of business
SCOTUS has ruled this is the “nerve center” (where corporate decision-making occurs)(Hertz).

Unincorporated Association:

Is a citizen of every state in which a member is a citizen

Aliens:

Permanent Alien is a citizen of the state in which he is domiciled
Alien can join citizens suing other diverse parties
Alien cannot sue another alien

Alienage jurisdiction: controversies between state citizens and citizens of foreign states

Created to deal with the tendency of the state courts to disrupt international relations and discourage foreign investment

Burden of proof for diversity of citizenship rests on the party invoking federal jurisdiction and when diversity is challenged it is again upon the original party invoking to prove diversity

Amount in Controversy (§1332)

Currently the amount in controversy to be under federal SMJ is $75,000
Diversity ONLY, not “arising under”
Aggregating claims
Generally, a plaintiff can aggregate all of his claims against ONE defendant to meet the amount in controversy
Even if those claims do not share anything in common other than being against the same party
Multiple plaintiffs who join together in one lawsuit can not aggregate their claims to meet the AIC requirement if their claims are separate and distinct
Multiple plaintiffs can aggregate if they seek to enforce a single title or right in which they have a common and undivided interest
Exception to AIC: see Class Actions

For a AIC to be jurisdictionally dismissed it must appear to a legal certainty that the claim is really for less than the $75,000

**See FS Outlines for Diversity policy pros/cons

SUPPLEMENTAL JURISDICTION

Can a court hear ancillary cases (state cause of actions) related to the case which has original jurisdiction under district courts?

Supplemental Jurisdiction Analysis § 1367:

1) Find anchoring claim
claim w/ grant of federal SMJ (arising under/diversity)
2) Go to limits of Article III
Supplemental claim is part of same “case or controversy”, “common nucleus of operative fact”
3) Check to see if claim is ousted by Subsection B
If “arising under” ignore B, check C
If diversity, check B carefully, then check C
4) Check Subsection C and use discretion

Subsection B:

If district court has original jurisdiction founded solely on diversity jurisdiction, the district court shall not have supplemental jurisdiction over claims byplaintiffs against persons made parties(under 14, 19, 20, or 24) if those parties defeat complete jurisdiction.
Example: When defendant exerts counter-claim against original plaintiff, the original plaintiff cannot implied a third party who will destroy complete diversity (however, defendant CAN add party)(Guaranteed Systems)

Subsection C:

District Court may decline to exercise supplemental jurisdiction IF…
Claim raises a novel or complex issue of state law
Supplemental (state law) claim substantially predominates over the anchoring claim
District Court has dismissed all anchoring claims
In exceptional circumstances, there are other compelling reasons for declining jurisdiction

Supplemental Jurisdiction Historical Path, prior to § 1367 in 1990

Gibbs, 1966
Can add a state claim to the same defendant, and if federal cause of action is dismissed after case, court can still decide state cause of action
“Common nucleus of fact” test
Supplemental jurisdiction is at discretion of the courts (Power + Discretion)
Owen v Kroger, 1978
Regardless of when parties are added, there still must be complete diversity of all complaints
Supplemental jurisdiction does not supersede diversity statute
Worried about gamesmanship
Aldinger, 1976
Cannot add parties to supplemental jurisdiction, simply claims against the same party-supplemental jurisdiction exists unless Congress disallows it (case by case determination if additional parties can be heard under supp. Jurisd)
Finley, 1989
Cannot add parties to supplemental jurisdiction, simply claims against the same party-supplemental jurisdiction does not exist unless Congress explicitly gives it (hard and fast rule that additional parties can not be added under supplemental jurisdiction)
Supplemental-PARTY justification is not allowed, simply supplemental issues

Gibbs survives in part in Section C of § 1367, while Owen v. Kroger survives in part in Section B of § 1367. Finley was overruled by § 1367

REMOVAL

Should be called remand jurisdiction because the petition for removal is automatically sent to district court where it is determined whether the case stays or is to remanded back to state court (§ 1441)

Case cannot be remanded unless it starts in state court
If originally filed in district court it must be dismissed
General Rule:
State case can be removed to federal court IF it could have been originally filed there
“arising under”, diversity w/ AIC, Smith/Grable exceptions, etc.
In “arising under” cases, district court must take the case and cannot remand it back to state
Exceptions to General Rule:
In diversity cases, if any defendant is from a state in which suit is removed from, then it can be remanded back to state court
No home field advantage argument
In essence, removal is denied
Does not apply to “arising under” cases
Additional Rules:
The defendant has 30 days to remove, and if he does not do so in the 30 days, if it is later removed, the plaintiff can remand on those grounds alone
Objective is to get the cases in the proper jurisdiction and moving forward
Plaintiff has 30 days to remand after the defendant removes
All defendants must agree to removal
Case can become removable at any time while the case is in litigation
Adding “arising under” claim during suit
Non-diverse parties are dismissed from claim during suit

More Rules:
Generally can’t appeal District Court’s decision to remand
Can’t appeal on grounds of lack of SMJ
Can’t appeal on procedural defect
Can appeal based on abstention utilized by courts
Colorado River type cases can be appealed
Three types of abstentions:
1) Cases presenting a federal constitutional issue which might be presented in a different posture by a state court determination of pertinent state law
2) Cases where there have been presented difficult questions of state law bearing on public policy problems of substantial public import whose importance transcends the results of the case then at bar
3) Cases, where absent bad faith, harassment, or patently invalid state statute, federal jurisdiction has been invoked for the purpose of restraining state criminal proceedings

**See FS 2009 Outline for Colorado RiverClark v Lacy analysis

Plaintiff cannot remove a state court action to federal court because a defendant interposes a counterclaim that would have federal SMJ. (Plaintiff already had his shot to put into federal court, do not get a second chance).

All supplemental jurisdiction rules apply to removal.

Don’t worry about proper venue when case is removed

Once case is officially removed, venue transfer and forum non conveniens rules apply

Reasons for SMJ rules:

Judicial efficiency
Federalism
Federal Forum
Protection of Prejudices

**Horizontal Choice of Law**

State-to-State substantive law choice (which state’s law applies)

Procedural Rules in Horizontal Choice of Law:

Under both restatements, the forum will apply ITS own local procedural laws (includes SOL)

2 Approaches to Horizontal Choice of Law:

1)1st Restatements

2)2nd Restatements

1st Restatements

Lex loci delecti
Vested rights theory
Where the last event leading to injury happens
“First Blood”

Vested Rights Theory

Rights to sue only vest when actual harm occurs, thus right vests where harm occurs and that law governs

Advantages of lex loci delicti (where the incident happens is the law used)

Clear cut standard; predictable
Puts trust in judicial system by making it less arbitrary

Criticism of lex loci delicti

Circular reasoning
Guest statute
Contributory negligence
Somewhat arbitrary rulings (unsatisfying)

2nd Restatements

Most significant issue
Interest analysis

Under 2nd restatement, the state that has the most significant interest or “most significant relationship with the occurrence and with the parties involved” should have its law applied. (Babcock)

Benefits of 2nd Restatement

“Best practical result”
Forum which “cares” most about the outcome gets to control legal issues raised by having its laws applied

Criticism of 2nd Restatement

A lot of analysis that ends up looking a lot like 1st Restatement
Difficult to administer; must determine state’s interests

Neumeier restarted cycle by advancing both lex loci delecti and “most significant issue” standards.

The law to be applied is that of the jurisdiction where the incident happens UNLESS it appears that displacing the normal applicable rule will advance the relevant substantive law purposes of the jurisdictions involved.
Neumeier recreated lex loci delecti with a little more wiggled room (place of location has default law unless it can be shown that using another state’s law better suits the situation)
Under new rule there can be different state’s laws applied to each substantial or substantive issue. Each issue is determined by whose law is best suited.

**See FS 2009 Outline for “guest statute” rules under Neumeier

**Personal Jurisdiction**

3 Types of Lawsuits in personal jurisdiction:

1) In rem: lawsuits against a piece of property to determine who owns its “against the world”
2) Quasi in rem: lawsuit against person in which the court “arrests” property to use to settle judgment (this occurs before proof of claim is even shown)
3) In personam jurisdiction: typical lawsuit…P sued D; if P wins and D refuses to pay, then P must go and find property and sell it.

Only concerned with defendant.

Personal Jurisdiction can be consented to.

IN PERSONAM JURISDICTION

Typical In Personam lawsuit:

Lawsuit #1 (merits) P sues D
Lawsuit #2 (“collection) P sues D to enforce lawsuit #1

Court of lawsuit #2 must follow ruling of 1st lawsuit (full faith and credit) IF it is issued by a competent jurisdiction (must have SMJ and personal jurisdiction over defendant)

Defendant’s Reaction to Lack of IPJ:

If defendant thinks that original court (lawsuit#1) does not have personal jurisdiction over him he has 2 options:

1)Not show up and have a default judgment ruled against him, then when second lawsuit is filed to “collect”, defendant can appeal the first court’s jurisdiction over him

BUT if he loses his objection to jurisdiction of 1st court then he cannot argue the merits of lawsuit #1 (because the merits have already been determined in lawsuit #1 by him choosing to not show up)

2)Make a special appearance to lawsuit #1 to litigate court’s jurisdiction

If he wins on jurisdictional objection, then case is dismissed,
If he loses on jurisdictional objection, he can then argue on the merits of the lawsuit

Historical Path of In Personam Jurisdiction:

Pennoyer

Intense territorial considerations (“territorial power”, state sovereignty)
Must serve process in state (“tag”)
Why “tag” doctrine?
Metaphysical reasons
Functional: notice, fairness (ability to return)
Structural: state projection of power outside borders, state sovereignty

Post-Pennoyer

Corporations, Contracts, and Cars helped shape new ideas of personal jurisdiction because the economy began to expand and the old “territorial” theory began to become burdensome
“Minimum Contacts”
Related/unrelated contacts
International Shoe
To subject defendant to IPJ, he does not have to be present within territory of forum, he simply must have certain minimum contacts with a state such that it does not offend “traditional notions of fair play and substantial justice”
Abandonment of Traditional View
International Shoe
General PJ
Specific PJ (“minimum contacts”)
Defendant’s contacts with forum state
“Purposeful availment” (if you get benefits of state, then you are likely to be liable to be sued in that state)
State’s interests
Plaintiff’s interests
Interjudicial efficiency

General Jurisdiction

An amount of business considered so much in a certain state that it can be sued for “anything” in that state and that state has proper personal jurisdiction
Always general jurisdiction in state where you are a resident

Specific Jurisdiction

A limited amount of business that is not continuous/systematic and thus can only be sued and have personal jurisdiction enforced against it which is related to the activities that company does in that state
Lawsuit must arise from “these” activities

Long-Arm Statutes

In PJ you need a statute (“long-arm” statute) that declares/interpreted as any exercise of jurisdiction allowed under the constitution
States should want a long arm statute that is detailed to define which interests it wants to protect to have a better chance at having the court be able to put the case under personal jurisdiction; if state has a broad long arm statute then courts tend not to interpret it as specifically protecting a certain right and thus the “interest” of the state is diminished

McGee (insurance in CA contract)

Minimum contacts can arise from a single contract

Hanson v Derckla (old lady w/ trust)

Unilateral action by the plaintiff with the defendant is not enough to have IPJ over defendant
Solicitation must be considered to “purposefully avail” yourself to state’s laws
Long-arm statute consideration: in McGee California had a long-arm statute which stated their interest in protecting their citizens from the insurance ordeal, but in Hanson, Florida did not have a long-arm statute specifically protecting the interest at hand in this issue

World-Wide VW (car crash in Ok.)

“Purposeful availment” includes standard of foreseeability
Defendant must reasonably anticipate being haled into court in forum state
Foreseeability of harm within the forum state must be accompanied by conduct directed at the forum state so defendant can reasonably anticipate being haled into court in the forum state

Kulko v Superior Court

“Effects” test: A does action that will cause an effect in state B, to be held under personal jurisdiction, the action must be wrongful or involve a commercial activity, a simple “effect” of any kind is not enough

Burger King

Choice of law and forum selection provisions are not necessarily determining factors, but should be considered in choice of jurisdiction

IPJ Test…

1) Determine if there are “minimum contacts” with state
2) Traditional Notions of Fair Play: These “contacts” are to be considered in light of the five interests stated in World-Wide
1) Burden of Defendant
2) Forum state’s interest in ruling on dispute
3) Plaintiff’s interest in convenient/effective relief
4) Interstate judicial system’s interest in efficient resolution
5) Shared interest of the states involved in furthering substantive social policies

Stream of Commerce: