1. SMJ – FQ & Diversity
2. Joinder – Parties (20, 14: SMJ) & Claims (13, 18: SMJ)
3. Removal
4. PJ
5. 12(b)(6)
6. Transfer 1404
Subject matter jurisdiction
Subject matter jurisdiction for the federal courts is set out in Article III section 2 of the US Constitution. Commonly, there are two ways to obtain federal subject matter jurisdiction: cases arising under federal Constitution or statutes (§1331), and cases between citizens of different states (§1332).
FQ
Rule: Under the Mottley “well pleaded complaint” rule, the court in deciding whether the case “arises under federal law” for purposes of §1331, asks whether the plaintiff would have to raise the federal issue in a complaint that includes the elements she needs to prove to establish her claim, and only those elements. Holmes’s creation test can be used in determining when the Mottley rule is met: the suit needs to arise “under the law that created the cause of action.” Federal question jurisdiction also applies when the plaintiff, in order to establish her state law claim, must prove a proposition of federal law; the statute is “significantly substantial” to the resolution of the suit. Additionally, the federal law asserted must allow for private enforcement.
Policy: Under the well-pleaded complaint rule, the court is able to determine at the outset whether it has jurisdiction, based on the claims the plaintiff has asserted, without waiting for the defendant’s answer.
Diversity
Rule: Under §1332(a), parties must be citizens of different states and the amount-in-controversy must exceed $75,000. Additionally, there must be complete diversity between the parties, meaning all plaintiffs in a suit are from different states than all defendants at the time suit is brought (Strawbridge).
For individuals, the courts have equated state citizenship for diversity purposes with the common law concept of domicile. Domicile is established at birth and changed by (1) being physically present in state with (2) the intention to remain indefinitely, and a person can have only one domicile (Mallon v. Lutz). A person’s original domicile persists if a new domicile is not established (Mas v. Perry).
For diversity purposes, §1332(c) describes corporations as citizens of both the state where the principal place of business is located and the state of incorporation. Principal place of business is determined using the “nerve center” test as the place where corporation’s officers direct, control, and coordinate the corporation’s activities, typically the corporate headquarters (Hertz Corp).
Policy: The framers were concerned that out-of-state citizens would suffer prejudice if they were forced to litigate against local citizens in local state courts.
Supplemental
Rule: Under §1367(a), when the federal courts have SMJ over the original claim, they have SMJ over all other claims that arise out of the same case and controversy (for our purposes, the same transaction and occurrence). However, under §1367(b), the courts do not have SMJ when (1) the original claim is based solely on §1332 diversity, (2) the new claim is asserted against parties added by rule 14 or 20, and (3) the new claim is made by a plaintiff against defendants.
Joinder of Parties/Claims
Rule 18 (aka “piggyback” rule) allows a party asserting a claim, counterclaim, cross-claim, or third party claim may join as many claims as it has against an opposing party; rule 18 is permissive.
Rule 20(a) 1 & 2 states that persons may (permissive) join as plaintiffs or be joined as defendants if (1) they are asserting claims arising out of the same transaction, occurrence or serious of transactions or occurrences, and (2) there is any question of law or fact common to all plaintiffs or defendants.
Policy: Allowing joinder of parties promotes efficiency and may prevent inconsistent verdicts, which reflect poorly on the judicial system and are best avoided where possible.
(Check SMJ (§1331, §1332, §1367) for new claims and PJ for new parties added)
Personal jurisdiction
Personal jurisdiction deals with the power of the court to make binding decisions on the parties involved. The federal court will apply the long arm statutes of the state in which it is sitting. Because … allows its courts to assert personal jurisdiction to the full extent permitted under the US Constitution, the only test used to determine personal jurisdiction is whether such an assertion complies with the due process clause of the federal constitution.
Rule: A number of bases for personal jurisdiction have evolved, including domicile, consent, physical presence (Burnham), and the minimum contacts standard (International Shoe). Under the minimum contacts test, we evaluate the contacts the defendant has with the forum state that give rise to the suit. Further, the defendant must have purposely availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws (Hanson v. Denkla).
The second prong of the minimum contacts tests is whether the assertion of personal jurisdiction is reasonable and fair under the circumstances.
Policy: Under the constitution, courts cannot deprive a person of life, liberty, or property without due process of law; this includes a right to fair judicial procedure, which places appropriate limits on the places where a defendant can be required to defend a lawsuit.
Minimum contacts jurisdiction is based on the premise that parties who conduct activities in a state accept the risk that those activities will give rise to suits and understand that they may have to return to the state where the activity was conducted to defend such suits.
Removal/Remand
The federal removal statutes allow the defendant, after the plaintiff has chosen a state court, to remove some types of cases from state court to federal court. For removal, the burden is on the defendant to prove the plaintiff’s claim invokes federal subject matter jurisdiction.
Rule: §1441(a) authorizes removal of state court actions of which the federal courts have original jurisdiction. However, §1441(b)(2) provides that a diversity case may not be removed if any of the defendants is a citizen of the state in which the action is brought. §1441(a) also says that a case can only be removed to the federal district court for the district and division embracing the place where such action is pending.
The procedure for removal is set forth in §1446: the defendant(s) must file a notice of removal in the appropriate federal district court within 30 days of receiving the plaintiff’s pleading in the state suit ((b)(1)), all defendants must agree ((b)(2)(A)), and the defendant must “promptly” notify plaintiffs of removal ((d)).
Policy: Defendants as well as plaintiffs should have the option to choose federal court for cases within the federal jurisdiction. That jurisdiction is intended to protect both parties, and therefore, both parties should have access to it.
Rule: Under §1447(c), if the basis for the motion to remand is failure to comply with the removal procedural requirements, the remand motion must be made within 30 days after removal, or the objection is waived. A motion to remand based on the lack of subject matter jurisdiction, can be made at anytime.
Venue
Venue rules deal with where a civil action may be brought, are purely statutory, and are meant to assure that suits are tried in a place that bears some sensible relationship to the claims asserted or to the parties to the action.
Rule: Under §1391 a plaintiff may choose a district that is a proper venue based on the residence of the defendants or based on substantial events giving rise to the claim that took place in that district or disputed property that is located there.
Transfer
Rule: §1404(a) provides federal courts with the discretionary authority to transfer a case to another federal district for the convenience of parties and witnesses, in the interest of justice where the plaintiff has chosen one district but it makes more sense to litigate the case in a different district. The transferee court should apply the law that the transferor court would have applied if the case had not been transferred.
Res judicata
Rule: A party who seeks relief based on a particular set of historical facts must join all his grounds for recovery on those facts in the first action or face the res judicata defense if he tries to sue later on one of these grounds.