Civil Procedure

Subject Matter Jurisdiction

Refers to a court’s competence to hear and determine cases of a general class and subject. Cannot be waived or agreed to by the parties.

• Federal Question Jurisdiction

• Diversity Jurisdiction

• Supplemental Jurisdiction

• Removal Jurisdiction

Federal Question Jurisdiction

Federal courts have original (subject matter) jurisdiction over all civil actions arising under the Constitution, laws, or treaties of the United States.

State courts and federal courts have concurrent jurisdiction over federal question claims—except when Congress expressly provides that the jurisdiction of the federal courts is exclusive.

Well-Pleaded Complaint Rule

Federal question jurisdiction exists only when the federal issue is presented on the face of the plaintiff’s complaint. Jurisdiction must be determined based on whether the plaintiff has pleaded the necessary elements of the plaintiff’s cause of action—not on defenses, answers, or counterclaims raised by the defendant.

Diversity Jurisdiction

Federal courts have diversity jurisdiction when:

• The opposing parties are citizens of different states or when citizens of a state and citizens of a foreign state (i.e., COMPLETE diversity) AND

• The amount in controversy exceeds $75,000.

Timing: Diversity must exist at the time the complaint is filed

Complete Diversity: No diversity of citizenship if any plaintiff is a citizen of the same state as any defendant.

What is minimal diversity and when is it sufficient for supplemental jurisdiction?

Minimal diversity is when at least one plaintiff is diverse from at least one defendant, even if the citizenship of other plaintiffs and defendants overlaps.

Sufficient in the following circumstances:

• Federal Interpleader Act: Statutory interpleader actions.

• Class Action Fairness Act: Actions with at least 100 class members with claims worth more than $5 million

• Interstate mass torts if at least 75 natural persons have died in one accident and the plaintiffs and defendants are from many different states (e.g., airline crash)

Hoe is citizenship determined for diversity jurisdiction purposes?

• Individual: Citizen of the state where the individual is domiciled (physically present with the intent to remain indefinitely)

  • Can have only one domicile at a time

  • A foreign citizen admitted into the U.S. as a permanent resident is treated as a citizen of the state of domicile

• Corporation: Citizen of every state where the corporation:

  • Is incorporated

  • Has its principal place of business (i.e., its “nerve center” or corporate headquarters)

• Unincorporated association: Citizen of every state where its members are domiciled

  • Applies to partnerships, limited partnerships, trade associations, and unions

• Legal representative: Citizenship of the legal representative controls EXCEPT:

  • The citizenship of a decedent controls for litigation involving the decedent’s estate AND

  • The citizenship of an infant or incompetent person controls for guardianship of the minor or incompetent person

• Class action members: Citizenship of the named class representative(s) controls, and unnamed class members may join without regard to citizenship.

When a corporation is a party, complete diversity between plaintiffs and defendants is still required. Therefore, you must consider EVERY state where the corporation has citizenship.

How is the amount in controversy determined for diversity jurisdiction purposes?

A plaintiff’s good-faith assertion in the complaint that the amount of controversy exceeds $75,000 is sufficient unless there is a legal certainty that the plaintiff cannot recover that amount.

Aggregation of claims is permitted for:

• A single plaintiff against a single defendant

• A single plaintiff against multiple defendants that are jointly liable OR

• Multiple plaintiffs against a sngle defendant if the plaintiffs have a common and undivided interest.

Counterclaims are generally not counted in determining whether the plaintiff has satisfied the amount-in-controversy requirement. Instead, a permissive counterclaim must meet the amount-in-controversy requirement, but a compulsory counterclaim need not because supplemental jurisdiction will apply to that claim.

Devices to create or destroy diversity jurisdiction

Diversity jurisdiction can be created or destroyed through the following actions:

• Assignment of claims

• Failure to name indispensable parties

• Voluntary change of state citizenship (permitted even if done to affect diversity)

• Replacement of parties

However, federal jurisdiction is prohibited if these actions are taken improperly or collusively to invoke such jurisdiction.

Supplemental Jurisdiction

A federal court with original subject matter jurisdiction over a claim may exercise supplemental jurisdiction over additional claims even though the court would not independently have subject matter jurisdiction over those claims. However, the additional claims must arise out of a “common nucleus of operative fact”, such that all claims should be tried in a single judicial proceeding.

• Federal Question Jurisdiction: When a federal court has federal question jurisdiction over a claim, the court can exercise supplemental jurisdiction over additional claims against the same party and/or other parties if the “common nucleus of operative fact” test is met.

• Diversity Jurisdiction: When a federal court has diversity juridiction over a claim, the court can exercise supplemental jurisdiction over additional claims if the “common nucleus of operative fact” test is met AND the claims are NOT asserted by:

  • Existing plaintiffs (not defendants) against persons made parties through impleader, compulsory joinder, permissive joiner, or intervention OR

  • Persons compulsorily joined or seeking to intervene as plaintiffs.

    • The following rules also apply:

      • An additional claim asserted by a permissively joined plaintiff cannot violate the complete diversity rule (even tough the plaintiff need not satisfy the jurisdictional amount)

      • Compulsory counterclaims need not satisfy the jurisdictional amount, but permissive counterclaims must satisfy both diversity jurisdiction requirements

      • Crossclaims may be asserted by a defendant against another defendant or by a plaintiff against another plaintiff if the crossclaim arises out of the same transaction or occurrence as the initial claim.

Removal Jurisdiction

A defendant may generally remove a case from a state court to a federal district court with subject matter jurisdiction. Removal must be to the federal district court and division in which the state actino is pending. Removal to the wrong district court is subject to a motion to remand the case back to the state court (or transfer it to the proper federal court.

If removal is based SOLELY on diversity jurisdiction, then then an action may be removed only if NO defendant is a citizen of the state in which the action was filed (i.e., home-court advantage or forum-defendant rule).

If federal question claims are joined with claims that are not independently removable, then the entire case may be removed.

A defendant must file the notice of the removal within 30 days after receiving or being served with the initial pleading, and ALL defendants must consent to the removal.

However, in federal question cases, only the defendants against whom the federal claim is filed must consent to or join in the removal. And in actions based on diversity jurisdiction, removal cannot occur more than one year after the action commenced unless the plaintiff acted in bad faith.

Remand from federal court

A federal court must remand a removed case to state court if the federal court lacks subject matter jurisdiction at any time before the final judgement is rendered.

A motion to remand for any defect other than subject matter jurisdiction must be fled within 30 days after the notice of removal is filed.

Issues triggered by a notice of removal

• Procedure:

  • Was the notice of removal timely filed within 30 days after receipt or service of the initial pleading?

  • Do all of the defendants consent to removal?

  • Does any defendant reside in the forum state (for diversity cases)?

• Subject matter jurisdiction:

  • Would the federal court have federal question or diversity jurisdiction (diversity is more common)?

• Applicable law:

  • Do the facts present competing laws that trigger a choice-of-law or Erie doctrine analysis?

• Venue: Is venue proper (i.e., in the federal district where the state court sits)?

Personal Jurisdiction

Refers to a court;s ability to exercise judicial power over the persons (namely, the defendants) or property involved in the case or controversy before it.