Subject Matter Jurisdiction - Overall Review

Introduction

Subject matter jurisdiction is the authority of a court to hear specific claims. Federal courts are said to have limited subject matter jurisdiction, meaning claims must meet the Congressional and Constitutional standards to be heard in Federal court. The Constitutional standards are outlined by Article III, Section 2 of the U.S. Constitution, and the Congressional standards are expressly conferred by Congress through statute. The party invoking the federal court’s jurisdiction has the burden to prove the action meets the requirements for the court to exercise jurisdiction. To meet the requirements for subject matter jurisdiction, a claim must meet the standards of 28 U.S.C. 1332 (Diversity jurisdiction), 28 U.S.C. 1331 (Federal Question jurisdiction), 28 U.S.C. 1367 (Supplemental jurisdiction), or be removable from state to federal court under the requirements of 28 U.S.C. 1441

Here, we have (#) of claims by (parties), and each must meet the requirements of subject matter jurisdiction to be heard in federal court.

1. Diversity Jurisdiction

For a claim to meet diversity jurisdiction, the U.S. Constitution, Article III, section 2, requires the diversity of citizenship, meaning at least one citizen on either side of the v. be from a different state. Under the Congressional, statutory requirement, in 28 U.S.C. 1332, the claim must be “between citizens of different states” which has been interpretted by Strawbridge to require complete diversity, meaning that no party from one side of the v. can be a citizen from any state as a party on the other side.

To determine whether there is complete diversity, citizenship of all parties in the dispute is identified at the time the suit is filed. Citizenship for U.S. individuals is tied to where they are domiciled, meaning where they have physical residence and concurrent intent to remain indefinitely. Further, citizenship for corporations is tied to where they are incorporated or where their principal place of business. Courts interpretted the principal place of business to mean the “nerve center” and ask where the corporation’s activities were centrally directed by officers, directors, and managers; it is usually found to be the place of their head-quarters. For non-incorporated business entities, citizenship is tied to that of its constituent members.

• Insert “Diversity of citizenship analysis.” Here, (x) is a citizen of (x) state because they are (domicile w/ intent to remain) or (incorporated there/principal place of business) or (are a nonincorporated business, so their citizenship is tied to member’s citizenship). [Repeat for all parties] Because (party 1) is a citizen of a different state than (party 2), this meets complete diversity and is within the congressional and constitutional requirements for diversity of citizenship. 

Further outlined by the congressional standard of 1332 is the amount in controversy requirement. To meet this, the amount in controversy for the claim must exceed $75,000. Further, so long as it appears the claim is in good faith, the court should generally accept the claim unless it appears legally certain the plaintiff could not recover the amount in controversy requirement,. This means the plaintiff must only be capable of recovering that amount. It does not mean that they must be able to recover that amount.

• Insert “AIC Analysis.” Here, the claim is for ($) which does/does not exceed the amount in controversy requirement. Because of the nature of this complaint, it appears to made in good faith, and (party) is capable of recovering that amount.

In certain situations, aggregation rules may or may not allow plaintiffs to add their claims together to achieve the amount in controversy requirement. Where one plaintiff has multiple claims against one defendant, they may add those claims together to reach the amount in controversy requirement. Further, where multiple plaintiffs sue one defendant, the plaintiffs can’t add the amounts of their claims together to reach the amount in controversy unless the plaintiffs are joining together to enforce a single title or right.

• Here, because (x) are joining together to enforce a single title or right, they may sue the defendant and add their claims together to reach the AIC.

2. Federal Question Jurisdiction

To satisfy the Constitutional standard of federal question jurisdiction, a claim may be heard as long as it arises under the United States Constitution, laws, or treaties, which is satisfied as long as there is a federal ingredient in the action. Federal ingredient means that the claim involves a question of federal law. The federal ingredient must be based on the plaintiff’s own case, thus counterclaims and defenses raised by the defendant are unlikely to suffice.

• Application: Answer is there a federal ingredient?

To satisfy the Congressional. standard, a complaint must “arise under” the law of the United States Constitution, laws, or treaties; “arise under” has been interpretted to mean the claim abides by the Well-Pleaded complaint rule. The Well Pleaded Complaint Rule states that to qualify for federal jurisdiction under 1331, the federal question must appear on the face of the plaintiff’s well-pleaded complaint.

• Application: does a federal question appear on the face of the complaint?

Further, courts use greater discretion to determine whether the claim meets the requirements of the well-pleaded complaint rule. Under the Holmes Creation Test, a suit arises under the law that creates a cause of action, and to satisfy this test, a court will look to whether the plaintiff’s cause of action was created by federal or state law.

• Application: was a federal law broken or should be applied"?

Grable further presented another approach to determine if the suit would meet the requirements of federal question jurisdiction. Grable begged the question: does a state law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities? 

• Application: is it a state law claim that raises a substantial federal issue that would not disturb federalism? 

3. Supplemental Jurisdiction

28 U.S.C. 1367 allows for additional claims, those not within the scope of federal question or diversity jurisdiction, to be heard in federal court along with a qualifying claim. 1367(a) provides a broad grant of jurisdiction so long as the claims form out of a common nucleus of operative facts. To meet the requirements of supplemental jurisdiction under 1367(a), there must be at least one claim within the suit that meets the requirements for original jurisdiction. Today, Exxon tells us that if the well-pleaded complaint contains at least one claim that satisifes the amount-in-controversy requirement, and there are no other relevant jurisdictional defects (the nonqualifying claim must still satisfy complete diversity), the district court, beyond all question has original jurisdiction over the qualifying claim. Further, the qualifying claims must arise from the same controversy, which has been interpreted through Gibbs to mean derived from the same nucleus of operative fact. 

[APPLY]

If the qualifying claim in the action is based solely on diversity jurisdiction, the court must look at specific exceptions outlined in 1367(b). 1367(b) limitis 1367(a) by providing exclusions to cases of 1332 diversity. Specific exceptions outlined in 1367(b) include claims brought by plaintiffs against third parties impleaded under Rule 14, necessary parties joined under Rule 19, permissively joined parties under Rule 20, and parties intervening under Rule 24, as well as claims brought by necessary parties proposed to be joined as plaintiffs under Rule 19 and parties seeking to intervene as plaintiffs under Rule 24. if a case derives original jurisdiction under 1332 and a specific exception is applicable, the nonqualifying claim may not be heard in federal court through supplemental jurisdiction. 

[APPLY]

Courts may further decide to utilize the discretionary factors outlined in 1367(c ), which empowers federal courts to not hear a case that has met the above requirements if these factors are evidenced at the outset of the case or with discovery through litigation. These factors include (1) the claim raises a novel or complex issue of state law, (2) the nonqualifying claim substantially predominates over the claim or claims over which the district court has original jurisdiction, (3) the court has dismissed all claims over which it has original jurisdiction, or (4) other compelling reasons for declining jurisdiction. 

[APPLY]

4. Removal

28 U.S.C. 1441 deals in matters of removal. In such cases, a suit that could originally be heard in federal court but was filed in state court may be removed to federal court once a notice of removal is filed by the defendant, Under 1441, which provides the general guidelines for removal, only defendants may seek removal. Removal is not required, but all defendants must agree to removal. The suit will be removed to the district court embracing the place where the action is pending. Once notice of removal is filed, the state court proceeds no further unless or until the case is remanded. Further, under 1446 and 1447, which provide removal procedures, defendants have 30 days from receipt of complaint to file notice of removal. The 30 days is triggered from the last served defendant. If circumstances change, defendants have 30 days from receipt of information suggesting the case is now removable. In diversity actions (except in cases of bad faith by the plaintiff), a case cannot be removed more than 1 year after the action is commenced. Unless tied to lack of subject matter jurisdiction, remand must be sought within 30 days after the notice of removal is filed (not receipt of notice). Defendants cannot remove a diversity action if one of the defendants is from the state in which the action is filed.

[APPLY]

[INSERT PARAGRAPH WITH FINAL ANSWERS AND CONCLUSIONS TO EACH CLAIM]

Where is a U.S. individual’s citizenship?

Where they are domiciled. (physical residence + intent to remain indefinitely).

Where is a corporation’s citizenship?

Where they are incorporated and where their principal place of business is. Courts use the nerve center test to determine principal place of business. This asks “where the corporation’s activities were centrally directed by officers, directors, and managers,” which is usually found to be their headquarters.

Where is an unincorporated business’s citizenship?

Tied to the citizenship of its constituent members.

What is the citizenship of legal representatives?

The citizenship of the individual who is being legally represented.

Citizens/subjects of foreign states admitted for permanent residence in the US?

The state of domicile in the US