subject matter jurisdiction

subject matter jurisdiction

court’s power over the case

federal courts — limited SMJ

state courts — general SMJ (can hear practically any case)

• state courts cannot hear

  • patent infringement

  • bankruptcy

  • some federal securities

  • antitrust

types of cases federal courts can hear

• federal question

• diversity of citizenship

NOTE: a lack of SMJ cannot be waived — judgment is void if a federal court hears a case without having SMJ

diversity of citizenship (and alienage) requirements

two requirements:

• case is either

  • between citizens of different US states OR

  • between citizen of US state and citizen of a foreign country (alienage)

AND

• amount in controversy exceeds $75,000

complete diversity (first requirement of diversity)

• diversity does not exist if any plaintiff is a citizen of the same state as any defendant

• diversity determined when the case is filed

NOTE: green card holder domiciled in US state still not considered a citizen

ALSO NOTE: suit between US citizen domiciled in a foreign country and US citizen in US state — no diversity or alienage jurisdiction (needed to be domiciled in US state to possibly have diversity)

citizenship of natural person (and new domicile)

• citizenship of individual determined by which US state she is domiciled in

  • a person can have only one domicile

ESTABLISHING NEW DOMICILE:

• physical presence in new domicile AND

• intent to make that place your home for the indefinite future

relevant factors for intent:

• taking a job

• buying a house

• civi organizations

• registering to vote

• qualifying for in-state tuition

citizenship of a corporation

a corporation is a citizen in any state or country in which it is

• incorporated AND

• in which it has its principal place of business

  • PPB — state from which the corporation’s managers direct, coordinate, and control business activities (nerve center)

citizenship of an unincorporated association (partnership, LLC, etc.)

takes on the citizenships of all of its members (including limited and general partners where applicable)

citizenship of decedents, minors, and incompetents

use the citizenship of the decedent, minor, or incompetent

REPRESENTATIVE’S CITIZENSHIP IS IRRELEVANT

citizenship for class actions

citizenship of the named representatives

amount in controversy (second requirement of diversity)

• only the claim itself is considered

  • INCLUDES interest if part of agreement or contract where it is part of the claim itself

  • EXCLUDES prejudgment interest — interest from delay of payment due to litigation

• whatever plaintiff claims in good faith is okay UNLESS it is clear to a legal certainty that she cannot recover more than $75,000

aggregation of claims

ONLY IF a single plaintiff and a single defendant:

• plaintiff may aggregate two or more claims to meet the amount in controversy requirement

• no limit on number of claims and claim do not need to be related

joint claims

use the total value of the claim (unlike aggregation of claims, total number of parties is irrelevant)

calculating amount in controversy based on equitable relief

satisfied by either test (do both on exam):

TEST 1: if granted, is the value of the relief requested by plaintiff greater than $75,000?

TEST 2: if granted, will the relief requested by plaintiff cost defendant more than $75,000?

excluded cases from diversity jurisdiction

• divorce

• alimony

• child custody

• actions to probate an estate

collusive creation of diversity

if a party attempts to create diversity by a sham transaction, the courts ignore the transaction and declare no diversity

ex: assigning a claim for collection purposes merely to create diversity SMJ

voluntary changes of citizenship

plaintiff can create diversity by changing her state citizenship after the cause of action accrued BUT before suit is commenced — okay so long as a genuine change of citizenship

federal question

• plaintiff’s claim must arise under federal law

  • pleader must follow well pleaded complaint rule — claim itself must arise under federal law

• ASK: is plaintiff enforcing a federal right?

removal

• only by defendant

• defendant may remove (transfer) a case from state trial court to federal trial court where the action originally filed could have been filed in federal court (diversity or FQ)

• if removal improper — will remand the case to state court

• even when the state court has no jurisdiction because the action is exclusively federal, federal court may hear and decide the case under its removal jurisdiction

how is a case removed?

defendant must file a notice of removal in federal court:

• grounds for removal stated (aka diversity or FQ)

• court permission (state or federal) not required

• served on adverse parties

• filed in federal court, copy to state court

timing of removal

defendant must remove no later than 30 days after service of the first paper that shows case is removable

AKA — usually no later than 30 days of service of process

who must join in the removal?

• all defendants served with process must join in removal and may file separates notices of such

• if defendants served at different times AND later served defendant initiates timely removal — earlier served defendant may join removal even if removal intitiation time period has expired

two limitations on removal

ONLY FOR CASES BASED SOLELY ON DIVERSITY:

• in-state defendant limitation — case should not be removed if any defendant is a citizen of the forum state

• one-year limitation — case should not be removed more than one year after the case was filed in state court

  • how does a diversity case with an in-state defendant (or non-diverse defendant) become removable later?

    • when the claim against the in-state defendant (or non-diverse defendant) is voluntarily dismissed from the case — remaining D may remove within 30 days of service of dismissal

    • ex: case filed in Wisconsin; P-Wisconsin, D1-Illinois, D2-Wisconsin, and P dismisses claim against D2 six months after filing case — D1 can remove within 30 days

removal venue

defendant removes to federal district court “embracing” the state court where case was filed

ex: state court in Southern District of CA, so removal must be to a federal court in the same district

remand to a state court

if a plaintiff moves to remand to state court:

• if reason other than SMJ — must move to remand no later than 30 days after filing of notice of removal

  • ex: one-year limitation on the removal of a diversity case)

• if reason is lack of SMJ — no time limit to move to remand

supplemental jurisdiction

gets claims into a federal case, even though the claims cannot use diversity of citizenship or FQ

two-step test for supplemental jurisdiction

BUT FIRST — must have a case in federal court based on diversity or FQ

step one

• look to see if there is SMJ over the additional claim

  • no need for supplemental jurisdiction if there is SMJ over additional claim

step two

• if no SMJ over additional claim, can find supplemental jurisdiction if:

  • original claim and additional claim share a common nucleus of operative fact AKA arise from the same transaction or occurrence (T/O)

limitation on supplemental jurisdiction

ONLY A LIMITATION ON CASES BASED ON DIVERSITY

• claims by plaintiffs generally cannot invoke supplemental jurisdiction

• EXCEPTION

  • when there are multiple plaintiffs AND the claim by one of them does not meet the amount in controversy requirement

discretionary factors for supplemental jurisdiction

• even if claim meets requirements for supplemental jurisdiction, court has discretion to decline it

• can do so if:

  • state law claim is complex or

  • state law issues would predominate in the case

• USUALLY WILL DECLINE IF — claim on which federal SMJ is based is dismissed early in the case