Subject Matter Jurisdiction

Subject matter jurisdiction

court’s power over this type of dispute

State and Federal SMJX

• Federal District has limited subject matter jurisdiction

  • o   Can only hear cases as prescribed by the US Constitution and federal statutes, must have both basises

• Trials courts of each state have general subject matter jurisdiction, can adjudicate virtually any case, any civil dispute

Federal Court lack of SMJX

• defense that cannot be waived

• Parties or court can raise issue at any time in case, even after court has entered judgment

  • If defendant challenges allegation, plaintiff has burden of proving that jurisdiction exists

Constituion Prescribed Federal SMJX

1.        Constitution, Laws of the US, Treaties (Federal Question Jurisdiction)

2.        Ambassadors, other public Ministers and Consuls

3.        Admiralty and Maritime

4.        Controversies to which the US shall be a party

5.        Controversies between two or more States

6.        Between a State and Citizens of another State

7.        Between Citizens of different States (Diversity Jurisdiction)

8.        Between Citizens of the same State claiming Lands under Grants of US

9.        Between a State, or the Citizens thereof, and foreign States, Citizens or Subjects (Alienage Jurisdiction)

Exception to state general SMJX

when it involves areas in which Congress has vested federal district courts with exclusive subject matter

• admiralty proceedings, bankruptcy matters, patent and copyright infringement, antitrust and securities law

Concurrent subject Matter Jurisdiction

In cases that satisfy subject matter jurisdiction for both state and federal court, Plaintiff has a choice of state or federal court

Original Jurisdiction

court's right to be the first to hear a case and has the authority to hear it before any other court

Diversity Jurisdiction

Section 1332

i) The parties to an action are:

a) Citizens of different states,

b) Citizens of a state and citizens or subjects of a foreign state,

c) Citizens of different states and citizens or subjects of a foreign state are additional parties, or

d) A foreign state as plaintiff and citizens of a state or different states, and

ii) The amount in controversy in the action exceeds $75,000.

• Requires Complete Diversity

• federal court in diversity case must apply state law on the substantive elements of the case

Complete Diversity Requirement

There will be no diversity of citizenship if any plaintiff in the case is a citizen of the same state or is a citizen or subject of the same foreign country as any defendant in the case.

• Two plaintiffs (and defendants) in a case may be from the same state without destroying diversity, as long as no plaintiff is from the same state as any defendant in the case

Exceptions to complete diversity

Interpleader, Class actions greater than $5 million, “Realignment”, Date of determination of diversity (A change in citizenship after the filing of the case will not affect diversity jurisdiction that was in existence at the time of the filing)

Realignment

courts will look beyond the face of the pleadings to determine the “ultimate interests.” If necessary, they will “arrange the parties according to their sides in the dispute.”

Mas v. Perry

Rule of Law: A party who temporarily lives in one state, but has a permanent residence in another state, is domiciled in the state where her permanent residence is located for the purposes of diversity jurisdiction

Facts: P were TAs at LSU when renting from D. Discover D was spying on them. Sued under diversity. P home in MS.

Determining Party Citizenship of US Citizen

Domicile: state in which she is present and intends to reside for an indefinite period of time.

• Only one domicile

• Domicile is determined at the time the action is commenced

• factors used in determining domicile include whether a party exercises civil and political rights (e.g., registration to vote), pays taxes, owns real and personal property, and is employed in the state.

Determining Party Citizenship of Corporations

• Under § 1332(c) “a corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.

  • Can only have one principal place of business

Amount in Controversy

• amount in controversy must exceed $75,000; a claim for exactly $75,000 fails.

• plaintiff’s good-faith assertion in the complaint that the action satisfies the amount-in-controversy requirement is sufficient.

• Claims by one plaintiff v. one defendant: single plaintiff may aggregate all of claims against a single defendant to meet the jurisdictional requirement (claims don’t have to be related)

• action involves multiple plaintiffs, then the value of their claims may be aggregated only if the multiple plaintiffs are enforcing a single title or right in which they have a common or undivided interest

• value of a single plaintiff’s claims against each defendant may not be aggregated if the claims are separate and distinct. If the defendants are jointly liable to the plaintiff, then aggregation to meet the amount-in-controversy requirement is permissible

Federal Question Jurisdiction

Permits federal courts to hear cases based upon the nature of the claim asserted by the plaintiff

• Article III,   Requires that federal law potentially be “an ingredient” of the case

• Rule by Section 1331

Federal Question Jurisdiction Requirments

1.        Essential Federal Element

2.        Well-pleaded complaint rule

Essential Federal Element

• if the cause of action in question is expressly created by federal law, and federal law provides the underlying right, then federal question jurisdiction will exist

• right is created by federal law, and a cause of action may fairly be implied and was intended by Congress, then federal jurisdiction is likely to be found

• cause of action is neither expressly nor implicitly created by federal law, then the complaint must involve a real and substantial issue of federal law, and its determination must necessarily depend on resolution of the federal issue.

• state-law claim necessarily raises a federal issue, actually disputed and substantial, that may be entertained without disturbing any congressionally approved balance of federal and state responsibilities, federal question jurisdiction exists, notwithstanding the absence of an express federal remedy

Well-pleaded complaint rule

• Federal question jurisdiction exists only when the federal law issue is presented in the plaintiff’s complaint

  • Consider only elements of the claim, not defenses

  • Do not consider answers and counterclaims

  • Applies both to Original and removal jurisdiction

Louisville & Nashville Railroad Co. v. Mottley

Rule of Law: For a suit to arise under the Constitution and laws of the US, giving a federal court jurisdiction to hear the case, a plaintiff must allege a cause of action based upon those laws or that Constitution. Not sufficient that the plaintiff anticipates that the defendant will raise a federal statute in defense. The Mottleys’ cause of action was a state-law contract claim; no federal law was necessary to state a prima facie case
Facts: D injured in accident and settled for lifetime passes. Later P refused to renew, D sued for specific performance, anticipating different act by congress.

Declaratory Judgment

court tells the parties to a dispute what their rights, responsibilities, or obligations are, without awarding damages or order

• merely creates a remedy, does not provide a jurisdictional basis. Proper only if supported by an independent basis of jurisdiction

Grable & Sons Metal Products, Inc. v. Darue

Rule of Law: A federal court may have jurisdiction over a state cause of action if the action has a substantial federal component in actual controversy and federal jurisdiction would not disrupt the balance of labor between state and federal courts
Facts: IRS seized P’s property to satisfy federal taxes. IRS sold to D. P filed motion alleging did not receive proper notice. D try to remove action to fedearl court

Removal Jurisdiction

In concurrent jurisdiction, if plaintiff filed in state court, the defendant may “remove” the case to federal court.

• Burden of removal is on defendant to plead that case invokes federal subject matter jurisdiction

• Removal only to the federal district “embracing the place where such action is pending”

Removal based on diversity

matter cannot be removed based on diversity of citizenship more than one year after the action is commenced

• claim may be removed only if no defendant is a citizen of the state in which the action was filed.

Reasons defendant may remove

-              Prefer unelected Federal Article III Judges

-              Concerned about possible local bias of state court

-              Prefer federal court procedures or better expertise

-              Lawyer may have greater familiarity with federal court practice

-              Federal jury drawn from wider geographic area

Rule of unanimity

all defendants who have been properly joined and served with process must agree to the removal

*exception in 1441c: permits single defendant to remove if a federal question claim has been asserted against her. She may remove entire case, including claims that do not invoke federal question, diversity, alienage, or supplemental jurisdiction, but federal court must sever claims and remand to state court, keeping only federal question claim

Challenging Federal SMJX

• If party thinks the court lacks subject matter jurisdiction, they must raise it during the case or no direct appeal. If they don’t, they lose the ability to raise it later in a separate lawsuit

  • Restatement permits a defendant to attack collaterally a default judgment based upon lack of subject matter jurisdiction