Subject Matter Jurisdiction

Individual claims that do not alone satisfy the jurisdictional amount may be aggregated in the following circumstances:

• plaintiff asserts multiple claims against a single defendant, whether or not they are transactionally related.
• plaintiff joins several defendants to the same claim pursuant to FRCP 20 if the several defendants have a common undivided interest or title in the claim.
• several plaintiffs join in the same claim against one or more defendants pursuant to FRCP 20 when the several plaintiffs have a common undivided interest or title in the claim.

Consent

Most courts hold that subject matter jurisdiction, unlike jurisdiction over the parties, may not be conferred by consent of the litigants.

• Consent of the parties cannot allow subject matter jurisdiction to a court. Unlike personal jurisdiction, which the court can obtain upon a party’s consent or failure to object, lack of subject matter jurisdiction is never waivable; either the court has it, or it cannot assert it.
• Agreements between the parties to confer subject matter jurisdiction upon a particular court are invalid.

Dismissal at any time

No matter when a deficiency in the subject matter jurisdiction of a federal court is noticed, the suit must be stopped, and dismissed for lack of jurisdiction. Even at the appellate level, the suit already tried may be dismissed for lack of subject matter jurisdiction.

• A party can raise lack of subject matter jurisdiction at any time; there are no time restraints on when such an objection can be raised (again, as opposed to personal jurisdiction, which must be raised at a very early stage in the proceedings). Therefore, a defendant who believes that a court lacks subject matter jurisdiction to hear the case may raise this issue before the trial court or in an appeal from the judgment. If a defect in subject matter jurisdiction is found, the judgment will usually be rendered void, having no legal force or binding effect.
• FRCP 12(h)(3) provides: “Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action.” This rule has been interpreted to mean that courts can raise lack of subject matter jurisdiction sua sponte, that is, on their own, without any suggestion by a party.
• Example: A case brought under federal question jurisdiction goes through trial and through one level of appeals, and is then heard by the Supreme Court. The Supreme Court decides that there was no federal question in the first place. Held, the entire case must be dismissed for lack of federal subject matter jurisdiction.

Test in practice

As far as where a corporation’s "principal place of business" is concerned, courts usually consider two factors: where the corporation’s headquarters are located ("nerve center" test) and where the majority of the corporation’s assets are located ("muscle center" test):

• Home office: Some courts hold that the corporation’s principal place of business is ordinarily the state in which its corporate headquarters, or "home office," is located. Under this test, "the locus of corporate decision-making authority and overall control constitutes a corporation’s principal place of business for diversity purposes.”
• Bulk of activity: Other courts hold that the principal place of business is the place in which the corporation carries on its main production or service activities. Under this test, greater weight is attached to the location of a corporation’s production or service activities in determining the principal place of business under this test.”

Some courts find it more satisfactory to use a hybrid of both tests, called the “total activity” test.

• This test “considers all the circumstances surrounding a corporation’s business to discern its principal place of business.
• The “total activity” test provides a realistic, flexible and non-formalistic approach to determining a corporation’s principal place of business through a balancing of all relevant factors.”

Selecting the court in which to bring suit

The following factors influence the parties’ choice of forum for litigating a given matter:

• there must be sufficient contacts between the defendant and the forum state to exercise personal jurisdiction over the defendant;
• the court must possess subject matter jurisdiction over the controversy;
• concerns of judicial efficiency and convenience of parties and witnesses will influence the appropriate venue within a specific court system in which to try the case;
• various tactical factors such as: reputation of judges presiding in specific courts, court calendars, and procedural differences influencing, for example, availability of a jury trial, required level of agreement for verdicts, applicable rules of evidence or availability of appellate review;
• client characteristics;
• where suit can be brought in more than one jurisdiction, differences in substantive law will be evaluated so that the law most favorable to a party’s claim may be applied.

As a result...

One corporation can be a citizen of two different states.

• For example: ABC Corporation is incorporated in Delaware and has its principal place of business in Michigan. It does not insure anything. ABC Corporation is a citizen of both Delaware and Michigan.

For diversity to exist, no adversary of the corporation may be a citizen of the state in which the corporation is incorporated, or of the state in which it has its principal place of business.

• For example: XYZ Corp., a corporation which is incorporated in Delaware, has its principal place of business in New York. In order for there to be diversity, no adverse party may be a citizen of either Delaware or New York.

Burden of proof

The party seeking to invoke the jurisdiction of a federal court must make an affirmative showing that the case is within the court’s subject matter jurisdiction.

• There is a presumption against federal jurisdiction. The existence of subject matter jurisdiction generally must be demonstrated at the outset by the party seeking to invoke it.
• Example: If P wants to invoke diversity jurisdiction, in her pleading she must allege the relevant facts about the citizenship of the parties.

Citizenship - Corporations

General vs. Exclusive

The diversity statute deems a corporation to be the citizen of “any State by which it has been incorporated and of the state where it has its principal place of business.”

• Corporations are citizens of the state in which they are incorporated and also of the state where they maintain their principal place of business.
• This citizenship in two places has the effect of narrowing the number of cases that qualify for a federal court's diversity jurisdiction because a corporation's citizenship is not diverse from the citizenship of anyone else in either of those two states.

State courts have general jurisdiction in most cases. Federal courts have exclusive jurisdiction in a limited number of cases, such as federal criminal, antitrust, bankruptcy, patent, copyright, and some admiralty cases, as well as suits against the U.S. government. If a claim can be filed in either state or federal court, and the plaintiff files the claim in state court, the defendant may remove the case to federal court. Federal court proceedings are widely considered to be less susceptible to bias because the jury pool is drawn from the entire state, not just from the local community.

subSection (a)

Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve joinder or intervention of additional parties.

New statute

28 U.S.C. § 1367

A resident alien (an alien who lives in the United States permanently) is deemed a citizen of the state in which she is domiciled.

A foreigner living in the U.S. is deemed to be a citizen of whatever state in which the alien is domiciled.

Supplemental jurisdiction is governed by 28 U.S.C. § 1367, which was enacted in 1990. Because statutes usually trump earlier judicial decisions, decisions addressing supplemental jurisdiction released before 1990 should only be used cautiously, if used at all.

28 U.S.C. § 1367 provides in relevant part:

Pendent jurisdiction

Ancillary jurisdiction

Origins of federal practice

Comparison - Federal question cases

Diversity of citizenship is one of the factors that will allow a federal district court to exercise its authority to hear a lawsuit. This authority is called diversity jurisdiction, which means that a case involving questions that must be answered according to state laws may be heard in federal court if the parties on the two sides of the case are from different states.

• No question of federal law is required, and jurisdiction is concurrent with that of the state courts, which means that if the requirements for federal diversity jurisdiction are satisfied, the plaintiff can file the action in either federal or state court.
• In diversity case, the amount in controversy must be greater than $75,000, exclusive of interest and costs.

Supplemental jurisdiction, a legislative creation since 1990 [28 U.S.C. § 1367], supplants two related judicial doctrines:

• pendent jurisdiction;
• ancillary jurisdiction.

Pendent jurisdiction allows a plaintiff who has a jurisdictionally sufficient federal question claim to join, in the original complaint, related claims that otherwise are jurisdictionally defective. Generally, it is invoked when a plaintiff brings a federal question claim against a non-diverse defendant and seeks to have a related state law claim against the same defendant adjudicated by the federal court as an incident to the federal claim. Pendent jurisdiction views matters from the plaintiff's perspective, i.e., may he join all his claims with the ones as to which the federal court has subject matter jurisdiction?

• Pendent jurisdiction has been essentially codified by Congress along with ancillary jurisdiction in 28 U.S.C. § 1367, its supplemental jurisdiction statute. However, Subsection § 1367 (c)(3) expressly authorizes the district judge to dismiss a supplemental claim when the federal claims have dropped out of the case.

Ancillary jurisdiction allows a federal court to assert jurisdiction over claims that are sufficiently related or subordinated to an action properly within the court's subject matter jurisdiction. Usually, it is invoked to permit a federal court to adjudicate claims that technically are jurisdictionally defective because they involve non diverse parties or are less than the requisite jurisdictional amount. Ancillary jurisdiction views matters from the defendant's perspective, i.e., may he file a cross-claim against a codefendant? May he bring in a third party against whom he would have a right of indemnity?

• Example: Moe, a citizen of California sues Curly, a citizen of New York in Federal District Court for $100,000 in damages arising from an auto accident. Curly wants to file a cross-claim (implead) against Larry, a citizen of California saying that if he (Curly) is liable then Larry is also liable and must indemnify Curly. Although Moe could not have named Larry in his original complaint without destroying diversity, there is ancillary jurisdiction over the claim against Larry and the federal court may hear the entire case.

Federal jurisdiction exists where there is a suit between a citizen of a state, on one side, and foreign countries, or citizens or subjects thereof, on the other side.

• Example: P, a citizen of Mexico, sues D, a citizen of Illinois. Even if there is no federal question issue, there will be federal subject matter jurisdiction of the "alienage" variety, assuming that the amount in controversy requirement is satisfied.

2007

For diversity purpose, unincorporated associations, such as partnerships and labor unions are viewed as citizens of each state in which any member is a citizen.

• Unincorporated associations, such as partnerships and labor unions, take the citizenship of each member.
• Example: XYZ Partnership is comprised of the following partners: Xavier, who is domiciled in Missouri; Yael, who is domiciled in Minnesota; and Zora, who is domiciled in Montana. XYZ’s domicile is all three states: Missouri, Minnesota and Montana.

2001

2013

subSection (b)

subsection (c)

Citizenship

Special circumstances

2010

2004

1998

Ancillary jurisdiction

Pendent jurisdiction

Ancillary jurisdiction

Rationale - Why?

In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure; or over claims by personal proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if:

• (1) the claim raises a novel or complex issue of State law,
• (2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
• (3) the district court has dismissed all claims over which it has original jurisdiction, or
• (4) in exceptional circumstances there are other compelling reasons for declining jurisdiction."

Ancillary jurisdiction extended jurisdiction from the freestanding (often diversity) claim to an otherwise jurisdictionally insufficient claim by the defendant(s) or similarly situated parties such as intervenors as of right. E.g., in a diversity action, ancillary jurisdiction supported a compulsory counterclaim or cross-claim for less than the jurisdictional amount or impleader of a non-diverse party.

• Ancillary jurisdiction is a form of supplemental jurisdiction that allows a United States federal court to hear non-federal claims sufficiently logically dependent on a federal "anchor claim" (i.e., a federal claim serving as the basis for supplemental jurisdiction), despite that such courts would otherwise lack jurisdiction over such claims. Ancillary jurisdiction differs from pendent jurisdiction in that pendent jurisdiction requires the federal and non-federal claims to arise from a "common nucleus of operative fact," not to be logically interdependent. Like pendent jurisdiction, a federal court can exercise ancillary jurisdiction if the anchor claim has original federal jurisdiction either through federal-question jurisdiction or diversity jurisdiction.

Areas where ancillary jurisdiction can be asserted include:

• counterclaims (Fed. R. Civ. P. 13)
• cross-claims (Fed. R. Civ. P. 13)
• impleader (Fed. R. Civ. P. 14)
• interpleader (Fed. R. Civ. P. 22) and
• interventions (Fed. R. Civ. P. 24).

Ancillary jurisdiction has been replaced entirely by supplemental jurisdiction, per 28 U.S.C. § 1367(b), part of the U.S. supplemental jurisdiction statute.

Pendent jurisdiction refers to the courts’ extension of jurisdiction from a freestanding (usually federal question) claim to an otherwise jurisdictionally insufficient pendent (usually state law) claim by a plaintiff or plaintiffs.

• Pendent jurisdiction is the authority of a United States federal court to hear a closely related state law claim against a party already facing a federal claim, described by the Supreme Court as "jurisdiction over nonfederal claims between parties litigating other matters properly before the court." Such jurisdiction is granted to encourage both "economy in litigation", and fairness by eliminating the need for a separate federal and state trial hearing essentially the same facts yet potentially reaching opposite conclusions.

In order to cope with the situation of multi-parties or multi-claims in a federal case, Congress in 1990 enacted the supplemental jurisdiction statute 28 U.S.C. §1367.

• By default, courts have supplemental jurisdiction over "all other claims that are so related . . . that they form part of the same case or controversy". The true test being that the new claim "arises from the same set of operative facts." This means a federal court hearing a federal claim can also hear substantially related state law claims, thereby encouraging efficiency by only having one trial at the federal level rather than one trial in federal court and another in state court. However, if the case is brought as a diversity action, there generally is no supplemental jurisdiction if such claims would destroy complete diversity. Courts are also free to decline to exercise supplemental jurisdiction in specified or exceptional circumstances.
• This subsection indicates that the grant of supplemental jurisdiction is a broad one the federal district courts are given jurisdiction to add any claim and any party to an additional claim as long as that claim is so close to the original one as to be part of the same case or controversy as that term is used in Article 3 of the Constitution.

A suit solely between citizens of two foreign countries does not fall within the alienage jurisdiction.

• Example: If P, a citizen of Canada, sues D, a citizen of Mexico, there is no alienage jurisdiction.

An American citizen living abroad permanently has no domicile within the United States and is not a citizen of any state.

• This means that if an American citizen lives abroad, there will not be diversity between him and an opposing party who is a citizen of a particular American state.

Test in practice

The courts have equated the state citizenship of natural persons with domicile in a state.

• Domicile is created by the concurrent establishment of physical residence in a state and an intent to remain there indefinitely. Although a person can have more than one residence at one time, he can have only one domicile at a time.
• Being a citizen of a state is something more than simply owning property or being physically present within the state. Citizenship means that the individual has a residence in the state and intends to have that residence as her present home. Residence plus this intent makes that place the individual's domicile, and a party can have only one domicile at a time.
• Citizenship does not mean that the individual must swear that she never intends to move, but the residence and the intent to consider it home are essential.

Domicile

Citizenship is not determined by residence, but rather by domicile. As the Fifth Circuit has held, “a person’s domicile is the place of ‘his true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom . . . .’

A change of domicile may be effected only by a combination of two elements: (a) a taking up residence in a different domicile with (b) the intention to remain there.”

Thus, a person is considered to be domiciled in the place where he has his current dwelling-place, if he also has an intention to remain in that place for an indefinite period.

Citizenship - Individuals

Citizenship for diversity purposes requires a party to be a citizen of both the United States and of a state. "Citizenship" is synonymous with "domicile".

• Domicile, not residence, is what counts.
• "Domicile" means physical presence in the state coupled with the intent to reside there indefinitely.
• Example: P has his main home in New York, but has an expensive second home in Florida. D has her only home in Florida. P can bring a diversity action against D, because P is deemed a citizen only of New York, not Florida, even though P has a "residence" in Florida.

Amount in controversy

In federal suits based on diversity, an amount in excess of $75,000 must be in dispute. This is the "amount in controversy" requirement. In federal question cases, there is no amount in controversy requirement.

State judicial system

Generally, a typical court system includes:

• A variety of courts of limited subject matter jurisdiction, authorized to hear specific types of cases, e.g., traffic, landlord-tenant, small claims or probate.
• A court of original and general jurisdiction that hears all claims not exclusively vested in courts of limited jurisdiction, such as state claims and nonexclusive federal question claims that also could have been brought in federal district courts. State courts of general jurisdiction often exist at the county level. Such courts vary in their designations, e.g., Superior Court in the District of Columbia, Circuit Court in Virginia, and Supreme Court in New York.
• An intermediate appellate court is available only in more populous states. In some jurisdictions, the decision of the intermediate appellate court is final for the most fact-bound and routine kinds of cases, such as domestic relations and non-capital criminal cases, subject perhaps to discretionary appeal for constitutional questions.
• A court of appellate jurisdiction, variously called the Supreme Court, the Court of Appeals, or, in Massachusetts, the Supreme Judicial Court. Where a state provides for an intermediate appellate court, the existence of such allows the highest state court to exercise considerable discretion in selecting cases for further review.

Pendent state claims with no new parties

Supplemental jurisdiction clearly applies when a related state claim involves the same parties as the federal question claim.

• Example: P and D are both citizens of New York. Both sell orange juice nationally. P sues D in federal court for violation of the federal trademark statute, arguing that D’s brand name infringes a mark registered to P. P also asserts that D’s conduct violates a New York State "unfair competition" statute. There is clearly no independent federal subject matter jurisdiction for P’s state law unfair competition claim against D – there is no diversity, and there is no federal question. But by the doctrine of supplemental jurisdiction, since the federal claim satisfies subject-matter jurisdictional requirements, P can add the state law claim that is closely related to it.

Additional parties to state-law claim

Section 1367 also allows additional parties to the state-law claim to be brought into the case.

• Example: P’s husband and children are killed when their small plane hits power lines near an airfield. P sues D1 (the U.S.) in federal court, under the Federal Tort Claims Act, for failing to provide adequate runway lights. Then, P amends her complaint to include state-law tort claims against D2 and D3 (a city and a private company) who maintain the power lines. There is no diversity of citizenship between P and D2 and D3, and no federal-question claim against them. But because P’s state-law claim against D2 and D3 arises from the same chain of events as P’s federal claim against D1, P may bring D2 and D3 into the suit under the supplemental jurisdiction concept, and the last sentence of §1367(a).

Where the original claim comes within the court’s federal question jurisdiction, §1367 basically allows the court to hear any closely related state-law claims. Where the original claim comes within the court’s federal question jurisdiction, the Supreme Court articulated a three-part test to determine whether a federal court has the power to entertain pendent claims:

• the federal claim must be sufficiently substantial to support federal question jurisdiction;
• the federal and nonfederal claims must derive form a common nucleus of operative fact;
• the federal and nonfederal claims must be such that the plaintiff would ordinary be expected to try them in one judicial proceeding.

Additional parties to state-law claim

Subsection 1367(a) expressly provides that “supplemental jurisdiction shall include claims that involve joinder or intervention of parties,” thereby authorizing jurisdiction over what were formerly called pendent party claims. Most courts have found that claims which satisfy the same transaction or occurrence standard for joinder under FRCP 13(a) (compulsory counterclaim), 13(g) (crossclaim), or 20 (joinder of parties) also qualify for supplemental jurisdiction.

Supplemental jurisdiction

federal question cases

Analysis of § 1367 - Subsection (c)

Pursuant to 28 U.S.C. § 1367(c), the district court has discretion to “decline to exercise supplemental jurisdiction over a claim under subsection (a) under some circumstances.

Jin v. Ministry of State Security

Analysis: The Supreme Court of the United States held that although the exercise of supplemental jurisdiction was warranted, the claim was dismissed because it was time barred by the statute of limitations. When a Federal court has an independent basis for exercising Federal jurisdiction, it may in certain circumstances, also exercise supplemental jurisdiction over related claims under state law. To determine when assertion of supplemental jurisdiction is appropriate, district court must determine whether state and Federal claims derive from common nucleus of operative fact and, if so, whether judicial economy, convenience and fairness to litigants weigh in favor of doing so Ultimately the Supreme Court held that the exercise of supplemental jurisdiction over the Falun Gong members’ state law defamation claims against the Chinese television corporation was warranted even though the practitioners were domiciled in different states, because the defamation claims formed a key part of the alleged overarching campaign to abridge and nullify the practitioners’ rights and liberties.

Conclusion: To determine when assertion of supplemental jurisdiction is appropriate, District Court must determine whether state and Federal claims derive from common nucleus of operative fact and, if so, whether judicial economy, convenience and fairness to litigants weigh in favor of doing so.

Requirements

Under the federal diversity jurisdiction statute, 28 U.S.C. § 1332, a federal court has subject matter jurisdiction over a matter where:

• there is complete diversity among the parties such that no plaintiff shares citizenship with any defendant; and
• the amount in controversy exceeds $75,000.

Deferring to state courts, federal courts have traditionally declined to exercise jurisdiction in the following types of cases, even when the parties satisfy the requirements for diversity jurisdiction:

• certain in rem cases.
• probate cases.
• domestic relations cases.

Additionally, courts are obliged by statute to deny jurisdiction which has been “improperly or collusively made.”

Difficult

one

Nonfederal claim that turns on construction of federal law

This area presents the harder problems of application of the federal question statute. The Supreme Court has confirmed that federal question jurisdiction can be proper “where the vindication of a right under state law necessarily turned on some construction of federal law.

• In order to establish federal question jurisdiction, a “right or immunity created by the Constitution or the law of the United States must be an element, and an essential one, of the plaintiff’s cause of action”. Even where a cause of action arises under state law, a federal court may have jurisdiction if it appears that the right to relief rests on the construction or application of a federal law. However, the mere presence of a federal issue in a state-created cause of action does not automatically confer federal question jurisdiction. Its availability depends in part on “an evaluation of the nature of the federal interest at stake”: whether it is sufficiently important to require a federal trial forum.
• Example: A shareholder sued to enjoin a corporation in which he held stock from purchasing bonds issued by federal land banks. The shareholder asserted that under state law the corporation was forbidden to invest in bonds that were not legally issued. The only issue in the case was whether the bonds were issued validly under federal law, and the Supreme Court held that there was federal question jurisdiction.

Rationale - Why?

In order to cope with the situation of multi-parties or multi-claims in a federal case, Congress in 1990 enacted the supplemental jurisdiction statute 28 U.S.C. §1367.

• By default, courts have supplemental jurisdiction over "all other claims that are so related . . . that they form part of the same case or controversy". The true test being that the new claim "arises from the same set of operative facts." This means a federal court hearing a federal claim can also hear substantially related state law claims, thereby encouraging efficiency by only having one trial at the federal level rather than one trial in federal court and another in state court. However, if the case is brought as a diversity action, there generally is no supplemental jurisdiction if such claims would destroy complete diversity. Courts are also free to decline to exercise supplemental jurisdiction in specified or exceptional circumstances.
• This subsection indicates that the grant of supplemental jurisdiction is a broad one the federal district courts are given jurisdiction to add any claim and any party to an additional claim as long as that claim is so close to the original one as to be part of the same case or controversy as that term is used in Article 3 of the Constitution.

Supplemental jurisdiction

diversity cases

There is also supplemental jurisdiction in many cases where the "core" claim – the claim as to which there is independent federal subject matter jurisdiction – is based solely on diversity. But there are some important exclusions to the parties’ right to add additional claims and parties to a diversity claim.

• Where the core claim the claim as to which there is independent federal subject matter jurisdiction is based solely on diversity, 1367’s grant of supplemental jurisdiction is a bit less generous. 1367 generally allows claims that would have been ancillary to fall within the court’s supplemental jurisdiction in diversity-only cases, and thus eliminates the requirement of diversity and amount-in-controversy as to the supplemental claim. But 1367(b) sets forth some explicit and important limits on supplemental jurisdiction.
• Subsection 1367(b) provides that in diversity-only cases the courts do not have supplemental jurisdiction over claims by plaintiffs against persons made parties by FRCP 14 (impleader), 19 (compulsory joinder of parties), 20 (permissive joinder of parties) or 24 (intervention), when exercising such jurisdiction would be inconsistent with the jurisdictional requirements of the diversity statute. Thus, a plaintiff may not assert claims against parties in a diversity action if supplemental jurisdiction would negate complete diversity.

Constitutionality

The federal question jurisdiction also originates from the U.S. Constitution. The Article 3, section 2 of the Constitution provides that federal judicial power shall extend to cases in law and equity arising under the Constitution, the laws of the United States, and treaties.

However, Congress did not grant original federal question jurisdiction to the lower federal courts until 1875, when it passed the predecessor to 28 U.S.C. 1331, which used language very similar to that in the Con law: U.S. district courts "shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."

Federal question jurisdiction

The Constitution gives the federal courts authority to hear "federal question" cases.

• A federal question case contains at least an issue directly involving the U.S. Constitution, federal statutes, or treaties between the United States and a foreign country.
• Application of these kinds of law to particular cases or interpretation of the meanings of these laws is a power within the authority of the federal courts. The authority to hear lawsuits that turn on a point of federal law is called federal question jurisdiction.
• Unlike federal jurisdiction based upon diversity of citizenship, federal question jurisdiction is not dependent on the parties meeting a prescribed amount in controversy.

Legal certainty test

The party seeking to invoke federal diversity jurisdiction does not have to prove that the amount in controversy exceeds $75,000. All she has to show is that there is some possibility that that much is in question.

• The plaintiff need not actually prove the amount in controversy. All that is required is a showing that there is some possibility that the amount in controversy exceeds $75,000. However, clearly frivolous prayers for relief will not be tolerated and will be excluded from the total amount in controversy. It should also be noted that a verdict for the plaintiff for less than $75,000 does not retroactively defeat diversity jurisdiction. As long as the claim was, at the time of the filing, potentially worth more than $75,000, the court has jurisdiction to hear the case.
• To put it another way, the claim cannot be dismissed for failing to meet the $75,000 requirement unless it appears to a legal certainty that the claim is really for less than the jurisdictional amount.
• Eventual recovery irrelevant - The fact that P eventually recovers far less than the jurisdictional amount does not by itself render the verdict subject to reversal and dismissal on appeal for lack of jurisdiction.

Amount in controversy

In diversity cases, but not in federal question cases, plaintiff must satisfy an "amount in controversy" requirement. In all diversity cases, the amount in controversy must exceed $75,000.

• This monetary limitation is intended to ensure that only substantial cases will be brought in federal court. The amount is computed as of the date of commencement of the action. Subsequent events do not defeat jurisdiction.
• The present amount in controversy is $75,000, exclusive of interest and costs. Jurisdictional amount is ordinarily computed from the plaintiff’s viewpoint without regard to possible defenses, and plaintiff’s good faith pleading controls unless the court concludes to “a legal certainty” that she cannot recover the pleaded amount.

Analysis of § 1367 - Subsection (b)

As provided in 28 U.S.C. § 1367(b), supplemental jurisdiction does not extend (where the original claim is based on diversity jurisdiction) to “claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure; or over claims by persons proposed to be joined as plaintiffs under Rule 19, or seeking to intervene as plaintiffs under Rule 24” when original diversity jurisdiction does not exist. Where the original claim is based in diversity jurisdiction, supplemental jurisdiction applies only to the following claims:

• Compulsory counterclaims (counterclaims that must be filed in that particular action) made pursuant to FRCP 13(a)
• Crossclaims made pursuant to FRCP 13(g)
• Joinder of additional parties to compulsory counterclaims pursuant to FRCP 13(h)
• Impleader, pursuant to FRCP 14, of third-party defendants, but only in certain circumstances.

Supplemental jurisdiction does not apply to claims by the original plaintiff against a third-party defendant. It does, however, extend to claims by third-party defendants, and claims by and against third-party plaintiffs.

Federal law creates claim

Examples: A claim of copyright infringement, trademark infringement or patent infringement raises a federal question, because in each of these situations, a federal statute – the federal copyright statute, trademark statute or patent statute – is the source of the right the plaintiff is asserting.

Devices to create or

destroy diversity

28 U.S.C. § 1332(c)(2) governs the diversity of citizenship rules for decedents, infants (minors) and incompetents. It provides: “[T]he legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.” Therefore, one cannot create diversity by appointing a representative who, in other circumstances, would have a different citizenship than their decedent or infant or incompetent.

• Nominal parties ignored - In determining the existence of diversity, nominal or purely formal parties are ignored. For example: Where a guardian of an infant sues, the guardian is deemed to be a citizen only of the same state as the infant.

In addition to 28 U.S.C. § 1332(c)(2), Congress has enacted 28 U.S.C. § 1359, which prohibits a party from creating diversity among the parties simply to impose federal jurisdiction over the case. The statute provides: “A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.” Even if the assignment is legal under state law, if it is done only to create diversity of jurisdiction, such a legal assignment will not allow federal jurisdiction.

• This means that a claimant may not assign her claim in order to create diversity. For example: Alex and Dennis are both citizens of Florida. Alex wants to bring a diversity action against Dennis. Alex assigns his claim to Barbara, a Massachusetts citizen, with the understanding that Barbara will remit to Alex 80% of any recovery. The court will not take diversity jurisdiction over the Barbara-vs.-Dennis action, because Barbara’s presence in the suit was an improper or collusive joinder.

A plaintiff suing in state court may sometimes seek to defeat her adversary’s potential right to remove to federal court. There is no federal statute prohibiting "improper or collusive" joinder for the purpose of defeating jurisdiction. However, as a matter of judge-made law, courts will often disregard obvious removal-defeating tactics (e.g., joinder of a defendant who has nothing to do with the underlying dispute, but who is a citizen of the same state as a plaintiff.)

• But the state-court plaintiff is always free to make a claim for less than the amount in controversy ($75,000), in order to defeat removal, even if P has really suffered a loss greater than this amount. (But the less-than-$75,000 amount must be named before D removes.)
• In order to determine whether diversity exists, the pleadings do not settle the question of who are adverse parties. Instead, the court looks beyond the pleadings, and arranges the parties according to their real interests in the litigation.

Don't forget: 28 U.S.C. § 1367(c)

Merely because a claim is within the court’s supplemental jurisdiction, this does not mean that the court must hear that claim. Subsection 1367(c) gives courts discretion to refuse jurisdiction when it believes, in the interests of judicial economy, convenience, fairness, and comity, that the supplemental claims would more appropriately be decided by state courts.

• Section 1367(c) gives four reasons for which a court may decline to exercise supplemental jurisdiction that exists. Most importantly, the court may abstain if it has already dismissed all claims over which it has original jurisdiction. This discretion is especially likely to be used where the case is in its early stages.
• Unless the court expressly finds that the supplemental claims falls into one of the four classes mentioned in 1367(c), probably it must keep the claim, even though it thinks that judicial economy would be better served by dismissing it. In other words, a court can decline to assert supplemental jurisdiction over a pendent or ancillary claim only if one of the four categories specifically enumerated in section 1367(c) applies.
• Example: P sues D1 (the U.S.) under a federal statute, then adds state-law claims against D2 and D3, as to which there is neither diversity nor federal question jurisdiction. Soon after the pleadings are filed, the court dismisses P’s claim against D1 under FRCP 12(b)(6). Probably the court will then exercise its discretion to decline to hear the supplemental claims against D2 and D3.

If you look at the situations where supplemental jurisdiction is allowed in diversity-only cases, and those where it is not allowed, you will see that basically, additional claims asserted by defendants fall within the court’s supplemental jurisdiction, but additional claims (or the addition of new parties) by plaintiffs are generally not included. So expect supplemental jurisdiction only in cases where the claimant who is trying to benefit from it is in a "defensive posture."

Supplemental jurisdiction

diversity cases

Whose point of view followed?

The courts are split as to which party’s point of view is to be considered in calculating the amount at stake. Most courts hold that the controversy must be worth $75,000 to the plaintiff in order to satisfy the jurisdictional amount.

• People can differ as to the worth of a claim, and courts are no different. Most courts hold that it is from the plaintiff’s point of view that the amount in controversy is calculated.
• The usual standard of proof is that it must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal.
• The sum claimed by the plaintiff controls if the claim is apparently made in good faith.

Function

Here are the principal diversity-only situations in which supplemental jurisdiction applies

(d) Rule 14 impleader of third-party defendants, for claims by and against third-party plaintiffs, and claims by third-party defendants, but not claims by the original plaintiff against third-party defendants.

• Example: P, from California, sues D, a retailer from Arizona, claiming that a product D sold P was defective and injured P. The suit is based solely on diversity. D brings a Rule 14 impleader claim against X, the manufacturer of the item, claiming that if D owes P, X must indemnify D. X is a citizen of Arizona. Because D’s suit against X falls within the court’s supplemental jurisdiction, the lack of diversity as between D and X makes no difference. Supplemental jurisdiction would also cover any claim by X against P. But any claim by P against X would not be within the court’s supplemental jurisdiction, so P and X must be diverse and the claim must meet the amount in controversy requirement.

(a) Rule 13(a) compulsory counterclaims.

(b) Rule 13(h) joinder of additional parties to compulsory counterclaims.

• Example: P, from New York, brings a diversity suit against D, from New Jersey. The claim is for $80,000. D counterclaims that in the same episode, D was injured not only by P but also by Y; D’s injuries total $1,000. Y is from New Jersey. D may bring Y in as a Rule 13(h) additional defendant to D’s compulsory counterclaim against P, even though D and Y are both from New Jersey, and even though D’s claim does not total $75,000 – supplemental jurisdiction applies, and obviates the need for D-Y diversity or for D to meet the amount in controversy requirement.

(c) Rule 13(g) cross-claims, i.e., claims by one defendant against another.

• Example: P, from Ohio, brings a diversity suit against D1 and D2, both from Kentucky. D1 brings a Rule 13(g) cross-claim against D2 – since it is a cross-claim, it necessarily relates to the same subject matter as P’s claim. Even though there is no diversity as between D1 and D2, the cross-claim may be heard by the federal court.

When a federal court possesses subject matter jurisdiction over a matter, it may exercise supplemental jurisdiction over one or more related claims that would not independently satisfy subject matter jurisdictional requirements.

• Modern federal litigation typically involves more than just the basic two parties and more than one claim. These additional claims and parties frequently present subject matter jurisdictional problems. Under the doctrine of supplemental jurisdiction, the new parties and new claims may not have to independently satisfy subject matter jurisdiction – they can in effect be "tacked on" to the "core" controversy.
• Supplemental jurisdiction is a way that one can bring state claims into federal court even though there is no diversity or federal question jurisdiction. What must exist, however, as the base upon which to build supplemental jurisdiction: a valid, independent claim over which the court has federal subject matter jurisdiction. This mechanism is called “supplemental jurisdiction,” by which additional claims and parties may be brought into a federal case without independently satisfying subject matter jurisdiction requirements, once there is a basic controversy as to which there is subject matter jurisdiction.

Where the core claim is based on diversity, some important types of claims do not get the benefit of supplemental jurisdiction

(d) Intervention: Claims by prospective plaintiffs who try to intervene under Rule 24 do not get the benefit of supplemental jurisdiction. This is true whether the intervention is permissive or of right.

• Example: P1 sues D in diversity. P2, on her own motion, moves for permission to intervene under Rule 24(b), because her claim against D has a question of law or fact in common with P1’s claim. P1 is a citizen of Indiana, P2 of Illinois, and D of Illinois. Because there is no supplemental jurisdiction over intervention, the fact that P2 and D are citizens of the same state means that the court may not hear P2’s claim. The same result would occur even if P2’s claim was so closely related to the main action that P2 would otherwise be entitled to "intervention of right" under Rule 24(a).

(a) Claims against third-party defendants: Claims made by a plaintiff against a third-party defendant, pursuant to Rule 14(a), are excluded.

• Example: P sues D, and D brings a third-party claim against X, asserting that if D is liable to P, X is liable to D. P and X are citizens of the same state. P does not get supplemental jurisdiction for her claim against X, so the P-vs.-X claim must be dismissed.

(b) Compulsory joinder: When a person is joined under Rule 19(a) as a person to be "joined if feasible" ("compulsory joinder"), neither a claim against such a person, nor a claim by that person, comes within the supplemental jurisdiction in a diversity-only case.

(c) Rule 20 joinder: When a plaintiff sues multiple defendants in the same action on common law and facts (Rule 20 "permissive joinder"), supplemental jurisdiction does not apply.

• Example: P is hit by D1’s car, then negligently ministered to by D2. P is from New York, D1 is from Connecticut, and D2 is from New Jersey. P’s claim against D2 is for $20,000. The federal court cannot hear the P-D2 claim, because it does not meet the amount in controversy and does not fall within supplemental jurisdiction.

Louisville & Nashville Railroad v. Mottley

Facts: P claims that D Railroad has breached its agreement to give P free railroad passes. A recently-passed federal statute prohibits the giving of such passes. In P’s complaint, he anticipates the railroad’s federal statutory defense, claiming that the statute violates the Fifth Amendment.

Issue: Is a plaintiff’s allegation that a defense to his complaint will raise an issue of federal or constitutional law adequate to give a federal court jurisdiction over the suit?

Well-pleaded complaint rule

The federal question must be integral to P’s cause of action, as revealed by P’s complaint. It does not suffice for federal question jurisdiction that P anticipates a defense based on a federal statute, or even that D’s answer does in fact raise a federal question. Thus the federal question must be part of a "well pleaded complaint."

• It is important to note that subject matter jurisdiction is achieved based on the allegations contained in the complaint. Even if the defendant raises a question of federal law, for example, in its answer, if such a question is not raised in the complaint, the court does not gain subject matter jurisdiction on the basis of the defendant’s answer. It is the plaintiff (or counterclaimant, as the case may be) who has the burden of alleging facts in the complaint that will establish the court’s subject matter jurisdiction.
• The rationale of this rule is to permit reliable early determinations of whether the federal court has jurisdiction, so this issue is not left to turn on later developments.

Subject Matter Jurisdiction

Definition - Level three

Finally, jurisdiction refers to the inherent authority of a court to hear a case and to declare a judgment.

• When a plaintiff seeks to initiate a suit, she must determine where to file the complaint. The plaintiff must file suit in a court that has jurisdiction over the case.

If the court does not have jurisdiction, the defendant may challenge the suit on that ground, and the suit may be dismissed, or its result may be overturned in a subsequent action by one of the parties in the case.

Instructor Xiang Li

Jurisdiction in civil litigation

For example, a state court's subject matter jurisdiction includes the civil laws passed by its own state, but doesn't include patent disputes or immigration violations, which Congress allows to be heard only in federal courts.

• And no court can hear or decide a case unless the parties agree to be there or live in the state (or federal district) where the court sits, or have enough contacts with the state or district that it's fair to make them answer to that court. (Doing business in a state, owning property there, or driving on its highways will usually be enough to allow the court to hear your case.)

In civil litigation, jurisdiction means the authority of a court to hear and decide a case.

• To make a legally valid decision in a case, a court must have both "subject matter jurisdiction" (power to hear the type of case in question, which is granted by the state legislatures and Congress) and "personal jurisdiction" (power to make a decision affecting the parties involved in the lawsuit, which a court gets as a result of the parties' actions).

Federal judicial system

Federal district courts are courts of original jurisdiction.

• District courts, like all federal courts, are also courts of limited subject matter jurisdiction, in that statutes authorize them to hear only certain kinds of cases, namely those based on federal questions or diversity of parties.
• Circuit Courts are courts of appellate jurisdiction as they are authorized only to review decisions on appeal from district courts, certain specialized federal courts or federal administrative agencies.
• United States Supreme Court has original jurisdiction over cases affecting ambassadors and in which states are parties. Its appellate jurisdiction over all other types of cases is largely discretionary.

Definition - Level two

Generally, courts of general and special jurisdiction have original jurisdiction over most cases, and appeals courts and the jurisdiction's highest court have appellate jurisdiction, but this is not always the case.

• For example, under Article III, Section 2, Clause 2, of the U.S. Constitution, the U.S. Supreme Court is a court of appellate jurisdiction. However, under the same clause, that court has original jurisdiction in cases between states. Such cases usually concern disputes over boundaries and waterways.

Jurisdiction can also be used to define the proper court in which to bring a particular case. In this context, a court has either original or appellate jurisdiction over a case.

• When the court has original jurisdiction, it is empowered to conduct a trial in the case.
• When the court has appellate jurisdiction, it may only review the trial court proceedings for error.

Supplemental Jurisdiction

Definition - Level one

In the law, jurisdiction sometimes refers to a particular geographic area containing a defined legal authority.

• For example, the federal government is a jurisdiction unto itself. Its power spans the entire United States.
• Each state is also a jurisdiction unto itself, with the power to pass its own laws.
• Smaller geographic areas, such as counties and cities, are separate jurisdictions to the extent that they have powers that are independent of the federal and state governments.

Pendent jurisdiction

Ancillary jurisdiction

The new supplemental provisions

Discretionary rejection

Venue not required

Subject Matter Jurisdiction

Definition

General vs. Limited

Federal courts

Diversity vs. Federal question

Burden of proof

Consent

Dismissal at any time

Federal Question Jurisdiction

Constitutionality

Exclusive vs. General

Federal law creates claim

Construction of federal law

Well-pleaded complaint rule

Ascertaining proper jurisdiction

There are three prerequisites a trial court must satisfy before it can entertain a plaintiff’s claim:

• jurisdiction over the subject matter (usually referred to as subject matter jurisdiction);
• jurisdiction over the parties or things (usually referred to as personal jurisdiction);
• Venue.

Diversity Jurisdiction

Time for determination

Diversity need only exist at the commencement of the action. The existence of diversity is determined as of the commencement of the action. A change in either party’s citizenship after the filling of the suit does not deprive the court of jurisdiction. If diversity existed between the parties at that date, it is not defeated because one of the parties later became a citizen of the same state as his opponent.

• Example: Chris and Matt are involved in a motor vehicle collision in which Chris sustained injuries. At the time of the collision, Chris and Matt were both citizens of Rhode Island. Assume for the purposes of this question that Chris’s cause of action arose at the time of the collision. A few months after the collision, Matt moves to Massachusetts with the intention of residing there permanently. Six months after the collision, Chris brings an action against Matt in federal court. Even though Chris and Matt were citizens of the same state, Rhode Island, at the time the cause of action arose, because Matt changed his domicile and was a citizen of Massachusetts at the time Chris filed suit, diversity of citizenship exists. If, during the course of the lawsuit, Matt changes his domicile back to Rhode Island, diversity is not defeated.

Constitutional provision

Complete diversity

Date of determination

Domicile vs. Residence

Diversity involving corporations

Amount in controversy

Aggregation of claims

Claim based on the merits

Remember !!!

Complete Diversity

If P’s claim clearly "arises" under federal law, it qualifies for federal question jurisdiction even if the claim is invalid on the merits.

• Here, the federal court must dismiss for failure to state a claim upon which relief may be granted (FRCP 12(b)(6)), not for lack of subject matter jurisdiction.

To conceptualize this rule, you can draw a vertical line in the middle of a piece of paper. On the left-hand side, list all of the plaintiffs’ citizenships. On the right-hand side, list all of the defendants’ citizenships. If any jurisdiction appears on both sides of the line, there is no diversity of citizenship and jurisdiction under 28 U.S.C.§ 1332 is unavailable.

Jurisdiction

Nonfederal claim that turns on construction of federal law

However, If Congress in passing a federal statute decides that there should not be a private right of action for violation of that statute, a state-created cause of action that alleges a violation of the federal statute as an element of the state-law claim will never be construed to arise under federal laws.

• It is not enough that P is asserting a state-created claim which requires interpretation of federal law. Where federal law is an element of a state law claim, it suffices to support federal question jurisdiction only when it is important to the outcome of the case.
• Example: P brings a state-court product liability suit against D for injuries sustained by taking a drug made by D. P claims that D violated the federal FDA statute by mislabeling the drug, and that this mislabeling automatically constitutes common-law negligence. D wants to remove to federal court, so it claims that the case is within federal question jurisdiction, because its disposition requires interpretation of a federal statute. Held, no federal question is raised, because P’s claim did not "arise under" federal law.

Jurisdiction generally

Subject matter jurisdiction

Personal jurisdiction

Venue

Step One

Subject matter jurisdiction

Step Three

Venue

Step Two

Personal jurisdiction

First of all, make a choice between federal court or state court. If the case is a federal case, you must then ask whether the court has subject matter jurisdiction. Essentially, this means that one of the following two things must be true:

• Diversity: Either the case is between citizens of different states (with "complete diversity" required, so that no plaintiff is a citizen of the same state as any defendant) and at least $75,000 is at stake; or
• Federal question: The case raises a "federal question." Essentially, this means that plaintiff’s right to recover stems from the U.S. Constitution, a federal treaty, or an act of Congress. (There is no minimum amount required to be at stake in federal question cases.)

Then, make sure that the court has "personal jurisdiction" or "jurisdiction over the parties." You must check to make sure that:

• D had minimum contacts with the forum state (whether the court is a state or federal court); and
• D received such notice and opportunity to be heard as to satisfy the constitutional requirement of due process.

Last but not least, check whether venue was correct. In federal court suits, the venue requirement describes what judicial district the case may be heard in. Essentially, the case must be heard either:

• in any district where the defendant resides (with special rules for multi-defendant cases; or
• in any district in which a substantial part of the events giving rise to the claim occurred.

Subject matter jurisdiction

General vs. Limited

Each state has its own judicial or court system within which there is a trial court of general jurisdiction. Additionally there is a federal judicial system. However, federal courts are courts of limited jurisdiction.

vs.

Unlike state courts of general jurisdiction (such as the Superior Court in California) which have jurisdiction over the subject matter of a wide variety of lawsuits, federal jurisdiction is limited in nature. Federal courts only exercise the limited subject matter jurisdiction bestowed by the Constitution and Congress.

Diversity & Federal question

In the federal courts, there are two basic kinds of controversies over which the federal judiciary has subject matter jurisdiction: (1) suits between citizens of different states (so-called diversity jurisdiction); and (2) suits involving a "federal question."

• Congress has conferred upon federal courts jurisdiction to decide federal questions i.e., cases or controversies arising under the Constitution and laws of the United States (28 U.S.C. § 1331) and cases or controversies between citizens of different states (diversity jurisdiction). (28 U.S.C. § 1332.)

Constitutional provision

The United States Constitution sets out the permissible scope of the judicial power of federal courts in Article III, § 2. It lists the following types of federal subject matter jurisdiction:

• cases “arising under" this Constitution, laws of the United States, and treaties (federal question jurisdiction);
• cases affecting ambassadors and other official representatives of foreign sovereigns;
• admiralty and maritime cases;
• controversies to which the United States is a party;
• controversies between states and between a state and citizens of another state;
• cases between citizens of different states (diversity jurisdiction);
• cases between citizens of the same state claiming lands under grants of different states;
• cases between a state or its citizens and foreign states and their citizens or subjects (alienage jurisdiction).

Definition

Subject matter jurisdiction refers to the question of whether a particular court has the power or competence to decide the kind of controversy that is involved.

• Subject matter jurisdiction means the power of a court to hear the type of claim being asserted. In other words, even though a state or federal court has jurisdiction over the parties in an action, it cannot try the case unless it has the power to adjudicate that kind of controversy.
• Note that subject matter jurisdiction is not an alternative to personal jurisdiction (the court's authority to enter a judgment binding on the particular defendant involved) but rather is an additional hurdle to be cleared.

design by Dóri Sirály for Prezi

Concurrent jurisdiction

There are two entirely distinct court systems in the U.S., while each state also has its own system of courts.

Keep in mind that this is not an exhaustive list. It is essential to read the text of each statute and any cases that analyze the statute to determine whether the federal trial courts have jurisdiction over the type of claim. In some cases (such as bankruptcy and maritime cases) the federal courts will have exclusive jurisdiction, which means that only the federal trial courts may hear such claims, not the state courts.

• Example: Andy brings a cause of action in admiralty law against Mark in a state trial court in Maine. Mark moves to dismiss the case on the ground that the state court has no subject matter jurisdiction over the case. Because, according to 28 U.S.C. § 1333, federal district courts “have original jurisdiction, exclusive of the courts of the States, of . . . [a]ny civil case of admiralty or maritime jurisdiction,” the case will be dismissed for lack of subject matter jurisdiction.

Congress has extended the federal trial courts’ jurisdiction to other matters, including cases involving:

• admiralty, 28 U.S.C. § 1333;
• federal bankruptcy cases, 28 U.S.C. § 1334;
• federal commerce and antitrust, 28 U.S.C. § 1337;
• federal patents, copyrights and trademarks, 28 U.S.C. § 1338;
• where the United States is a plaintiff, 28 U.S.C. § 1345.

On the other hand, the general federal question jurisdiction means federal courts shall have jurisdiction over those cases in which a right or immunity created by federal law must be a basic element of the plaintiff’s cause of action, not merely a collateral issue or introduced by way of defense. As a result, the chief problem in invoking this general federal question jurisdiction is in determining how to apply the “arising under” requirement in the statute.

Mas vs. Perry

Analysis: Domicile requires two things: Presence + Intent. Although Ps were present in Louisiana for educational purposes, they had not formed the intent to make Louisiana their permanent residence. Wife’s citizenship never changed despite her various residences because she never had the intention to remain permanently in any of those residences. Because she never effectively changed her domicile, she remained a domiciliary of Mississippi. Therefore, the court had proper jurisdiction over her claim under 28 U.S.C. § 1332(a)(1). Husband retained his status as a French citizen. Therefore, the court had proper jurisdiction over his claim under 28 U.S.C. § 1332(a)(2).

Conclusion: The court affirmed the trial court’s ruling.

Exclusive vs. General

Jurisdiction

Louisville & Nashville Railroad v. Mottley

Analysis: Since P’s claim was merely a breach of contract claim, and the federal statute was not essential to that claim, there was no federal question – the fact that federal law was an integral part of D’s anticipated defense is irrelevant.

Conclusion: The plaintiff’s federal question must appear in the allegations of the complaint, and anticipated defense, involving federal law are inadequate for federal question jurisdiction.

Federal law creates claim

Easy one

There is no precise definition of a case "arising under" the Constitution or laws of the United States. But in the vast majority of cases, the reason there is a federal question is that federal law is the source of the plaintiff’s claim.

• There is generally no problem when federal law creates the claim sued upon. As Justice Holmes put it, “a suit arises under the law that creates the cause of action.” Federal question jurisdiction will definitely exists, when federal law is the source of the cause of action. In other words, if the plaintiff’s cause of action derives from federal law, the case necessarily is one falling within the federal question jurisdiction.

Mas vs. Perry

Facts: Plaintiffs, husband & wife, brought an action against Defendant, their landlord, in a federal court in Louisiana. Ps claim that D had set a two way mirror in their room and had watched them in action. Husband P was a French citizen and wife P was a resident of Mississippi. They were in Louisiana for education purposes and were not sure where they would settle after college. D was a citizen of Louisiana. D claims that Ps were Louisiana domiciliary and the federal court had no subject matter jurisdiction.

Issue: Does the federal court have diversity jurisdiction over this matter?

Aggregation by single plaintiff

Additional defendants - But a plaintiff who has aggregated his claim against a particular defendant, usually may not join claims against other defendants for less than the jurisdictional amount.

• Example: P has two claims, each for $40,000, against D1. P will be deemed to meet the amount in controversy requirement as to these claims, because they aggregate more than $75,000. But if P tries to bring D2 into the lawsuit, and has a single claim worth $40,000 against D2, most courts will not allow this claim, because P’s total claims against D2 do not exceed $75,000, and the doctrine of supplemental jurisdiction does not apply.

Time for determination

The existence of diversity is determined as of the commencement of the action. If diversity existed between the parties on that date, it is not defeated because one of the parties later moved to a state that is the home state of the opponent.

• The citizenship of each party must be determined as of the time the lawsuit is commenced. A party's domicile at the time of the events that give rise to the Cause of Action or a change of domicile during the course of proceedings does not affect the court's jurisdiction.
• This rule, of course, gives a person contemplating a lawsuit the opportunity to change his or her domicile just before serving legal papers that start an action. This tactic has been challenged on a few occasions on the ground that it violates another federal law that prohibits collusion to create federal jurisdiction.
• Generally, the courts have ruled that a plaintiff's motives in moving to a new state are not determinative, and the only question is whether in fact the plaintiff's domicile is different from that of the defendants at the time the lawsuit begins.

Example 4

Complete diversity

Mary, Joe, and Charles bring an action in federal court against Todd, Beth, and Larry. Mary, Joe, and Charles are citizens of Indiana, Illinois, and Pennsylvania, respectively. Todd, Beth and Larry are citizens of Iowa, Florida and Illinois, respectively. Diversity of citizenship does not exist.

Example 3

Mary, Joe, and Charles bring an action in federal court against Todd, Beth, and Larry. Mary, Joe, and Charles are citizens of Indiana, Illinois, and Pennsylvania, respectively. Todd, Beth and Larry are citizens of Iowa, Florida and Georgia, respectively. Diversity of citizenship exists.

Example 1

Example 2

The single most important principle to remember in connection with diversity jurisdiction is that "complete diversity" is required. That is, it must be the case that no plaintiff is a citizen of the same state as any defendant.

• There must be complete diversity of citizenship between the parties on each side, i.e., all plaintiffs must be citizens of different states than all defendants. The "rule of complete diversity" holds that there is no diversity jurisdiction when any party on one side of the dispute is a citizen of the same state as any party on the other side. If any plaintiff shares a common citizenship with any defendant, then diversity is destroyed and along with it federal jurisdiction.
• This does not prevent a pair of plaintiffs, or a pair of defendants, from being co-citizens.

In a suit between citizens of different states, the fact that a foreign citizen (or foreign country) is a party does not destroy diversity.

• For example: P, a citizen of Ohio, sues D1, a citizen of Michigan, and D2, a citizen of Canada. Diversity jurisdiction exists.

Mary, Joe, and Charles, all citizens of Indiana, bring an action in federal court against Todd, Beth, and Larry, all citizens of Iowa. Diversity of citizenship exists.

Mary, Joe, and Charles, all citizens of Indiana, bring an action in federal court against Todd, Beth, and Larry. Todd and Beth are citizens of Iowa; Charles is a citizen of Indiana. Diversity of citizenship does not exist.

Constitutionality

The power of federal courts to try diversity cases comes from the Article 3, Section 2 of the Constitution, which provides that: "the judicial power of the United States may extend to controversies between two or more states, between a state and a citizen of another state, between citizens of different states, or between a state and foreign states citizens or subjects."

This grant is repeated in a statute, 28 U.S.C. 1332: (a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between –

• citizens of different States;
• citizens of a State and citizens or subjects of a foreign state;
• citizens of different States and in which citizens or subjects of a foreign state are additional parties; and
• a foreign state . . . as plaintiff and citizens of a State or of different States.

Aggregation by single plaintiff

If a single plaintiff has a claim in excess of $75,000, he may add to it any other claim of his against the same defendant, even though these other claims are for less than the jurisdictional amount. This is done by the doctrine of supplemental jurisdiction.

• No claim exceeds $75,000 - Even if a plaintiff does not have any single claim worth more than $75,000, he may add together all of his claims against a single defendant. So long as these claims against a single defendant total more than $75,000, the amount in controversy requirement is satisfied.

Aggregation of claims

Aggregation by multiple plaintiffs

Counterclaim

It depends on different situations.

• At least one plaintiff meets amount - If one plaintiff meets the jurisdictional amount, it’s not completely clear whether the other plaintiffs may join their related claims against that same defendant. The plaintiffs may probably use the doctrine of "supplemental jurisdiction" so as to enable the low-amount plaintiffs to join their claims together with the high-amount plaintiff.
• No single claim meets the amount - If no single plaintiff has a claim or claims meeting the jurisdictional amount, aggregation by multiple plaintiffs is not allowed. (Exception: Where two or more plaintiff unite to enforce a single title or right in which they have a common and undivided interest, aggregation is allowed.)

If the plaintiff sues in federal court for less than the jurisdictional amount, and the defendant counter-claims for an amount which, either by itself or added to the plaintiff’s claim, exceeds the jurisdictional amount, aggregation is not permitted.

Aggregation by multiple plaintiffs

Special restrictions for class actions

• In class actions, until recently there has been an especially stringent, and clear, rule: every member of the class had to satisfy the jurisdictional amount. This meant that class actions in diversity cases were rarely possible. Some courts, however, have recently ruled that as long as the named class representatives each have a claim in excess of $75,000, the supplemental jurisdiction doctrine applies, so that the unnamed members need not meet the jurisdictional amount.

Counterclaim

Suit initially brought in federal court - If P sues in federal court for less than the jurisdictional amount, and D counterclaims for an amount which (either by itself or added to P’s claim) exceeds the jurisdictional amount, probably the amount in controversy requirement is not met.

Removal by defendant - The plaintiff may never remove, even if D counterclaims against him for more than $75,000. (The removal statute simply does not apply to plaintiffs, apart from amount-in-controversy problems.) If the defendant counterclaims for more than $75,000, but plaintiff’s original claim was for less than $75,000, the result depends on the type of counterclaim. If D’s counterclaim was permissive (under state law), all courts agree that D may not remove. If D’s claim was compulsory under state law, courts are split about whether D may remove.

Jurisdiction

Definition

When opposing parties in a lawsuit are citizens of different states (including corporations incorporated or doing business in different states) or a citizen of a foreign country, this places the case under federal court jurisdiction, pursuant to Article 3, section 2 of the U. S. Constitution, and the federal Judicial Code, if the amount in controversy exceeds $75,000.

• Example: P, a citizen of California, wants to sue D, a citizen of Oregon, for hitting P with D’s car. Assuming that P’s damages exceed $75,000, P can bring her negligence suit against D in federal court, because it is between citizens of different states.

Essential question

A plaintiff cannot invoke the original jurisdiction of the federal courts by importing a federal question into his complaint that is not essential to his case.

• A federal claim or question is sufficient to vest the court with jurisdiction unless it clearly appears to be immaterial or made solely for the purpose of obtaining jurisdiction, or where the claim is wholly insubstantial and frivolous.
• Where the court’s federal question jurisdiction is properly invoked, there is no minimum amount in controversy requirement.

Definition

• Jurisdiction means a power of court to adjudicate a particular case.

why? What's Function?

The right of an individual to take her case into a federal court is assured by Article III, § 2 of the U.S. Constitution. This provision extends the federal judicial power to controversies between the citizen of a state and the government of a different state, citizens of a different state, or between a state or its citizens and a foreign government or its citizens.

It is put into effect by a statute that limits federal diversity jurisdiction to cases involving a dispute worth more than $75,000. This minimum is intended to keep small cases from clogging the calendars of federal courts. Cases worth less than $75,000 must be brought in a state court even though diversity of the parties' citizenship otherwise would entitle them to be brought in federal court.

Definition

Supplemental jurisdiction is the authority of United States federal courts to hear additional claims substantially related to the original claim even though the court would lack the subject matter jurisdiction to hear the additional claims independently.

Rationale

Supplemental jurisdiction is the means through which one can bring into federal court claims over which a federal court would normally not have subject matter jurisdiction. Essentially, a claim over which the court does not have original subject matter jurisdiction is attached to a claim over which the court has original subject matter jurisdiction.

This is a way for federal courts to hear claims for which they would not ordinarily have jurisdiction. Supplemental jurisdiction only exists in the situation where a lawsuit consists of more than one claim, and the federal court has valid jurisdiction (either diversity jurisdiction or federal question jurisdiction) over at least one of the claims. In that situation, if the federal claim and the other claims arise out of a "common nucleus of operative fact," then the court may (but does not have to) exercise supplemental jurisdiction to hear the other claims as well.

The origin and purposes of federal diversity jurisdiction have long been debated. It was created when the Constitution was first adopted, a time when loyalty to one's state was usually stronger than feelings for the United States. It was undoubtedly intended to balance national purposes with the independence of the states.

No

Yes

Even if diversity jurisdiction did help the economic growth of the United States, many people question whether it continues to be useful. Because these cases require substantial investments of time and energy by the federal judiciary in cases that arise under state law, proposals to curtail or abolish diversity jurisdiction have been introduced repeatedly in Congress since the 1920s. None of the proposals have been adopted, however.

Some scholars believe that the opportunity to take business and commercial disputes into an impartial federal court helped to encourage investment in the developing South and West. People from the industrialized Northeast felt more secure when their financial transactions in other states were not necessarily at the mercy of local prejudices.

Analysis of § 1367 - Subsection (a)

Under subsection (a), the additional claims to be attached through supplemental jurisdiction must “form part of the same case or controversy” as the count which properly invokes the court’s subject matter jurisdiction. In other words, there must be some sort of relationship between the count(s) over which the court has original subject matter jurisdiction and the count(s) over which the court will need supplemental jurisdiction.

• Example: Adam, a citizen of Michigan, files a complaint against Mary, a citizen of Michigan, in federal court. The complaint consists of two counts: violation of Adam's patent and negligence. Adam's patent claim involves his allegation that Mary marketed and sold a product that Adam claims he holds a patent for. This claim is based on federal law and the court will have federal question jurisdiction to entertain that claim. Adam's negligence claim involves the injuries Adam sustained when he slipped on an icy path on Mary’s property. This count is based on state law. Even though the court has subject matter jurisdiction over the patent count (in fact, the court actually has exclusive jurisdiction over that count), the court will not have supplemental jurisdiction over the negligence claim because the two claims are completely unrelated.

Remember: Supplemental jurisdiction does not only apply to claims against original parties. Pursuant to 28 U.S.C. § 1367(a), “claims that involve the joinder or intervention of additional parties” are also included.

Definition

The Constitution gives the federal courts jurisdiction over "controversies ... between the citizens of different states...." This is the grant of "diversity jurisdiction."

• A phrase used with reference to the jurisdiction of the federal courts which, under the U.S. Constitution, Art. III, § 2, extends to cases between citizens of different states designating the condition existing when the party on one side of a lawsuit is a citizen of one state and the party on the other side is a citizen of another state, or between a citizen of a state and an alien. The requisite jurisdictional amount must, in addition, be met.

Jin v. Ministry of State Security

Facts: Plaintiffs, a group of 51 visiting Chinese Nationals, U.S. residents, and U.S. citizens, alleged violations of their rights under the United States Constitution and Federal and State law by persons associated with the People’s Republic of China. The Plaintiffs practice Falun Gong, a self-improvement discipline. Plaintiffs allege that in an effort to eradicate Falun Gong, the government of the People’s Republic of China published a series of negative articles about the practice in state-run newspapers. Over the next few years, the government issued a ban on Falun Gong literature, and began a media campaign describing it as a cult whose members advocated criminal activity. Ultimately, Plaintiffs filed a defamation suit against the Defendant Ministry of State Security of China, following a news event put on by the Chinese government in which Falun Gong members lit themselves on fire. Plaintiffs alleged supplemental jurisdiction over the Ministry as the defamation suit arose under state law. Defendants moved to dismiss the defamation claim under Federal Rule of Civil Procedure 12(b) (1) and (6).

Issue: When is supplemental jurisdiction appropriate?

Statute of limitations

It is important to note that under 28 U.S.C. § 1367(d), if a claim is dismissed for lack of supplemental jurisdiction, the statute of limitations is tolled for 30 days, leaving the claimant the option to re-file in state court. The claimant also has the option to voluntarily dismiss other claims and re-file them in state court.

Personal jurisdiction

&

Venue

The application of the supplemental jurisdiction doctrine does not eliminate the requirement of jurisdiction over the parties, nor does it eliminate the requirement of service of process. It speaks solely to the question of subject matter jurisdiction.

• But often in the supplemental jurisdiction situation, service in the 100-mile bulge area will be available.

Where supplemental jurisdiction applies, probably venue requirements do not have to be satisfied with respect to the new party. But usually, venue will not be a problem anyway in these kinds of situations.

100-mile Bulge Rule

When supplemental jurisdiction is asserted over third-party defendants and indispensable parties, service may be effectuated by the 100-mile bulge rule, if such parties cannot be served within the state in which the federal court sits. The rule allows service on such added parties anywhere within 100 miles of the federal courthouse in which the action is pending. [FRCP 4(k)(1)(B)]