I. Subject Matter Jurisdiction
a. States have general sm jx (only statutory limits) under federal law. But, will never have any jx over sm that feds have exclusive jx over (i.e. patents)
b. Feds have specific jx over federal questions (1331) and diversity actions (1332)
c. Diversity of Citizenship, Constitution (Art. III.2) and Statute (1332)
i. Art. III.2 permits fed cts to entertain “cases between citizens of different states.”
ii. Congress has enacted statutes granting this diversity jx to fed cts. Statute mirrors constitution but adds amount in controversy requirement (>75k).
1. 1332 (a)(1): Diversity Jx
2. 1332 (a)(2): Alien Jx
iii. Constitution only requires minimal diversity but statute (because of Strawbridge) requires complete diversity.
iv. Diversity of Citizenship Controversy
1. “Many view as a misallocation of federal judicial resources – In an era of crowded fed ct dockets, feds should not be forced to spend valuable time interpreting and applying state law.”
2. If fed cts make a mistake in interpreting state law, there is no way a state ct can fix, bc state cts do not review fed judgments.
d. Diversity of Citizenship (1332)
i. Determined by domicile; to establish must have:
1. physical presence in a place;
2. intention to remain there indefinitey
Section 1332 (claims over $75,000):
ii. Citizens of different states 1332 (a)(1)
iii. Citizens of state and citizens of foreign state 1332 (a)(2)
iv. Alien admitted to the U.S. for permanent residence shall be deemed to be a citizen in which an alien is domiciled.
e. Complete diversity rule (1332 (a) (1))
i. Strawbridge – Established complete diversity rule
1. Held: Every plaintiff must be of diverse citizenship from every defendant. If one defendant and one plaintiff are co-citizens of the same state, there is no diversity jurisdiction.
2. Advantage: Reduces number of cases in federal cts
3. Disadvantage: One of the parties will be subjected to possible ‘hometowning.’
4. Exception is Federal Interpleader Act (1335) – establishes minimal diversity (for claimants to res).
a. “Interpleader is a procedure that allows someone in possession of property or money to force all adverse claimants to that property to litigate the ownership of that property in a single proceeding.”
i. “Model of efficient litigation because the question of ownership is litigated once, with all claimants and the present possessor of the property being bound by the judgment.”
f. Alienage Jurisdiction (Section 1332 (a)(2))
i. Citizen(s) of U.S. State v. citizen(s) of foreign state
g. Questions of Citizenship
i. Domicile Mas – husband domicile Paris, wife domicile Mississippi. Filed complaint in Louisiana. Archaic to make wife’s domicile the same as husbands. In this case, doesn’t make sense because he is an alien. They were both allowed to recover on the complaint because they were both diverse from the defendant, who was domiciled in Louisiana.
1. Physical presence AND
2. Intention to remain there
h. Citizenship of a corporation (Defined by federal statute)
i. Place of incorporation
1. Corporation’s domicile doesn’t necessarily mean it is incorporated there. Randazzo
ii. Principal place of business
1. Courts apply “total activity test” to determine principal place of business. Looks at nerve center and place of activity. J.A. Olson
a. Nerve center – where business radiates out (used when operations are evenly divided in several states)
b. Place of activity (more commonly used)
i. Far-flung operations – nerve center more important
ii. Sole ops in one state, executive in another – place of activity more important
iii. Activity of corp. is passive – How involved you are in what goes on (I.e. holding company), use brain of operation
i. Unincorporated Associations
i. Citizenship is that of each and every one of its members (must have complete diversity)
ii. Members of LLC – citizenship looks at each member of the LLC Belleville Catering
1. A member of the LLC can be another corp. or LLC, looks at the members of the corp or LLC.
j. Joinder – Still must maintain complete diversity
k. Amount in controversy must be over $75,000
i. Must be the amount that is known in good faith at the outset of litiga
be removable w/o regard to citizenship or residence of the parties.
3. Part e.1.b: removal of an action under this section must be made in accordance w/ section 1446…
4. Part e.6: nothing in this subsection shall restrict the authority of the d ct to transfer or dismiss action on the ground of inconvenient forum.
v. Causes for remand back to state ct:
1. D failed to follow procedures for removal (in 1446)
2. Feds lack subject matter jx (D has burden to prove P’s claim invokes sm jx)
vi. When Prime Time was added as a co-defendant to Bradford, Prime Time could not remove since Bradford did not originally remove within 30 days. Bradford’s silence on the matter waived his right to remove. The effect became binding on Prime Time. Therefore, Bradford did not wish to remove so the decision to remove between Bradford and Prime Time was not unanimous. Noble
vii. If there is a new complaint sets forth a NEW basis of federal jurisdiction, the defendants have a renewed 30 days to remove
viii. Procedure after removal (1447, Procedure After Removal Generally)
1. Part a: d ct may require all necessary orders and process to bring all proper parties before it, whether serve by process issued by state ct or otherwise.
2. Part b: May requiring removing party to file copies of all records and proceedings from state ct w/ clerk…
3. Part c: Case shall be remanded (at any time before judgment) if federal district ct. lacks subject matter jurisdiction.
4. Part d: remands are not appealable.
5. Part e: if after removal, the plaintiff wants to join additional defendants whose joinder would destroy sub mat jx, the ct may deny joinder or permit and remand to state ct.
vii. Only defendant may remove
