I. Subject matter jurisdiction
A. Do the Federal Courts have authority to hear this type of case?
B. State courts are courts of general jurisdiction. In most instances where federal courts have SMJ, their jurisdiction is concurrent with state court jurisdiction. Therefore, P can bring the action in either federal or state court.
C. If one federal court has SMJ, then they all do. Does not impose geographic limitations.
D. Federal Question Cases – 28 USC 1331
1. Two part test
i. Constitutional Test
· Cases in which there is a disputed issue of federal law
· Original ingredient of plaintiff’s claim is a federal question
ii. Statutory Test
· Look at what is in well pleaded complaint
· Federal law must give rise to cause of action
2. Well Pleaded Complaint Rule
i. A complaint that states only what is essential to P’s cause of action and which arises under federal law.
ii. Does not anticipate D’s defenses
iii. Louisville Case
· The Court said that to sue in federal court, under the statutory test, the P must assert a claim that arises under federal law.
· P in this case did not.
· P had sued for a breach of K, a state law cause of action that did not require them to prove any proposition of federal law.
3. Declaratory Judgment
i. Reverse the parties and determine if there would have been a federal question if the aggrieved party had brought the complaint.
4. Federal courts have obligation to inquire into jurisdiction on their own
i. Assumption is there is SMJ in state court but not in federal unless you establish it.
ii. If no federal issue exists, the court must dismiss
iii. Lack of subject matter jurisdiction not waiverable like PJ
II. Diversity of Citizenship Claims – 28 USC 1332
1. Citizens of different states
2. Citizens of state and subjects of foreign state
3. Citizens of different states and in which foreign states or citizens are additional parties
4. Foreign state as P and citizens of a state
5. (a)(4) Alien admitted for permanent residence is a citizen of the state in which the alien is domiciled.
– Ex. Citizen of state A and alien permanently domiciled in State A is NOT federal Claim
– However, this does not confer jurisdiction over two aliens. Amendment was added to restrict diversity jurisdiction not increase it. (Saddeh)
B. Corporation has SMJ where it is incorporated and its principal place of business
1. Principal place of business tests:
– 1) nerve center (where are executive functions);
– 2) where are everyday business activities;
– 3) combination of the two
C. Partnership and Unincorporated organization is deemed to be citizen where any partner/member is a citizen
D. Legal representative/Administrator is a citizen of the state of its party/descendent
E. Third party claim doesn’t destroy diversity
F. US citizen living abroad is a citizen of no state. So no diversity.
G. Two types of diversity
– If no state appears in both lists then complete
– Not constitutionally mandated but arises from case law interpretation of the diversity statute
– Not violated by IL v. MO v. IL
– If we find at least one state that is not in both columns then diversity is minimal
– Constitution requires this
H. Meaning of state citizenship
1. US citizenship + domicile
2. Domicile – state where the person has taken up residence with the intent to reside indefinitely
3. Residence is not the equivalent to domicile, having a residence is the state is necessary but NOT sufficient to establish a domicile for diversity purposes.
4. A person can only have one domicile
5. The time to measure citizenship is the date on which the complaint is filed in federal court.
I. Exceptions to diversity statute
1. The domestic relations exception-cases asking for divorce, custody, property division, and support are outside the federal courts diversity jurisdiction
2. Probate exception-federal courts will
o federal court
C. An action filed in state court over which federal court could have jurisdiction b/c of diversity or some other basis may be removed only if no D is from the forum state.
1. P(IL) and P(IL) v. D(MO) and D(IL) not removable unless second D is dismissed b/c no complete diversity.
D. A removed action is heard in federal district in which state court from which the action was removed sits (venue is not an issue)
E. Procedure and Time limits
1. D files a notice of removal setting forth the grounds for removal, together with all process, pleadings, and orders served upon D. This is filed in federal court, with service on all parties and a copy filed in state court. Once this is done, the case is removed, and there is nothing for either the state or federal court to do concerning removal.
2. Timing: Notice must be filed within 30 days of receiving notice that action is removable (either by receiving the initial summons and complaint or by receiving an amended pleading, order or other paper from it which it may first be ascertained that the case has become removable)
– Special Rule: If it is a diversity case, it must be removed within one year after being filed in state court
– In federal question cases, it can be removed anytime
1. If a P believes a case is improperly removed, P may file a motion for remand
– If based on improper procedure, it must be made within 30 days after filing of notice of removal
– If it appears federal court lacks SMJ, motion to remand can be made at any time.
2. An order of remand may not be reviewed on appeal.