FEDERAL JURISDICTION AND PROCEDURE
I. ARTICLE III: COURTS OF LIMITED SUBJECT MATTER JURISDICTION
i. Federal courts are courts of limited smj and can only hear those cases or controversies that:
1. The Constitution gives them express power to hear; or
2. That Congress has given them jurisdiction over.
ii. A fed court must have SMJ over each and every claim in the suit
b. Pleading and Litigating SMJ
i. Complaint must affirmatively allege facts to show the basis of smj
ii. The burden of proving jurisdiction is on the party that brought the suit to fed court
iii. Once smj attaches, it remains
iv. Parties cannot waive defects in smj
v. Any party, including the court sua sponte, can raise a defect in smj at any stage of litigation; but not after final judgment in the case.
vi. A defect in smj is raised by a motion to dismiss and will result in dismissal of the case
1. But, if jurisdiction is based on §1332, the court may dismiss the non-diverse D BEFORE trial and retain jurisdiction over the remaining parties. This is allowed as long as the non-diverse D is not an indispensable party under Rule 19.
vii. When a case is removed to fed court and a defect in smj is found, the case will be remanded to state court- a party will file a motion to remand
II. DIVERSITY JURISDICTION
i. Diversity jurisdiction exists in suits between:
1. Citizens of different states
2. State and citizen thereof
3. Citizen and foreign state or its citizen
a. When there are alien parties on both sides- a fed court can only hear the suit if state citizens are parties on both sides as well
ii. Where the amount in controversy exceeds $75,000
b. Two Requirements
i. Diversity Requirement
1. The complete diversity rule says that all Ps must be diverse from all Ds; meaning no P can have the same citizenship of any D.
a. Complete diversity applies to aliens
2. Must be satisfied at the time the §1332 suit is filed in federal court or removed to fed court. [But, a non-diverse D can be dismissed as long as not indispensable and suit can remain if §1332 requirements satisfied.] 3. Usually, diversity is neither created nor destroyed by post-filing changes of the citizenship of the parties.
4. Strategies or devices to create diversity before suit is filed will be scrutinized carefully and rejected if they are “improper, collusively made or in bad faith” but courts may tolerate some strategies to defeat diversity (see below)
ii. Amount in Controversy
1. Amount in controversy must exceed $75,000 (i.e., must be at least $75,000.01)
2. Amount must usually be exclusive of interest, costs, and attorneys fees.
a. But, if state law or a contract entered into by the parties allows for the recovery of attorney’s fees, they can be included in the JA
b. If interest is part of the underlying obligation, such as interest owning on a defaulted note, then it can be included in the JA
3. JA attaches at the time of filing- and once it attaches usually remains
4. The court will use the “facially apparent” standard where the court determines from the face of the complaint whether the amount in controversy is “likely to exceed” the JA
a. D can challenge by filing a motion to dismiss for lack of SMJ due to inadequate jurisdictional amount and must demonstrate that to a legal certainty P cannot recover an amount in excess of $75,000.
b. A Ps claim concerning an amount in controversy is presumed correct, but a D may remove a suit to fed court if he can show that the amount in controversy satisfies the JA by a preponderance of the evidence. The P can only defeat removal by showing that to a “legal certainty” the amount in controversy will not exceed the JA
6. Aggregation of claims
a. Allowed for multiple claims of P against single D
i. Note §1367 provides a redundant basis for smj where single P suing single D, P can bring all claims when one claim satisfies the JA and the other claims share a common nucleus of operative facts.
b. No aggregation by single P against multiple Ds
i. Instead, P must allege an adequate amount in controversy with regard to claims against each D.
c. No aggregation by multiple Ps with separate claims under §1332 diversity to meet the JA
i. But, circumvention allowed under §1367. Multiple Ps can aggregate claims under limited circumstances (Exxon-Mobile):
1. Ps suing D in diversity; Ps joined under Rule 20 (joinder of parties) or Ps in class action.
2. All Ps diverse from D
3. At least one claim of one P exceeds $75k
4. Relationship b/w that one claim and all others brought by Ps is so related under §1367 so as to establish supplemental jurisdiction b/c share common nucleus of operative fact.
d. Multiple Ps may aggregate claims based on “single title or right” or “common and undivided interest”
i. Multiple Ps may aggregate the amounts in their claims when they have a common, undivided interest or when a single title or right is involved in the suit- ex) partnership debt
e. No aggregation by multiple Ps against multiple Ds under §1332
i. If joinder of Ds is proper (i.e., STO and CQLF), P must meet the diversity and jurisdictional requirements as to each D under §1332.
ii. But note, if P does not meet the jurisdictional amount requirement for both Ds, §1367 supplemental jurisdiction may be available if P’s claim against one D exceeded $75,000, so that the claim against the other D could be treated as a pendant claim.
c. Determining Citizenship
1. Citizenship = place of domicile
2. Domicile = physical presence + intent to remain indefinitely
a. Person may change domicile by establishing physical presence in another state and intending to remain there indefinitely. [Note: desire not to return to state of domicile does not establish intent for new one.] b. Person who has a domicile will not lose it until he acquires a new one.
c. Courts will look at circumstantial evidence to determine domicile
d. US citizens that leave the states and live abroad without the intent to remain there indefinitely become “stateless” for purposes of diversity
3. Alienage Jurisdiction
a. Lawful (non-permanent resident) or illegal aliens – citizen of home country
b. Permanent resident aliens – deemed state citizens of domicile state
D’s absence will impair his ability to protect his own interest; or
iii. D’s absence will subject the remaining Ds to the risk of incurring multiple or inconsistent obligations.
e. Other Issues
i. If P brings suit in state court that satisfies §1332 requirements, D can file a Notice of Removal in federal court. [See infra] ii. Sometimes when P brings a claim w/ good SMJ under §1332 against one D, P is allowed to join another claim against that D (a pendant claim) or join a claim against another D a pendant party). [See infra] iii. Also, a D may want to bring a counterclaim against the P; implead a third-party D, or intervene on either side of the suit. [See infra]
III. FEDERAL QUESTION JURISDICTION
i. Federal courts have jurisdiction over cases arising under federal law and the Constitution.
1. No jurisdictional amount requirement here.
b. The Well Pleaded Complaint Rule
i. Rule = Courts look to the face of P’s well-pleaded complaint to see if there is a question in P’s suit that arises under federal law.
1. Rule applies to Ds seeking removal
2. So, P’s complaint must show that the suit will arise under federal law.
3. Satisfied if federal law expressly or implicitly creates the cause of action.
ii. Federal Cause of Action
1. Suit arises under federal law where federal law expressly/impliedly creates the cause of action on which P is suing.
2. Also, but more rarely, case may arise under federal law even though state law creates cause of action, if it necessary for P to plead and prove a substantial proposition of federal law.
iii. Well-Hidden Federal Question
1. Lack of reference is not controlling so long as nature of federal right is clearly set forth.
2. So, P can not evade federal question by filing complaint in state court. D can remove by showing that P’s cause of action is created by federal law or that P must prove substantial proposition of federal law. [But, mere fact that state law requires reference to federal law is not enough.] iv. Frivolous Federal Claims
1. If complaint devoid of merit, it should be dismissed as not involving a federal controversy.
v. Federal Defenses
1. If P pleads a state law cause of action to which D has a federal defense, case does not arise under federal law (federal element does not appear on “face” of P’s well-pleaded complaint). It is also not enough for P to anticipate a federal defense.
2. Similarly, a federal compulsory counterclaim does not create federal jurisdiction.