Three Questions
Does only state court, federal court, or both have power to hear claims?
What law will apply to this case?
Does ct. (state or federal) in state, have power to hear case over def. (PJ)?
Subject-Matter Jurisdiction
Federal courts are courts of limited jurisdiction granted to them by Article III of the Constitution; Two Types of Cases: Federal Question and Diversity
Federal Question Jurisdiction – the case arises under some federal law; cases involving claims under federal law
28 U.S.C. §1331 – All civil actions arising under the Constitution, laws, or treaties of the U.S. have original federal jurisdiction.
Article III § 2 of Constitution – federal judicial power shall extend to cases in law and equity arising under the Constitution, laws, or treaties of the U.S.
Article III is much more broad than §1331. Article III allows federal S-M J on the basis of federal defenses even in the absence of any federal claims. (Bank v. Osborn)
Article III is like a soup pot. If you see federal ingredient in the case, Article III gives federal question jurisdiction.
§1331 is much more narrow à well-plead complaint rule
Well-Pleaded Complaint Rule (Mottley); interpretation of §1331.
A federal question (claim under federal law) must appear in the plaintiff’s well-pleaded complaint for S-M J.
Plaintiff’s statement of own cause of action has to be based on U.S. laws or Constitution for Federal Question Jurisdiction and be necessary to complaint
A case involving an anticipated federal defense but no federal claim in the complaint cannot be brought in federal court b/c it doesn’t have S-M J. Also, federal questions raised by an answer are not sufficient as well.
Embedded Federal Questions in a state cause of action – A claim arises under state law, but has federal question embedded. To decide on the state law claim, you have to decide the federal question. (Merrell Dow).
Diversity Jurisdiction – Federal courts have authority to hear cases in which the dispute involves state law, but the parties in the case are citizens of different states and the amount in controversy exceeds $75,000.
Article III grants federal diversity jurisdiction as long as any two opposing parties are from different states
Article III is much more broad than §1332 because it doesn’t require an amount in controversy and doesn’t require complete diversity of citizenship.
§1332 (a) – grants original jurisdiction to federal district courts when the amount in controversy exceeds $75,000 and is between either:
1) citizens of different states
2) citizens of a state and citizens of foreign state/country
· §1332 requires complete diversity for federal diversity jurisdiction (Strawbridge)
o Complete diversity means that all plaintiffs are diverse from all defendants. Thus a suit with a single plaintiff and two defendants, one who is from the same state as the plaintiff, does not fall w/in diversity jurisdiction. Co-Parties lack of diversity doesn’t matter.
· §1332 is Congress’s attempt to limit federal jurisdiction.
· Citizenship for diversity purposes is determined by the Domicile test (Sheehan):
1) Presence/residence in the state, and
2) Intent to remain there
o Until you meet two-part test somewhere else, you are domiciled in original place (Mas).
o Diversity determined by examining citizenship of the parties on date complaint is filed.
o Plaintiff cannot add non-diverse defendant against whom he has no claim for purposes of defeating diversity jurisdiction (Rose)
§ §1332 (c)1 – A corporation is considered to be domiciled in every state in which it is incorporated and in the state in which it has its principal place of business.
1) Two tests for a company’s principal place of business: Nerve Center Test and Place of Operations Test (Peterson)
o Nerve Center Test – where the corporation makes its home office; where the activities of the corp. are directed and controlled
o Place of Operations Test – where the bulk of the physical, corporate activity takes place
§ Amount in Controversy must exceed $75,000 between the parties; the monetary limitation seeks to ensure that only “substantial” cases will be brought to federal court.
1) Each plaintiff must meet the amount in controversy requirement for there to be
ate and federal claims overlap factually. (Gibbs)
· Pendent Jurisdiction – plaintiff has asserted more than 1 claim against defendant (state/federal)
o Gibbs Test
§ 1) Find substantial federal question
§ 2) Common nucleus of operative fact
§ 3) District Court’s discretion
· Gibbs became part of §1367(a)’s basic grant of supplemental jurisdiction.
Finley overruled by language in §1367(a) that states “such supplemental jurisdiction shall include claims that involve joinder or intervention of additional Parties (local utility company in Finley is additional party).
· §1367(b) – When courts have S-M J only based on diversity (§1332)
i. Exception – limits the scope of (a) in certain types of cases. (If all of 3 triggers met, no supplemental jurisdiction).
1. 3 triggers
a. If anchor claim is solely based on §1332
b. Limitation only applies to claims by plaintiff
c. Look at particular joinder rules (asking how the party that’s apart from the anchor claim is joinged):
i. Is supp. claim against supp. person/entity made under Rule 14, 19, 20, 24?
ii. By supp. person/entity made party by 19/24?
Removal Jurisdiction – If a federal court has S-M J over a case, the defendant may remove the case from state to federal court.
· §1441 – Removal to Federal Court
(a) – Whenever federal courts have original jurisdiction,
