Civil Procedure II
Casey
Spring 2012
4 requirements that must be satisfied before a court may hear a case:
1) personal jurisdiction,
2) proper notice,
3) subject matter jurisdiction
4) venue
Subject Matter Jurisdiction
1. Diversity Jurisdiction: Is it a case “between citizens of different states”? U.S. Constituion Article III, sec. 2
a. Under 28 USC 1332, federal courts may hear cases where
i. No defendant is a citizen of the same state as any plaintiff in the case AND
ii. More than $75,000 is in controversy
b. COMPLETE DIVERSITY: NO P SAME AS ANY D, CORPS HAVE 2 CITIZENSHIPS
i. No plaintiff may have the same citizenship as any defendant.
1. For purposes of diversity, citizenship is determined by “domicile,” which in turn, means one’s fixed and permanent home, which can be changed only by residing in another state with the intention to remain there. Mere residence in another state, without demonstration of intention to remain, does not equate to domicile/citizenship. Mas v. Perry
a. Domicile-intend to stay there indefinitely; No definite intent to leave to make home elsewhere; Do not acquire new domicile until physically arrive there to stay
ii. Corporations have the citizenship of
1. every state in which they are incorporated AND also
2. their principal place of business
a. Principal Place of Business Nerve-center test: The place where a corporation’s officers direct, control, and coordinate the corporation’s activities, normally HQ, provided that HQ is the actual center of direction, control, coordination Hertz Corp. v. Friend
i. Asserted rationale for diversity jurisdiction is to avoid prejudice against outsiders. The corporation will most likely be perceived as local where it employs the most people, conducts the most activities, and has the most interaction with the public.
b. If called corporation, treated as corporation under 1332(c)(1). Nomenclature, rather than legal characteristics control given the interests of efficiency and consistency. Hoagland v. Sandberg
iii. Other grouping of people (partnerships, labor unions) may be considered to have citizenship of each of their partners or members
1. In case of partnership, citizenship for diversity jurisdiction is determined by the citizenship by all general and limited partners Hart v. Terminix
c. AMOUNT IN CONTROVERSY: >$75K, GOOD FAITH, IF “LEGAL CERTAINTY”!RCVRD, THEN !SATISFIED
i. More than $75,000 in controversy for jurisdiction to be available
ii. If the plaintiff has claimed more than this amount, then determine whether claim made in good faith?
1. Legal certainty test: If court can say to a “legal certainty” that this amount could NOT be recovered, this requirement is NOT satisfied. It must appear to a legal certainty that the claim is really less than the jurisdictional amount to justify dismissal. A.F.A. Tours v. Whitchurch
a. Where the P will probably get less, but just might get more, amount in controversy requirement is satisfied.
2. Amount of damages recoverable may be measured either by P’s losses or profits unjustly received by D.
3. Where P seeks injunctive relief, measured by the extent of the impairment to be prevented by injunction, not only past losses but potential harm.
4. Court must afford P an “appropriate and reasonable opportunity to show good faith in believing that a recovery in excess of 75k is rsnbly possible
iii. Aggregation
1. One P can aggregate all of her claims against one D to meet the amount in controversy requirement, “even when those claims share nothing in common besides the identity of the parties (Everett v. Verizon Wireless)
2. A single P cannot aggregate amounts sought from different defendants.
3. However, in the case of a single defendant, as long as one P meets the AIC requirement, others may join as co-plaintiffs even though they are seeking less. Exxon Mobil
4. Multiple Ps
a. who join together in one lawsuit may not aggregate their claims to meet the jurisdictional requirement if the claims are separate and distinct.
b. may aggregate their claims only when they seek to enforce a single title or right, in which they have a common and undivided interest. If one plaintiff were to fail to collect his share, the remaining plaintiffs would collect a larger share.
2. Federal Question Jurisdiction: Is it a case that arises under federal law?
a. ESSENTIAL FEDERAL ELEMENT (Osborn): For federal law to be an “ingredient” of a case, one of the parties in the case would have to rely on federal law
1. to estb either a claim or defense in the lawsuit, or
2. at least raise a federal issue in proving her case
ii. Q: Does the claim contain an essential federal element such as it arises under federal law?
1. If the plaintiff is asserting a claim created by federal law, this ground for jurisdiction should be satisfied.
a. The claim may be expressly created by federal statute OR
b. Implied by federal courts for violation of a prohibition in a federal statute
iii. The arising under language in Article III is broad enough to apply to substantial issues of federal law in any case in which a party seeks to rely or establish a proposition of federal law in order to prove either a claim or a defense in the case.
b. 28 USC s. 1331 only applies if the plaintiff’s claim requires proof of federal law. The statute does not confer jurisdiction on the federal district courts over cases that involve federal law unless the federal issue is necessary to the proof of the plaintiff’s claim.
c. WELL-PLEADED COMPLAINT RULE (MOTTLEY)
i. Does the essential federal element appear on the face of the plaintiff’s well-pleaded complaint? (MOTTLEY)
1. If so, federal jurisdiction is appropriate.
2. Anticipated or actual defenses or counterclaims presented must be ignored for purposes of assessing the propriety of federal question jurisdiction. (Mottley)
3. Artful Pleading Doctrine: Is the presence (or absence) of a federal element genuine or artfully pleaded.
d. Holmes creation test: a claim “arises under” if the federal law creates the cause of action.
i. T.B. Harms v. Eliscu court says it’s more useful for inclusion than exclusion. It’s just a starting point.
e. Merrell Dow: appears to reject jurisdiction based on embedded federal issues.
i. Merrell Dow court held that to allow plaintiffs to turn their negligence claim into one “arising under” federal law, simply by alleging that the D was negligent for failure to provide the warnings required by the federal statute, would fly in the face of Congress’s decision not to create a federal right to sue for damages
i. 1441(b) a diversity case is only removable if “None of the parties in interest properly joined and served as defendant is a citizen of the state in which such action is brought”
ii. The exception to “no removal allowed if any D is a citizen of the state where the action is pending” rule is that most state courts class-actions can be removed e/t one or more defendants are citizens of the forum state.
e. Where suit goes: When a case is removed, it passes to the federal district court for the district and division embracing the place where the state cause of action is pending. 1441(a)
f. In removal cases, the usual rules governing existence of a federal question or of diversity, and those governing the jurisdiction, apply. If there is no federal question, diversity must be complete.
g. Entire suit removed unless particular defendant can't be sued in fed. Ct. When the defendant properly removes a suit to federal court, the defendant’s entire suit is removed, including not only the specific claim that gives rise to removal jurisdiction, but also any related claims the federal court has power to hear under supplemental jurisdiction.
h. Federal jurisdiction predicated on diversity of citizenship can be sustained even if there did not exist complete diversity at the time of removal to federal court, so long as complete diversity exists at the time the district court enters judgment. Catterpillar Inc. v. Lewis
i. You can cure jurisdiction anytime by dismissing parties. Nondiverse defendant dismissed after motion to remand was denied but before trial.
ii. If there was a jurisdictional defect at the time of removal, so that the case could have been remanded but was not, and the defect is cured before final judgment is entered, interests of finality, efficiency, and economy justify disregarding that defect on appellate review, even if the plaintiff timely moved to remand and the district court erroneously denied that motion.
i. Mechanics of Removal
i. Time D must usually file for removal within 30 days of the time he receives service of the state court complaint
ii. All Ds joined: All defendants (except purely nominal ones) most join in the notice of removal.
iii. The removal decision is not irrevocable.
1. P can make a motion in federal court to remand the case back to state court.
a. If the basis for the motion is failure to comply with the procedural requirements, motion must be made within 30 days after removal, or the objection is waived. 1447 ©
b. A motion to remand on the basis of lack of subject matter jurisdiction, however, may be made at any time prior to final judgment in the case.
