Schwartzchild
Civ Pro
Spring 2012
1. SMJ: State or Fed Ct? (I.e., whether fed ct has constitutional + statutory authority to resolve a certain kind of claim
a. Powers of State + Fed Gov: U.S. has state + fed ct system
i. State
1. General J/D: any kind of claim b/t any person (note–unless legal authority says otherwise)
2. Exclusive J/D: sole j/d over: tort (e.g., personal liability, products liability), breach of K, domestic cases, divorce, probate proceeding
ii. Fed
1. Limited J/D: Sec 2, Article III of U.S. Constitution– authorizes fed gov to enact statutes to permit lower fed cts to decide certain kinds of cases (e.g., 1331, 1332)
2. Exclusive J/D + Original (i.e., ct has power to hear the case for the 1st time): claims where U.S. is a party, patent infringement, admiralty + maritime, bankruptcy, claims against foreign state
iii. Concurrent J/D: State + fed share SMJ over claim
1. Gives P the choice as to which ct to file claim
b. 2 Approaches For P To Assert Claim in Fed Ct
i. Federal Question SMJ– 1331: fed district cts have original J/D over “all claims arising under the Constitution, laws, or treaties of the U.S.”
1. Note– P can elect not to plead every claim, assert only state claim to avoid fed Q J/D
2. Broad v. Limited Reach
a. Sec 2, Article III– allowed Congress to confer broad Fed Q SMJ where fed law is merely an ingredient to a claim
b. 1331– congress limited fed dis cts less power to claims “arising under” fed law
3. 2 Reqs For P to Establish Fed Q SMJ:
a. Assert fed Q arising under constitution, treaties + laws of the U.S. (i.e., not an anticipated affirmative defense of D)
b. Fed Q must appear in P’s well pleaded complaint (i.e., rule 8 req a short + plain statement of the grounds for ct J/D)
i. Fed Q J/D + Well- Pleaded Complaint Rule – D promised to provide P w/ lifetime free passes for railroad transportation. P sued D for breach of K. In P’s complaint, P pled that the D stopped honoring the passes b/c Congress passed a statute that prohibited railroads from giving free transportation. In P’s complaint, P alleged that the statute didn’t apply to their free passes +, if it did, it was unconstitutionalàP’s original cause of action must arise under U.S. Constitution + must appear in complaint (Louisville & Nashville Railroad v. Mottley.).
1. As Applied: Fed Q– no, P’s original cause of action (i.e., breach of K) doesn’t arise under constitution. An anticipated defense (i.e., statute is unconstitutional) by P to an original cause of action isn’t enough.
ii. Diversity SMJ–1332(a):
1. Def: fed district cts have original J/D where matter in controversy exceeds $75,000 (exclusive of interest + costs) + arising b/t:
a. Citizens of Diff States
b. Citizens of a State + Citizens/subjects of a Foreign State
i. Except– B/T citizens of a state + citizens/subjects of a foreign state who are lawfully admitted for permanent residence in the U.S. + domiciled in the same State
c. Citizens of Diff States + Citizens of a Foreign State are Additional Parties
2. Establishing Diversity of Citizenship
a. Time For Measuring Citizenship: Date of commencement of action (i.e., date complaint is filed)
i. I.e., No citizenship if P moves to another state for the sole purpose of establishing diversity
b. PP: provide neutral forum to guard against local state prejudice
c. Complete Diversity Req:
i. Article III– only req minimal diversity (i.e., at least 1 P must be a citizen of a diff state from at least 1 D)
ii. Strawbridge’s Rule of Complete Diversity– complete diversity on either side of V (i.e., no P may be a citizen of the same state as any D)
d. Person: Present Domicile
i. Physical presence
ii. Intent to remain (i.e. an open-ended basis, no present plans to leave)
1. Proof of Subjective Intent: where D is registered to vote or has health insurance, driver’s license, rents an apartment, bank account, register’s car
e. Domicile v. Residence
i. Domicile– where D regards as home– a true, fixed, principle, permanent home, to which D intends to return + remain
ii. Residence– D lives, but intends to leave
1. P filed suit against D1 (2 individuals) + D2 (1 Corporate D), all citizens of NY, in NY fed ct. In complaint, P alleged he was a U.S. citizen residing in France, w/o establishing state of citizenship. Ds filed a motion to dismiss under 12(b)(1) for lack of SMJàDiverse residences don’t support diversity J/D (Redners v. Sanders).
a. Diversity of Citizenship: 1332(a)(3)– No.
b. 1332(a)(2)– No, P asserts he is a citizen of CA, demonstrated by license to practice law in CA. P fails to establish domicile b/c P fails to explain residency in France, purposes for living there, intent to return to CA.
c. 1332(a)(3)– No, Residency isn’t synonymous w/ citizenship. P is a U.S. citizen residing in France; the case doesn’t involve an action b/t a citizen of a state or a citizen of a foreign country
d. Note– P’s CA citizenship would have been proper if P did not intend to remain in France, a temporary change in residence, doesn’t change domicile for J/D
f. Corp: 1332(c)(1)–Both:
i. Any state by which it has been incorporated
ii. Principle place of business
1. Nerve Center Test (i.e., Hertz)– Corp headquarters + where high level officers + directors control + coordinate activities
a. Even if more activity (e.g., sales) occurs elsewhere
g. Partnerships: not entities, but are collections of individuals (i.e., Thus, citizenship of each member needs to be considered)
h. Legal Reps–1332(c)(2): where legal rep commences a claim, citizenship of incompetent controls (e.g., infant, incompetent adult, deceased person)
3. Determining The Amount in Controversy– 1332(a): A-I-C (exclusive of costs + interests) has to exceed $75,001
a. Legal Certainty Test– cts look to P’s complaint + review A-I-C w/ minimal scrutiny
i. PP: a presumption exists to its validity
ii. Except:
1. Bad Faith: 1332(4)(b)– if amount claimed is clearly in bad faith, then ct may deny judgment or impose ct costs on P
b. Equitable Relief: Injunction– (i.e., ct order for D to do/not to do something)
i. Majority– value of injunction to P
ii. Minority– cost to D
c. Law of Aggregation[GS1] – determining whether A-I-C req has been satisfied:
i. 1 P + Dàyes
ii. Promote independence or sovereignty of state gov
b. Standard To Remove:
i. Based on Federal Question Under 1331:1441(c)(1)(A)– P’s state ct claim arises under Constitution, laws, treaties of U.S.
1. Note– same principles that apply to determine whether fed Q exists also apply in determining whether a case filed in state ct is removable
ii. Based on Diversity of Citizenship Under 1332(a): 1441(b)(2)–
1. Req citizens be of diff state
2. A-I-C >$75,000
3. No D may be a citizen of forum state (I.e., case can’t be removed if there is an in-state D)
a. E.g., Julia from CA, sues Tommy, from NY, in NY state ct, Tommy can’t remove to NY fed ct
iii. Venue After Removal–1441(a): district + division embracing the place where such action is pending (division is admin sub-district w/in a district).”
iv. Tactical Advantage–1404(a): After removal, this allows fed ct to transfer to another fed district in diff state, but a state ct can’t.
v. Perform
c. 1446– Procedural Reqs By D:
i. Generally 1446(a)
1. File signed notice of removal in fed district ct pursuant (i.e., according to) to Rule 11
2. Containing a short + plain statement of the grounds for removal
3. Copy of all process, pleadings, orders served
ii. Notice of Removal:
1. Notice must be filed by D w/in 30 days:
a. 1446[GS2] (2)(B)– after receipt by service or otherwise[GS3] of the initial pleading or summons
b. 1446(3)– after receipt through service or otherwise, of a copy of an amended pleading or order that makes[GS4] the action removable (e.g., multiple D’s)
iii. Consent of All Properly Joined + Served Ds– 1446(B)(2)(A): all D’s properly joined + served, must join in or consent to removal of action (i.e., if 1 D refuses[GS5] to consent, then removal is improper + P may remand)
iv. 1/Yr Bar: 1446(c)(1)– Case may not be removed under subsection (b)(3) under 1332 more than 1 yr after commencement of the action
1. I.e., Diversity case à case can never be removed after a year of its state filing
2. Exception 1446(c)(3)(b): district ct finds that P has acted in bad faith in order to prevent D from removing action (e.g., P deliberately failed to disclose the actual amount in controversy to prevent removal)
v. Waiver– D waives right to remove case (1) after 30 days/1yr of deadline (2) by providing clear + unequivocal intent
1. D agreed in K provision that any dispute would be filed in state ct
2. D defends merits of suit in state ct
3. D moves to transfer venue
4. D files motion for summary judgment
5. D files counterclaim/other claim
[GS1]Aggregation problems
[GS2]Is there a different allotted time period for foreign citizens/subjects?
[GS3]Otherwise?
[GS4]Or order that makes action removable
[GS5]Will Ct make an exception where 1 D submits notice of removal too late?
