o    US Const Art III Secs. 1, 2

§  Section 1. Establishes Judicial branch (Supreme Court + lower courts)  

§  Section 2. Specifies the subject-matter jurisdiction of the federal courts and requires trial by jury in all criminal cases, except impeachment cases

o    US Const Art IV Sec 1

§  Section 1. Provides for the responsibilities states have to each other, and the responsibilities the federal government has to the states (“full faith and credit given to the states”)

o    US Const Art VI

§  The Supremacy Clause - establishes the Constitution, Federal Statutes, and U.S. treaties as "the supreme law of the land." The Constitution is the highest form of law in the American legal system. State judges are required to uphold it, even if state laws or constitutions conflict with it.

     I.        Federal Question Jurisdiction

a.    Title 28 U.S.C. § 1331: The district courts shall have original jurisdiction of all civil actions arising under the Constitution, law or treaties of the United States…

                                          i.    “Arising under” – a case arises under federal law if the plaintiff is alleging a right or interest that is substantially founded on federal law, which consists of federal common law, federal constitutional law, federal statutory law, treaty law, and federal administrative regulations.

                                         ii.    Federal Question must appear in the complaint – must appear as part of plaintiff’s cause of action, as set out in a well-pleaded complaint. (FRCP 8a)

1.    A suit arises under the Constitution and laws of the United States only if the original statement of the plaintiff’s cause of action shows that it is based on the Constitution or federal statutes. A complaint does not raise a federal question if it does so only in anticipation of some defense. Likewise, the court may not look to a counterclaim asserted by the defendant to determine whether the plaintiff’s complaint states a federal question claim.

a.    Louisville & Nashville Railroad v. Mottley (1908) - Mottley’s rec’d lifetime passes for RR use in a settlement with named RR co.  Later, Congress made it illegal to issue free passes, and RR refused to honor Mottley’s free passes.  Fed court lacked SMJ b/c Mottley’s original complaint failed to state a cause of action in terms of federal question.  The federal law did not give rise to the plaintiffs’ claim, although it was the cause of the plaintiffs’ troubles.  The federal question issue only arose as a matter of anticipated defense by RR company, b/c RR company was just following federal rule in refusing to honor Mottley’s pass.

b.    Some actions are under the exclusive jurisdiction of federal courts (under other specific statutes). 28 U.S.C. §§ 1333-1365.

c.    In order to have a good Federal question claim, you will need to show (1) the conduct of which you are complaining is substantively wrong under federal law, and (2) the federal courts have the jurisdictional authority to redress the wrong.

   II.        Diversity of Citizenship Jurisdiction 28 U.S.C. § 1332 – Complete diversity, & amount in controversy exceeds $75k.  The federal courts have been given SMJ over controversies between citizens of different states, even thought the controversies do not involve questions of federal substantive law, in order to protect an out-of-state party from possible local bias in state courts. 

a.    Amount in Controversy (>$75k)

                                          i.    Exclusive of interest and costs; Determined only by what is claimed in the complaint, & doesn’t include defenses or counterclaims

                                         ii.    Doesn’t matter if ultimate judgment is less than $75k all that is necessary is that there is a good faith allegation that the amount in controversy is more than $75k.

1.    Good faith – means that there is a legal possibility to get this recovery. Complaint can be dismissed only if there’s no legal possibility to recover more than $75k.

                                        iii.    Amount “In Controversy”

1.    Collateral effects of a judgment may not be considered in this amount

a.    Ex.  If disability installments due, only the amount currently due can be claimed. Future installments cannot.

2.    Exclusive of Interests and Costs

a.    Attorney’s fees that are recoverable by contract or statute can be considered. Otherwise it cannot.

b.    Interest that is part of the claim is considered, as opposed to interest accrued by delay in payment (which is not).

3.    Equitable relief (ex. Specific performance, injunction, etc.) – since plaintiff doesn’t seek money damages, it may be hard to calculate the amount in controversy.

a.    Courts may look from plaintiff’s viewpoint – what is the value of harm caused by defendant?

b.    Or, Courts may look from defendant’s viewpoint – what would be cost to defendant if equitable relief were ordered?

c.    Or, some courts say amount in controversy satisfied if, under either of the 2 above tests, the amount exceeds $75k

4.    Punitive Damages – if it is permitted under state substantive law, then ok to consider because there is no legal certainty amount cannot be recovered.

                                       iv.    Aggregation of separate claims

1.    1 P v. 1 D – Where a single plaintiff has multiple unrelated claims against a single defendant, that plaintiff can aggregate those claims (add the amounts together), to satisfy the amount in controversy requirement.

2.    1 P v. 2+ D - In cases involving more than one defendant, a plaintiff may aggregate the amount claimed against multiple defendants only if the defendants are jointly liable (any of the defendants can be held liable for the full amount of the claim).  However, if the defendants are severally liable (where the parties are liable for only their respective obligations), plaintiff must satisfy the amount in controversy requirement against each individual defendant.

3.    2+ P v. 1 D – Several plaintiffs can aggregate their claims against a defendant only where they are seeking to enforce a single title or right in which they have a common or undivided interest (like in class actions)

b.    Complete Diversity - Every plaintiff must be of diverse citizenship from every defendant.  If one defendant and one plaintiff are citizens of the same state, there is no diversity jurisdiction (includes state citizen v. alien or foreign state, but not between 2 foreign entities, a U.S. state citizen must be involved).

                                          i.    Mas v Perry (1974) – Plaintiffs in LA to go to school (P1 from Miss., P2 from France). Action brought in Federal Court against LA domicile. Issue was whether there was a diversity of citizenship to have SMJ. 

1.    If any plaintiff shares a common citizenship with any defendant, then diversity is destroyed and along with it federal jurisdiction.

2.    Citizenship of an Individual is their domicile; mere residence in that State is not sufficient

a.    A person’s domicile is the place of ‘true, fixed, and permanent home and principal establishment, and to which he has the intention of returning whenever he is absent therefrom.’  A change in domicile may be effect by a) taking up residence in a different domicile and b) with the intention to remain there.

b.    A woman does not have her domicile or State citizenship changed solely by reason of her marriage to an alien.

                                         ii.    Citizenship of a corporation

1.    Any and every state of incorporation, and

2.    State in which it has its principle place of business

a.    Principle place of business is a fact question

b.    Courts have generally held that:

                                                                                          i.    If corporation has its executive officers in one state and its physical operation wholly pr predominantly in another state, the principle place of business is the state where physical operations are conducted.

                                                                                         ii.    If corporation performs its operational activities in many states, then the “nerve center” test applied, and the principle place of business is where the executive officers are located.

c.    Note: if incorporated in foreign state, then alien for diversity purposes. If principle place of business in U.S., then citizenship is of that state.

d.    Note: if opposing party is of same citizenship of any of the corporation’s citizenship’s, then no diversity.

                                        iii.    Citizenship of unincorporated Associations

1.    Citizenship is that of each and every one of its members.  The association may sue or be sued in their own name if local law permits. If not, and state follows the common law rule, then it is an aggregate of individuals

2.    Class Action – the relevant citizenship is that of the named members who sue or are sued on behalf of members of an association

3.    Partnerships – citizenship is that of each and every partner

c.    §1359 Federal court does not have jurisdiction if any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.

                                          i.    If a claim is assigned to another party, court would ignore citizenship of assignee to determine diversity jurisdiction (someone may do so just for purposes of getting SMJ). However, if the assignor retains no interest in the claim, then citizenship of assignee ok to consider for SMJ.

                                         ii.    For class actions, ok to select named members for purposes of diversity.

                                        iii.    Voluntary change in state citizenship - To be considered for diversity, the change must have been made before the suit is brought (although ok if changed after the cause of action). Change must be genuine, but motive is irrelevant.

                                       iv.    Ok to manipulate the choice of a rep, or assignment of a claim to defeat diversity (and so also removal). However, fraudulent joinder of an in-state defendant is no bar to removal.

d.    Class Action – complete diversity & more than $5 million

e.    Subsequent Addition of Parties – must still satisfy SMJ or if not, invoke supplemental jurisdiction

                                          i.    Rule 24(a) Intervention of Right - A potential party has the right to intervene in a case either (1) when a federal statute explicitly confers upon the applicant an unconditional right to intervene, or (2) when the applicant claims an interest relating to the property or transaction which is the subject of the lawsuit (and only by getting involved can they protect it).

                                         ii.    Rule 24 (b) Permissive Intervention – may be permitted in the court’s discretion where the intervenor’s action and the main action have a claim or defense involving a common question of law or fact.  Requires independent SMJ, or if none, Suppl. Jurisdiction (which is unlikely).

                                        iii.    Rule 25 Substitution – Changes in parties to a lawsuit ok if necessary due to death, incompetency, etc., after action has commenced.  Citizenship is still of the original party.

1.    Ex. If A sues B, and A dies, then C, administrator of A’s estate, is substituted. Citizenship considered is that of A, not C.

2.    As opposed to replacement, which happens if A sues B, then finds out that C, not B, is the right defendant. So C replaces B, and citizenship considered is of C

                                       iv.    Rule 14 Impleader - one party joins a third party into a lawsuit because that third party is liable to an original defendant.

1.    Example: A (NY) sues B (CA). B impleads C (NY) because C is liable to B.  A and C have same citizenship, but doesn’t matter because the impleader is between B and C.  However, if A impleads C, no diversity, and cannot use supplemental jurisdiction (but maybe ancillary). If a federal question, then there’s SMJ.

f.     Cross-Claims (Rule 13) – allows a party to assert a claim against a co-party, but only if the claim arises from the same transaction or occurrence as the underlying dispute. Must still invoke SMJ (or if not ancillary jurisdiction)

g.    Counterclaims (Rule 13)

                                          i.    Defendant’s counterclaim cannot be combined with plaintiff’s claim to reach amount in controversy requirement (for plaintiff’s original claim).

                                         ii.    A compulsory counterclaim (arising from the same transaction or occurrence as the original claim) does not need to meet amt in controversy requirement (this is ancillary jurisdiction, and also like impleader)

                                        iii.    A Permissive counterclaim (arising from a unrelated transaction) must meet the amount in controversy independently

                                       iv.    No removal to federal court based on counterclaim (where plaintiff’s claim does not meet amount in controversy requirement, but defendant’s counterclaim does.)

1.    A plaintiff cannot remove because removal is reserved for defendant

2.    But, traditionally, a defendant cannot remove either. So, a plaintiff with a small claim can require a defendant with a large claim to litigate in state court by being the first to file. However, there is a recent trend allowing removal.

h.    Exceptions – no matter if SMJ is satisfied, federal courts will not hear the following:

                                          i.    Domestic Relations – divorce, alimony, child support

                                         ii.    Probate Proceedings – the claim must involve actual probate (legal process of settling the estate of a deceased person) or annulment of a will or seek to reach property in the custody of a state probate court

 III.        Supplemental Jurisdiction

a.    28 U.S.C. § 1367

                                          i.    The authority of United States federal courts to hear additional claims substantially related to the original claim even though the court would lack the subject-matter jurisdiction to hear the additional claims independently. 

                                         ii.    The claim to be joined must arise from a common nucleus of operative fact as the claim that invoked SMJ.  This means the claims must arise from the same transaction or occurrence.

                                        iii.    This encourages efficiency by only having one trial at the federal level rather than one trial in federal court and another in state court. 

                                       iv.    However, if the case is brought as a diversity action (i.e., each defendant comes from a state different than each plaintiff), there generally is no supplemental jurisdiction if such claims would destroy complete diversity.

b.    Ancillary jurisdiction

                                          i.    Applies when the parties are in federal court because of diversity (i.e., each defendant is from a state different than each plaintiff) and one party wants to bring a claim against another party (possibly a third-party) which would otherwise defeat that diversity.

                                         ii.    Ancillary jurisdiction allows the federal court to continue hearing the case despite this lack of diversity because bringing in the 3^rd party (the party that would destroy diversity) is sufficiently related to and necessary for the fair conclusion of the claim

                                        iii.    Restraints of ancillary jurisdiction

1.    The additional non-federal claim must be sufficiently related to the original claim ("ancillary and dependent" rather than "new and independent"). Compulsory claims, claims which must be heard in the present case or they will be lost, are especially likely to be heard.

2.    A court is far more likely to grant ancillary jurisdiction to a claim asserted by the defendant rather than the plaintiff because the plaintiff chose the court in which to bring their case whereas the defendant was forced into the plaintiff's choice. This preference for defendants helps prevent a plaintiff from getting into federal court through suing one diverse defendant and simply impleading in the necessary non-diverse parties.

c.    Pendent jurisdiction - is the authority of federal court to hear a closely related state law claim against a party already facing a federal claim (based on federal ques OR diversity), or "jurisdiction over nonfederal claims between parties litigating other matters properly before the court." Such jurisdiction is granted to encourage both "economy in litigation," and fairness by eliminating the need for a separate federal and state trial hearing essentially the same facts yet potentially reaching opposite conclusions. However, in diversity complete diversity must be kept, only applies if additional claim does not meet amount in controversy.

                                          i.    United Mine Workers of America v. Gibbs, 383 U.S. 715 (1966)  - Gibbs was a manager who got in trouble with a union and was shut out of work.  He sued the union on two claims: one state (tort) and one federal (labor statute).  The issue was whether it was proper for federal court to exercise jurisdiction over the state claim. Court decides yes.  Gibbs has been read to require that (1) there must be a federal claim (whether from the Constitution, federal statute, or treaty) and (2) the non-federal claim arises "from a common nucleus of operative fact" such that a plaintiff "would ordinarily be expected to try them in one judicial proceeding."

                                         ii.    Ex.:  P (NY) asserts 2 claims on D (also NY), in fed court. Both claims arise from the same transaction.  Claim #1 invokes federal question jurisdiction, but Claim #2 is based on state law and doesn’t. No diversity here to bring Claim #2 to fed court. However, pendent jurisdiction would allow Claim #2 to be brought in with Claim #1 in fed court.

d.    Pendent party jurisdiction - the court's authority to adjudicate claims against a party not otherwise under the court's jurisdiction because the claim arises from the same nucleus of facts as another claim properly before the court.

                                          i.    Where plaintiff sues more than 1 defendant – if there is federal jurisdiction over the claim against one defendant, then the claim against 2^nd defendant which does not invoke SMJ may invoke suppl. Jurisdiction under pendent party jurisdiction if the claim arises from the same nucleus of common facts as the claim which did have SMJ. 

                                         ii.    If multiple plaintiffs asserting claim against 1 defendant – P1’s claim against D invokes SMJ, but P2’s claim does not (no diversity or federal question). However, Suppl. Pendent party jurisdiction can be invoked if arising from a common transaction with claim that did have SMJ.

1.    Exxon Mobile Corp v Allapattah Services, Inc.  - dealers of a fuel company (1) filed a class action, and invoked the District Court's diversity jurisdiction. The issue was whether the court had properly exercised supplemental jurisdiction over the claims of class members who did not meet the jurisdictional amount.  Yes.  The Supreme Court found that, where the other elements of jurisdiction were satisfied and at least one named plaintiff met the amount-in-controversy requirement, § 1367 authorized supplemental jurisdiction over claims of other plaintiffs in the same U.S. Const. art. III case or controversy, even if those claims were for less than the jurisdictional amount. By enacting 28 U.S.C.S. § 1367, Congress overruled prior Supreme Court precedent that had required every plaintiff to separately satisfy the amount-in-controversy requirement.

 IV.        Venue (The exercise of discretion by the courts) – Venue determines what county or judicial district a case may be brought in.  The purpose of venue rules is to limit the plaintiff's choice of forum in order to insure that the locality of the lawsuit has some logical relationship to the litigants or the subject matter of the dispute.  Venue, unlike subject matter jurisdiction, may be waived.  Stated another way, the distinction is this:  jurisdiction is the power to adjudicate, venue relates to the place where judicial authority may be exercised and is intended for the convenience of the litigants. 

a.    §1391 – Venue Generally - Summarized: 

                                          i.    Venue is proper in a judicial district:

1.    where any defendant resides, if all defendants reside in the same state.

2.    in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property in dispute is located

3.    if there is no district in which the action may otherwise be brought

a.    if federal jurisdiction based on diversity only,

                                                                                                  i.    in which any defendant is subject to personal jurisdiction at the time the action is commenced

b.    if federal jurisdiction is not based solely on diversity

                                                                                                  i.    any district in which any defendant may be found, if there is no district in which the action may otherwise be brought

c.    Where defendant is the U.S., or agency of, acting in official capacity

                                                                                                  i.    Where the plaintiff resides if no real property is involved in the action

                                                 ii.    For purposes of venue, a defendant that is a corporation is deemed to reside in any district in which it is subject to personal jurisdiction.

                                                iii.    For purposes of venue, an unincorporated association “resides” where it does business

                                               iv.    An alien may be sued in any district.

                                                v.    Improper venue may be waived (SMJ cannot).  Venue is considered to be waived unless timely objection is made to the proper venue.

b.    Transfer or Change of Venue & Forum Non Conveniens - This doctrine permits a court having jurisdiction over an action to refuse to exercise its jurisdiction when the litigation could be brought more appropriately in another forum. 

                                                  i.    Where original venue is improper - § 1406(a) provides that if a civil action is commenced in the wrong district or division, the court shall dismiss, but if it is in the interest of justice, the court may instead transfer the case to any district or division in which it could have been brought.  Transfer is preferable to dismissal since it avoids the necessity of commencing a new lawsuit.  Transfer can be ordered only if the court in which the action was brought has jurisdiction of the subject matter but it is not necessary that it have personal jurisdiction.

1.    Applicable Law – the originally applicable laws carry over to the transferred-to venue (Under Erie).

                                                 ii.    Where the original venue is proper - § 1404(a) states:  allows transfer to another district where the action “might have been brought” for convenience, but new venue still needs SMJ, PJ, and new venue must also be proper. 

1.    Under the rule of "forum non conveniens" a court can dismiss a suit even though it has both personal and subject matter jurisdiction and the venue is properly laid if there exists another forum so much more convenient for the parties and the courts that plaintiff's privilege of choosing his forum was outweighed. 

a.    Gulf Oil Corp v Gilbert – Gilbert sues Gulf Oil on a tort claim. Gilbert brought an action in NY on diversity grounds (b/c more favorable).  There was proper venue in NY, but Gulf Oil could also be served w/ process in VA, and the accident happened in VA, many of the witnesses were in VA, and Gulf Oil is in VA. The court issued a forum non conveniens dismissal, and Supreme Court upheld it.

                                                                                                  i.    Unless the balance is strongly in favor of the defendant, the plaintiff’s choice of forum should rarely be disturbed.  

                                                                                                 ii.     One reason to change the forum is if the burden and “oppressiveness” to the defendant is out of proportion to the convenience of the plaintiff.

                                                                                                iii.    The court must consider and balance certain public interest factors and private interest factors.

b.    Piper Aircraft v Reyno (1981) – A small plane crash in Scotland. Scottish relatives sued the American manufacturers (PA). Plaintiff filed in PA b/c ore favorable for plaintiff.  Defendant removed the case to Federal Court, transferred to PA, and was granted a forum non conveniens dismissal.  The issue was whether trial court had a right to issue the forum non conveniens dismissal.  Court follows Gulf Oil, and decides the best forum is in Scotland.

                                                                                                  i.    Forum non conveniens cannot be inflexibly defeated merely on the basis that the alternative forum would have laws less favorable to the plaintiff.

                                                                                                 ii.    The interests of foreign plaintiffs should be weighted less heavily than the interests of domestic defendants (more convenient and favorable for defendants to litigate in Scotland).

                                                                                                iii.    Court acknowledges that Scotland has many contacts with the litigation and that it would be best if it moved there

2.    Applicable Law – is the applicable law of the transferred-to venue (the proper venue)

                                                iii.    Procedure for Transfer 1404(a) Motion for transfer may be made by any party, including the plaintiff.  Motion may be made at any time though delay in moving is a factor that will be considered in passing on the motion.  Once the motion is granted the transferor court loses all jurisdiction over the case.  If the transfer is on motion of the defendant, the transferee court must apply the law that would have been applied in the transferor court; a change in forum means only a change of courtrooms but not a change of law.  This means that in passing on the motion to transfer the court must consider the effect that retaining the law of the transferor state will have.  (E.g., if law is unclear in transferor state that would influence against transfer.) 

5. Removal Jurisdiction - allows the defendant in state court to have the case transferred to the federal court. This is not an appeal.
1. Removal governed by 3 statutes: 1441, 1446,1447

                                          i.    You can remove from state to district court if there was original federal SMJ (to the district court where the action is pending)

                                         ii.    Only Defendants can remove, plaintiffs can NEVER remove

                                        iii.    All defendants must agree - rule of unanimity

                                       iv.    You can remove only to the federal district that embraces the state court

                                        v.    You must remove within 30 days of the service of the document that first made the case removable.

                                       vi.    Diversity cases are removable only if none of the defendants is a citizen of the state in which the action is brought (doesn’t matter if SMJ based on federal question)

b.    28 U.S.C. §§ 1441-1452  *See additional info.

                                          i.    Details removable/non-removable actions and the procedures of removal.