Chap. 4 federal subject matter jurisdiction p.266
- Subject matter jurisdiction in the state courts is determined by the state constitution, state statute, and judicial decisions ;; in the federal system, governed by Article III of the US constitution, federal statute, and judicial decisions
- Removal jurisdiction : allows the D a limited right to transfer a case from state to federal court (28 USC 1441)
- “forum shop” : litigant autonomy v. public concern
- 1331 (federal question) ; 1332 (diversity of citizenship)
Lacks v. Lacks, 41 N.Y.2d 71, 1976, p.267
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Capron v. Van Noorden, 6 U.S. 126, 1804, p.26
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- A party cannot consent to jurisdiction in a federal court if no actual diversity exists. Challenges to subject matter jurisdiction can be raised at any time prior to final judgment
- Jurisdiction is a matter that can be raised sua sponte
Mas v. Perry, 489 F.2d 1396,
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Hertz Corp. v. Friend, 130 S. Ct. 1181
- 28 USC 1332(c)(1), for diversity jurisdiction purpose, a corporation is a citizen of a state where (i) incorporated or (ii) principal place of business ;
- Held - corporation's principal place of business, for diversity jurisdiction purposes, is its nerve center
- “nerve center” - the place where a corporation's officers direct, control, and coordinate the corporation's activities, normally the place where the corporation maintains its headquarters, ; it is a single place within a State
- Courts have an independent obligation to determine whether subject-matter jurisdiction exists, even when no party challenges it
A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, p.285
- P corporation sued D, a former employee, for misappropriate of trade secrets ; P claimed D, after his resignation, made use for profit of client, marketing, and tour information developed by P ; seeking (i) injunction …, (ii) damages … 50,000, (iii) punitive damages …
Held
- “the rule governing dismissal for want of jurisdiction … in federal court … is that … the sum claimed by the P controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify a dismissal”
- Where the P seeks injunctive relief, the value of his claim is assessed with reference to the right he seeks to protect and measured by the extent of the impairment to be prevented by the injunction
- Before making a determination that the P’s claim does not meet the jurisdictional minimum, the court must afford the P an “appropriate and reasonable opportunity to show good faith in believing that a recovery in excess of the jurisdictional amount is reasonably possible
Sec. C.. 28 USC 1331 – federal question
Louisville & N. R. Co. v. Mottley, 211 U.S. 149, p.299
- a railroad company entered into a contract with Ps, to give them travel passes every year ; when a new federal law prohibited railroads from issuing free passes, a railroad declined to renew the passes ; Ps sued in federal court for specific performance of the contract, ( a suit to compel the specific performance by a carrier of its agreement to issue free passes annually to the complainants )
Held
- “a suit arises under (under 1331) the Constitution and laws of the United States, only when the plaintiff's statement of his own cause of action shows that it is based upon (federal laws) those laws or that Constitution”
- It is not enough that some anticipated defense to his cause of action is federal (law) question
- ( narrow interpretation of sec. 1331 ; it is federalism issue ; Congress may rewrite sec.1331 to allow the court have original jurisdiction over this case )
Here,
- P’s cause of action is based upon a contract b/w railroad company and Ps ; federal law is anticipated defense
Tennessee v. union & Planters’ Bank
- Holding : not federal question – “a suggestion of one party, that the other will or may set up a claim under the Constitution or laws of the U.S., does not make the suit one “arising under” (under 1331) that Constitution or those laws.”
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T. B. Harms Co. v. Eliscu, 339 F.2d 823, p.303
- Even though a claim is created by state law, a case may "arise under" a law of the United States if the complaint discloses a need for determining the meaning or application of such a law
- In the absence of express statute, federal law may govern what might seem an issue of local law because the federal interest is dominant
- An action "arises under" the Copyright Act if and only if the complaint is for a remedy expressly granted by the Act, e.g., a suit for infringement or for the statutory royalties for record reproduction,
Merrell Dow Pharmaceuticals, Inc. v. Thompson, 478 U.S. 804, 1986, p.309
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- P alleges (on negligence count) the drug Bendectin was “misbranded” or failure for adequate warning, in violation of the Federal Food, Drug, and Cosmetic Act (FDCA, federal law) ; P alleges the federal law violation constitutes a rebuttable presumption of negligence
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o Congressional determination that there should be no federal remedy for the violation of this federal statute, is tantamount to … that the presence of an alleged federal law violation as an element of a state law cause of action, is insufficiently “substantial” to confer federal question jurisdiction
Reasoning
- As to federal question – “arising under” under s.1331, there is no single, precise definition of that concept ; vast majority follows Justice Holmes’ – suits in which federal law creates the cause of action ; also, “where the vindication of a right under state law necessarily turned on some construction of federal law”
Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308, 2005, p.317
Merrell Dow
- Merrell Dow should be read in its entirely as treating the absence of a federal private right of action as evidence relevant to, but not dispositive of, the sensitive judgment about congressional intent
Rule
- Another factor in assessing “arising under” under 1331
o whether “the arising under jurisdiction to hear a state law claim” upsets the state-federal line drawn by Congress = congressional judgment about the sound division of labor between state and federal courts under s.1331
- test : the question is, does a state-law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibility
o test for “arising under” under 1331, under Grable&Son – whether a state law claim (cause of action) necessarily raise a federal law issue, actually dispute, substantial, without disrupting state-federal line drawn by Congress
Sec. D.. supplemental claims and parties p.324
- ** judicial power over state law claim (DO – as a matter of art. 3 sec. 2 of the US constitution and 28 USC 1331 federal question
US constitution art.3 sec. 2
- The judicial Power shall extend to all Cases, … arising under this Constitution, the Laws of the United States, … to Controversies to which the United States shall be a Party; to Controversies between two or more States; between a State and Citizens of another State; between Citizens of different States; between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.
28 U.S.C.A. § 1367 supplemental jurisdiction
Pendent jurisdiction
- when the P, in her complaint, appends a claim lacking an independent basis for federal jurisdiction to a claim possessing such a basis
ancillary jurisdiction
- when either a P or a D injects a claim lacking an independent basis for federal jurisdiction by way of a counter-claim, cross-claim, or third party complaint
- both pendent and ancillary merged into sec. 1367 (supplemental jurisdiction)
United Mine Workers v. Gibbs, 383 U.S. 715, <pendent claim jurisdiction> p.325
- The employee filed a suit in federal court against petitioner union (UMW) for damages for alleged violations of federal law and state law. (common law of TN)
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<judicial power of federal district court over state law claim (=pendent claim jurisdiction over state claim) >
- (1) a substantial federal claim
- (2) the relationship b/w federal claim and state claim is deemed as “one case” – both claims must derive from a common nucleus of operative fact
<(assuming pendent jurisdiction) whether to exercise the jurisdiction
- Pendent jurisdiction is a doctrine of discretion, not of P’s right ;
- consider judicial economy, convenience, and fairness
Aldinger v. Howard, 427 U.S. 1, <pendent party jurisdiction> p.330
- ** one P and two Ds ; one D (county official) on federal law claim ; the other D (county) bases on state law claim ;
o (pendent claim jurisdiction) Assuming (i) federal law claim substantial, (ii) both federal and state law claims stem from common nucleus of operative fact
- Pendent party where 28 USC 1343, 42 USC 1983
- P sought to join county as additional D under state law claim
Held
- Pendent party (federal) jurisdiction exist if (i) Article III permits, (ii) Congress does not negate it
Here
- suit against D (county) is 28 USC 1343, 42 USC 1983 ; Congress excludes county from 42 USC 1983 ; thus, federal court may not join county under pendent party jurisdiction
Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, p.332
- Kroger (NE) vs. OPPD (DE), federal claim (1332(a)(1)), in federal court ; Kroger sought to join Owen as an additional D (NE) (non-federal claim)
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Held
- (In addition to Gibbs, here Gibbs satisfied – common nucleus of operative fact )
- (1) pendent party jurisdiction is more designed for D who is brought to federal court against their will (rather than for P)
o Kroger is P ; if Kroger really wanted to sue both Owen and OPPD in the same action, they could easily have done so in State Court
- (2) Kroger is not allowed to defeat diversity requirements simply by suing only the D of diverse citizenship and wait for the D to implead non-diverse D
- (3) the non-federal claim (non-diverse claim) must be "ancillary and dependent" on the original claim rather than "new and independent"
o Owen's liability did not depend on whether or not OPPD was also liable
Finley v. United States, 490 U.S. 545, 1989, p.334 (lead to 28 USC 1367)
- P sues FAA under 28 USC 1346(US as defendant) of FTCA ; P seeks to join city of San Diego and utility company as additional D
- Held - FTCA did not permit exercise of pendent party jurisdiction over additional parties as to which no basis for federal jurisdiction existed
Reasoning
- Federal jurisdiction exist (i) Art.III of constitution, (ii) Congress
- Here, FTCA confers jurisdiction only over civil action against US
note 1. at 336 - 28 U.S.C.S. § 1367
- make sure to try to apply s. 1331 and s. 1332 / it they cannot apply, then try to apply s.1367
- first, 1331 and 1332, then, 1367 **
Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 2005, p.338
- regarding federal district court ‘s exercise of supplemental jurisdiction pursuant to 28 USC 1367, in a class action suit, with respect to class member who did not meet the amount in controversy,
summary
- whether a federal court in a diversity action(1332) could exercise supplemental jurisdiction (s.1367) over additional P whose claims did not satisfy the minimum amount in controversy. (DO- if minimum amount suffice, then, could apply s.1332)
- Held , where the other elements of jurisdiction were satisfied and at least one named P 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.
- Although § 1367(b) precluded supplemental jurisdiction over claims of plaintiffs joined under Fed. R. Civ. P. 19 or intervenors under Fed. R. Civ. P. 24,, nothing in the statute withheld jurisdiction over claims of plaintiffs (DO- who were) permissively joined under Fed. R. Civ. P. 20 or certified as class members under Fed. R. Civ. P. 23.
o 28 USC 1367(b) “over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Rules”
o here, 28 USC 1367(a) applies
o here, Exxon Mobil (D) is Not “persons made parties under Rule 20” ; Exxon Mobile was D, irrespective of the Rule 20 ; thus, 28 USC 1367(b) does not kick in
o the statute is not ambiguous; court must interpret it as such and follow it
- The Class Action Fairness Act, did not affect the Court's interpretation of 28 U.S.C.S. § 1367.
Executive Software N. Am. v. United States Dist. Court, 24 F.3d 1545,
- A worker who was fired brought federal and state claims for discrimination and the district court remanded (declined to take up) the state law claims.
- Issue: Can a district court look beyond the express exceptions listed in section 1367 (C) in declining jurisdiction over pendant state claims?
- Held - district court, when declining to exercise supplemental jurisdiction (1367) over pendent state law claims, must provide written reasons so as to allow Court of Appeals to determine whether district court relied on statutorily permissible factors in declining to exercise such jurisdiction
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, p.351
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- P brought the original action in TX state court against D. D counterclaimed for his unrelated contract. P then removed on the basis of diversity
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- Held – No - it is irrelevant whether the counterclaim was compulsory or permissive under state law, or even factually related to the main claim. “Defendant” means what it says. A P cannot remove, even if he is counterclaimed
American Fire & Casualty Co. v. Finn, 341 U.S. 6,
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- An insurance dispute involving state law claim against multiple Ds, some diverse from P other Ds are not ; the complete diversity requirement barred 1332 jurisdiction ; two of diverse Ds successfully removed to federal court ß wrong
- All claims were “a single wrong” (thus, not “separate and independent”) – the failure to pay compensation for the loss on the property
Borough of W. Mifflin v. Lancaster, 45 F.3d 780
(DO)
- 1441(c.) kicks in when “a separate and independent claim” is joined with non-removable claim
- If it is NOT combination of removable and non-removable claim, then, 1441(a) kicks in
- thus, claims arise out of same transaction or same series of events, 1441(c.) not kick in
- “remand” (claim from federal court to state court) is governed by 1441(c.)
Fact
- The arrested sued the arresting agent (42 USC 1983), mall, municipality ; all arise out of same transaction and same series of events
Rule
- Originally sued in state court
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- <1367.(c.)> the federal court could not remand under 1367(c.) ; nothing in this section permits the district court to decline to hear claims it has original (as opposed to supplemental) jurisdiction over, i.e. the federal civil rights claim ;
28 U.S.C.A. § 1338 § 1338. Patents, plant variety protection, copyrights, mask works, designs, trademarks, and unfair competition
28 U.S.C.A. § 2201 § 2201. Creation of remedy
28 U.S.C. ss. 2201-02, (p.302, note 5)
- allows the federal court to issue a declaration of “rights and other legal relations” to an “interested party” in “ a case of actual controversy within its jurisdiction.”
- would there have been jurisdiction in the principal case if the railroad had sought a judicial declaration that the 1906 Act had rendered the passes invalid? à. No
e.g. P (patent holder) v. D (alleged infringer)
- P can sue against D under either (i) sec. 1338(a)(suit for infringement) OR (ii) sec. 2201(suit for declaratory judgment)
o Cf. exclusive federal jurisdiction is rarity - e.g. anti-trust, copy right, security
- D can sue against P under sec. 2201
