CIVIL PROCEDURE OUTLINE

Subject Matter Jurisdiction

The court’s power to hear a case because of the nature of the dispute
 State courts: determined by the state constitution, state statutes, and judicial decisions
o Are courts of general jurisdiction
o Just because a case was removed to federal court does not mean state court did
not have jurisdiction
 Federal courts: governed by Article III, federal statues, treaties, and judicial decisions (28
U.S.C. § 1331)
o If the case is not a federal law question, it needs to satisfy both the amount-in-
controversy and diversity (28 U.S.C § 1332)
o few statutory instances of exclusive federal jurisdiction

Parties cannot waive or create subject matter jurisdiction

I. DIVERSITY

Diversity exists in civil actions between (28 U.S.C § 1332(a)):

 citizens of different States
 citizens of a State and citizens or subjects of a foreign state (unless alien domiciled in the
same state)
 citizens of different States and in which aliens are additional parties
 a foreign state as plaintiff and citizens of a State or different States

Diversity is interpreted to mean “complete diversity”

 there is no diversity jurisdiction if any plaintiff is a citizen of the same state as any
defendant
o EXCEPTION: class actions only require minimal diversity
 burden of proof – party asserting diversity jurisdiction must demonstrate it exists
 determination of citizenship for diversity purposes is controlled by federal law, not any
state law.

A. Citizenship of Individuals

Citizenship means “domicile” (Mas v. Perry)

 mere residence is not sufficient for diversity purposes
 a person’s domicile is the place of “his true, fixed, and permanent home and principle
establishment, and to which he has the intention of returning whenever he is absent”
 change of domicile can only occur by (1) taking up residence in a different domicile and
(2) intending to remain there
 in Mas v. Perry, moving to a location for graduate school was not viewed as a change of
domicile – you are domiciled at the last place that meets the definition.

B. Citizenship of Corporations
A corporation has two locations of citizenship (28 U.S.C. § 1332(c))
(must have diversity for BOTH locations)
1. the state(s) in which it is incorporated; and
2. the state in which it has its principal place of business

Test for Principal Place of Business

 Standard – the principal place of business is the nerve center (Hertz Corp. v. Friend)
o “Nerve Center” test – focus of corporate decision-making and overall control
o typically headquarters, although it cannot be just a HQ in name but must maintain
essential functions
 justifications for using Nerve Center
 administrative simplicity is a major virtue in jurisdictional statute –
vested economic interest in using a predictable standard
 Other Possible Tests
o “Corporate Activities” or “Operating Assets” test – greatest location of a
corporation’s production or service activities
o “Total Activity” test – hybrid of previous two; considers all the circumstances
surrounding business

C. Amount in Controversy (AIC)

The district courts shall have original jurisdiction of all civil actions where the matter in
controversy exceeds the sum or value of $75,000 (28 U.S.C. § 1332(a))

Standard for evaluating the value of a claim

 The sum claimed by the plaintiff must be made in good faith. It has to appear to a legal
certainty that the claim is really for less than the jurisdictional amount
 If punitive damages are permitted under the controlling law, they may be included in the
amount

Aggregating claim amounts

 Each plaintiff must satisfy the amount in controversy individually
 One plaintiff can aggregate all of their claims into one suit (1 plaintiff v. 1 defendant)
even when the claims share nothing in common besides the identity of the parties.

Indemnification Joinder and Diversity

 A defendant suing another party under Rule 14 for indemnification does not destroy
diversity unless the plaintiff amends the complaint to add a claim against the new
defendant
 For the purposes of SMJ it is treated as a separate suit or claim
o Impleader claims must arise from the same set of facts as the main claim to satisfy
Rule 14 so will necessarily meet the requirements in Gibbs and § 1367(a)
 Reference: Owen Equipment v. Kroger

II. FEDERAL QUESTION

The district courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States (28 U.S.C. § 1331)
 Article III, § 2 also includes cases affecting ambassadors, admiralty/maritime
jurisdiction, and controversies to which the US is a party.

Determining Federal Question (“Well-Pleaded Complaint”)

 Rule – The court looks only at the complaint (not anticipated defenses or later
counterclaims or cross-claims) to see if the issue involves a federal question (Louisville
& Nashville R. Co. v. Mottley)
o Case involving a breach of contract by a railroad company to provide free
transportation after Congress based an act forbidding such agreements (court held
that at its core merely a breach of contract dispute with state law claims)
o “A suggestion of one party, that the other will or may set up a claim under the
Constitution or laws of the United States, does not make the suit one arising under
that Constitution or those laws.”

What to look for on the face of the complaint

CHECK INTO FINISHING THIS LATER

III. SUPPLEMENTAL

Supplemental jurisdiction: used to get claims lacking independent federal jurisdiction into
federal court

Three-step approach to analyzing supplemental jurisdiction

 Does the court have the constitutional power to hear the supplemental claim? (Gibbs
standard)
 Has Congress authorized the jurisdiction over the related claim? (§ 1367(b) joinder
exclusions)
 Does it fall within the discretionary factors allowing a court to deny supplemental
jurisdiction?

28 U.S.C. § 1367 – Supplemental Jurisdiction

(a) Common nucleus of facts: jurisdiction over all other claims that are so related to claims
in the action within original jurisdiction that they form part of the same case or
controversy
(b) Exceptions: supplemental jurisdiction does NOT exist over the following claims/parties
–
o claims against defendants joined under Rule 14 (third-party), 19 (required
joinder), 20 (permissive joinder), or 24 (intervention)
o claims by plaintiffs joined under Rule 19 or 24
(c) Discretion to decline: A district court may decline to exercise supplemental jurisdiction
if –
o state claim raises a novel or complex issue of state law (state sovereignty basis),
o state claim substantially predominates over the actual federal claim,
 o all claims over which court originally had jurisdiction have been dismissed, or
o any other exceptional circumstances, such as jury confusion of federal-state law

Pendent Claim Jurisdiction

 federal court may decide state issues which are closely related to the federal issues being
litigated – “common nucleus of operative facts” (United Mine Workers v. Gibbs)

Pendent Party Jurisdiction

 Past/Historical Approach
o supplemental jurisdiction may not be used to join a defendant that a federal statute
specifically doesn’t have a cause of action against
o cannot bypass complete diversity by using supplemental jurisdiction if federal
jurisdiction was originally conferred due to diversity (Owen Equipment v.
Kroger – defendant joined a third-party indemnifier who was non-diverse then
stepped away)
 EXCEPTION: non-diverse parties joined under Rule 14 indemnification
do not unless the complaint was amended to add them as a co-defendant
because it would violate § 1367(b)
 NOTE: must have independent jurisdiction over the indemnification suit
[Rule 14 joinder by the defendant not prohibited by § 1367(b)]
o Congress must explicitly authorize pendent jurisdiction for the federal cause of
action in that case for supplemental jurisdiction to be applied (Finley v. United
States)
 Modern Approach
o If a court has jurisdiction over a single claim in the complaint, then it has
jurisdiction over the entire civil action (Exxon Mobil v. Allapattah Services)
o Diversity: § 1367 overturned Finley but retained the limits suggested in Kroger
against using supplemental jurisdiction to circumvent diversity requirements
 Rule 20 exception in §1367(b) prevents joining non-diverse defendants
but not plaintiffs
 However, cannot use supplemental jurisdiction to join non-diverse
plaintiffs under § 1367(b) because inconsistent with jurisdictional
requirements of §1332
o AIC: supplemental jurisdiction may be used if at least one named plaintiff
satisfies the amount in controversy requirement for diversity
 Different because court views amount in controversy as statutory but
complete diversity is a constitutional requirement from Article III, § 2

IV. REMOVAL

Removal of civil actions – 28 U.S.C. § 1441

 Any case that could have been brought in federal court can be removed from state court
 At-home defendants cannot remove – the defendant may not remove to federal court if
they are a citizen of the state in which the action is brought
 All defendants must consent to removal
 Where an action involves both federal and state claims, the district court may sever the
claims which it would not have had independent jurisdiction over and send back to state
court
 EXCEPTION: class action suits where any defendant can remove without consent of
others even in-state defendants