Federal Courts Outline
Federal Courts Outline
Federal Courts Outline
**add all of the actual constitutional/statutory language under the pertinent sections**
Jurisdiction
general Federal
(states) (limited)
While a party can consent to PERSONAL jurisdiction they can not consent to SUBJECT
MATTER.
Subject matter jurisdiction – Black’s law dictionary - Jurisdiction over the nature of the case and
the type of relief sought; the extent to which a court can rule on the conduct of persons or the
status of things
5 main principles of federal (limited) jurisdiction
1. there is a presumption that the federal court does not have power
2. A party invoking the court’s power must prove it exists (so they have to rebut #1)
3. to establish a right to be in federal court, litigants must unlock the constitutional door
and the statutory door.
4. parties cannot create subject matter jurisdiction by consent.
5. the supreme court has repeatedly held that federal courts have an independent duty to
examine their jurisdiction over the subject matter in every case.
if a case is dismissed for lack of jurisdiction, then nothing has happened because it is all
void
there are 3 types of limited jurisdiction: §1331 (federal question); §1332 (diversity); §1367
(supplemental).
Title 28 of the U.S. code is the judicial title.
For federal question jurisdiction:
Constitutional – Article III arising under clause
Statutory – 28 U.S.C. §1331
Osborne v. Bank of the United States, (1824): This case resulted in a very broad reading
of federal power. Justice Marshall wrote the opinion and he was a leading federalist. A case
arises under federal law when the federal issues is an original ingredient of the cause of action
being pled. keep in mind that this case was decided before congress passed §1331. the
federal thing does not have to be a main issue or even at issues at all. Just possible.
Arising under – when does a case arise under federal law?
Outer bounds
under Article III
Outer bounds
of §1331
The language of the constitution and the statute are the same. However, they have been
given very different meanings by the court
Albright v. Texas, (1883): The first time the court had the opportunity to analyze the arising
under test from the statutory standpoint the statute was passed in 1875 (called the removal
act) _To arise under federal law for purposes of the statute a party must assert a right,
privilege, claims, protection, or defense founded, in whole or in part, in any law of the united
states
Feibelman v. Packard, (1883): bond issue. Because the federal law created the bonds terms his
cause of action was created by the federal law.
Joy v. St. Louis, (1906):
Louisville & Nashville R.R. v. Mottley, (1908): Plaintiff’s statement of his own cause of action
shows that it is based upon those law or that Constitution. Well pleaded complaint rule. defenses
that the defendant might set up are NOT good enough Only look at the facts in the complaint
necessary to create a cause of action.
One implication of the rule that the court adopted in motley is that congress knew of that
decision and could have amended the statutory text to be sure it mirrored the interpretation given
to Article III, but they never did.
Cause of action: a factual situation that entitles one person to obtain a remedy in court from
another person
Applying the well pleaded complaint rule:
Start by reading the complaint and looking at either:
I. does the plaintiff’s cause of action state a federal claim or cause of action; or
American Well Works Co: a suit arises under the law that creates the
Most of the case cause of action.
come in here Bell v. Hood: read the complaint and defer to what the plaintiff’s are
claiming under and if it is the federal law they can bring it in federal court.
there is a distinction between jurisdictional analysis and merits
based analysis. But the court as of late has been reluctant to
apply bell
II. state a cause of action that has an embedded federal issue
a. is necessarily raised
b. actually disputed
Grable Test c. substantial; and
d. capable of resolution in federal courts without disrupting the
federal-state balance approved by congress.
Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, (2005): does a state
claim 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.
Gunn v. Minton, (2013): Lawyer malpractice case that analyzes whether the underlying patent
claim is an embedded issue that necessarily required to be solved by federal courts.
if you read an opinion interpreting §1331 or §1338 it applies to BOTH.
Federal question Jurisdiction summed up:
Arising Under
Constitutional Key Statutory Key
Article III, Sect. 2, Cl. 1 28 U.S.C. §1331
“Case, in law and equity “civil actions arising under”
Arising under” *more narrowly construed
Constitutional Test – a case “arises under” federal law when a question of federal law form an
ingredient of the original cause. Although other questions of fact or law may be involved in it.”
Osborne
Statutory test – for statutory purposes a cases can “arise under” federal law in two ways – 1) the
cause of action is a federal one or 2) Gunn v. Minton. 1. Federal law creates the cause of action
contained in plaintiff’s well-pleaded complaint. Or in extremely rare circumstances 2. Plaintiff
states a state law claim which a) necessarily raises a state federal issue, b) which is actually
disputed, c) and substantial, d) which a federal forum may entertain without disturbing any
congressionally approved balance of federal and state judicial power.
if in doubt, kick it out
Declaratory judgment and federal question jurisdiction – a plaintiff desiring a federal forum may
not depend solely on the federal declaratory judgment act to create federal jurisdiction. The
federal declaratory judgment act creates a remedy – NOT A CAUSE OF ACTION.
Skelly rule: if the plaintiffs only federal cause of action is the declaratory judgment act, then
jurisdiction is lacking. THE TEST IS, IGNORING THE REQUEST FOR DECLARATORY
JUDGMENT REQUEST, WHAT LAW DO THE RIGHTS AND DUTIES ARISE UNDER?
Verlinden B.V. v. Central Bank of Nigeria: Congress has authority to adopt other statutes to
expand federal question jurisdiction in other areas.
For statutory purposes, a case can “arise under” federal law in two ways. Gunn v. Minton.
A case arises under federal law when federal law creates the cause of action asserted.
However, even if a claim is from state law rather than federal law, there is a special and
small category of cases in which arising under jurisdiction still exists. Gunn v. Minton
states that when a state law necessarily raises a federal issue, which is actually disputed and
substantial which a federal forum may entertain without disturbing any congressionally
approved balance of federal and state judicial power.
In determining whether the plaintiff’s claim arise under federal law, the court will look to
the plaintiff’s well pleaded complaint. Louisville v. Mottley. The court will consider the
plaintiff’s own statement of the cause of action looking only to those facts necessary to
create the cause of action. Louisville v. Mottley. The claim arises under if those facts point
to a cause of action based on the federal laws or the federal constitution.
Diversity jurisdiction
28 U.S.C. §1332 requires complete diversity
Article III, Section 2 only requires minimal diversity.
Always start with federal question analysis, if there is none, then come to the diversity analysis.
1332(c) defines the citizenship of corporations.
The original diversity statute was the first act of congress – passed by the first senate.
Strawbridge v. Curtis: requires complete diversity of parties under the statute. “The court
understands these expressions to mean, that each distinct interest should be represented by
persons, all of whom are entitled to sue, or may be sued, in the federal courts.”
State Farm v. Tashire: Strawbridge was construing the statute, not article III. Article III allows
jurisdiction on minimal diversity. Minimal diversity exists when at least on plaintiff is from a
different state as at least one defendant.
Seyler: just briefly discusses supplemental jurisdiction statute. It preserves complete diversity in
the statute under 1367(b).
Morris v. Gilmer: The only time that matters for citizenship is the time that the case was filed.
Time of filing requirements. Citizenship is determined by the law of domicile. To be considered
a domicile there must be an actual residence in the state with the intention that it is to be a
principal and permanent residence.
Mas v. Perry: Domicile. A change of domicile may be affected only by a combination of two
elements: (1) taking up a residence in a different state with (b) the intention to remain there
indefinitely.
Hertz: Corporate citizenship: 1332(c) state of incorporation and their principle place of business.
The corporation’s principle place of business is its nerve center; the place where corporation’s
high level officers direct, control and coordinate the corporations activities.
§1332 does not apply to other legal entities – only to corporations. Carden Rule: except a
corporation, with respect to every other business enterprise, the business has the citizenship of all
its members.
Americold Realty: expands on the Carden rule. This case was a unanimous opinion of the court.
Lumberman case: Frankfurter’s concurrence is all that matters. The court was considering
diversity. Justice Frankfurter basically said that the federal courts are too good to deal with petty
state claims and diversity is dumb.
Grupo v. DataFlux: Jurisdictional facts are determined at the time federal jurisdiction is invoked
(so remember for removal it’s not the time filing).
Tank v. Chronister: reread to get the rule, but basically §1359 don’t collude and be sketchy.
Reread this case to under the caterpillar rule.
Federal courts have an independent duty to question and determine their own jurisdiction.
Congress has the power to ordain and establish lower courts. Sheldon v. Sill states that
power include the power to both limit and destroy the federal courts. This is how to start
analysis when discussing any statute regarding the jurisdictional requirements of the federal
courts.
Amount in Controversy Requirement:
$75,000 exclusive of interest and costs. Must be more than; So $75,000 and a penny!!!
How do you determine how much is in controversy?
Vance v. W.A. Vandercook Co.: jurisdiction will be defeated if the party opposing jurisdiction
can establish, to a legal certainty, that amount in controversy does not meet the statutory
requirement. Otherwise, you accept the well-pleaded complaint as the amount in controversy.
St. Paul Mercury Rule: the party invoking federal jurisdiction must state in their well pleaded
complaint/notice of removal that the amount in controversy exceeds the requisite amount.
The party invoking federal power has the burden to plead and prove federal jurisdiction.
Burns v. Anderson: a plaintiff’s good faith claim will satisfy jurisdiction unless it appears to a
legal certainty that the claim is for less than the jurisdiction amount. Time for calculating
damages is also at the time of filing/removal.
Hoffman v. Vulcan: amount in controversy when the plaintiff is seeking an injunction. Look at
the object of the litigation to determine the value. There are three different approaches that the
court’s use. If the matter in controversy cannot be translated into money, there is no amount in
controversy.
If the damages are unliquidated (not money) look at the value of the object in controversy.
3 ways to determine per the circuit split:
Plaintiff perspective – look at the value through the plaintiff’s eyes.
Defendant viewpoint – look at the value through the eyes of the defendant.
Either viewpoint – evaluates per everyone involved in the litigation.
If the right or matter in controversy cannot be translated into terms of money, there is no amount
in controversy.
The amount in controversy is determine by reading the face of the pleadings at the time that
federal jurisdiction is invoked.
This case was decided by a trial court, because there is no binding precedent here. Courts are
all over the place.
Barnes v. Parker: discusses whether counterclaims are included in the amount in controversy
calculation. While the St. Paul rule says no, this case says that if a counterclaim is compulsory,
then it is included in the amount in controversy. However, SCOTUS has still not addressed this
issue.
Elgin v. Marshall: do not consider collateral consequences when calculating the amount in
controversy.
Aetna Casualty: Installment contracts; If the law would allow you to recover the full amount, you
can consider the full amount. However, if the law only allows installment by installment,
Beaman: 4th circuit. Calculating benefits of social security plaintiff – essentially an installment
scheme. The court focuses on what the plaintiff is entitled to recover at the end of this case.
Pinel: If a case involving a single plaintiff, that plaintiff can aggregate the claims even if they are
unrelated. In a case involving multiple plaintiffs, they may not aggregate their claims. Both must
meet the requisite amount!
Brainin v. Melikian: in determining the jurisdictional amount, interest imposed as a penalty for
delay in payment is excluded. However, interest which is exacted as the agreed upon price for
hire of money is included in the amount to which claimant is entitled.
Supplement Jurisdiction
Constitutional Basis for Supplemental jurisdiction
Prior to 1934 plaintiffs had to choose a cause of action through a single writ, so supplemental
jurisdiction was never an issue. These issues only arose once the Federal Rules of Civil
Procedure were passed. [13, 14, 18, 19, 20, 23]
United Mine Workers v. Gibbs: the federal court may hear a state claim attached to a
federal claim if it includes a common nucleus of operative facts. This inquiry is fact
determinative. The facts that matter are the ones that are related to the cause of action so the
elements needed to plead and prove your claim.
The relationship between that claim and the state claims made in the complaint permits the
conclusion that the entire action before the court comprises one constitutional case. Courts are
permitted by Article III, Section 2 to hear cases.
Pendant = attached to/hanging from.
Owen Equipment v. Kroger:
Finley v. United States:
Does the court have original
jurisdiction over at least one
claim?
Yes No
Yes No
Yes No
Removal
Constitutional bases of removal
Statutory bases of removal
28 U.S.C. §1441
Procedure and timeline
In order for a case to be removed to federal court, it must be determined that the court would
have original jurisdiction over the case.
Review Session:
State courts = courts of general jurisdiction.
Federal courts = court of enumerated (limited) jurisdiction
you want to litigate in federal court:
discussion of justiciability stay focused on the text of article III as the outer boundary of
judicial power.
“The judicial power shall extend to all Cases, in Law and Equity [and] to Controversies.”
Venue:
Congratulations, you’re in federal court.
Rule Statements:
It must be a case or controversy – a concrete dispute between adverse parties where there
is a substantial likelihood that a federal court’s ruling in favor of one of the parties will have
some effect.
If the court’s judgment would be considered “advice” by the parties to the dispute, the
dispute is not a case. Hypos belong in the classroom, not the courtroom.
Subject Matter Jurisdiction: In order to litigate in federal court there must be both a
constitutional and statutory basis for the subject matter over each of the party’s claims. The party
invoking the federal jurisdiction must plead and prove the requisite jurisdiction facts.
Diversity Jurisdiction: Constitutional diversity jurisdiction under Art. III section two has been
interpreted only to require minimal diversity, that is, one plaintiff is diverse from one defendant.
However, section 1332 diversity jurisdiction requires complete diversity – no plaintiff is from the
same state as any defendant. See Strawbridge. The purpose of diversity jurisdiction is to provide
a “neutral” forum and to protect against local prejudice.