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Civil Procedure

 

I.                     Territorial Jurisdiction and Related Matters

A.      Introduction

1.        Types of Territorial Jurisdiction

                                                                                a.      In personam jurisdiction: permits a court to enter a judgment that is personally binding on defendant

                                                                               b.      In rem jurisdiction: permits a court to adjudicate the rights of all the world in a specific piece of property. This authority originated from a state’s power to determine controversies regarding real property within its borders

                                                                                c.      Quasi in rem jurisdiction: there are two types of quasi in rem jurisdiction. The first type permits a court to determine rights of particular parties in property under its control. The second type permits a court having jurisdiction over defendant’s property, but not over defendant personally, to use the property to satisfy plaintiff’s personal claim against defendant. Use of this latter type as a basis for jurisdiction over nonresident defendants has been severely limited on constitutional grounds.

2.        Traditional Power Theory: In Pennoyer v. Neff the court adopted a rigid power-based approach to state court jurisdiction that was later applied to determine the constitutional limits of jurisdiction under the Due Process Clause. This approach has been substantially eroded by more modern decisions

                                                                                a.      The Pennoyer decision: attorney Mitchell sued Neff in an Oregon state court, alleging he owed him for legal work performed. Neff was not personally served, service was by publication based on Mitchell’s assertion that Neff owned property in Oregon. A default judgment was entered against Neff. Later Neff acquired title to a tract of land in Oregon, Mitchell had the sheriff seize and sell the land to satisfy the judgment. Mitchell bought the land at the sheriff’s sale and sold it to Pennoyer. Years later Neff sued Pennoyer in federal court arguing that the sale was invalid bc the Oregon court lacked jurisdiction over him. The SC agreed, holding that the Oregon court lacked jurisdiction bc there was no personal service of process on Neff in Oregon. It relied on two “principles of public law”:

                                                                                                               i.      Every state has “exclusive jurisdiction” over persons and property within the state; and

                                                                                                              ii.      As a corollary, states may not exercise “direct” authority over persons or property outside the state

 (1)          Criticism: highly formalistic and disregards the significance of “indirect” effects of the exercise of state jurisdiction. For example, a valid in personam judgment against Neff in favor of Mitchell in Oregon would be entitled to full faith and dredit in California, and CA would therefore be required to satisfy the judgment our of Neff’s CA property. In this manner, CA’s “exclusive” jurisdiction over property wi CA would be impaired.

 (2)          Relation to Due Process: Bc the 14th Amendment did not become effective until after Mitchell had Neff’s property sold, the Due Process Clause was not involved in the case. However, the court made it clear in dictum that in the future, due process would apply the same limitations on exercise of jurisdiction

                                                                               b.      Territorial limits on process: the basic limitation on the power of state courts to exercise in personam jurisdiction has been weakened by the modern shift to a contacts analysis

                                                                                c.      Service within state sufficient: This is the basis for what has come to be know as transient jurisdiction

                                                                                                               i.      Example – service in an airplane: service on a passenger on a nonstop scheduled flight from TN to TX while the plane was over ARK was held to be sufficient to establish jurisdiction in ARK

                                                                                                              ii.      Limitation – fraudulent inducement into forum:  courts decline transient jurisdiction where the defendant was fraudulently lured into the jurisdiction

                                                                                                            iii.      Constitutional validity: SC has upheld transient jurisdiction

                                                                               d.      Seizure of defendant’s property: prejudgment seizure of a defendant’s property was sufficient to permit a state to dispose of that property to satisfy unrelated claims. Where such seizure was accomplished, the absence of service wi the jurisdiction did not limit the court’s power to proceed with regard to disposition of the property. This is an application of the second category of quasi in rem jurisdiction

                                                                                                               i.      Need for prejudgment seizure: quasi in rem jurisdiction was not available in Pennoyer bc in the first action, the plaintiff did not attach Neff’s property before entry of the judgment. Seizure after judgment is insufficient to support jurisdiction.

                                                                                                              ii.      Scope of property

1.        Debt as property: the court upheld assertion of quasi in rem jurisdiction over a debt owed to the defendant by a temporary visitor to the state.

2.        Insurance policies: some states extended this idea to justify the seizure of an insurer’s obligation to defend and indemnify its insured. The obligation was said to be property of the insured, present wherever the insurer could be served, thereby justifying jurisdiction – the SC invalidated this practice

                                                                                e.      Exceptions: In Pennoyer, the court recognized some exceptions to its rigorous rules:

                                                                                                               i.      Status: a state court could determine the status of one of its citizens toward a nonresident. This exception bore principally on divorce cases and gave rise to the Nevada divorce, in which one spouse would move to Nevada for the period required to establish residency and obtain a divorce there

                                                                                                              ii.      Consent: states could require noncitizens to consent to suit as a condition for conducting activities in the state. Gradually, this caused the doctrine of implied consent to arise.

1.        Example –nonresident motorist statutes: In Hess v. Pawloski, the court upheld jurisdiction based on a statute that treated driving within the state as implied consent to suit there on claims arising from that driving. It stressed that “motor vehicles are dangerous machine, even when skillfully and carefully operated”

                                                                                 f.      Notice: Pennoyer had an ambivalent attitude toward the need for notice to the defendant of the pendency of the action

                                                                                                               i.      Notice not sufficient: because process could not run into another state, notice to Neff in CA of the suit filed by Mitchell in OR would not have had any effect on the power of the OR court to enter a binding judgment

                                                                                                              ii.      Notice not required: prejudgment seizure of the defendant’s property would be sufficient notice. The law presumes that property is always in the possession of its owner, and therefore its seizure will inform the owner that he must look to any proceedings authorized by law upon such seizure for its condemnation and sale

3.        Shift to Minimum Contacts: With International Shoe, the court shifted from an emphasis on in-state service to requirement of minimum contacts with the forum state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.”

                                                                                a.      Systematic and continuous activities: the court has upheld in personam jurisdiction over a nonresident defendant based on systematic and continuous contacts with the state.

                                                                               b.      Single contact: the court upheld jurisdiction over a nonresident (TX) defendant based on a single contact with the forum (CA) – sending a contract for reinsurance to an insured in CA.

                                                                                c.      Purposeful Availment limitation: the court cautioned that “it is a mistake to assume that this tend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts.” In Hanson, the court said that there must be “some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws”

                                                                               d.      Post-International Shoe trend: state courts and legislatures expanded state court jurisdiction. The usual impetus behind such expansions was to provide a forum for local plaintiffs claiming injury due to products or serviced provided by distant defendants. Given elastic limitations on jurisdiction, there were strong pressures to open the doors of the local courts to such plaintiffs.

B.       Contemporary Constitutional Grounds for State Court Jurisdiction

1.        Contacts with the forum: International Shoe generated a two-stage approach to jurisdiction problems, looking first at the purposeful availment requirement, which is usually the harder requirement to satisfy, and then, if satisfied, at the reasonableness of permitting jurisdiction

                                                                                a.      Minimum Contacts – Purposeful Availment: purposeful availment inquiry focuses solely on activities of defendant, looking for some voluntary action by defendant establishing a beneficial relationship with forum state. Usually the lower courts justified extensions of jurisdiction on grounds of reasonableness, lack of burden to the defendant, state interest in local adjudication, and convenience to the plaintiff

1).      Rationale: this requirement gives defendants fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign. It thereby gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.

2).      Foreseeability: mere foreseeability of contact with the forum is important but insufficient; defendant’s conduct with respect to the forum state must be such that he should reasonably anticipate being haled into court there (e.g., long-term relationship with forum or seeking to serve forum market).

                                                                                                                                       i.      Unilateral act of plaintiff: the unilateral act of the plaintiff in bringing a product to the forum or relocating in the forum is insufficient to establish the requisite connection

1.        Example – relocation to forum: where the donor under a trust moved to FL after setting up the trust in DE, that unilateral act did not justify FL’s assertion of jurisdiction over the DE trustee even though the move was foreseeable

2.        Example – taking product to forum: where plaintiffs bought a car in NY and drove it to OK, this action by plaintiffs did not establish a contact between the retail seller and OK

                                                                                                                                      ii.      Long-term relationship with forum: where the defendant has establish a long-term relationship with a forum resident, that may suffice.

1.        Example – franchise agreement: where a MI defendant entered into a 20-year franchise agreement with a FL fast-food corp. that required defendant to adhere to a detailed set of specifications in operation of his franchised restaurant, FL jurisdiction was proper in litigation over a dispute under the agreement

2.        Compare – acceptance of corporate directorship: when defendants have accepted directorships in a corporation incorporated in the forum state, they may be subject to jurisdiction in that state. The rationale is that the defendants’ status as directors and their power to act in that capacity arise exclusively under the forum state’s laws. The DE court held that the directors accepted their directorships with explicit statutory notice that they could be haled into the forum state’s courts to answer for alleged breaches of the duties imposed on them by the very laws which empowered them to act in their corporate capacities.

                                                                                                                                    iii.      Seeking to serve: in World-wide Volkswagen v. Woodsen, the court indicated that OK contacts would have been sufficient to support jurisdiction on a showing that the defendants regularly sell cars at wholesale or retail to OK customers or residents or that they indirectly, through others, serve or seek to serve the OK market

1.        Single act: a single act seeking to serve the forum market has been held to suffice to support jurisdiction in an action asserting a claim growing out of the act

                                                                                                                                    iv.      Stream of commerce: a forum state may assert personal jurisdiction over a corp. that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state

1.        Retail seller: in World-Wide, the stream of commerce ends with the retail sale of the product, even if it is foreseeable that the purchaser will take the product to another state.

2.        Manufacturer or component supplier: In World-Wide, the court cited with approval Gray v. American Radiator and Standard Sanitary Corp., which upheld jurisdiction over a component supplier whose product was sent into the forum state as part of a product manufactured by its customer. However, in Asahi, O’Connor’s opinion (nor for a majority of the court) indicated that placing a product in the stream of commerce is not sufficient and that some additional conduct by which the defendant indicates an intent or purpose to serve the forum state is essential. This matter remains unclear.

                                                                                                                                     v.      Targeted or intended effects in forum: the court has indicate that, at least for intentional torts, jurisdiction can be obtained over a nonresident defendant in a forum where the defendant has targets its action

1.        Limited to wrongful or commercial activity: the effects test was intended to reach wrongful activity outside of the state causing injury within the state or commercial activity affecting state residents

2.        Not applicable to all intentional torts: the test may not apply to all intentional torts – alleged abuse of process by CA lawyer in filing suit against IN resident in CA court did not subject CA lawyer to jurisdiction in IN

3).      Relation to claim: the courts assumes jurisdiction is proper with regard to claims that are related to forum contacts that satisfy purposeful availment (this involve what has been called specific jurisdiction), but it may also be proper where the claim is related to contacts not satisfying purposeful availment requirement. This might be rationalized by focusing on foreseeability.

                                                                                                                                       i.      Example: World-Wide: seemed to be assumed that jurisdiction was proper over Audi and Volkswagen of America because both seek to serve the OK market. But it is difficult to see how the claim by the plaintiffs, who bought their car in NY, arose out of or was related to the efforts to serve OK

                                                                                                                                      ii.      Example: Buckeye Boiler Co v. Superior Court: the pl was injured in CA by the explosion of a boiler manufactured by the defendant. The defendant regularly supplied boilers to a CA purchaser, but these were of a different type from the one that injured the plaintiff, and nobody could explain how that boiler got to CA. The CA court upheld jurisdiction because plaintiff’s cause of action appears to arise from Buckeye’s economic activity in CA, the totality of its sales of pressure tanks to CA customers or to other customers for foreseeable resale or use in CA.

4).      Commercial v. noncommercial: purposeful availment is more easily found with regard to defendant’s commercial activity.

                                                                                                                                       i.      Example – franchising agreement: noting that the defendant was a commercial actor (in Burger King), the court held that the FL contacts constituted purposeful availment and thus upheld jurisdiction at BK’s home in FL

                                                                                                                                      ii.      Compare – suits against consumers: in BK, the court indicated that suits against consumers to collect payments due on personal purchases would not be permitted at the distant sellers’ locations

                                                                                                                                    iii.      Compare – Family law: the court held that a divorced father who sent his daughter to live with his ex-wife did not thereby become subject to CA jurisdiction in an action to modify support and child custody arrangements. The court reasoned that a father who agrees to allow them to spend more time in CA than was required under a separation agreement can hardly be said to have purposefully availed himself of the benefits and protections of CA laws (Kulko)

5).      Choice of law distinguished: the fact that a given state’s law may apply does not bear on satisfying the purposeful availment requirement. Fact that particular state’s law may apply under choice-of-law “center of gravity” principles does not alone satisfy purposeful availment requirement as to that state.

                                                                                                                                       i.      Choice of law clause: the parties’ election that a certain stat’s law will govern their relations may, however, support jurisdiction in that state. In BK, the court stated that the inclusion of a provision selecting FL law in the parties’ contract, although not sufficient of itself to support jurisdiction, reinforced defendant’s deliberate affiliation with FL

6).      Reasonableness insufficient to satisfy purposeful availment requirement: factors such as a lack of inconvenience to defendant cannot outweigh requirement of purposeful availment.

7).      Internet communications: ordinarily, the most important consideration is whether internet communications satisfy the purposeful availment requirement, and in some instance courts rely by analogy on cases involving other technologies, such as the telephone. Some recurrent problems deserve mention:

                                                                                                                                       i.      Contracts via internet: suffices to support jurisdiction in the forum of either party

                                                                                                                                      ii.      Causing effects in forum: activities via the internet have been reviewed under the effects test to determine whether defendants should have recognized that the effect in the forum would lead to suit

                                                                                                                                    iii.      Level of interaction and nature of web page relevant: if the web page is passive (e.g., merely provides information), jurisdiction will not be found. If the web page permits users to enter into transactions with the defendant via the internet, however, jurisdiction is usually upheld in actions based on those transactions

                                                                                                                                    iv.      Relation to state long arm statute requirements: some courts find that on the facts before them state long arm statutes are not satisfied

                                                                                                                                     v.      Relation to general jurisdiction: treating web page access as sufficient to support general jurisdiction would make general jurisdiction over any operator of a web page available anywhere. Therefore, constitutional issues of personal jurisdiction in web site cases are generally treated in specific jurisdiction terms

                                                                               b.      Fair play and substantial justice – reasonableness: In the reasonableness inquiry, consideration of plaintiff’s interests is proper.

1).      Factors: reasonableness factors include state’s interests in providing a forum and regulating the activity, relative burdens on plaintiff and defendant, nature of defendant’s activities in forum are systematic and continuous, the extent to which the claim is related to the defendant’s local activities, and desirability of avoiding multiple suits.

2).      None critical: the fact that certain factors do not point toward forum jurisdiction is not fatal to jurisdiction. Thus, the plaintiff need not be local for jurisdiction to be valid (Keeton v. Hustler Magazine). Similarly, the fact that the defendant has conducted only one piece of business in the state does not by itself defeat jurisdiction over a claim arising out of that business.

3).      Easy to satisfy: where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.

                                                                                                                                             i.      Example: In Keeton v. Hustler Magazine, plaintiff sued in NH after her first suit in OH was dismissed. She had no prior contact with NH and sued there only bc the limitations period had expired in all other states. The court found that the defendant’s regular sale of magazines in the state constituted purposeful availment and upheld jurisdiction as reasonable even though the plaintiff sought to recover damages for defamation worldwide under the single publication rule

4).      Greater concern with foreign defendants: it may be relevant that the defendant is a foreigner

                                                                                                                                             i.      Example: In Asahi, the court held that it was unreasonable for CA to exercise jurisdiction over a cross-complaint for indemnity by a Taiwanese manufacturer against a Japanese component manufacturer. The court placed weight on the fact that the CA plaintiff had settled his claim, leaving only the indemnification claim to be decided, and that it could be decided equally conveniently in Japan or Taiwan, where the dealings between the parties occurred

                                                                                                                                            ii.      Caution: it is not clear whether Asahi indicates that as a general matter there is greater concern with foreign defendants. It may be that the court would have viewed things differently had the CA plaintiff been pursing a claim against the Japanese component manufacturer who objected to jurisdiction.

2.        Presence of defendant’s property in forum: presence of defendant’s property in the forum will often establish a constitutionally sufficient contact between defendant and the forum, ordinarily because it establishes relevant contact between defendant and forum.

                                                                                a.      Location of property: tangible property is located in a state if it is physically present there. Intangible property may be considered located in a jurisdiction if some transaction related to the property occurred there, but if embodied in an instrument, it is usually said to be located where the instrument is.

                                                                                                                                       i.      Examples: a debt (such as a bank account) may be deemed located where the debtor (the bank) is located, but generally shares of stock are said to be located where the certificate is located

                                                                                                                                      ii.      Absence of constitutional limitations: no constitutional limitations on the power of a state to declare intangible property present within its borders. When a debt may be located in more than one state, due process forbids a state from declaring the property escheated unless it can guarantee that no other state would make a conflicting a duplicative claim

1.        Example – corporate stock: In Shaffer v. Heitner, DE, unique among the 50 states, declared that shares of stock in corp. it chartered were located in that state rather than where the certificate was located. The court did not question this

                                                                               b.      Presence of property supports jurisdiction: In Shaffer, presence of property in state may support jurisdiction by providing contacts among forum, defendant, and litigation.

i.         True in rem: states continue to have power to exercise true in rem jurisdiction, as in condemnation proceedings

ii.        Preexisting claim to property: actions for specific performance or otherwise to perfect a claim to the property should also still be permissible in the state where the property is located

                                                                                                                                             i.      Compare: this reasoning would not necessarily apply to an action by the owner of local property to force a nonresident to perform an alleged contract to purchase the property, as the presence of the property may not imply any connection bt the defendant and the state

iii.      Claim related to rights and duties arising from ownership: property provides sufficient contact where the claim is related to rights or duties related to the property (e.g., absentee owner might be sued for injuries sustained on property located in the forum).

iv.      Absence of other forum: the court has not ruled on the scope of jurisdiction be necessity, which may exist in cases where defendant’s property is located in the forum and no other forum is available to plaintiff.

v.       Enforcing valid judgment: the noted that once a judgment is entered by a court with in personam jurisdiction, it is proper for another state to enforce the judgment, even if it did not have jurisdiction to decide the case as an original matter

                                                                                c.      Presence of property insufficient for jurisdiction: when property is completely unrelated to plaintiff’s cause of action, its presence alone will not support jurisdiction.

                                                                               d.      Insurance Obligations: state cannot obtain jurisdiction over nonresident defendant in automobile tort actions by treating the defendant’s insurer’s obligation to defend and indemnify as property in the state and garnishing the insurer

                                                                                e.      In personam alternative: whenever the defendant may be subject to in rem jurisdiction, it is important to consider in person jurisdiction as well

                                                                                                                                       i.      Example: In Shaffer, Brennan, while agreeing that Internation Shoe should be applied to quasi in rem jurisdiction, argued that the defendants’ acceptance of positions as officers or directors in DE corp. should support jurisdiction over them in DE. After the decision, the DE legislature promptly enacted a statute so providing, and such exercise of in personam jurisdiction was upheld.

3.        General Jurisdiction: some courts distinguish between general jurisdiction, which subjects defendant to suit on any claim in the forum; and specific jurisdiction, which confers jurisdiction only for claims arising from defendant’s contact with the forum.

                                                                                a.      Natural persons: general jurisdiction is available in the state of a natural person’s domicile. One acquires a domicile by being present in a state and intending to make it one’s home for an indefinite period.

                                                                                                                                       i.      Compare – diversity of citizenship subject matter jurisdiction: domicile is also important for determining diversity of citizenship in connection with the subject matter jurisdiction of federal courts. Be sure to keep the concepts of personal jurisdiction and subject matter jurisdiction separate.

                                                                               b.      Corporations: a corporation is subject to general jurisdiction in the state of incorporation, the state in which its headquarters are located if different from state of incorporation, and in states in which it conducts “substantial activity.” The level of activity that is sufficient for this purpose is ambiguous. Although one could argue that only a very large volume of activity should suffice, some courts have seemingly lowered the threshold. A number of examples provide touchstones:

                                                                                                                                       i.      Purchase of equipment and execution of contract: In Helicopteros Nacionales de Colombia v. Hall, defendant, a Colombian corp., had contracted to provide transportation service in Peru, in connection with a project being built there by a TX based joint venture, and had been paid over 5 million for its services under the contract. Def had also purchased most of its helicopter fleet from a TX manufacturer and sent its pilots to TX for training. The court held the def contact with TX to be insufficient as a basis for general jurisdiction over the def

                                                                                                                                      ii.      Ongoing operation of office: In Bryant v. Finnish National Airline, the NY court of appeals upheld jurisdiction over a claim for injuries sustained in Europe based on the def operation of a one and a half room office in NY, staffed by 3 full time and 4 part time employees, and maintenance of a bank account in NY. CAUTION: this case may lower the standard too low

                                                                                                                                    iii.      Regular purchases in forum: an OK retailer;s purchase of a large portion of its merchandise in NY was held not to be sufficient for jurisdiction, even when coupled with regular visits to NY in connection with the purchases. The SC cited this case with approval in Helicopteros

                                                                                c.      Relation to claim: general jurisdiction analysis becomes important when defendant’s contacts with the forum are not sufficiently related to the claim sued upon. Where there is not a sufficient relation to the claim, one may fall back on general jurisdiction reasoning.

                                                                                                                                       i.      Example: in Helicopteros, plaintiffs sued in TX to recover for the deaths of workers killed in a crash in Peru of a helicopter operated by def. The court looked only to general jurisdiction bc the parties conceded that the claims did not arise out of def contacts with TX. Brennan dissented, arguing that the claims sufficiently related to def TX contacts to permit specific jurisdiction bc def negotiated the contract it was performing in TX, bought in TX the helicopter that crashed, and sent its pilots to TX for training.

                                                                               d.      Possible reasonableness limitation: some lower courts hold that jurisdiction may be denied, even when def contacts with the forum are sufficient to support general jurisdiction, if the exercise of jurisdiction would be unreasonable under the minimum contacts analysis

4.        Consent: defendant may consent to jurisdiction in a forum.

                                                                                a.      Express consent: defendant may expressly consent to jurisdiction, either before or after suit is filed, and suffices to support jurisdiction wo reference to other contacts with the forum.

1.        Registration by corporations: in many state, foreign corp. that engage in business in the state are required to register and appoint an agent for service of process in the state, thereby consenting to suit there.

                                                                                                                                       i.      Commerce clause limitations: the power of a state to insist on consent to general jurisdiction may be questionable to the extent that it unreasonably burdens interstate commerce

                                                                                                                                      ii.      Implied consent contrasted: as an adjunct to the registration requirements, states often treat conduct of business in the state to be impliedly appointing a state official, often the secretary of state, as agent for service of process. This is not based on a true consent theory, but on the constitutionality of exercise of state jurisdiction over claims arising from the corporation’s activities in the state.

2.       Limitation – local actions: in cases involving title to land, courts will proceed only if the land is located in the jurisdiction. In such cases consent of the parties is insufficient.

                                                                               b.      Implied consent: by filing suit in a forum, plaintiff consents to jurisdiction as to any related counterclaim by defendant. However, this implied consent does not extend to a counterclaim unrelated to the subject matter of pl claim against the def.

                                                                                c.      Appearance: depending on prevailing rules, jurisdiction may be supported by a party’s voluntary appearance in court to contest issues other than jurisdiction.

1.        What constitutes appearance: in general, an appearance occurs when the def defends litigation on the merits. Depending on the prevailing rules in the jurisdiction, the issue turns on the extent to which the def raises issues other than jurisdiction

a.        State courts: in many state, a def who wishes to preserve objections to personal jurisdiction must make a special appearance raising only jurisdictional issues. Raising other matters subjects the def to the risk of having made a general appearance and thereby consenting to jurisdiction

b.       Federal Courts: in federal courts and in most state courts, a def need not make a special appearance; all ground of defense, including lack of personal jurisdiction, can be asserted in a motion or answer

                                                                                                                                                         i.            Waiver: if the def fails to raise personal jurisdiction in her initial motion or answer, that objection is waived.

                                                                                                                                                        ii.            Consent to jurisdiction to decide jurisdiction: by moving to dismiss for lack of personal jurisdiction, the def consents to the power of the court to decide that question, including the power to order discovery pertinent to the jurisdictional question

c.        Alternative of default: a def who believes that jurisdiction in the forum is improper may disregard the suit and permit a default to be taken. When the pl later attempts to enforce the judgment in another jurisdiction under the full faith and credit clause, the def can then challenge on the ground that the rendering court lacked jurisdiction, If the enforcing court finds jurisdiction was proper, however, there will be no further opportunity to defend on the merits.

5.        Service within jurisdiction: traditionally (under Pennoyer), service within the jurisdiction was presumptively sufficient to support jurisdiction.

                                                                                a.      Possible minimum contacts requirement: In Shaffer v. Heitner, the court stated that all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe. However, the SC wo a majority opinion but with no dissents (in Burnham v. Superior Court), upheld the constitutionality of transient jurisdiction, obtained by service on a nonresident temporarily wi the state, even thought the suit was unrelated to the def activities in the state. CAUTION: this ground for jurisdiction may not suffice, according to some Justices’ opinion, where the def presence in the state was not intentional or voluntary.

                                                                               b.      Fraudulent inducement: if defendant is served with process after being fraudulently induced to enter the state by the pl false statements, the court will not exercise jurisdiction.

                                                                                                               i.      Compare – trickery to effect service: although fraudulently inducing a def into the jurisdiction is generally a defense to service, using trickery to effect service on a def already in the jurisdiction generally does not interfere with the effectiveness of service.

                                                                                                              ii.      In rem cases: when the pl relies on seizure of the def moveable property to establish jurisdiction, the seizure should be disregarded if the property is moved to the forum as the result of some trickery by the pl.

6.        Territorial jurisdiction of the federal courts: in most cases, the territorial jurisdiction of a federal court is no broader than that of the state where it is located.

                                                                                a.      Constitutional limitations on nationwide service: subject to possible due process limitations, Congress could constitutionally give federal courts nationwide personal jurisdiction.

                                                                               b.      National contacts: the court has not decided whether an alien defendant’s contact with this country may be aggregated to support jurisdiction.

C.       Statutory Authorization for Jurisdiction

1.        Long Arm Statutes: it is not enough that an exercise of jurisdiction is constitutionally authorized; there must also be a statute authorizing jurisdiction. After International Shoe, state legislatures began to enact long arm statutes extending the reach of their courts’ jurisdiction. Some long arm statutes authorize jurisdiction whenever it would not violate the Constitution, but most long arm statutes list specific acts that will warrant the exercise of jurisdiction.

                                                                                a.      Full power: in a few states, explicitly authorize exercise of jurisdiction whenever it would not violate the Constitution. In such cases, the only question that need be considered is the constitutionality of jurisdiction, Note that some courts have interpreted statutes  that do not expressly provide this broad jurisdiction to nevertheless have this effect

                                                                               b.      Specific Acts: most designate specific acts as warranting the exercise of jurisdiction. Common examples include: the transaction of any business wi the state; the commission of a tortious act wi the state; ownership, use, or possession of real property wi the state; contracting to insure any person, property, or risk located in the state at the time of contracting; and the maintenance of a marital domicile in the state in an action for divorce. With such a statute, one must consider (i) whether the def activities fall wi the terms of the statute and (ii) if so, whether the exercise of jurisdiction in this case is constitutional.

                                                                                                                                       i.      Common sense reading: in general, courts say that they will give the words of the rule or statute their ordinary meaning. In some instances, they seem to overextend that reading. In Gray, the court read the ILL statute provision of jurisdiction for the commission of a tortuous act wi the state to cover the manufacture in OH of an allegedly defective valve that was shipped to a manufacturer in PA and incorporated into a boiler made there

                                                                                                                                      ii.      Different legal theory: if the def specific act is wi the statute, claims based on the same act but a different legal theory can also be asserted in the action

                                                                                                                                    iii.      Arising out of requirement: usually, statutes that designate specific acts require that claims arise out of that act. This presents a problem similar to that in determining whether there is a relationship bt the claim and the contacts on a minimum contacts analysis and whether specific or general jurisdiction is being invoked. However, in this instance, the analysis made is of the relationship bt the contacts and the claim as a matter of state law, rather than as a matter of federal constitutional law

                                                                                                                                    iv.      Torious act: this requirement is generally held to be satisfied when the act as alleged would be tortuous. If the ground were actual commission of a tort, a finding that the def did not commit a tort would mean that the court lacked jurisdiction.

                                                                                                                                     v.      Full power through interpretation: in some state that have specific act statutes, the courts have interpreted the statutes to extend jurisdiction to the constitutional limit

1.        Rationale: often the reasoning behind such extensions is that the legislature had no reason to deny residents access to the courts in cases in which jurisdiction would be constitutional

2.        Caution: states that have taken this approach sometimes balk at pursing. Thus, after Nelson, the ILL SC cautioned a a statute worded in the ways outs is should have a fixed meaning wo regard to changing concepts of due process

2.        Federal Court Jurisdiction: in general, federal courts exercise jurisdiction no broader than that authorized by the long arm statute of the state where the court is located.

                                                                                a.      In personam jurisdiction

                                                                                                                                       i.      Subject to jurisdiction of state court: process from a federal court is effective to confer jurisdiction over a defendant if the def would be subject to jurisdiction of a court of heneral jurisdiction in the state in which the federal court is located

1.        Constitutionality: where this is the ground for exercise of personal jurisdiction, the constitutionality of that exercise is the same as if the case were in state court

                                                                                                                                      ii.      Rule 14 or Rule 19 joinder: a party who is served wi a judicial district and wi 100 miles of the place from which the summons was issued is subject to jurisdiction if joined under Rule 14 (impleader) or Rule 19 (necessary parties)

                                                                                                                                    iii.      Interpleader or other federal statutory basis: where a federal statute authorizes nationwide jurisdiction, federal courts can exercise jurisdiction even though state courts could not

                                                                                                                                    iv.      Minimum contacts with US: for claims arising under federal law, federal courts can exercise jurisdiction even though the def is not subject to the jurisdiction of the courts of general jurisdiction in any state, if this would be consistent with the Constitution

1.        National v state contacts: this provision could apply if def national contacts permit exercise of jurisdiction although no state has sufficient contacts to support it

2.        Narrow long arm statute: alternatively, this provision could apply if the state in which the court is located has a narrow long arm statute that does not apply to the circumstances presented in the case although there are constitutionally sufficient grounds for exercise of jurisdiction

                                                                               b.      In rem jurisdiction: the federal court may assert jurisdiction by seizing a def assets found wi the district only if def cannot be served by means otherwise authorized, and then only in the manner provided by the law of the state in which the district court is located

                                                                                c.      No court created authority: in Omni the court rejected arguments that it should authorize nationwide service of summons in connection with a federal claim for which Congress had not provided for such service. The court found it likely that Congress has been acting on the assumption that federal courts cannot add to the scope of service of summons Congress has authorized

D.      Litigating Jurisdiction

1.        Default: if a party believe the court lacks personal jurisdiction, she may default and later argue that the judgment should not be given full faith and credit because the court did not have jurisdiction.

2.        Appearance to litigate jurisdiction: in federal court and in most states, defendant may raise lack of personal jurisdiction along with other defenses in her answer or preanswer motion. A few states require a special appearance.

3.        Discovery: where factual issues are pertinent to resolution of a personal jurisdiction objection, the court may order discovery regarding those issues. By making a personal jurisdiction objection, the def consents to the court’s jurisdiction wrt such discovery

E.       Venue

1.        Introduction: venue is a statutory limitation on the geographic location of litigation to prevent a plaintiff from suing where it would be burdensome for the defendant to appear and defend.

                                                                                a.      Federal System: venue statutes in the federal system limit the federal districts in which suit may be brought

                                                                               b.      State courts: venue statutes in state court systems usually limit the counties in which may be brought

2.        Federal venue limitations: where any defendant resides, if all defendants reside in the same state; or where a substantial part of the events or omissions giving rise to the claim occurred or a substantial part of the property that is subject to the litigation is situated. If no other district is available, venue is proper: (i) in diversity cases, where any defendant is subject to personal jurisdiction, and (ii) in federal question cases, where defendant is found.

                                                                                a.      Defendants subject to personal jurisdiction: when federal subject matter jurisdiction is founded solely on diversity of citizenship, venue is proper in any district in which any def is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought

                                                                                                                                       i.      Service within jurisdiction: personal service wi the jurisdiction would not suffice to establish venue under this provision bc it would not be a ground fore personal jurisdiction that exists at the time the action is commenced. Federal civil actions are commenced by filing a complaint with the court

                                                                                                                                      ii.      Unavailability of other districts: to use this ground for venue, pl must show that venue cannot be established in any other district. Thus, this subsection, like section 1391(b)(3), is a fallback that can come into play only if venue is lacking under both subsections (1) and (2). The availability, under subsection (1), of venue where a def resides when all def reside in the same state also means that subsection (3) can apply solely in multiparty cases involving dispersed def

                                                                                                                                    iii.      Ensures proper venue in multidefendant cases: bc venue is proper in any district in which one def is subject to personal jurisdiction, the absence of personal jurisdiction over other def will not preclude suit on venue grounds if jurisdiction can be obtained over one def

                                                                               b.      Where defendant found: if federal jurisdiction is not based solely on diversity of citizenship, venue is proper in a district in which any def may be found, if there is no district in which the action may otherwise be brought

                                                                                                                                       i.      Meaning of found: it appears that a def may be found in a district in which she can be served with process

                                                                                                                                      ii.      Unavailability of other districts: to use this ground for venue, pl must show that venue cannot be established in any other district

                                                                                c.      Special venue statutes: Congress has altered the general rules of venue in connection with certain types of cases:

                                                                                                                                       i.      Additional venue options: in some type of cases, venue may be proper in certain locations in addition to the districts allowed under the general rules

1.        Patent infringement actions: in addition to the districts specified by the general venue statues, venue in a patent infringement action is also proper in the district where the def committed acts of infringement if the def has a regular and established place of business in that district

2.        Copyright suits: similary, in addition to the districts specified by the general venue statutes, venue in copyright suits is proper in any district in which the def or her agent may be found

                                                                                                                                      ii.      Substitute venue: in a few type of cases, venue is proper only in the districts specified by the special statute

1.        federal tort claims actions: venue for federal tort claims action is proper only in the district where the pl resides or where the claim arose

2.        Statutory interpleader: in statutory interpleader actions, venue is proper only in a district where a claimant to the fund resides

                                                                               d.      Aliens: in a suit against an alien, venue is proper in any district

                                                                                                                                       i.      Compare – citizenship for determination of diversity of citizenship: where the residence of an alien must be considered to determine whether there is subject matter jurisdiction due to complete diversity of citizenship, an alien admitted to the US for permanent residence is deemed a citizen of the state in which the alien is domiciled

                                                                                e.      Removed cases: where a case is removed from state court to federal court, it is assigned to the district encompassing the state court in which the action was pending, regardless of the residence of the parties. In a sense, removal creates its own venue

3.        Litigating venue: improper venue may be waived unless the issue is properly raised (e.g., by timely motion).

4.        Federal Transfer Provisions: a federal case may be transferred to another federal court in the following cases:

                                                                                a.      Venue or jurisdiction improper in original court: if venue or jurisdiction is improper, court may transfer case to proper court.

                                                                               b.      Transfer for convenience: court will respect plaintiff’s choice of forum, but may, for convenience in the interests of justice, transfer case to another district where it might have been brought.

                                                                                                                                       i.      Proper transferee court: the statute authorizes transfer only to a district in which the action might have been brought. This means that the transferee district must be a proper venue and have valid personal jurisdiction. The moving party’s willingness to waive objections to venue or personal jurisdiction does not satisfy this requirement

                                                                                c.      Procedure

                                                                                                                                       i.      Proper moving parties: either the pl or the def can move to transfer under this section. A def who has removed a case from a state court can still move to transfer after removal.

                                                                               d.      Forum selection clause: where the parties have entered into a contract containing a forum selection clause concerning the dispute in question, the SC has stated that the presence of the clause should be a significant factor in determining whether to transfer the case to the forum designated.

F.       Forum Non Conveniens: even when jurisdiction and venue are proper, a court may decline to exercise jurisdiction if the venue selected by the plaintiff is grossly inconvenient.

1.        Present use

                                                                                a.      Federal courts: when the inconvenience problem can be solved by transfer to another federal district, the court may not dismiss; but if the proper forum is in another country, the federal court can dismiss

                                                                               b.      State courts: when the more convenient court is not wi the state and transfer is therefore not possible, forum non conveniens remains an important device

2.        Rationale: courts are not required to make their jurisdiction available to parties who engage in unfair forum shopping and thereby impose substantial inconvenience on other parties and expense and burden on the courts of the forum selected by the pl

3.        Procedure: the def must make a motion to dismiss on grounds of inconvenience

                                                                                a.      Showing required: the def must show that the pl has selected a grossly inconvenient location for the suit

                                                                               b.      Factors: the court is to consider a number of private and public factors in making a decision whether to dismiss on forum non conveniens grounds

                                                                                                                                       i.      Private factors

1.        Relative ease of access to sources of proof

2.        availability of compulsory process

3.        cost of obtaining attendance of willing witnesses

4.        need to view premises

                                                                                                                                      ii.      Public factors

1.        local interest in having localized controversies decided at home

2.        interest in having trial in forum familiar with the law to be applied

3.        Avoiding unnecessary problems with conflict of laws

4.        unfairness of burdening citizens of an unrelated forum with jury duty

4.        Effect on choice of law: bc forum non conveniens results in a dismissal, the pl must file a new suit, and the choice of law rules that apply are determined by the forum for the new suit

5.        Compare – contractual limitations of forum: dismissal in favor of litigation in another forum can also occur where the dispute arises out of a contract in which the parties have agreed to litigate in a specific forum, and transfer to that forum is not possible

                                                                                a.      Federal law – generally enforceable: the SC has declared that, as a matter of federal common law, such clauses are generally enforceable even where they result in dismissal bc the forum chosen is in another country. Moreover, the SC has held that a forum selection clause on a printed passenger ticket is enforceable even though not the subject of bargaining, unless enforcing it would violate fundamental fairness. NOTE: Congress invalidated such clauses in ship passenger tickets, but later re-amended the statute to restore the original language, although apparently intending still to change the result in Carnival Cruise Lines. Such clauses may be valid in other consumer situations, however.

                                                                               b.      State law – enforcement limited: in many state, the enforcement of such clauses is limited on the theory that the parties cannot by agreement oust a court with jurisdiction to decide the dispute.

                                                                                c.      Choice between state and federal rules in federal court: where state law claims are presented in federal court, there may be a serious problem determining whether to apply state or federal common law. The SC has not decided this question. It has, however, decided that where transfer to the selected forum is possible under § 1404(a), the existence of such a clause is a significant factor in deciding whether to transfer.

G.       Notice

1.        Constitutional Requirements: due process requires that reasonable efforts to proved notice be made with regard to persons whose interests are to be determined.

                                                                                a.      In rem cases: the notice requirement applies even to pure in rem actions

                                                                               b.      Method: the method of giving notice must have a reasonable aspect of giving actual notice: the means employed must be such as one desirous of actually informing the absentee might reasonably adopt to accomplish it

                                                                                                                                       i.      Personal delivery: this is the traditional method of giving notice

                                                                                                                                      ii.      First class mail: In Mullane, the court required mailed notice to those whose addresses were known, reasoning that the mails today are recognized as an efficient and inexpensive means of communication

1.        Class actions: there must be a mailed notice to all identifiable class members

                                                                                                                                    iii.      Posed notice: notice by posting on the def residence may not be sufficient

                                                                                c.      Effort to identify: reasonable efforts to identify and locate affected persons are required. As to named def, the identification issue should not be a problem, but in other instances, such as in rem actions, it can prove more difficult

                                                                                                                                       i.      Example – mortgagee: where property was sold for nonpayment of taxes, a mortgagee with a mortgage on file with the county recorder was held entitled to notice

                                                                                                                                      ii.      Example – creditor of decedent: application of a state requirement that claims against a decedent be presented to his executor wi 2 months of publication of notice of the commencement of probate proceedings was held to violate due process to the extent it cut off rights of creditors whose identity was reasonably ascertainable to a decedent’s executor and who were not given notice

                                                                                                                                    iii.      Class actions: the court has accepted failure to identify significant numbers of class members

1.        Rationale: In Mullane, the court explained that notice reasonably certain to reach most of those interested in objecting is likely to safeguard the interests of all, since nay objections sustained would inure to the benefit of all

                                                                               d.      Contents: the notice must intelligibly advise the def of the nature and place of the proceeding

                                                                                e.      Constructive notice: in some instances where a person cannot be located after reasonable efforts, published or other constructive notice will suffice

                                                                                 f.      Effect of failure to receive: if a constitutionally valid procedure is used, the judgment is binding even if some interested parties do not receive notice

2.        Service of process: usual method of gibing notice is service of a summons and complaint on defendant, directing that he file an answer or suffer a default.

                                                                                a.      Methods of service: depending on the rules of the jurisdiction, service of process may be made by personal deliver, by mail (waiver of service), or by leaving it a defendant’s home or office.

                                                                                                                                       i.      Personal delivery: process may be served on the person, In the case of a corporation, partnership, or unincorporated association, service may be made on an officer or managing agent, or on an agent authorized by law

                                                                                                                                      ii.      Substituted service: other means of service may be authorized by statute or court rule

1.        federal rules

a.        at defendant’s home: can be left at the usual place of abode of the person to be served with a person of suitable age and discretion residing therein

b.       in accordance with state law: service may be made pursuant to the law of the state in which the district court is located, or pursuant to the law of the state in which service is effected

c.        Waiver of service: a pl may ask a def to waive formal service by sending a request for waiver of service to the def by 1st class mail. A def located wi the US who fails to waive service wo good cause can be liable for the costs of formal service. A def who waives service receives additional time to answer the complaint compared to one who is served in the usual manner

d.       On def in foreign country: may be served by an internationally agreed means or, if there is not agreed means, as directed by the law of the place of service, including, unless forbidden by the law of that country, personal delivery or any form of mail requiring a signed receipt, or as directed by the court

2.        State Law: state law on substituted service varies. In CA, for example, such service may be accomplished in the following ways:

a.        At def office or home: left at that location and also mailed a copy at the same location

b.       By mail wi the state: allowed if the person executes and returns an acknowledgment of service

c.        By mail outside the state: can be served on a person outside the state by using return-receipt mail

3.        Service in diversity cases: the service procedures of Federal Rule 4 are to be applied

                                                                               b.      Immunity from service: in some jurisdictions, rules immunize from service those persons who are present in the state only to participate in a legal proceeding.

3.        Timing of notice – Prejudgment seizures: at common law, defendant’s property could be seized, even before defendant had notice of the action, to provide security for any judgment plaintiff might obtain.

                                                                                a.      State law requirements: states have placed various limits on prejudgment seizures. Thus, before considering possible constitutional objections to state procedures, one must first consider whether ithe prejudgment seizure sought by the pl is authorized by state law.

                                                                               b.      Procedural due process requirements for prejudgment seizure: supreme court decisions on prejudgment seizures without notice or advance hearing where the claimant’s interest in the property does not antedate the suit seem to require proof of exigent circumstances and a factual setting where claims can reliably be evaluated on documentary proof.

                                                                                                                                       i.      Sniadach – garnishment of wages: the court held that the state violated a def due process rights by allowing prejudgment garnishment of wages. The opinion contained suggestions that wages might be viewed as a special type of property bc they are essential to everyday life

                                                                                                                                      ii.      Fuentes – seizure of chattels: the court invalidated FL and PA procedures for writs of replevin that authorized the seizure of property, bc there was no provision for notice and a preseizure hearing

1.        Purpose of hearing: the court emphasized that the notice and hearing requirement ensured a fair process of decision making, but was not clear on whether this was limited to reducing the risk of erroneous issuance of writs of replevin

2.        Alternative safeguards against error: the plurality viewed alternative safeguards against error as significant factors in determining the type of hearing afforded, but far from enough by themselves to obviate the right to a prior hearing of some kind. One dissenter argued that the bond requirement, coupled with the creditor’s desire to have the transaction completed, should provide sufficient protection

3.        Unimportance of cost of hearing: the court placed little importance on the possible cost of more elaborate hearing procedures, noting that the Constitution recognizes higher values that speed and efficiency

4.        Exception for extraordinary situations: the plurality recognized in dictum that the right to preseizure notice and hearing could be overcome in extraordinary situation. It specified 3 factors that appeared all to be necessary

a.        Such seizures should be directly necessary to secure an important governmental or general public interest (public health, or the war effort)

b.       Such seizures wo notice may occur only where delay would be inimical to the public interest

c.        Such seizures should be limited to circumstances in which the state controlled the initiation of proceedings

                                                                                                                                    iii.      Mitchell: the court upheld LA sequestration procedure in a case where the seller of several household appliances obtained a writ for their seizure when the def missed payments

1.        Fuentes overruled?: one could argue that Mitchell overruled Fuentes since the situation was difficult to fir wi the extraordinary situations analysis

2.        Mitchell’s requirements – Fuentes distinguished: the majority said that it was applying Fuentes, however, and that the LA procedures were different in ways that made them constitutional bc:

a.        They required more than the conclusory claims of ownership called by the state procedures at issue in Fuentes

b.       In the parish where this case arose, the practice was that a judge would pass on the application for the writ

c.        Narrowly confined issues were presented by the application for the writ in LA in contrast to the broad fault standard applicable in the statutes at issue in Fuentes

d.       The def in LA had a right to an immediate hearing on whether the pl was entitled to the writ, and the burden remained on the pl to justify the issuance of the writ

3.        Explanation for shift: the easiest explanation for the shift from Fuentes to Mitchell is that two new Justices (Powell and Rehnquist) were added to the court in the interim.

                                                                                                                                    iv.      Doehr: the court held CT provision for attachment of real property wo prior notice and an opportunity for a hearing invalid as applied in this case. The court followed a 3 step analysis

1.        Private interest: the court held that the interests of a homeowner were significantly affected by attachment even though it did not interfere with possession of the property bc attachment can cloud title, impede sale, and interfere with borrowing on the property

2.        Risk of erroneous deprivation: there was a substantial risk of an erroneous deprivation bc the state practice allowed decisions based on a conclusory affidavit wo prior notice and adversary hearing, and the underlying issue in the case did not lend itself to documentary proof

3.        Governmental interest: CT had no significant interest in allowing a private pl to attach def property wo notice or a showing of exigent circumstances, in view of the fact that other state have more exacting requirements for seizure wo notice

                                                                                                                                     v.      Effect of Doehr: appears to have the following effects besides prescribing the 3 part analysis

1.        Exigent circumstances: proof of exigent circumstances may be constitutionally necessary to permit seizure wo notice

2.        effect of preexisting interest in property: distinguished its summary affirmance in another case involving a mechanic’s lien, suggesting that less rigorous standards might apply when the pl is asserting an interest in the property that antedates the suit

3.        Type of claim: emphasis on the difficulty of evaluating the assault claim before it on the basis of filings by pl suggests that only claims that can be reliably evaluated on documentary proof may be the basis for seizure wo notice

4.        Due process limitations if hearing held before seizure: even if a hearing is held before seizure, procedural due process may limit seizure unless the above criteria are satisfied.

II.                   Subject Matter Jurisdiction of the Federal Courts

A.      Introduction

1.        Nature of subject matter jurisdiction: subject matter jurisdiction involves a court’s authority to rule on a particular type of case.

2.        Defect not waivable:

                                                                                a.      Defendant may raise at any time: lack of subject matter jurisdiction may be raised at any time, even after final judgment

                                                                               b.      Court to raise sua sponte: if the parties do not raise lack of subject matter jurisdiction, the court will raise it on its own motion

B.       Diversity Jurisdiction

1.        Constitutional authorization: Article III, Section 2 authorizes diversity jurisdiction to provide a forum for persons who might be victims of local prejudice. The Constitution requires only minimal diversity (i.e., that diversity exist between one plaintiff and one defendant)

2.        Diversity Statute:

                                                                                a.      Complete Diversity requirement: the diversity statute requires complete diversity (i.e., that no defendant have the same citizenship as any plaintiff)

                                                                               b.      How citizenship determined: for natural persons, including permanent resident aliens, citizenship is generally the same as domicile. A corporation is a citizen of any state in which it is incorporated and of the state of its principal place of business. Unincorporated associations are citizens of each state of which any member is a citizen.

                                                                                                               i.      Class actions: only the citizenship of the named representatives is considered

                                                                                                              ii.      Fictitious defendants: citizenship of fictitious defendants is disregarded in considering whether a case is removable.

                                                                                                            iii.      Executors, guardians, and trustees: legal representatives of decedents or incompetents are deemed citizens of the same state as the person represented

                                                                                c.      Time for determination: diversity need exist only at the commencement of the action

                                                                                                               i.      Removal: for removed cases, diversity must exist both at the time of filing the suit and at the time the removal notice is filed.

                                                                               d.      Realigning parties: in considering diversity, the court looks to the real interests of the parties and may realign them accordingly as plaintiffs or defendants

                                                                                e.      Efforts to create diversity: diversity cannot be created by collusively or improperly joining a party or by assigning a claim without sufficient consideration

                                                                                 f.      Efforts to defeat diversity: plaintiffs are allowed some latitude in taking steps to defeat diversity (e.g., adding bona fide claims against nondiverse defendants)

                                                                               g.      Effect of lack of diversity: A plaintiff may sometimes preserve diversity by dismissing a nondiverse defendant, but may not proceed in federal court without a necessary party

                                                                               h.      Jurisdictional amount: more than $75,000 must be in controversy in a diversity case

                                                                                                               i.      Legal certainty test: the amount claimed by plaintiff is determinative unless defendant shows to a legal certainty that the minimum cannot be met

                                                                                                              ii.      Aggregation of claims to satisfy requirement: single plaintiff may aggregate all claims against a single defendant to meet the minimum. Single plaintiff may aggregate claims against several defendants only if all defendants are jointly liable. Multiple plaintiffs may aggregate claims against single defendant only if they have a common undivided interest in the claims. Defendant’s counterclaim may not be aggregated with plaintiff’s claim to meet minimum

C.       Federal question jurisdiction

1.        Constitutional Grant: Article III, section 2 extends the federal judicial power to cases arising under the Constitution, the laws of the US, and treaties; cases affecting ambassadors, consuls, etc.; admiralty cases; and cases to which the US is a party

2.        Federal Question Statute

                                                                                a.      Statute interpreted more narrowly than Constitution: the language of the federal question statute is very similar to that in Article III, but has been interpreted more narrowly

                                                                                                               i.      State court jurisdiction over cases raising federal questions: state courts have concurrent jurisdiction over most federal question issues

                                                                               b.      Standards for determining whether federal question is raised: a federal question may be raised when federal law has created the claim sued upon or when a right under state law turns on construction of federal law

                                                                                c.      Well-pleaded complaint rule: the federal question must appear in the properly pleaded allegations in the complaint

                                                                                                               i.      Anticipation of defense insufficient: a federal question is not sufficiently raised by plaintiff’s allegation that defendant will rely on a defense based on federal law

                                                                                                              ii.      Plaintiff’s election not to assert federal claim: plaintiff may, within limits, elect not to assert a federal claim and thus avoid federal question jurisdiction

                                                                               d.      Plausible assertion of federal right sufficient: a federal question is sufficient to vest the court with jurisdiction unless it is frivolous or made solely to bring about jurisdiction

                                                                                e.      Jurisdictional amount: in most federal question cases, there is no required minimum amount in controversy

D.      Supplemental Jurisdiction

1.        Introduction: where jurisdiction is proper, federal courts have jurisdiction over all issues in the case, not just federal questions

2.        Background – pendent and ancillary jurisdiction: the supplemental jurisdiction statute arises from the common law concepts of ancillary jurisdiction and pendent jurisdiction

                                                                                a.      Ancillary jurisdiction: the doctrine of ancillary jurisdiction gave federal courts the power to hear claims brought by parties other than the plaintiff related to the plaintiff’s claim, such as counterclaims, cross-claims, interpleader claims, and claims by intervenors

                                                                               b.      Pendent jurisdiction: the doctrine of pendent jurisdiction gave federal courts the power to hear nonfederal claims against a nondiverse defendant as long as such claims arose from the same event as the federal claim

                                                                                c.      Lack of statutory basis: in 1989, the SC called the validity of ancillary and pendent jurisdiction into doubt, at least with regard to claims against added parties, because there was no statutory basis for such jurisdiction and all exercises of federal court jurisdiction have been said to require a statutory basis

3.        Supplemental jurisdiction statute: in response to SC cases, Congress adopted the supplemental jurisdiction statute, which grants federal courts that have original jurisdiction over a claim supplemental jurisdiction over all other claims that form part of the same case or controversy under Article III. Thus, any claim that is part of the same constitutional case may be added, including claims that involve the joinder or intervention of additional parties

                                                                                a.      Standard: in determining whether supplemental jurisdiction is proper the court will ask whether:

                                                                                                               i.      The federal claim is sufficiently substantial;

                                                                                                              ii.      The federal and nonfederal claims arise from a common nucleus of operative fact; and

                                                                                                            iii.      The federal and nonfederal claims are such that they would ordinarily be tried in one judicial proceeding

                                                                               b.      Limitation on diversity cases: when federal subject matter jurisdiction is founded solely on diversity there is no supplemental jurisdiction over claims by plaintiffs against persons made parties under Rule 14, Rule 19, or Rule 24, nor over claims by persons proposed to be joined under Rule 19 or Rule 24

                                                                                c.      Discretionary decline of jurisdiction: a federal court can decline to exercise supplemental jurisdiction where: (i) a novel or complex issue of state law is involved; (ii) the nonfederal claim predominates; (iii) all original jurisdiction claims are dismissed; or (iv) in other extraordinary circumstances

E.       Removal

1.        Grounds for removal: in general, an action that plaintiff could originally have filed in federal court can be removed there by defendant

                                                                                a.      Local defendant: removal on grounds of diversity is not permitted if any defendant is a citizen of the state in which the action is brought

                                                                               b.      Separate and independent federal claim: defendant may remove if sued on a removable separate and independent federal claim, even if plaintiff has joined nonremovable claims

2.        Procedure for removal: defendant removes by filing a notice of removal in the appropriate federal district court and notifying the other parties and the state court

                                                                                a.      Only defendants can remove: plaintiff may not remove on the basis of defendant’s assertion of a counterclaim

                                                                               b.      All defendants must join: unless an individual defendant has a separate and independent claim against him, all defendants who have been served must join in filing for removal

3.        Remand: the federal court should remand an improperly removed case to state court