Diversity Jurisidiction
A person can be domiciled in a state even if she has a definite intent to leave that state at a particular time.
(A) True
(B) False
(A) True
This is true. Suppose that Margo goes to Texas from Minnesota, planning to get an associate’s degree in accounting and work in Dallas. After being there for a very hot summer she realizes that she hates the weather. She decides that when she finishes her degree she will leave for California. Margo is domiciled in Texas, because when she first lived there, she resided there with the intent to remain indefinitely -- before she experienced that too-hot summer. She won’t lose her Texas domicile until she resides in another state.
Under 28 U.S.C. § 1332(c)(1), a corporation is a citizen of both the state of its nerve center and the state where its daily activities are centered.
(A) True
(B) False
(B) False
This is false. Before the Supreme Court decided Hertz Corp. v. Friend, some courts determined a corporation’s principal place of business based on a “daily operations” test, which looked to the state where the productive activities of the corporation were centered. Others, using the “nerve center” test, held that the principal place of business is the state where the corporate home office was. However, in Hertz Corp. the Supreme Court adopted the latter test for the principal place of business under § 1332(c)(1). Although in some ways the “daily operations” test seems a better choice, because large operations in a state would lead local citizens to think of the corporation as local, the Supreme Court has decreed otherwise.
Allen is arrested by Chicago police officers and is punched during the arrest by one of them, breaking his jaw. He isn’t sure whether it was Officer O’Brien or Officer Morrell who hit him; they were both present at the time. He sues both O’Brien and Morrell for battery, seeking $120,000 in damages, a fair award for his substantial injuries. Allen meets the amount-in-controversy requirement against both defendants.
(A) True
(B) False
(A) True
This statement is true. If Allen has sufficient grounds to sue both officers – because he has plausible evidence that it was O’Brien who hit him and, alternatively that it was Morrell -- he may sue them both and let the jury decide which officer is liable to him.
So either officer might be liable for Allen’s damages, which exceed $75,000.Thus it does not appear to a legal certainty that he will recover less that the required amount from O’Brien: if he proves that O’Brien hit him, he could recover more than $75,000 from him. And it does not appear to a legal certainty that he will recover less from Morrell. If he proves that Morrell hit him, he will recover his damage from Morrell. So either might be liable to him for more than $75,000; he meets the amount-in-controversy requirement against both.
Which of the following cases filed in state court cannot be removed to federal court?
(A) Parsons, from Vermont, sues Tremain, from Maine, and Puzo, from Michigan, for injuries that she alleges they caused in an accident that happened in Vermont. Parsons seeks $250,000 in damages. Suit is brought in state court in Maine.
(B) Parsons, from Vermont, sues Tremain, from Maine, for injuries that she alleges Tremain caused in an accident that happened in Vermont. Parsons seeks $250,000 in damages. Suit is brought in state court in Vermont.
(C) Parsons, from Vermont, sues Tremain, from Maine, for violation of the federal Age Discrimination in Employment Act. Suit is brought in a state court in Maine, seeking $12,000. Tremain answers the complaint, denying that the Age Discrimination in Employment Act applies to him because he has only four employees.
(D) Nolan, from New Hampshire, sues Ryan, an individual defendant, who lives in New York, in Vermont state court for $200,000 for negligence. He claims that Ryan exposed him to dangerous chemicals while Nolan was working for Ryan on a small construction job in Vermont. Ryan removes to federal court. Nolan moves to remand, arguing that the case cannot be removed because the claim arose out of conduct in Vermont.
(A) Parsons, from Vermont, sues Tremain, from Maine, and Puzo, from Michigan, for injuries that she alleges they caused in an accident that happened in Vermont. Parsons seeks $250,000 in damages. Suit is brought in state court in Maine.
The case described in D is removable. It’s a diversity case between a citizen of New Hampshire and a citizen of New York. The removal statute bars removal of a diversity case if there is an in-state defendant, but not if the events giving rise to the claim took place in the forum state.
C is a case arising under federal law, so could have been brought in federal court under 28 U.S.C. § 1331 and is therefore removable. There is no amount-in-controversy requirement for federal question cases, so the fact that he is only seeking $12,000 doesn’t matter. The fact that Tremain has answered before removal and denies that the federal statute applies to the case does not prevent removal. Parsons has brought suit under a federal statute. If it turns out that the federal statute doesn’t apply, she will lose, but she has still brought a claim seeking recovery under federal law, which supports removal. B is also removable; it’s a good diversity case and there is no in-state defendant. So the answer is A. That case is not removable because it is based on diversity and there is an in-state defendant. See 28 U.S.C. § 1441(a)(2).
Guerrero, from California, is seriously injured in a forklift accident while working in Arizona. She sues the forklift manufacturer, General Products Company, in an Arizona state court for negligence, seeking $1,000,000 in damages. General Products is incorporated in Delaware with its principal place of business in New York. General Products removes the case to federal court.
Unfortunately, the federal district to which the case is removed has a heavy docket. The court is unlikely to be able to try Guerrero’s case for at least two years. Guerrero is seriously debilitated by her injury and heavily in debt; she really needs a speedy recovery. Her counsel therefore moves to remand to state court, which could reach the case for trial much more quickly. The federal court will deny the motion.
(A) True
(B) False
(A) True
This is true. If a case is properly removed to federal court, it will be heard there, even if a plaintiff has strong practical reasons for preferring the state court, as Guerrero does here. The defendant has a right to the federal forum if the case is removable. The federal court has no authority to accommodate a plaintiff who prefers state court. Similarly, if Guerrero had filed in federal court, the court would not dismiss if General Products argued various persuasive reasons why it preferred state court. The federal court does not have authority to decline jurisdiction for such reasons.
Jack grows up in Maryland. At eighteen he goes to a one-year program at a culinary school in Connecticut. He does not know exactly where he will live after he completes the program, but he is sure of two things: he will never return to the state of Maryland and he will not stay in Connecticut. While he is in the program, Jack is domiciled in Connecticut.
(A) True
(B) False
(B) False
False. Jack is domiciled in Maryland. He was domiciled there before he moved to Connecticut. When he moved to Connecticut, he did not acquire a new domicile, because he knew that he was there for a limited time – the one year it will take to get his certificate. He is in Connecticut for a definite time, does not acquire a new domicile there, so we look back to his previous domicile. Even though he swears he will never set foot in Maryland again, he is still domiciled there under the test.
Futura Corporation is a new internet start-up corporation incorporated in Delaware by three creative software engineers, Lincoln, Blinken and Nod. Lincoln lives in California, Blinken in Georgia, and Nod in Minnesota. They are the officers of the corporation. There is a board of directors scattered across the country who meet once a year by Skype. The three officers interact mostly by e-mail and text message, and meet twice a year at any convenient resort with a good golf course. The corporation has yet to market a product. It files yearly tax returns in California, keeps corporate records at Blinken’s home in Georgia, and has accountants in New York City. Because its corporate activities are so widespread and changeable, Futura will be a citizen only of Delaware for diversity purposes.
(A) True
(B) False
(B) False
False. Under 28 U.S.C. s. 1332(c)(1), Futura is a citizen of both its state of incorporation and its principal place of business for diversity purposes. If it is sued in federal court based on diversity, the court will have to look at their corporate interactions and choose a state as Futura’s principal place of business. This may be hard to do – perhaps almost arbitrary – but the statute mandates that Futura be treated as a citizen of the state of its principal place of business, so the court will have to select one. Justice Breyer recognized in Hertz Co. v. Friend that this might lead to “occasional counterintuitive results.” 557 U.S. 77, 96 (2010). However, in most cases the state in which the officers direct and control the activities of the corporation will be clear enough.
Farquhar sues Rezendez in federal court for compensatory damages, for selling him a piece of property for $100,000 and misrepresenting the zoning status of the property. Farquhar alleges that, under the true zoning regulation, the property is only worth $50,000. In a second claim, Farquhar alleges that Rezendez was negligent in checking on the zoning, so he was mistaken about it, and is liable for the $50,000 difference in value on a negligence theory. Farquhar’s suit does not meet the amount-in-controversy requirement.
(A) True
(B) False
(A) True
This is true. Farquhar has sued Rezendez for the difference in the value of the land on two different theories. If he proves that Rezendez committed fraud, he will recover the difference in value....$50,000. If he proves that Rezendez was negligent in stating the value of the land (but did not do it deliberately) he will recover the difference in value... $50,000. But we don’t double the damages because Farquhar asserts two legal theories as the basis the same recovery! We still ask, “if Farquhar recovers from Rezendez, how much will he get?” Here, the answer is “$50,000'' whether he proves both of his legal theories or either one. So the amount-in-controversy requirement is not met.
Mattison, from New York, sues Riggins, from Pennsylvania, and Puzo, from Virginia, in a state court in Virginia, seeking $200,000 damages for discharging her in violation of her contract. The defendants are served with the complaint five days later, but do not remove to federal court. Five months later Mattison amends her complaint with leave of court to add a claim against them under the federal Age Discrimination in Employment Act.
(A) The defendants may not remove the case after the federal claim is added to the complaint, because the case could have been removed as originally filed. Thus, the case did not “become removable” when the federal claim was added by the amendment.
(B) The defendants may not remove to federal court, because there is an in-state defendant.
(C) The defendants may remove to federal court.
(D) The defendants may not remove because a case must be removed to federal court within thirty days after the original complaint is served on the defendant.
(C) The defendants may remove to federal court.
C is right, the case is properly removable within thirty days after the defendants receive service of the amended pleading that adds the federal claim to the case. See 28 U.S.C. §1446(b)(3). A is wrong because the case was not originally removable; Puzo is an in-state defendant, and a diversity case cannot be removed when there is an in-state defendant. B is wrong because, when the basis of removal is a federal claim, the in-state defendant bar in §1441(b)(2) does not apply. D is wrong because §1446(b)(3) creates an exception to the usual rule that removal must be within thirty days after receiving the complaint.
Dellinger, from Maine, sues Warner, from Vermont, and Munoz, from New York, for breach of contract, a state law claim. The suit is brought in Vermont state court. Thirty-five days after receiving service of the complaint Munoz removes the case to federal court. Although Warner had been served with the complaint, she refuses to join in the notice of removal. Dellinger’s claim against each defendant is for $60,000.
Three months after removal, Warner moves to remand to state court. The motion should be
(A) granted, because the case was not removed within thirty days after service of the complaint.
(B) granted, because Warner did not join in the notice of removal.
(C) granted, because the amount-in-controversy requirement is not met.
(D) All of the above are correct.
(C) granted, because the amount-in-controversy requirement is not met.
C is correct. Dellinger has sued each defendant for less than the jurisdictional amount. Dillinger cannot add the two claims together to meet the amount-in-controversy requirement; she must meet it separately against each defendant. So this case could not have been filed originally in federal court and therefore cannot be removed under 28 U.S. C. § 1441(a).
A is wrong. Warner's motion to remand based on late removal will be denied, because she did not move to remand on this basis within thirty days after removal. Section 1447(c) provides that a motion to remand based on any defect in the removal other than a lack of subject matter jurisdiction must be made within thirty days after removal. Warner waited three months to raise the late-removal objection, so Warner has waived it. For the same reason B is wrong as well. Warner waived the objection based on failure to consent to removal by failing to move to remand within thirty days.
Rojas loses his job as a stockbroker in New York. He looks for work and is offered a one-year contract to work in California as a financial analyst for a large mutual fund company. He takes the job, planning to return to New York when the job ends. He starts work, likes California and decides to look for work in California after the contract ends. But two months later his company offers him a promotion to a job in Illinois, and he decides to take it when the year is up. After deciding to go to Illinois.
(A) Rojas is not domiciled in California, because when he arrived there he planned to leave on the occurrence of a definite event.
(B) Rojas is still domiciled in New York, because his job will end at the end of one year.
(C) Rojas acquired domicile in California upon his arrival, since he intended to stay for a year.
(D) Rojas is domiciled in California, even though he plans to leave at the end of the year.
(E) Rojas acquired a domicile in California but has lost it after deciding to leave at the end of the year.
(D) Rojas is domiciled in California, even though he plans to leave at the end of the year.
So, let's see. When Rojas moved to California he intended to leave at the end of the year, so he expected to be there for a definite period of time and did not acquire a new domicile in California. However, when he decided to look for a job in California instead of going back to New York, the two requirements to form a domicile -- residence and intent to remain on an open-ended basis -- coincided, and (presto!) Rojas acquired a California domicile. Although he later decides to leave, he has not yet done so, so he retains his California domicile. D takes the cake here.
Petrovo, a lawyer domiciled in New York, is fired from his law firm, Able, Baker, Charlene and Denisa, a partnership with four partners. Able, one partner, is domiciled in Ohio. Baker, a second partner, is domiciled in West Virginia, Charlene, a third partner, is domiciled in Connecticut. Denisa, the fourth partner, lives in New York but is a citizen of Portugal who is in the US on a temporary visa. The law firm’s principal place of business is in New York. If Petrovo sues the partnership in federal court in New York, the court will
(A) have diversity jurisdiction, because Petrovo is diverse from the partnership.
(B) lack diversity jurisdiction because Petrovo and Denisa are both domiciled in New York
(C) lack diversity jurisdiction, because the partnership has its principal place of business in Petrovo’s state.
(D) lack diversity jurisdiction, because Petrovo, a citizen of New York, has sued in a court in New York.
(A) have diversity jurisdiction, because Petrovo is diverse from the partnership.
Choose A. In applying diversity jurisdiction, the citizenship of a partnership is that of each of the partners. Able is an Ohio citizen, Baker is a West Virginia citizen, Charlene is a Connecticut citizen, and Denisa is a Portuguese citizen. She is not a citizen of New York, even though she is domiciled there, because she is not a U.S. citizen. She is a foreign citizen, and therefor diverse from Petrovo.
Angelos, a passenger in Budd’s car, is injured when Budd and Franklin collide on Main Street. Angelos is not sure whether Budd’s negligence caused the accident or Franklin’s, or both. He sues Budd and Franklin together in federal court as codefendants. Under governing law, whichever defendant was negligent in causing the accident would owe Angelos his full damages, which are $125,000. If both were negligent, they would each be liable for the full damages (but Angelos could only collect the amount of his damages once, not twice). If neither was negligent, Angelos will of course lose.
(A) Angelos meets the amount-in-controversy requirement against both defendants, because either may be liable for more than $75,000.
(B) Angelos does not meet the amount-in-controversy requirement against either, because the total damages are $125,000 and there are two defendants.
(C) Angelos does not meet the amount-in-controversy requirement against either defendant, because either may end up owing him nothing.
(D) Angelos does not meet the amount-in-controversy requirement against either defendant, because it does not appear to a legal certainty that either of them will be liable for more than $75,000.
(A) Angelos meets the amount-in-controversy requirement against both defendants, because either may be liable for more than $75,000.
The best answer is A. Because Angelos might recover a judgment for more than $75,000 from either defendant (or from both, if both were found at fault), he meets the amount-in-controversy requirement against each. B is wrong, because, while Angelos suffered $125,000 in damages, either might be liable for it. As the question states, if either or both are found liable for the injury, they will be liable for the full damages.
Romano, from Virginia, sues the Charleston and Savannah Railroad for injuries he suffered in a train accident. The Railroad is incorporated in Virginia and has its principal place of business in South Carolina. Romano sues in state court in Virginia, seeking $250,000 in damages for negligence under state law. The Railroad
(A) may remove to federal court, because it has been sued in Romano’s home state and is sued for more than $75,000.
(B) may remove, because Romano is a citizen of Virginia, the Railroad is a citizen of South Carolina, and the amount-in-controversy is met.
(C) may not remove, because Romano is a citizen of the state in which suit is brought.
(D) may not remove, because there is not complete diversity.
(D) may not remove, because there is not complete diversity.
Once again, the key to the question is whether the case is one which the plaintiff could have brought initially in federal court. It is not, because Romano and the Railroad are both citizens of Virginia. Under 28 U.S.C. § 1332(c)(1) a corporation is a citizen of the state of incorporation and the state of its principal place of business. So the Railroad is a citizen of two states. If Romano is a citizen of either of those states (as he is here) then there is no diversity jurisdiction. Choose D.
Don’t be fooled by A. True, the defendant has been sued in the plaintiff’s home state. Perhaps it would like to bump the case into federal court (even though it too is a Virginia citizen based on its incorporation). But federal court is not a cure-all for all possible sources of prejudice; to get there the case must meet one of the categories of federal subject matter jurisdiction. Romano’s does not, because there is not complete diversity (so B fails as well). C is wrong as well; the bar on removal if there is an in-state citizen applies to defendants, not to plaintiffs.
Gomez, a real estate broker from Colorado, sues Solow, from Utah, and Tetro, from Nevada, in state court in Utah. Gomez claims that Solow and Tetro, co-owners of a large building, failed to pay her a $100,000 commission on the sale of the building that Gomez arranged for Solow. Twenty days after being served with the complaint, Solow removes to federal court, without the consent of Tetro.
(A) The claim against Solow is now pending in the federal court, and the claim against Tetro is pending in state court.
(B) Tetro will waive the objection to removal unless he moves to remand the case to state court within thirty days.
(C) Tetro may move at any time to remand the case to state court based on his refusal to join in the removal.
(D) Tetro should move in the state court to remand the case to state court because all defendants did not agree to removal.
B) Tetro will waive the objection to removal unless he moves to remand the case to state court within thirty days.
B is right. A is gravely wrong: the federal court will not divide the case up and take jurisdiction of only one of the two claims. If it is properly removed the entire case will be pending in federal court. C is wrong, because Tetro must move to remand within thirty days after removal or he will waive the objection based on his refusal to join in the removal. D is also wrong. Once the case is removed to federal court, the state court loses authority to enter any order in the case; it is now no longer pending in the state court. See 28 U.S.C. §1446(d) (“the State court shall proceed no further” unless the case is remanded).
Chen, from China, came to Pennsylvania to attend the University of Pennsylvania. He has not been admitted to the United States for permanent residence, but hopes that he might be in the future and could stay in Pennsylvania. While at Penn, he married Schwartz, a citizen of Delaware. During Chen’s second year, and after his marriage, Morris (a Pennsylvania citizen) told the newspapers that Chen had only married Schwartz so that he could strengthen his argument for getting permanent residence status. Chen and Schwartz sue Morris in federal court for $150,000 for defamation, a state law claim. The federal court.
(A) has diversity jurisdiction, because Schwartz and Chen are now both treated as citizens of Delaware.
(B) has diversity jurisdiction, because Schwartz and Morris are diverse and Chen is a foreign citizen.
(C) lacks diversity jurisdiction, because Chen is treated as a citizen of Pennsylvania and so is Morris.
(D) lacks diversity jurisdiction, because Chen is domiciled in Pennsylvania.
(B) has diversity jurisdiction, because Schwartz and Morris are diverse and Chen is a foreign citizen.
Choose B. Chen is a citizen of China, a “citizen of a foreign state” in the language of 28 U.S.C. § 1332(a)(2) and (3). He does not acquire his wife’s state citizenship just by marrying her. He does not acquire Pennsylvania citizenship by living there, even if it is his domicile: A person must be a citizen of the United States to be a citizen of a state, and Chen is not a US citizen. Nor does the “except” clause in § 1332(a)(2) apply, because Chen is not admitted for permanent residence. If it did, Chen would not be authorized to sue a citizen of Pennsylvania based on diversity – that’s what the “except” clause says.
Amazonia Corporation is incorporated in Delaware and Oregon and has its central offices in California, from which the directors and officers control the activities of the corporation. The directors vote at a meeting of the board of directors to establish a second headquarters, in addition to the California offices, in West Virginia. The new West Virginia headquarters directs and controls Amazonia’s corporate activities east of the Mississippi, and the California headquarters directs and controls its activities west of the Mississippi. Filippone, from West Virginia, wants to bring a diversity action against Amazonia in Colorado federal court for injuries suffered in Colorado. The court will treat Amazonia as a citizen of
(A) Oregon and California, since the claim arises from Amazonia’s activities west of the Mississippi.
(B) only Delaware and Oregon, based on its incorporation in those states.
(C) Delaware, Oregon, California and West Virginia.
(D) only Delaware and either California or West Virginia.
(E) None of the above.
(E) None of the above.
Analyzing this question requires a close reading of 28 U.S.C. § 1332(c)(1). (Reading the relevant statute or rule so often answers civil procedure questions!) That section provides that a corporation is a citizen of “every state” by which it has been incorporated. So Amazonia is a citizen of Delaware and Oregon based on incorporation. So A is wrong, because it leaves out Delaware, and D is wrong because it leaves out Oregon. The statute goes on to provide that a corporation is a citizen of “the state” (italics added) where it has its principal place of business. B is wrong, because it leaves out Amazonia’s principal place of business. Thus, there must be only one, because the statute says so. C is wrong, because Amazonia cannot have two principal places of business under the statute. The court will have to decide whether its principal place of business is West Virginia or California. That may be a very close question, perhaps a toss-up, but the court has to do it because the statute so provides. So E is right, because none of the other answers is.
Jack sues Morello for injuries suffered in an accident. His injuries would support a recovery of up to $60,000. His wife Rachel was also injured in the accident. Her injuries would support recovery of up to $35,000. If they sue Morello as co-plaintiffs the amount-in-controversy requirement.
(A) is met, because both claims arise from the same accident.
(B) is met, because Jack and Rachel may add their claims together to meet the amount requirement.
(C) is met because Jack and Rachel are members of the same family.
(D) is not met, because neither plaintiff seeks more than $75,000 in damages.
(D) is not met, because neither plaintiff seeks more than $75,000 in damages.
In this example, neither party independently meets the amount-in-controversy requirement. D is the correct answer here. The two plaintiffs may not add their damages together to meet the $75,000+ requirement, even if their claims arise from the same accident, and even if they are members of the same family. It is true that a plaintiff whose claim does not exceed $75,000 may sue along with another plaintiff whose claim does meet the required amount. But here neither claim does.
Argento arrested Dupree, and there was a scuffle, during which both were injured. Argento sues Dupree in state court for battery, a state law tort claim. (Both are citizens of Delaware.) Dupree asserts a counterclaim against Argento under 42 U.S.C. §1983, the federal statute that authorizes damages for violations of federal constitutional rights. Dupree claims that he was subjected to an unreasonable seizure by Argento, in violation of the Fourth Amendment. Dupree may not remove to federal court.
(A) True
(B) False
(A) True
This is true. Argento sued in state court. Dupree asserts a counterclaim (a claim for relief by the defendant back against the plaintiff) that arises under federal law. But the right to remove belongs to defendants; they may remove a case that could have been filed initially in federal court. This one could not have been filed in federal court, because Argento asserted a state law claim against a defendant from the same state. Even though in some sense Dupree is now a plaintiff (because he is asserting a claim for relief), removal may not be based on a counterclaim.
in state court in Utah. Gomez claims that Solow and Tetro, co-owners of a large building, failed to pay her a $100,000 commission on the sale of the building that Gomez arranged for Solow. Solow answers the complaint and the parties begin discovery in the case.
Five months after the case is filed, Gomez files a motion to amend the complaint to add a claim under a federal fraud statute, based on the same sale. The judge grants the motion and Gomez serves the amended complaint on Solow and Tetro. Ten days later, Solow and Tetro each file answers to the amended complaint and serve them on Gomez. Twenty-five days thereafter, Solow removes the case to federal court. Six weeks after removal, Gomez moves to remand the case to state court. The federal judge should
(A) remand the case to state court. It was not removable, because Solow is an in-state defendant.
(B) remand the case to state court, because it was removed too late.
(C) remand the case to state court, because the case did not become removable when Gomez amended to add the federal fraud claim.
(D) not remand the case to federal court.
(D) not remand the case to federal court.
This case takes some serious thought. A is not right. It is true that Solow is an in-state defendant. As originally filed, the case was not removable, because 28 U.S.C. §1441(b)(2) bars removal of a diversity case if there is an in-state defendant. However, when Gomez adds a claim under federal law, the case “becomes removable;” if a case is based on federal law the in-state defendant bar does not apply.
B is also wrong. It is true that Solow removed too late. The thirty-day period for removal in §1446(b)(1) runs from the receipt by the defendants of the amended complaint asserting the claim under federal law, not from the time of their answer. However, late removal is a procedural mistake; it is not a problem with the federal court’s subject matter jurisdiction over the case. Section1447(c) provides that any objection to removal “other than lack of subject matter jurisdiction” must be raised within thirty days after removal. Gomez moved to remand six weeks after removal, so missed that deadline.
Scratch C as well. Gomez’s case was not removable as originally filed, because there is an in-state defendant. So it did “become removable” (§1446(b)(3)) when Gomez amended to add the federal claim. Choose D.
Atkins retired from his job in Louisiana. He had always wanted to live on a boat, so he bought one and took up residence at a marina in Texas. However, his boat sank in a storm and he has returned to Louisiana (he had kept an apartment there to use when he visits his children). He plans to get the boat raised and repaired, and return to live on it, but isn’t sure when he will have sufficient funds to do so.
Udall is a consultant for a fancy New York consulting firm. He lived in New York, but was sent on assignment to a company in Texas to consult on their computer operations. It isn’t clear how long the job will take; when it is finished Udall will return to New York.
Raskin is a student at Louisiana State University. She came to Louisiana from New York to go to school. She is a senior now. She has no definite post-graduate plans, except to look for work either in Louisiana or anywhere else where she may find an appropriate job.
Atkins, Udall and Raskin have a boating accident and Atkins sues Udall and Raskin in federal court for his injuries. The federal court will...
(A) have diversity jurisdiction because Atkins is a citizen of Texas, Udall is a citizen of New York, and Raskin is a citizen of Louisiana.
(B) not have diversity jurisdiction, because both Udall and Atkins are citizens of Texas.
(C) have diversity jurisdiction, because Atkins is a citizen of Louisiana, Udall is a citizen of Texas, and Raskin is a citizen of New York.
(D) not have diversity jurisdiction, because both Atkins and Raskin are citizens of Louisiana.
(A) have diversity jurisdiction because Atkins is a citizen of Texas, Udall is a citizen of New York, and Raskin is a citizen of Louisiana.
A is the right answer. Atkins is living in Louisiana, even has an apartment there, but it is clear that his intention is to return to live on his boat once it is repaired. The fact that he is isn’t sure when he will be able get his boat repaired doesn’t change the fact that his intent is to do so and go back to live at the marina in Texas, where he was domiciled before the storm. So he has a plan to leave on the occurrence of a specific event – the repair of his boat – and does not acquire domicile in Louisiana.
Valdez, a Georgia citizen, sues Quik-Loan Corporation for violation of the federal Truth-in-Lending statute. Quik-Loan is incorporated in Delaware with its central offices in Georgia. It contracted with Valdez for the loan in a Florida regional office. Valdez brings the action in federal court in Florida. The federal court
(A) lacks jurisdiction over the action, because Valdez and Quik-Loan are both citizens of Georgia.
(B) has jurisdiction over the action, because the loan was negotiated in Florida, which supports minimum contacts jurisdiction.
(C) has jurisdiction over the action, as long as the suit is for more than $75,000.
(D) has jurisdiction over the action, regardless of how much is in controversy in the suit.
(D) has jurisdiction over the action, regardless of how much is in controversy in the suit.
This question is provided just to remind you that there is more than one way to get into federal court. This case arises under federal law. It is properly brought in federal court under 28 U.S.C. § 1331, regardless of where the parties are from and regardless of the amount in controversy. Choose D with confidence! And don’t be befuddled by B, which confuses personal jurisdiction with subject matter jurisdiction. Even if there would be personal jurisdiction over Quik-Loan in Florida, subject matter jurisdiction requires a different, additional analysis.
Trent sues Jiminez in federal court for breach of contract for refusing to deliver 20,000 widgets that Jiminez had agreed to sell to him. In his suit, basing jurisdiction on diversity, Trent alleges that as a result of the default he suffered $55,000 in lost profits on a pending resale of the widgets to another buyer. In the same action he sues Weston, a competitor who convinced Jiminez to sell the widgets to her instead of to Trent. He seeks the same lost profit damages from Weston, alleging intentional interference with his contract with Jiminez.
Trent meets the amount-in-controversy requirement against both defendants because he might prove both his $55,000 breach of contract claim against Jiminez and also prove his $55,000 interference with contract claim against Weston.
(A) True
(B) False
(B) False
This is false. Trent has suffered a single $55,000 loss, the profits he would have made from reselling the widgets. He may recover this loss from Jiminez if Jiminez breached the contract. He may recover it from Weston if she interfered with the contract. Indeed, he might prove his claims against both Weston and Jiminez. However, even if he does, he will not recover twice the amount of his damages just because the loss might give rise to claims against two defendants. Trent has a claim against Jiminez and a claim against Weston for the same $55,000 loss. He does not meet the amount requirement against either.
The Mottleys, from Kentucky, sue the Louisville & Nashville Railroad, incorporated in Kentucky with its principal place of business in Kentucky, for breach of contract for refusing to renew the Mottleys’ free passes on the railroad. The Railroad answers the complaint, raising the defense that a new federal statute bars giving free passes. It then removes to federal court. The case will be remanded to state court.
(A) True
(B) False
(A) True
This is true. The Mottleys could not have started in federal court, because their claim does not arise under federal law and there is no diversity. Since the Mottleys could not have started in federal court, the Railroad cannot remove to federal court, even though they have raised a federal defense. Thus, the case is not properly removed, and the court will remand it to state court.
Patel, from New Mexico, sues Omni Corporation (incorporated in California with its principal place of business in New Mexico) in state court in New Mexico under the federal Age Discrimination in Employment Act. Patel claims that Omni fired him based on his age, in violation of the Act. Patel asserts a second claim in the complaint for breach of contract, based also on the dismissal.
Omni Corporation is served with the complaint seven days after it is filed. It files an answer to the complaint ten days later, and files a notice of removal in the federal court for the District of New Mexico twenty-six days after service of the complaint upon it. Removal is
(A) proper.
(B) improper, because there is an in-state defendant.
(C) improper, because Omni had already filed an answer to the complaint.
(D) improper, because there is not complete diversity.
(E) improper, because the removal was beyond the time limit for removal in 28 U.S.C. § 1446(b).
(A) proper.
Removal is proper here; choose A. The fact that Omni is an in-state defendant does not bar removal. The bar on removal if there is an in-state defendant applies only to diversity cases. See 28 U.S.C. §1441(b)(2). There is also no bar on a defendant filing an answer and then removing. If it answers first and then removes the answer will simply be in place in the federal court. D is wrong, because this case arises under federal law, the federal Age Discrimination in Employment Act. The state contract claim is proper under supplemental jurisdiction (see 28 U.S.C. §1367(a)) so it does not need an independent basis for subject matter jurisdiction. And E fails, because the thirty-day time period for removal runs from service of the complaint on Omni, not from filing. The notice was filed twenty-six days after service, so it was timely.