Diversity Jurisdiction Basics
According to the Supreme Court's decision in Hertz Corp. v. Friend, how is a corporation's 'principal place of business' determined for diversity jurisdiction purposes?
A.
The state where the corporation has its most significant physical assets and largest number of employees.
B.
The state where the corporation conducts a plurality of its business activities, such as sales and employment.
C.
The state designated as the principal place of business in the corporation's articles of incorporation.
D.
The location of the corporation's 'nerve center,' where its high-level officers direct, control, and coordinate its activities.
D.
The location of the corporation's 'nerve center,' where its high-level officers direct, control, and coordinate its activities.
A plaintiff from Texas sues a defendant from Oklahoma in federal court, claiming $80,000 in damages. After the trial, the jury awards the plaintiff only $50,000. What is the effect of this verdict on the court's subject matter jurisdiction?
A.
The case is dismissed for lack of jurisdiction because the final award did not exceed $75,000.
B.
The verdict is valid, but the plaintiff may be sanctioned under Rule 11 for exaggerating the claim.
C.
The court maintains jurisdiction but must transfer the case to state court for entry of the final judgment.
D.
Jurisdiction is unaffected, provided the initial claim for $80,000 was made in good faith.
D.
Jurisdiction is unaffected, provided the initial claim for $80,000 was made in good faith.
Under the St. Paul Mercury rule, jurisdiction is determined by the good faith amount claimed at filing, not the amount ultimately recovered.
In the case of Gordon v. Steele, how did the court determine the domicile of a college student living away from her parents' home?
A.
By weighing her physical presence in the new state against her stated intent to make it her home for an indefinite period.
B.
By focusing solely on objective factors like her driver's license and bank account, which pointed to her parents' state.
C.
By concluding that a student has dual domicile in both their college state and their parents' home state.
D.
By ruling that a student's domicile automatically remains with her parents until she graduates.
A.
By weighing her physical presence in the new state against her stated intent to make it her home for an indefinite period.
The court applied the standard domicile test: residence combined with an intent to remain, finding her stated plans and ties to her new state sufficient to establish a new domicile.
A plaintiff sues a railroad company in federal district court for breach of a contract providing for free lifetime travel passes. The plaintiff's complaint anticipates that the railroad will defend itself by citing a federal law that prohibits such passes. Assuming no diversity of citizenship, does the federal court have subject matter jurisdiction under 28 U.S.C. § 1331?
A.
No, because claims involving contracts are always considered state law matters and can never be heard in federal court.
B.
Yes, because the case involves a 'federal ingredient,' which is sufficient for jurisdiction under Article III.
C.
Yes, because the resolution of the case will ultimately turn on the interpretation of a federal statute.
D.
No, because under the well-pleaded complaint rule, a federal issue raised only as an anticipated defense does not create federal question jurisdiction.
D.
No, because under the well-pleaded complaint rule, a federal issue raised only as an anticipated defense does not create federal question jurisdiction.
This correctly applies the rule from *Louisville & Nashville R.R. v. Mottley*, which states jurisdiction must be based on the plaintiff's own cause of action, not on potential federal defenses.
Plaintiff and Defendant were married in State A, where their children were also born. Thereafter, Plaintiff received a promotion and sizeable bonus at work, so he moved to State B, while his spouse and children remained in State A. Plaintiff purchased a home in State B, converted his driver’s license to State B, and began paying all applicable taxes in State B. After 17 years of marriage, the couple decided to divorce. Plaintiff filed for divorce in federal district court in State B, seeking joint custody of the children and a court order splitting the marital estate (2 homes and $3 million in marital assets) equally to each spouse. Defendant moved to dismiss the divorce action.
How should the court rule on her motion?
(A)
The district court should deny the motion, because diversity jurisdiction is satisfied where Plaintiff and Defendant are now citizens of different states and the marital estate exceeds $3,000,000.
(B)
The district court should remand the divorce action to a State B state court, because the federal court lacks federal subject matter jurisdiction.
(C)
The district court should transfer the divorce action to a State B probate and family court.
(D)
The district court will decline to exercise jurisdiction over the action.
D is correct because even if diversity jurisdiction is present, federal courts will decline to exercise such power when the lawsuit pertains to divorce and child custody (domestic relations exception). Generally, a federal court is required to exercise subject matter jurisdiction over a state law claim if the individual parties are citizens of different states and the amount in controversy is satisfied. However, the Supreme Court of the United States has recognized an exception in diversity actions for suits involving domestic relations. The exception covers divorce actions, alimony, and child custody cases, but does not include suits for torts. Here, Plaintiff seeks a divorce and child custody, and the district court should exercise its discretion and decline to exercise diversity jurisdiction even though diversity jurisdiction is present.
A is incorrect because the Court has recognized the doctrine of abstention which allows a federal district court to decline to exercise federal jurisdiction in a diversity action that involves divorce, alimony, or child custody. Therefore, even if diversity jurisdiction is present, the court will grant the motion.
B is incorrect because it incorrectly states that a federal court can remand an action when a party moves to dismiss the action for lack of subject matter jurisdiction. Remand is the process whereby the federal court returns an action back to state court when defendant has improperly removed an action from state court to federal court. There was no such removal here as the case was originally filed in federal court.
C is incorrect because transfer is permitted only between federal judicial districts, not federal to state as this answer choice suggests. While the district court will exercise its discretion and decline to exercise diversity jurisdiction in a suit that pertains to divorce, alimony, or child custody, the proper course would be to dismiss the action and allow the parties to file it in the appropriate state court. A federal court does not have power to transfer a federal lawsuit to a court in a state court system, even if it is the same state in which the federal court sits.
For the purpose of diversity jurisdiction, on what date is a party's citizenship determined?
A.
The date the cause of action accrued (e.g., the date of the accident).
B.
The date the complaint is filed with the court.
C.
The date the defendant is served with the summons and complaint.
D.
The date of the trial.
B.
The date the complaint is filed with the court.
The rule set forth in Smith v. Sperling establishes a clear, predictable cutoff for assessing diversity, promoting administrative simplicity.
What is the 'legal certainty' test established in St. Paul Mercury v. Red Cab Co.?
A.
A standard requiring the plaintiff to prove with legal certainty that their damages exceed $75,000 before the case can proceed.
B.
A test used after a verdict is rendered to confirm that the amount awarded was legally certain to be over the jurisdictional minimum.
C.
A test to determine if it is legally certain that the plaintiff will win the case on the merits.
D.
A rule stating the court can dismiss a case if it appears to a legal certainty that the claim is really for less than the jurisdictional amount.
D.
A rule stating the court can dismiss a case if it appears to a legal certainty that the claim is really for less than the jurisdictional amount.
This rule gives the plaintiff the benefit of the doubt, allowing dismissal only when it is objectively impossible for the damages to meet the threshold.
Student was a student attending State A University. While at school, Student lived in a dormitory on campus. During holidays and breaks, Student returned to his childhood hometown in State B, where his parents still reside. During his senior year in college, Student decided to move to State A permanently, so he began looking for an off-campus apartment. After graduating, Student was recruited by a multi-national firm based in State C. Student was recruited to head up their State D office. While travelling to State D to begin searching for an apartment, Student was in a car accident which required a six month stay at a rehabilitation hospital in State A.
Plaintiff wants to file a diversity action against Student. Where is Student domiciled?
(A)
State A, where Student has been living for over four years for school and rehabilitation.
(B)
State D, where Student is planning on living and working after his release from the hospital.
(C)
State B, where he lived prior to attending college and returned to on holidays and breaks.
(D)
State C, where his current employer is incorporated and has its principal place of business.
C is correct. An individual is domiciled where his true, fixed, and permanent place of residence is located. Domicile is the place the person intends to return whenever they are away for a period of time. However, intent alone is not enough. The individual would have to take affirmative steps to establish a physical residence. Before establishing a new domicile, the person maintains their previous one. Here, Student was domiciled in State B and, although he lived in State A for four years, living in a dormitory on campus is not a permanent place of residence. Nor is living in a rehabilitation hospital.
Even after deciding to move to State A permanently, Student had not yet established a permanent residence. Thus, Answer A is incorrect.
Also, despite his intent to find housing in State D, Student did not establish a physical residence in State D, making Answer B incorrect.
Student’s employer’s domicile is irrelevant, which means Answer D is incorrect. Thus, since Student has not established a new domicile, he keeps his old one, which is still State B.
What is the primary difference between the scope of federal question jurisdiction under Article III of the Constitution (as interpreted in *Osborn*) and the scope under the statute 28 U.S.C. § 1331 (as interpreted in *Mottley*)?
A.
Article III requires a federal issue to appear in the plaintiff's complaint, while § 1331 allows jurisdiction based on a defendant's counterclaim.
B.
There is no practical difference; § 1331 is simply the modern codification of the Article III standard established in *Osborn*.
C.
Article III jurisdiction is limited to claims created by federal law, while § 1331 allows jurisdiction for any case with a 'federal ingredient'.
D.
Article III allows jurisdiction whenever there is a 'federal ingredient' in the case (claim or defense), while § 1331 is narrower, requiring the federal issue to be part of the plaintiff's well-pleaded complaint.
D.
Article III allows jurisdiction whenever there is a 'federal ingredient' in the case (claim or defense), while § 1331 is narrower, requiring the federal issue to be part of the plaintiff's well-pleaded complaint.
This accurately contrasts the broad constitutional grant from *Osborn* with the narrower statutory interpretation from *Mottley* that governs federal district courts.
A plaintiff files a lawsuit in state court vaguely referencing violations of 'federal law' but asserting only state-law causes of action like nuisance and trespass. The defendant removes to federal court. Later, both parties agree the court lacks subject matter jurisdiction. What is the proper outcome?
A.
The case remains in federal court because the plaintiff waived the right to remand by not objecting immediately.
B.
The case must be remanded to the state court from which it was removed, and any orders issued by the federal court are vacated.
C.
The case is dismissed with prejudice.
D.
The plaintiff is allowed to amend the complaint to add a proper federal claim to cure the jurisdictional defect.
B.
The case must be remanded to the state court from which it was removed, and any orders issued by the federal court are vacated.
As seen in Avitts v. Amoco, if a federal court lacks subject matter jurisdiction, it has no power to act, and the case must be sent back to state court.
A citizen of California sues two defendants, one from Arizona and one from California. Which statement accurately describes the status of diversity jurisdiction in this case?
A.
Complete diversity is lacking because a plaintiff and a defendant are citizens of the same state.
B.
Minimal diversity exists, which is sufficient for federal jurisdiction under the statute.
C.
Complete diversity exists because there is also a defendant from a different state (Arizona).
D.
The court can exercise jurisdiction over the claim against the Arizona defendant but must dismiss the claim against the California defendant.
A.
Complete diversity is lacking because a plaintiff and a defendant are citizens of the same state.
The rule from Strawbridge v. Curtiss requires that no plaintiff can be a citizen of the same state as any defendant.
In Diefenthal v. C.A.B., why did the court dismiss the plaintiffs' tort and contract claims against the airline?
A.
The Federal Aviation Act preempted all state-law tort and contract claims against airlines.
B.
The plaintiffs failed to establish complete diversity of citizenship with the airline.
C.
The claims were dismissed because the facts alleged could not, to a legal certainty, support a recovery meeting the jurisdictional amount.
D.
The airline, as a common carrier, was immune from suits based on seating arrangements.
C.
The claims were dismissed because the facts alleged could not, to a legal certainty, support a recovery meeting the jurisdictional amount.
The court found that the alleged humiliation from a brusque flight attendant could not possibly result in damages meeting the then-required $10,000 threshold.
Plaintiff, a citizen of State X, filed suit in federal district court against Defendant Car Co., incorporated in State Y with its principal place of business in State X. Plaintiff alleges a defect in the manufacturing of her car by Defendant caused her accident where she incurred property damage and severe bodily injuries. Due to the severity of her injuries, Plaintiff alleges her medical expenses alone exceed $1,000,000.
After filing suit in federal district court in State Z, Defendant filed a motion to dismiss for lack of personal jurisdiction. The court denied the motion and Defendant filed its answer to Plaintiff’s complaint, denying any liability for Plaintiff’s losses. A month thereafter, Defendant filed a motion to dismiss for lack of subject matter jurisdiction. Plaintiff opposed the motion arguing that Defendant waived its right to object to the court‘s power when it failed to assert it with its previous motion.
How should the court rule on Defendant’s second motion to dismiss?
(A)
The district court should deny Defendant’s motion because Defendant waived its right to object to the court’s power when it unreasonably delayed in asserting this defense.
(B)
The district court should grant Defendant’s motion, because the court lacks jurisdiction over the parties because Plaintiff and Defendant are both from State X.
(C)
The district court should deny Defendant’s motion, because Plaintiff and Defendant are from different states, State X and State Y, respectively.
(D)
The district court should grant Defendant’s motion, because the court erred in its decision to deny Defendant’s motion to dismiss for lack of personal jurisdiction.
B is correct. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant), and the controversy is reasonably likely to exceed $75,000. Individuals are citizens in the state where they are domiciled, meaning where their true, fixed, and permanent place of residence is located. Corporations have dual citizenship: their state of incorporation and where their principal place of business is located. Here, Plaintiff is a citizen of State X. Defendant Car Co. has its principal place of business in State X. Since both Plaintiff and Defendant are from the same state, there is no diversity of citizenship. Therefore, the federal court lacks the power to adjudicate this controversy and it must dismiss.
A is incorrect because the lack of subject matter jurisdiction cannot be waived. One of the fundamental principles in civil procedure is the court’s power over the controversy. Subject matter jurisdiction, the court’s power over the controversy, can never be waived. The lack of the court’s subject matter jurisdiction can be asserted at any stage of the litigation, even for the first time on appeal. Rule 12(g)(2) requires parties to consolidate and bring forth as many defenses and objections the party has available or else they are waived, except for the lack of subject matter jurisdiction found in FRCP 12 (h)(3)
C is incorrect because it misstates Car Co.’s citizenship. For purposes of diversity jurisdiction, individuals are citizens of the state where they are domiciled, meaning where their true, fixed, and permanent place of residence is located. Corporations have dual citizenship: their state of incorporation and where their principal place of business is located. Here, Car Co. is incorporated in State Y and has its principal place of business in State X. Thus, at all times, Car Co. is a citizen of both states, destroying diversity of citizenship.
D is incorrect because an error in ruling on one motion does not give the court the power to “make up” for the error by incorrectly ruling on another motion. If the court erred in ruling on the first motion, the party against whom the court ruled can take up the matter on appeal at the appropriate time.
A plaintiff files a state-law quiet title action in state court. A critical element of the plaintiff's claim is proving that the IRS failed to give proper notice under a federal tax statute before seizing and selling the property. According to Grable & Sons v. Darue, could a federal court potentially have subject matter jurisdiction over this case?
A.
No, because Justice Holmes's creation test dictates that if a state law creates the cause of action, it cannot be a federal question case.
Not quite
While the Holmes test is the general rule, *Grable* established a narrow exception for state-law claims that necessarily raise a substantial federal issue.
B.
Yes, if the state claim necessarily raises a disputed and substantial federal issue that is appropriate for a federal forum.
C.
No, because any issue involving the IRS must be heard exclusively in U.S. Tax Court.
D.
Yes, because any case that makes a reference to a federal statute automatically arises under federal law
B.
Yes, if the state claim necessarily raises a disputed and substantial federal issue that is appropriate for a federal forum.
This correctly states the test from *Grable*, which carves out a small exception to the creation test for embedded federal issues.
After the Mottleys' first case was dismissed from federal court for lack of jurisdiction, they re-filed in Kentucky state court. The railroad raised its federal statutory defense, lost, and appealed all the way to the U.S. Supreme Court. Why did the Supreme Court have jurisdiction to hear the second case when the federal district court did not have jurisdiction to hear the first?
A.
Because all final judgments from state supreme courts are automatically appealable to the U.S. Supreme Court.
B.
Because the Supreme Court's appellate jurisdiction is broader and based on Article III, which allows review so long as a federal issue is 'drawn in question,' even as a defense.
C.
Because the Mottleys amended their complaint in the state court to properly plead a federal question.
D.
Because by the time the case reached the Supreme Court, Congress had amended § 1331 to allow for jurisdiction based on federal defenses.
B.
Because the Supreme Court's appellate jurisdiction is broader and based on Article III, which allows review so long as a federal issue is 'drawn in question,' even as a defense.
This correctly identifies the key distinction: SCOTUS appellate jurisdiction (§ 1257) mirrors the broad Osborn standard, unlike the narrow § 1331 standard for district courts.
A plaintiff from Florida sues a limited liability company (LLC). The LLC was organized in Delaware, has its headquarters in Georgia, and has three members who are citizens of Georgia, Alabama, and Florida. Does complete diversity exist?
A.
Yes, because for LLCs, only the state of organization and principal place of business matter, which are Delaware and Georgia.
B.
No, because the plaintiff cannot sue an LLC in federal court; they must sue the members individually.
C.
Yes, because the majority of the LLC's members are from states other than Florida.
D.
No, because one of the LLC's members is a citizen of Florida, the same state as the plaintiff.
D.
No, because one of the LLC's members is a citizen of Florida, the same state as the plaintiff.
For unincorporated associations like LLCs and partnerships, the citizenship of each member is considered, and here, the shared Florida citizenship destroys complete diversity.
Plaintiff, a citizen of State A, filed suit in federal district court against Defendant, citizen of State B alleging one count of negligence resulting from a car accident and one count for breach of contract resulting from an unrelated agreement the parties entered into a year prior to their accident. Plaintiff alleged total damages from the car accident in the amount of $50,000. The contract called for liquidated damages in the amount of $45,000.
Defendant filed a motion to dismiss challenging the court’s subject matter jurisdiction over the entire suit. How should the court rule?
(A)
The court should grant Defendant’s motion, because Defendant lacks sufficient minimum contacts with the forum state to be bound by the court’s judgment.
(B)
The court should grant the motion, because Plaintiff cannot aggregate their damages from two unrelated claims against the Defendant in order to satisfy the amount-in-controversy requirement for diversity jurisdiction.
(C)
The court should deny the motion, because Plaintiff can aggregate their damages from two unrelated claims against the Defendant in order to satisfy the amount-in-controversy requirement for diversity jurisdiction.
(D)
The court should deny the motion, because Plaintiff and Defendant are from different states, thereby satisfying the complete diversity of citizenship required for diversity jurisdiction.
C is correct. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant), and the controversy is reasonably likely to exceed $75,000. In order to satisfy the threshold amount, aggregation of damages is permitted in unrelated cases between the same parties.
A is incorrect because Defendant is not challenging the court’s jurisdiction over the person but rather the controversy. Subject matter jurisdiction is the court’s power over the controversy (here, through diversity jurisdiction), not the person (Defendant). Since the challenge is to the court’s power over the controversy and not over Defendant, this answer choice is non-responsive to the question and is, therefore, incorrect.
B is incorrect because the answer misstates the law. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant) and the controversy is reasonably likely to exceed $75,000. In order to satisfy the threshold amount, aggregation of damages is permitted in unrelated cases between the same parties. Therefore, this answer choice is incorrect.
D is incorrect because it is an incomplete response. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant) and the controversy is reasonably likely to exceed $75,000. In order to exercise proper diversity jurisdiction, both requirements must be satisfied. Answer choice D suggests that complete diversity of citizenship alone is enough for federal subject matter jurisdiction, which is incorrect.
Plaintiffs were travelling in their home state of A when Defendant, from State Z, crashed into Plaintiffs’ car, causing the car to spin out of control and into oncoming traffic. Both plaintiffs suffered significant personal injuries, requiring long-term hospital stays and rehabilitation. A year after the accident, Plaintiffs filed suit against Defendant in federal district court in State Z based on diversity jurisdiction, each plaintiff alleging damages exceeding $250,000. The next day, prompted by a lucrative job offer, Plaintiffs decided to permanently move to State Z. Several months later, Defendant learned that Plaintiffs moved to State Z and filed a motion to dismiss for lack of subject matter jurisdiction.
How should the court rule?
(A)
The court should grant the motion, because diversity was destroyed when Plaintiffs moved to State Z.
(B)
The court should grant the motion, because Plaintiffs cannot prove with reasonable certainty that their damages are $250,000 each.
(C)
The court should deny the motion, because the Defendant delayed in asserting lack of subject matter jurisdiction.
(D)
The court should deny the motion, because the court has proper subject matter jurisdiction over this claim.
D is correct. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant) and the controversy is reasonably likely to exceed $75,000. Individuals are citizens in the state where they are domiciled, meaning where their true, fixed, and permanent place of residence is located. For purposes of diversity jurisdiction, citizenship is determined at the time of filing and diversity of citizenship need not continue after filing. Here, at the time of filing, Plaintiffs were citizens of State A and Defendant was a citizen of State Z, thus complete diversity existed. The fact that Plaintiffs moved the day after filing the suit does not affect the court‘s jurisdiction, as diversity need not continue after the suit is filed.
A is incorrect. As noted above, for purposes of diversity jurisdiction, citizenship is determined at the time of filing and diversity of citizenship need not continue after filing. Here, at the time of filing, Plaintiffs were citizens of State A and Defendant was a citizen of State Z, thus complete diversity existed. The fact that Plaintiffs moved a week after filing the suit does not affect the court’s jurisdiction, as diversity need not continue after the suit is filed.
B is incorrect. For diversity jurisdiction, plaintiffs only need a good faith basis for alleging damages that are reasonably likely to exceed $75,000. Considering the extent of their injuries and medical expenses, Plaintiffs have met their burden of alleging in good faith that their damages will meet the amount-in-controversy requirement. The statute does not require plaintiffs to prove their damages at the pleading stage.
C is incorrect. Lack of subject matter jurisdiction cannot be waived. Subject matter jurisdiction, the court’s power over the controversy, can never be waived by consent or by delay. The lack of the court’s subject matter jurisdiction can be asserted at any stage of the litigation, even for the first time on appeal. See FRCP 12(h).
A plaintiff from Texas sues a defendant from Oklahoma in Texas state court for $100,000 over a state-law contract dispute. The defendant is served with the complaint on October 1st. The defendant files a notice of removal to federal court on November 15th. The plaintiff files a motion to remand on November 20th. How should the court rule on the motion to remand?
A.
Deny the motion, because the case meets the requirements for diversity jurisdiction and is therefore removable.
B.
Grant the motion, because the defendant failed to remove the case within the 30-day period required by 28 U.S.C. § 1446(b)(1).
C.
Grant the motion, because a defendant cannot remove a diversity case filed in their home state.
D.
Deny the motion, because the plaintiff waited too long to file the motion to remand.
B.
Grant the motion, because the defendant failed to remove the case within the 30-day period required by 28 U.S.C. § 1446(b)(1).
Removal was filed more than 30 days after service, making it procedurally defective. The plaintiff's motion to remand was filed promptly after the improper removal.
Plaintiff, a citizen of State X, filed suit against her neighbor, also a citizen of State X, for damages to her new car resulting from an accident on their street. The neighbor had also caused significant damage to Plaintiff’s front yard and fencing. Plaintiff filed suit in federal district court in State X alleging damages against the neighbor exceeding $75,000. The neighbor filed a motion to dismiss.
How should the court rule??
(A)
The court should deny the neighbor’s motion because the federal district court has exclusive jurisdiction over claims that exceed $75,000.
(B)
(B) The court should grant the motion, because Plaintiff cannot aggregate the damages to the car, front yard, and fence in order to meet the jurisdictional threshold for diversity jurisdiction.
(C)
The court should deny the motion, because the plaintiff is the master of her complaint and can choose which court she wishes to hear her case.
(D)
The court should grant the motion, because Plaintiff has not met the requirements for diversity jurisdiction.
D is correct. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant), and the amount in controversy is reasonably likely to exceed $75,000. Here, Plaintiff has a state law claim of negligence against her neighbor. In order to assert proper federal jurisdiction, Plaintiff would have to satisfy both prongs. While the damages are reasonably likely to exceed $75,000, the parties are neighbors, meaning that they are citizen of the same state. Therefore, complete diversity of citizenship is lacking.
A is incorrect because there is no requirement that claims exceeding $75,000 be adjudicated in federal court. Federal courts have exclusive jurisdiction over claims arising under certain federal statutes such as antitrust claims, patent violations, bankruptcy claims, etc.
B is incorrect because aggregation of damages resulting from the same cause of action is permitted. Federal courts have subject matter jurisdiction over state law claims where the adverse parties are diverse in citizenship (meaning no plaintiff is from the same state as any defendant) and the controversy is reasonably likely to exceed $75,000. Here, Plaintiff has a state law claim of negligence against her neighbor where Defendant’s conduct caused damages to Plaintiff’s property. Plaintiff is permitted, (and in fact required to or else waives her rights), to assert all damages and claims against Defendant in a single action.
C is incorrect because, although the plaintiff is the master of the complaint and can in fact choose which court to file the claim, the chosen court must have proper jurisdiction over the claim in order to render a valid judgment. Here, Plaintiff chose to file her claim in federal court. In order for the court to have power to adjudicate the claim, it must fall under a claim of federal/constitutional law violation or a state law claim under diversity jurisdiction. As this is a state law claim that does not meet diversity jurisdiction requirements, the court must dismiss for lack of subject matter jurisdiction.
How does the constitutional grant of diversity jurisdiction in Article III differ from the statutory grant in 28 U.S.C. § 1332?
A.
There is no difference; the statute is a direct codification of the constitutional text.
B.
Article III includes jurisdiction over corporations, while the statute is silent on corporate citizenship.
C.
The statute adds an amount-in-controversy requirement and requires complete diversity, neither of which are mandated by Article III.
D.
Article III requires complete diversity, while the statute permits minimal diversity.
C.
The statute adds an amount-in-controversy requirement and requires complete diversity, neither of which are mandated by Article III.
Congress has the power to grant federal courts less jurisdiction than the maximum authorized by the Constitution, and it has done so by adding these two requirements.
Plaintiff filed suit in federal district court against the Defendant for breach of contract. The contract was for the sale of real estate worth $75,000. In fact, not only did the Defendant refuse but the day after signing the contract with Plaintiff, the Defendant sold the land to a bona fide purchaser.
Plaintiff is a citizen of State M and Defendant is a citizen of State C. After suit was filed, Defendant filed a motion to dismiss based on lack of subject matter jurisdiction.
How should the court rule?
(A)
The district court should grant the motion, because the court lacks subject matter over the controversy.
(B)
The district court should grant the motion, because the federal court does not have jurisdiction over state law contract claims.
(C)
The district court should deny the motion, because the court has jurisdiction over the claim based on diversity jurisdiction.
(D)
The district court should deny the motion, because the parties stipulated in the signed contract that the federal district court will resolve all disputes arising from performance or non-performance of the contract.
A is correct. Federal courts have subject matter jurisdiction over violations of federal law, constitutional rights violations, and state law claims under diversity jurisdiction. Diversity jurisdiction requires that there is complete diversity of citizenship between plaintiff and defendant and the claim is reasonably likely to exceed $75,000. Here, the real estate was worth exactly $75,000 and there is no indication that the Plaintiff has damages above the worth of the land. Since the claim is for exactly $75,000, it is not reasonably likely to exceed $75,000; therefore, diversity jurisdiction is not satisfied.
B is incorrect because federal courts may exercise subject matter jurisdiction over state law claims if the litigants can satisfy the requirements for diversity jurisdiction, which they have not done so here.
C is incorrect for the reasons stated in A.
D is incorrect because subject matter jurisdiction cannot be conferred by consent or waiver. The court must have proper subject matter jurisdiction in order to render a valid judgment. Since the court here did not have subject matter jurisdiction, the only proper ruling is to grant the motion to dismiss.
Passenger, a citizen of State L, was riding in a car driven by his friend Driver, a citizen of State T. They crashed into a car driven by Plaintiff, a State T citizen. Plaintiff and Passenger filed an action in federal court in State T in which each of the plaintiffs asserted a $100,000 tort action against Driver. Driver filed a motion to dismiss for lack of jurisdiction, which the court granted.
Did the court err in granting the motion?
(A)
Yes, because jurisdiction is proper under diversity and supplemental jurisdiction.
(B)
No, because Driver and Plaintiff are both citizens of State T.
(C)
Yes, because each claim is for more than $75,000.
(D)
No, because the action was filed in State T.
B is correct. The presence of one non-diverse plaintiff (here, Plaintiff) destroys the complete diversity required by 28 U.S.C. §1332. Thus, the lack of diversity between Plaintiff and Driver precludes Passenger from using diversity jurisdiction as the basis for exercising original jurisdiction over any claim in the case. Thus, the court must dismiss both claims.
A is incorrect. With no original jurisdiction over either claim (this being state law claims lacking proper diversity jurisdiction), there is no claim upon which to “anchor” the claims in exercising supplemental jurisdiction. So even though the claim by Passenger against Driver would have met the requirements of diversity jurisdiction under §1332 had it been brought by itself, the claim by the non-diverse Plaintiff prevents the court from exercising supplemental jurisdiction.
C is incorrect. In order to properly assert federal subject matter jurisdiction based on diversity, the Plaintiff must satisfy both the diversity requirement and the amount-in-controversy requirement. Here, the fact that both claims exceed the amount in controversy requirement is irrelevant since Plaintiff and Driver are not completely diverse in citizenship.
D is incorrect. The fact that the action was filed in State T is irrelevant.
A plaintiff from New York sues a defendant from New Jersey in New Jersey state court over a $1 million state-law claim. Can the New Jersey defendant remove the case to federal court?
A.
Yes, because when federal jurisdiction exists, the defendant always has the right to choose a federal forum.
B.
Yes, because there is complete diversity and the amount in controversy exceeds $75,000.
Not quite
This overlooks the specific limitation on removal in diversity cases known as the 'forum defendant' or 'in-state defendant' rule.
C.
No, because the plaintiff is the 'master of the complaint' and their choice of a state forum cannot be overridden.
D.
No, because a defendant in a diversity case cannot remove if the case was filed in their home state.
D.
No, because a defendant in a diversity case cannot remove if the case was filed in their home state.
This correctly applies the in-state defendant rule of 28 U.S.C. § 1441(b)(2), which prevents removal in this scenario.
Plaintiff, a lifelong resident of State A, went to State B for a convention. One night, he tasted a local Cajun whiskey. Liking what he tasted, he bought a case of the whiskey to take back to State A. Upon his return to State A, Plaintiff gave a bottle to his boss, Boss, a citizen of State A. After work that evening, Boss decided to try the whiskey and prepared himself a cocktail consisting of the Cajun whiskey and water. After three or four sips of his cocktail, Boss experienced a severe burning sensation in his throat and stomach. He called his doctor, who advised him to come to the hospital and bring the bottle of the whiskey with him. At the hospital it was determined that the bottle contained a high percentage of acid. Boss was treated accordingly. He survived, but had to have part of his stomach removed and will talk in a low raspy voice for the rest of his life.
Boss comes to you, an attorney in State A, and wants you to represent him in his personal injury action. He wants to sue for $1 million to pay for his medical expenses and be compensated for his pain and suffering and permanent physical impairments. You agree to represent him and immediately begin making certain investigations. You learn that the Cajun whiskey is a product distilled by the Whiskey Company, a Stae B corporation with its principal place of business in State B. It distributes its products in State B, State C, and State D.
Assume that the legislature in every state in the country has passed the following statute:
The courts of this state shall have personal jurisdiction over an individual, corporation, or other entity who, in person or through an agent: transacts business within the state; or commits a tortious act without the state causing injury within the state; or is personally served within the state; or owns property within the state.
Can a state court in State B exercise general jurisdiction over Whiskey Company?
(A)
No, because it does not have a bank account in State B.
(B)
Yes, because it transacts business in State B.
(C)
No, because it did not commit a tortious act in State B.
(D)
Yes, because it is a citizen of State B.
D is the correct answer. State courts have personal jurisdiction over their citizens, even if they are not residing in the forum state at the time suit is brought. There is no need to examine the application of the long-arm statute since these statutes deal with obtaining personal jurisdiction over noncitizens and nonresidents. There is also no constitutional objection to exercising personal jurisdiction over a forum citizen. Consequently, all the other answers are incorrect.
A is incorrect because the mere fact that a defendant does not have a bank account in the forum state does not rule out constitutionally exercising personal jurisdiction over that defendant. For general jurisdiction, the court would look to the defendant’s contacts in the forum state in order to assess whether the defendant is “at home” in the forum state. This is a heightened standard that is not satisfied by the mere existence of (or lack thereof) of one single contact in the state.
B is incorrect because the existence of a bank account is only one form of contact with the forum state that is not, by itself, sufficient to satisfy the requirements for personal jurisdiction. For general jurisdiction, the court would look to the defendant’s contacts in the forum state in order to assess whether the defendant is “at home” in the forum state. This is a heightened standard that is not satisfied by the mere existence of (or lack thereof) of one single contact in the state.
C is incorrect because a tortious act was committed in State B; namely, the whiskey was manufactured in State B. For general jurisdiction, the court would look to the defendant’s contacts in the forum state in order to assess whether the defendant is “at home” in the forum state. This is a heightened standard that is not satisfied by the mere existence of (or lack thereof) of one single contact in the state.