U.S. Constitution – Article III §2 (See Below)

28 U.S.C. §1331: Federal Question

28 U.S.C. §1332: Diversity of Citizenship; Amount in Controversy; Costs

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

28 U.S.C. §1441: Removal of Civil Actions

28 U.S.C. §1442: Federal Officers or Agencies sued or Prosecuted

28 U.S.C. §1443: Civil Rights Cases

28 U.S.C. §1446: Procedure for removal of civil actions

28 U.S.C. §1447: Procedure after Removal generally

28 U.S.C. §1448: Process after removal

“The judicial Power shall extend…

1. to all Cases, in Law and Equity arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;

2. to all Cases affecting Ambassadors, other public Ministers and Consuls;

3. to all Cases of admiralty and maritime Jurisdiction;

4. to Controversies to which the United States shall be a Party;

5. to Controversies between two or more States;

6. between a State and Citizens of another State,

7. between Citizens of different States, [“Minimal Diversity”]

8. between Citizens of the same State claiming Lands under Grants of different States,

9. and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.”

Diversity Jurisdiction

1. NOTE: Article III more broad than 28 U.S.C. §1332

   1. Complete Diversity requirement (Strawbridge)

   2. Amount in Controversy Requirement (§1332)

§1332(e): “The word “States”, as used in this section, includes the Territories, the District of Columbia, and the Commonwealth of Puerto Rico.”

See National Mut. Ins. Co. of D.C. v. Tidewater Transfer Co., U.S. 1949 (split court decision, §1332(e) is OK.)

Strawbridge v. Curtiss, U.S. 1806, CJ John Marshall (Supp. 41)

Complete Diversity for federal diversity SM JD under section 11 of Judiciary Act of 1789 (Now 28 USC §1332.)

RULE: Complete Diversity Across the “v.”

Policy Reasons:

1. For Federal Removal, generally: in-state bias against out-of-state party

   1. If in-state on both sides, might not have bias.

2. -> Good mechanical rule for keeping cases out of federal court

Class Actions: §1332(d) exempts complete diversity in certain class actions

1. Class Action Fairness Act of 2005: can usually be brought in a federal court when there is justminimal diversity, such thatany plaintiff is a citizen of a different state fromanydefendant.

Assignee Clause: Can’t assign debt, etc., to a third party to create diversity for SMJD. See 28 U.S.C. 1359.

Executor Rule: Executor of estate from a different state than dead person does NOT create diversity. (Post Piper v. Reno).

Long-term permanent residents count as citizens of the state in which they are domiciled. (See 1332(a)(2)) (See, e.g., Mas v. Perry)

Foreign aliens and complete diversity:

1. Ruhrgas (U.S. 1999, CB 854 N.1): No complete diversity if aliens on both sides of the case.

2. BUT §1332(a)(3): SM JD when “citizens of different States and in which citizens or subjects of a foreign state are additional parties.”

3. Does complete diversity apply to 1332(a)(3)?

4. Hypos:

   1. Definitely Not OK:

      1. FR v. UK.

      2. NY + French v. UK

   2. Probably Not OK (But not really clear):

      1. NY + French v. MA + UK

   3. OK:

      1. NY + FR (NY-LPR) v. FR

Generally:

1. “The place at which a person has been physically present and that the person regards as home; a person's true, fixed, principal, and permanent home, to which that person intends to return and remain even though currently residing elsewhere” Black's Law Dictionary

2. Where you’ve (a) moved there (b) with the intent of staying permanently. Remain domiciled at last domicile until switched (e.g., students not domiciled @ school; prisoners not domiciled @ prison).

3. NOTE: Take “snapshot” of diversity at time of suit filed.

Person

1. Mas v. Perry (5th Cir. 1974. CB 851). [FR + MS v. LA = OK.]

   1. Facts: Frenchman marries a Mississippi woman in Mississippi; both studying at LSU. Sues a Louisiana landlord for a two-way mirror in rented apt.

   2. Held: Diversity met. Mr. Mas citizen of France. Mrs. Mas resident of MS, because she grew up there and hadn’t changed domicile.

   3. Professor Note: Some legal realism in this case. Maybe Mrs. Mas a resident of Louisiana? No intent to return to MS.

Corporation

1. Any state in which it is incorporated; and

2. “the State where it has its principal place of business.”

   1. “Total activity” test: “nerve center” test (where the activities of the corporation are controlled and directed) and “locus of operations test” (where corporation’s actual physical operations are).

3. See, e.g., Diaz-Rodriquez v. Pep Boys Corp. (1st Cir 2005, CB 859) (holding that a Delaware corporation, also incorporated in PA, with HQ in Philadelphia, but 100% of day-to-day business w/in Puerto Rico counts as PR citizen).

Other Organization

1. Generally, evaluated like people, not corporations.

2. E.g., a partnership is a citizen of any state in which a partner is.

Increases over time. $500 in 1789. $75k in 1996.

Has to “exceed.” 28 U.S.C. §1332.

Each π has to meet required amount. (But see Allapattah)

However, recovering less than Amount in Controversy is OK.

1. “The sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal. The inability of the plaintiff to recover an amount adequate to give the court jurisdiction does not show his bad faith or oust the jurisdiction…” St. Paul Mercury Indem. Co v. Red Cab Co. (US 1938, CB 861)

NOTE: Article III broader than application of 28 U.S.C. § 1331

Louisville & Nashville R.R. v. Mottley (SC 1908, CB 865)

Facts: RR gives free passes for life as settlement for a crash. RR can’t renew passes because of a new Federal law. π complaint NOT mention new law – simply sues for the passes.

Rule: Federal question must be apparent from the face of the π’s well-pleaded complaint.

1. Plaintiff’s complaint must “show that it is based upon those [federal] laws or the Constitution. It is not enough that the plaintiff alleges some anticipated defense to his cause of action, and asserts that the defense is invalidated by some provision of the Constitution of the United States.”

Policy Considerations

1. NYT v. Sullivan (important 1A libel case) – was brought under state law. Federal law defense, implicating Constitutional Law, not enough. Has to appeal after state supreme court.

2. Federal-law counterclaim also fails well-pleaded complaint test.

3. Can’t justify well-pleaded complaint rule based on “gets the most important cases in.” (See, e.g., NYT v. Sullivan).

4. SCOTUS appellate role from state supreme courts used to be mandatory, now discretionary. Might be a reason to narrow W-P CR?

5. Powerful sorting/filtering mechanism for federal SMJD.

Exception: Complete Preemption Doctrine (CB 872-3)

1. In order for Defendant to override an artful pleading by Plaintiff to stay in state court, Defendant must show complete preemption.

2. Two Factors: (1) the statute at issue must completely preempt the state law causes of action; (2) it must create a federal cause of action that Congress regarded as the exclusive basis for seeking to remedy the conduct at issue in the complaint.

3. Examples: Labor Management Relations Act; National Bank Act completely preempts state-law usury claim against a national bank.

Artful Pleading: Plaintiff CAN try to limit removal to federal court by declining to raise possible federal issues. Except in cases of complete preemption, see supra, this is OK. See Rivet v. Regions Bank (US 1998, CB 873).

Osborn v. Bank of United States (US 1824, CB 870): Suits involving national bank are federal question cases.

1. Are all federal creations also federal questions? Amtrak, Red Cross, etc. [Probably? But maybe goes to extreme when talking about modernly-created states?]

Can sue federal officers, military, civil rights cases, etc.

1. See 28 U.S.C. §§1442-3

Two Conflicting (?) Early Cases (CB 880)

1. Smith v. Kansas City Title & Trust Co. (US 1921): State-created cause of action for breach of fiduciary duty raised a federal question concerning the power of Congress to adopt a statute in question. SM JD Upheld

2. Moore v. Chesapeake & Ohio Ry. (US 1934): Refused SM JD. Federal regulation affected the duty of employer, but the state law claim based on breach of that duty is not a federal question.

An early attempt at a rule: Bell v. Hood (US 1946; CB 881)

1. Rejected an attempt to link jurisdictional inquiry to a determination of whether the complaint states a claim for relief.

2. Rather, a district court “must look to the way the complaint is drawn to see if it is drawn so as to claim a right to recover under the Constitution and laws of the United States. … it is well settled that the failure to state a proper cause of action calls for a judgment on the merits and not for a dismissal for want of jurisdiction.”

3. Federal claims shouldn’t be immaterial/made solely for the purposes of jurisdiction or insubstantial/frivolous.

4. If π asserts a federal question that is plausible and non-frivolous, can stay in federal court EVEN if court ultimately rejects the federal question.

   1. Subject matter jurisdiction attaches

...