Personal jurisdiction



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I. Article III: Minimum diversity

  • 1) Cases between citizens of different states

  • 2) Cases between citizens of a state and citizen of foreign country

  • II. 28 USC 1332: *Diversity is established at date of filing

    • Requirements:

      • 1) Complete diversity (No P can be from the same state as any D)

      • 2) Amount in controversy >$75,000

    • 1) Citizens of different states

    • 2) Citizens of state and citizen or subject of foreign country (alienage jdx)

    • 3) Citizens of different states in which citizens of subjects of foreign state are additional parties

  • Complete Diversity/Citizenship:

    • Determining Citizenship (natural persons): one is deemed a citizen where one is domiciled and can only have one domicile

      • Party invoking jdx has burden of proof of showing domicile

      • Presumption of comtinuing domicile when one moves. To defeat presumption person must show “domicile of choice”

      • Rodriguez v. Senor Frogs de La Isla (Bank One Factors)

        • 1) Show that party exercises civil and political rights

        • 2) Pays taxes

        • 3) Real and Personal property

        • 4) Drivers license

        • 5) Bank accounts

        • 6) Jobs or owns businesses

        • 7) Attends church/club membership

    • Determining Corporate Citizenship 28 USC 1332(d)(2):

      • 1) place of incorporation AND

      • 2) principal place of business

        • Hertz v. Friend: “Nerve center” is where the principal place of business is where high level officers, direct control and coordinate corporate activities

      • Dual corporate citizenship: if corporation is incorporated in place diff than principal place of business dual citizenship

      • Unincorporated associations/organizations: deemed citizens in every state member is a citizen of

      • Partnership (anything that isn’t an “inc” or “corp”): deemed citizen where every member is

    • Alienage Jdx:

      • Complete diversity required: There cannot be aliens on both sides of dispute

        • UNLESS there are citizens of different States on both sides as well

        • Eze v. Yellow Cab Co. of Alexandria: P, from Nigeria, was in an accident and sued Ds Yellow Cab and driver Akakpo, from Ghana. At time P had not alleged citizenship of Akakpo but stated its residence was unknow. Complete diversity not met b/c alienage on both sides.

      • Old rule: Permanent resident of state= citizen of alien AND citizen of state

        • Diversity could be established by permanent resident of state X suing a citizen of state X

      • New rule: Permanent resident is not citizen of the state, considered alien only, but if the alien resides in the same state, no jdx

  • Amount in Controversy

    • Presumption of P’s “good faith” allegations control

      • 1) P subjectively thought amount exceeds $75,000 AND

      • 2) P was objectively reasonable in believing the amount exceeds $75,000

        • If either factor is not met, case is dismissed

    • Legal certainty rule: even if P can show through good faith that he exceeds the minimum amount if D can show that Ps recovery is limited by statute or contractual provision to amount under $75,000 then will not be able to bring action in federal court. (legal certainty rule trumps good faith rule)

      • Some courts ignore “legal certainty” argument if its based on a waiveable affirmative defense.

      • Some courts see “legal certainty” standard as part of P’s good faith claim. If facts or law make it legally certain P cannot recover then generally means P knew or should’ve known claim was jdx’lly deficient

    • Subsequent event vs. Subsequent revelation:

      • Subsequent event: will not change court’s SMJ as long as minimum was met at time suit was filed

        • Ex: abandonment or dismissal of some of P’s claims

      • Subsequent revelation: will effect court’s jdx if its shown that P lacked good faith

    • Coventry Sewage v. Dworkin Realty: P and D entered a K where D, Dworkin, would pay fee for sewer-main usage owned and operated by P, Coventry Sewage. Service fee was based in part on number of water consumed on property. Parties got in a dispute about increased service fees and D refused to pay P’s bills and accumulated total of $75,953 in unpaid bills. P filed action and alleged it believed amount exceeded jdx minimum. D filed answer and soon discovered that invoices underlying P’s fees had been miscalculated by water meters and actual sum of bills was $18,667. Held: Ps in 1) good faith alleged amount exceeding jdx minimum and court looks at circumstances at time complaint is filed (discovery of billing error was after filing) and 2) face of complaint does not reveal to legal certainty that controversy did not meet required amount, and later discovery does not preclude federal court of jdx. 3) also error was not mere revelation of fault estimation on P’s part b/c error laid w/in the control of a 3rd party.

    • Amount in controversy in declaratory judgment

      • 1) P’s viewpoint rule: ascertain amount from P’s perspective

      • 2) Majority rule: “either viewpoint rule”- as long as either party satisfies

      • 3) Minority rule: viewpoint of party invoking federal jdx

    • Aggregation of Claims:

      • Traditional approach:

        • Single P v. Single D OR

        • Multiple Ps can add up all claims and don’t have to be factually related v. single D

      • Cannot add up amount for claims against separate Ds

      • Each P must individually satisfy the amount in controversy requirement

      • Exceptions:

        • Claims involving single title or right: can aggregate P’s amounts (100% mine and 100% yours) as if Ps are acting as one person

        • Joint and several liability: when Ds are jointly and severally liable even though there is contribution

  • Supplemental Jdx (1367)

    • [Judge-made nomenclature]

      • Pendant jdx: referred to claims by P over which no indep basis of jdx but could exercise jdx

      • Ancillary jdx: Courts jdx over a claims by person other than P (ex: D’s counterclaim)

    • Pendant claims & 1331:

      • United Mine Workers v. Gibbs (1331/add’l claims) P was hired as a mine superintendent to open a new mine which members of Local 5881 picketed and tried preventing the opening of the mine, believing they should’ve received the work. Gibbs lost job and began losing other contracts in the area. He sued the int’l union of Local 5881. P brought 3 claims in federal court: 1 federal secondary boycott claim (under Labor Mgmt Relations Act) and 2 state claims for interference of K w employment and haulage. Held: the federal claim and K violations come from the same nucleus of operative facts and state and federal claims are reflected alternative remedies, in fact jury only awarded one of the claims. Exercised proper discretion b/c DC already decided the case and throwing it out would be an abusive discretion.

      • 1. Do claims come from common nucleus of operative facts?

      • 2. Power v. Discretion:

        • Court has ‘power’ to hear all state and federal claims if it satisfies 1367, but does not have to exercise its ‘discretion’

          • Ex of abusive discretion: judge being too busy to take a state claim

          • Judge can exercise discretion throughout the litigation of the case

        • Discretion factors:

          • 1. Judicial economy, convenience, fairness to litigants

          • 2. Jury confusion

          • 3. If state claim is really dominate factor

          • 4. If state claim is so closely tied to federal policy and preempt the state law issue

    • Pendant party claims & 1332: (Kroger evasion)

      • Owen Eqiupment v. Kroger (1332/add’l parties): Kroger (IW) was electrocuted by a electric power line that he walked too closely too and his widow filed a wrongful death action against Omaha Public Power District (NE)(OPPD). Kroger (literal P) sues OPPD (literal D), who through Rule 14 joins Owen (IW) (3rd party) on indemnity b/c crane was operated by Owen (Owen is a 3rd party P to OPPD and 3rd party D to Kroger). OPPD motion for summary judgment and in the meantime Kroger amends complaint and names Owen as an add’l D. Summary judgment for OPPD granted and now between Kroger (IW) v. Owen (IW). Held: Allowing Kroger’s “pendent party” claim (re: Owen) violates complete diversity of 1332(a)(1).

      • Step 1: Common nucleus of operative facts? (if yes, additional step 2 b/c Art III Congressional limits is different for 1332)

      • Step 2: 1332 satisfied?

        • Substep i: Complete diversity must be satisfied: complete diversity between literal P and literal D

        • Substep ii: Kroger Evasion Rule Test: Federal court may not exercise ancillary jdx under circumstances that violate the complete-diversity principle or that offer the opportunity to evade that principle

          • Are there additional acts that sufficiently ameliorate potential for evasion?

          • Examples of sufficient additional steps to defeat Kroger evasion:

            • 1) Kroger filed claim against Owen and Owen per Rule 14 filed claim against her. Kroger responds to the claim with a compulsory counterclaim no evasion even though Kroger’s claim is not completely diverse against Owen b/c of the intermediate claim filed by Owen against Kroger (P sues 3rd party, but 3rd party files claim against P, P files compulsory counterclaim)

            • 2) OPPD filed counterclaim against Kroger and Kroger impleaded Owen under Rule 14 indemnity no evasion b/c counterclaim filed by OPPD sufficiently ameliorates potential evasion. (D files counterclaim against P, now P is a D, and P files impleader against non-diverse 3rd party)

      • Pendant Party Jdx

        • Kroger court held that pendant party jdx is inconsistent with congressional intent of 1332 (complete diversity)

        • Aldinger and Finley: continued to reject pendant party jdx; Finley stating that it was never going to allow pendant party jdx over non diverse parties unless explicitly allowed by Congress

          • 1367 was response to Finley:

            • 1367(a) expressly allows addition of parties, as was true of ancillary jdx and would’ve occurred w pendent party jdx

            • 1367(b) attempt to codify Kroger Evasion Rule and disallow supplemental (formerly pendant-party jdx) in diversity cases

    • 1367: (codified Gibbs and Kroger)

      • (a) Common nucleus of operative facts w/ the anchor claim (adoption of Gibbs)

      • (b) Diversity cases only: applies to Ps and its joinders (adoption of Kroger)

        • Complete diversity requirement

        • Amount in controversy requirement

        • Kroger evasion rule

      • (c) Discretion

        • Claim raises a novel or complex issue of state law

        • Claim substantially predominates over claims

        • DC has dismissed all claims over which it has origin jdx

        • Other compelling reasons for declining jdx

      • (d) Period of limitation: gives DC more leeway with exercising discretion by not allowing statue of limitations to toll

  • Removal Jurisdiction (1441)

    • Terms:

      • “Removal” taking a civil case from state court  federal court

      • “Remand” sending case from federal court  state court

        • Usually if Federal court doesn’t have jdx it won’t remand but will dismiss

      • In diversity:

        • P can limit his damages to under the minimum amount to prevent removal to federal court, but cannot post-removal reduce amount in attempt to defeat federal jdx

        • P can also name an additional D who is a citizen of forum state UNLESS

          • P “fraudulently joins” D of same forum will be ignored for purposes of removal

          • “Fraudulent party:” P has no possibility of recovery against the in-state D

    • 1441: Removal generally

      • (a) case can be removed from state to federal court if it could be filed in federal court in the first place (under 1331, 1332, 1367)

        • Whole case must be removed, including related claims

        • Can only remove to the federal court that embraces the same geographic region as the state court

        • Only a D can invoke this (P had its chance to file in federal court in the first place)

        • ALL Ds have to join in petition for removal

          • * D can show up and motion to remove case and this does NOT waive objection to personal jdx

        • McCurtain v. Cowett: Previous removal procedure by one of the D was incorrect b/c not all Ds joined on removal and even with all Ds joining, SMJ would not be satisfied b/c amount in controversy isn’t met.

      • (b) (applies to diversity claims only): Limit on diversity removals

        • If any D or parties joined and served as Ds is a citizen of the forum state, even if diversity is satisfied, case cannot be removed

      • (c) Fall back provision: if independent claim satisfies 1331 and claim is joined, then entire case can be removed and unrelated state claims are severed and remanded

        • can only use this if 1441(a) does not work

        • Cannot be used with 1332 (diversity)

        • Requirements:

          • 1) There must be claim under 1331

          • 2) Any claim not within original or supplemental jurisdiction of the DC is remanded (“separate and independent standard is gone)

            • Only Ds in federal claim are required to join in removal

            • *Under 1367(c), supplemental claims attached to a federal claim can be sent back under court’s discretion (apply discretion factors)

          • 3) All otherwise non removable claims are severed and go back to state court—no discretion

        • [Old 1441(c) requirement: other non-federal claim had to be “separate and independent” which meant claims stemming from factually distinct events in order to qualify under 1441(c)

          • Discretion to remand was based on if state law predominated]

          • Eastus v. Blue Bell Creamery (court applies wrong standard): Eastus asked for time off b/c his wife was going to give birth and then was fired which he claims violated FMLA. Interviewed for other jobs that said he alleges D gave bad reference for. (couldn’t originally be filed in federal court b/c of the tortious interference) Eastuses filed civil action against D, Blue Bell in Texas state court for 1) FMLA violation (federal), 2) tortious interference w K’l relations and 3) IIED from being fired when his wife was pregnant. D removed to federal court on grounds of federal question, P moved for remand. Held: Standard for remand is that court must remand all separate and independent claims. DC held tortious interference could be remanded but not IIED b/c IIED and FMLA come from the same right and same facts (Gibbs changed this b/c of loosened common nucleus of operative facts)

            • *Court applied the removal standard here when it’s a remand; under the old 1441(c) the remand standard was if state law predominated

            • Under new 1441(c) the tortious interference claim could attach to the removal; when state claims severed and remanded tortious interference would have to be remanded b/c not original or supp jdx and IIED under discretion of court b/c it was a supplemental claim

    • 1446: Procedure for removal

      • (a) requires filing removal notice in federal court, and then notification to state court and certification that you have notified and then file in federal court

      • (b) removal has to be filed within 30 days of service of summons, after this point, removal cannot be filed

      • (c) permits otherwise late removal under diversity if information satisfying amount in controversy is revealed later in discovery

    • 1447 (c): Motion to remand: must be within 30 days; unless the issue is a SMJ issue (this can be raised at any time)

      • If motion to remand granted (either based on SMJ or process defect) this cannot be appealed

      1. Challenging SMJ

        • Direct Attack:

          • SMJ can be raised at any time

          • Originally filed in federal court dismiss

          • Originall filed in state, then removed remand

          • If both personal jdx and SMJ challenged determine SMJ first

          • State attack on SMJ:

            • CA: Any time during the litigation including appeal

            • Does not result in dismissal but transfer to correct tribunal

        • Collateral attack:

          • Old rule: if court made judgment that didn’t have SMJ over case, judgment treated as void

          • Modern rule: 2 tests- Finality is rule and collateral attack is exception

            • 1) Final judgment may be more likely subject to collateral attack if:

              • Jdx manifestly clear of abuse of authority

              • Jdx issue is only based on question of law

            • 2) If these questions are answered in the negative, may facilitate collateral attack

              • Have original parties relied on defective judgment?

              • Was question of jurisdiction actually litgated and decided?

              • Was party challenging SMJ able to raise the objection in the prior proceeding?




    1. VENUE, TRANSFER AND FORUM NON CONVENIENS

          • Venue: whether selected court provides convenient location for dispute

          • Venue considered D’s personal right that can be waived or altered

      1. Venue in State Courts (CA)

        • Local action: Ownership or possession of real property

        • Transitory action: Everything that isn’t a local action

        • Cal Civ Pro 395(a): Transitory action

          • 1) Any county where D resides

          • 2) Action for injury to person or personal property or death for wrongful act/negligence superior court in either county where injury occurs or event causing injury or where D resides

          • 3) Action for K obligation where K was entered into or where obligation is incurred or where D resides

          • 4) If no Ds in that state or residence unknown to P any county that P designates

        • Cal Civ Pro 392(a): Local action

          • Any county where real property is located

        • Mixed action: venue determined by nature of “main relief” P seeks

      2. Venue in Federal Courts

        • Venue Generally:

          • Venue is determined at time action commences

            • P may dismiss nonresident D from case to cure defect in venue, in which case venue is assessed in accord w post-dismissal configuration

          • Improper venue by raising objection under Rule 12

          • Multiple claims:

            • Under 1391(b), substantiality requirement must be fulfilled w/ respect to that district by every claim against every D

        • 1391

          • 1391(a) regards all civil actions brought in District Court unless specific statute specifics otherwise

            • (a)(2) no distinction between local (based on ownership or possession of real property) and transitory action

          • 1391(b) (covers both diversity and federal question cases)

            • (1) civil action may be brought in a judicial district in which any D resides

              • Residence: Domicile of Ds determine the district the D resides in

              • Single district state: wherever a D resides in that state state is proper venue

              • All Ds from same state and diff districts  pick any district as long as one of the Ds resides in that district

              • Multiple Ds from different states this section does not apply

            • (2) civil action brought in judicial district where substantial events or omissions giving rise to claim or a substantial part of property is situation

              • First of Michigan Corp v. Bramlet: Bramlets, residents of FL, invested money in retirement fund with First of Michigan via the advice of Sobol a broker (MI). When they found out the IRA was losing money they brought arbitration action in FL and Sobol and First of MI filed action seeking to enjoin arbitration as ineligible under Arbitration Code statute in Michigan DC. Bramlets met Sobol in MI and Sobol conducted its calls w Bramlets and establishing the IRA in MI. DC dismissed Ps case as being improper venue b/c most substantial events giving rise to complaint was Bramlet’s initial filing arbitration in FL. Ps argue that DC’s dismissal was based on improper interpretation of venue statute. Held: P’s filing in MI was proper b/c 1391(a) only requires that “substantial” activities took place in that district and not the district where the most substantial activities took place.

              • Substantial test will likely satisfy minimum contacts for personal jdx purposes under 1391(b)(3) and (c)(2)

            • 3) Fall Back provision: if no district proper in US under “residence” or “substantial part,” venue can be in a district which any D is subject to personal jdx

              • Mainly used if substantial events occurred outside US

              • A D that has venue established based on another D’s personal jdx can challenge that and be dismissed from the case
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