Purpose: Provide a neutral forum for cases involving a risk of local bias (US Constitution Art. III
Sec. 2)
Historical Context
Framers were worried that state courts would not adequately protect out of state creditors
trying to collect debts from local citizens
More even-handed treatment of out of state litigants by federal judges (not state
appointed)
Requirements:
A) Complete diversity of citizenship (Strawbridge; Mas v Perry)
B) Matter in controversy exceeding $75,000 (Strawbridge)
A. Citizenship
Citizenship = Domicile
Complete Diversity required = no plaintiff can be from the same state as any defendant
(Strawbridge v Curtis; Mas)
Individuals §1332(a)(1)
TEST: residence + intent to remain indefinitely (Krasnov; Gordon v Steele)
o Intent to remain = not necessarily an intention to remain permanently
o Residence = physical presence in the state
o Retain domicile until a new one is acquired
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o Contradicts Mas but recognized as right
Citizenship at the time the action was commenced/filed is important (Brough v Strathmann
Supply)
Alienage Jurisdiction: foreign citizen has diversity under constitution and congressional
authority (Mas)
Green carded citizens are domiciled in the state they live in - §1332(a)(2)
Corporations §1332(c)(1)
TEST: principal place of business + place of incorporation (Hertz v Friend)
o Principal place = where the corporations highest level officers direct, control, and
coordinate the corporation’s activities – “Nerve Center”
Typically, the headquarters
Criticism: issues determining nerve center with telecommuting and 21st
century business models
o Partnerships/UA’s are treated as groups of individual litigants not as a corporation
Corporations favor litigating in federal court
B. Amount in Controversy
TEST: legal/factual basis for recovery + good faith (Diefenthal)
o If the applicable legal remedy (i.e. State law, statute etc.) limits damages to below
the min amount in controversy - even if the plaintiff believes they could claim for
more - it will fail for lack of diversity jurisdiction because they can only recover less
than the min amount anyways
o Plaintiff's are allowed to later amend their complaint with additional evidence to
bolster their damages amount in order to meet the min amount in controversy
requirement
Historical Context
o Min amount in controversy is not in constitution
o Congress chose to interpret a min amount in controversy in order to prevent petty
cases from reaching fed courts
Historical Context:
Need for uniform interpretation of federal law
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States could undermine federal government by unsympathetic construction of federal law
Holmes Creation Test: what law gives plaintiff a cause of action (i.e. it must be a federal law
that the claim arises under and a state law claim generally will not provide a method for
federal court)
Justice Marshall’s Test:
Requirements:
Well-Pleaded Complaint Rule (Mottley): the federal issue must appear on the face of the
plaintiff’s complaint
o This is an interpretation of §1331 not the US Constitution (voluntary limitation on
federal courts)
o Cannot use an anticipated defense as grounds for federal question jurisdiction
EXCEPTION:
Gunn v Minton – applied the Grable exception
Grable & Sons – a federal court may hear a lawsuit arising under state law as a federal
question when the federal issue is:
a) Necessarily raised
b) Actually disputed
c) Substantial
Must be substantial to the federal system as a whole (not just the parties)
d) Capable of resolution in federal court without disrupting the federal/state balance
US has a direct interest
Federal government has expertise in the area that state courts do not
The case will not remove an entire class of cases away from state courts
Requirements:
A) Could have been filed in federal court initially §1441(a) – but must be removed within the
same district
o Diversity Jurisdiction §1441(b)(1)
o Federal Question §1441(c)(1)(b) – if a fed question claim is joined with a state claim the
entire case can be removed and the fed court can hear both claims BUT if state claim is
predominant then fed court may remove to state court
B) D must remove within thirty days of receiving complaint §1446(b)(1)
D cannot remove from state court when it is their home state §1441(b)(2)
Historical Context:
Previously no statutory authority for supplemental jurisdiction
Getting this power from US Constitution under Article III §2
Requirements:
ONLY APPLIES TO FEDERAL QUESTION CLAIMS
State and federal claims must have a “common nucleus of operative fact” or come from the
same “case or controversy” (United Mine Workers)
Rules:
If the considerations of judicial economy, convenience and fairness are not present then the
federal court should hesitate to exercise supplemental jurisdiction
§1367(b) does not apply when it is a federal question claim (only applies to diversity)
§1367(d) – if a P is dismissed in federal court they have 30 days to refile in state court
Once it appears that a state claim constitutes the real body of a case to which the federal
claim is only an appendage the state claim may fairly be dismissed
§1367(b) – bars jurisdiction over certain claims by plaintiffs
Cannot implead or add third party under Rule 14(a)(1) if it violates complete diversity and
the claim is brought on diversity jurisdiction (Kroger)
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Historical Context:
Pennoyer v. Neff (mostly not good law) – set rigid rules but that were not practical with
nationalization of commerce
o upheld transient jurisdiction - courts only had personal jurisdiction over a person if they
were personally served with the complaint and summons within the forum state
o is the property in the borders of the state?
o under Pennoyer - a court could exercise in rem or quasi in rem jurisdiction as long as the
asset was located within the forum state and was attached at an appropriate time
o Most of the laws under Pennoyer are no longer relevant because PJ can be shown under
specific jurisdiction
CASES:
o International Shoe
o Pennoyer
o Hanson
o McGee
o Shaffer
o Daimler
o Burnham
o Jackson
o Asahi
o World Wide Volkswagen
RULES:
12(b)(2) – Motion to dismiss for lack of PJ
4(k)(1) – Determines federal court jurisdiction (i.e. If a state court has PJ over D then so will fed
court)
Article IV Full Faith + Credit Clause = every state is required to give full faith and credit to the
decisions of every other state but only where that other state had personal jurisdiction over that
defendant
4(k)(1)(A) – long arm provision that applies in most federal cases
4(k)(1)(C) – exception to the general rule + allows federal courts to exercise broader jurisdiction
whenever the court is authorized to do so under a federal statute (ie. Bankruptcy)
4(k)(2) – personal jurisdiction is proper in federal question cases involving foreign defendants
when no state can exercise personal jurisdiction (only if consistent with 5th amen)
4(k)(1)(B) – the “Bulge” Rule
o if a defendant has been joined pursuant to Rule 14 (third party claim) or Rule 19 (for
necessary and indispensable parties) the defendant is subject to personal jurisdiction in
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federal court as long as the defendant is served within one hundred miles of the federal
courthouse
Collateral Attack
o Defendant does not make an appearance in the forum state – a default judgment is then
entered
o When the P attempts to enforce the default judgment from the first court in a state that has
PJ over the D the defendant will challenge PJ from state 1 where judgment was entered
o D cannot challenge merits for the case
o If the D loses the judgment from state 1 is enforced (full faith + credit)
1) In Personam Jurisdiction
o Serving the defendant while they are physically present in the state
2) In Rem Jurisdiction
o Attaching property of the land owner's in order to assert jurisdiction over the property
owner
o used to control and determine the ownership of specific property (i.e. land or a bank
account)
o Can only recover damages up to the value of the property (but not necessarily the entire
value of it - can only recover as much as you are claiming)
o Defendant does not need to be served
o Shaffer narrowed to only being applicable when the property of the lawsuit itself is
attached
4) Transient Jurisdiction
o General rule is that a State may dispense with in forum personal service on a nonresident
defendant in suits arising out of their activities in the state and the defendant's minimum
contacts may take the place of physical presence as the basis for jurisdiction
o Jurisdiction based on physical presence alone constitutes due process because it is a
continuing tradition of our legal system that defines the due process standard of TNFPSJ
(Justice Scalia’s opinion in Burnham)
o The rules developed under International Shoe only apply to an absent defendant
o Physically present defendants do not need to be treated identically as to absent ones
o Transient (tag) jurisdiction may not need a long arm statute to authorize it because it was
used under common law for centuries even though a statute never provided for it
o Not valid if D was not voluntarily and knowingly in that state
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5) Consent
o Defendant fails to make a special appearance + instead makes a general appearance =
consent to that forum's state jurisdiction
o Plaintiff consent by filing the case - relevant where the D counterclaims against P and the
P then becomes the D, they are then subject to PJ in forum state and are deemed to have
consented to everything connected with that lawsuit (Adam v Saenger)
o Forum Selection Clause - deemed to have consented to jurisdiction in whichever state is
prescribed by it
o Fictional Consent - i.e. Hess v Pawlowski where a state statute creates fictional consent
creating long arm statute and then minimum contacts will allow the state to assert that
personal jurisdiction over the D
8) SPECIFIC JURISDICTION
o Claim arises out of the defendant’s deliberate contact with the forum state
o International Shoe – established minimum contact standard
o McGee – established TNFPSJ requirement
o Hanson - Defendant must have purposefully availed themselves of the state (when D's have
purposefully availed themselves of the privileges and benefits of conducting activities in a
particular forum)
o Purposeful availment = minimum contacts
o Minimum contacts does not always equal purposeful availment
o World Wide Volkswagen reasonableness factors to determine if TNFPSJ are offended:
1) Burden on the defendant
2) Forum state's interest in adjudicating the dispute
3) Plaintiff's interest in obtaining convenient and effective relief
4) Interstate judicial system's interest in obtaining the most efficient resolution of
controversies
i. Where are the witnesses and evidence?
ii. Where would the witnesses who would be able to testify for plaintiff located?
5) Shared interest of the several states in furthering fundamental substantive social
policies
i. Terms of the kind of law suit (i.e. Tort)
ii. Where do the states have similarities in enforcing the law? Differences?
o Foreseeability – is it foreseeable that the defendants conduct and actions would give rise to
anticipation of being hailed into court there? (WW VW)
o Burger King – Court found personal jurisdiction even though the defendant had very few
contacts with the forum state but recognized a contract as a contact
o Asahi – Stream of Commerce Theory
o Allows a state to assert PJ over a component manufacturer in a different state
o Marks Rule = take the narrowest holding from a case when there is no clear majority
o i.e. Here that is Justice Steven’s opinion that said a corporation has risen to the level
of purposeful availment considers:
volume
value
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hazardous character of the components
o Claim must arise out of the defendants contacts with that state (Asahi)
o Evidence Test = A claim arises out of the D in state contacts only if the D forum
contact provides evidence of one or more elements of the underlying claim (more
rigorous)
o But For Test = A claim arises out of a contact if the claim would not have arisen but
for the D contact in that state (more expansive approach)
o Jackson – Internet Contacts
o Zippo Test = used to identify which types of websites are subject to PJ
Highly interactive websites = PJ (sales)
Websites with limited info exchange = maybe PJ
Require close scrutiny to determine if PJ exists
I.e. Websites where info is exchanged with the host computer
Passive websites = generally no PJ
No exchange – user is just reading from the website
9) GENERAL JURISDICTION
o Defendant is essentially “at home” within the state
o Corporations = incorporate + principal place of business (Daimler)
Historically was a test of “continuous and systemic contacts” as to render
it at home (overruled)
o Individuals = domicile
o Defendant has so many contacts with the forum state that they can always be sued in
that state for any reason whatsoever even if the lawsuit doesn't have anything to do
with a contact in that state
o Do not need WW VW factors
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1) RESIDENT DEFINED:
Individuals - 28 USC §1391(c)(1) = domicile
RULES:
12(b)(3) – D right of objection if filed in an improper venue (if not raised it is waived)
§1441 – basic removal provision
§1391(c) – a D that does not reside in the US can be sued in any judicial district (universal venue
across the US)
§1631 – transfer if PJ is not proper
TRANSFER OF VENUES
Filed in the Wrong Venue Filed in the Correct Venue
Motion to Transfer 28 USC §1406 28 USC §1404
(can be asserted by P or D)
Motion to Dismiss 28 USC §1406 AND Federal Rule Forum non conveniens (common
12(b)(3) law doctrine) - can only be
asserted by Defendants
b. Public Interest
Transferees familiarity with governing laws
Relative congestion of the calendars of the potential courts
Local interest in deciding local controversies at home
o Court dismissing for forum non conveniens can set terms and conditions for dismissal
o Not easily applied
STATE LAW METHODS - Follow the rules for service of process of the state where the fed court sits or
of the state in which service of process is made - 4(e)(1)
o Most states have certified process by certified mail
o Notice by publication may be valid in limited circumstances where notice is reasonably
calculated under all circumstances to apprise interested parties of the action AND afford
reasonable time to respond (Mullane)
o This was further expanded in Baidoo to include electronic publications (limited
application)
Time Limits
o Rule 4(d)(1)(F) = gives the D 30 days to respond to the waiver of service
o Rule 4(d)(3) = D has 60 days to answer the complaint after waiver of service was sent
o Exclude day of event
o Count Sat, Sun, & Fed Holidays
o BUT if last day of the period falls on Sat, Sun, or Holiday the D gets one more day
RULES:
o Any party can move for summary judgment (i.e. Third party, P, D)
o 56(c)(1) – a party asserting that a fact cannot be or is genuinely disputed must support the
assertion by:
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o (A): citing to particular parts of materials in the records i.e. Depos, documents etc. OR
o (B): showing that the materials cited do not establish the absence or presence of a genuine
dispute, or that an adverse party cannot produce admissible evidence to support the fact
o 56(c)(4) – affidavits or declarations must be:
o Made on personal knowledge
o Set out facts that would be admissible in evidence
o Show that the affiant or declarant is competent to testify on the matters stated
o Rule 56(d) - the court may allow time to obtain affidavits or declarations or to take discovery
Foman Standards:
Under Rule 15(a) leave to amend should be freely given unless there is:
1. Undue delay (by nonmoving party)
2. Bad faith
3. Dilatory motive by movant
4. Repeated failure to cure deficiencies by amendments previously allowed
5. Undue prejudice to the opposing party (preparation prejudice) - will the nonmoving party have the
opportunity to prepare a response to whatever the amended pleading is
6. Futility of amendment
Cases:
o Beek v Aquaslide n Dive
o Bonerb v Richard J Caron Foundation
o Krupski
RULE 11 - SANCTIONS:
o Sanctions for violation of Rule 11 are discretionary
o 11(c)(2) - Motion for sanctions cannot be filed right away (must give 21 days to fix the problem) –
safe harbor
o 11(b) - to conduct an inquiry reasonable under the circumstances
o Authorizes sanctions in particular circumstances
o 11(c)(1) - if after notice and a reasonable opportunity to respond the court determines that Rule
11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm,
or party that violated the rule or is responsible for the violation
o Court is not obligated to impose sanctions
o 11(c)(3) - a court acting sua sponte must order the offender to show cause why conduct
specifically described in the order has not violated Rule 11(b)
o 11(c)(4) - sanction must be limited to what suffices to deter repudiation of the conduct or
comparable conduct by others similarly situated
o May include an order to pay attorneys fees for the other party
o Nonmonetary directives
o An order to pay a penalty into court
o The Snapshot Rule = looking at what the law was in the moment the claim was filed
o 11(b)(2) - the lawyer certifies the claims are warranted by existing law
o Or by a nonfrivolous argument for extending, modifying, or reversing existing law or for
establishing new law
o Only the lack of any legal or factual basis is sanctionable (Hunter v Earthgrains)
o 11(c)(5)(A) - court may not impose monetary sanctions against the represented party for
violating Rule 11(b)(2)
o 11(d) - Sanctions do not apply to discovery matters (including interrogatories) -- exception to
Rule 11
o Rule 26(e) - obligation to correct discovery answers that have become invalid
o Hays v Sony – objective standard applied to attorneys conduct
RESPONDING TO PLEADINGS
Defendant's Options:
Do Nothing -- Rule 55(a) Default Judgment
Answer -- Pleading in response to the complaint
Pre-Answer Motion -- Rule 12(a)(4)
(2) Can we plausibly infer from the remaining allegations in the complaint, the conclusion in #1
Attach presumption of truth (Gibson)
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If NO to both - apply federal law
If YES to both - you might apply state law -- then go on to analyze IV
If YES to one and NO to the other - balance the factors / depends on circumstances
IX. DISCOVERY
Rule 26(b)(1) - targets any matter that is non privileged
Rule 26(b)(5) - to invoke a privilege, it requires that a claim expressly and describe the nature of the
documents, communications, or tangible things not produced or disclosed and do so in a manner
that without revealing information itself privileged or protected, will enable other parties to assess
the claim
Rule 37(a) : Motion to Compel
Rule 37(b)(2) : Sanctions
Rule 37(b)(3)(C)
Rule 26(g)(1) : Signature Required
Discovery Mechanisms
Interrogatories (Rule 33)
Requests for production of documents (Rule 34)
Physical and mental examinations (Rule 35)
Requests for admission (Rule 36)
Depositions (Rules 27-31
Jury Control:
o Rule 50(a) - motion for judgment as a matter of law (directed verdict)
o Rule 50(b) - renewed motion for judgment as a matter of law (JNOV)
Must first move for a 50(a)
o Rule 59 - motion for new trial
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Same standard as a 12(b)(6) motion -- only difference is these three motions are filed at the trial
and not before
JNOV = judgment not withstanding the verdict
Burden of Production - producing enough evidence so it would be rational for the jury to find for the
P
o The party bearing the burden of production is the one that would lose if neither side
introduced any evidence
When it is a bench trial (judge deciding) -- Rule 52(c) is equivalent to Rule 50(a)
Burden of Persuasion - convincing the trier of fact that it is more probable than not that P is correct
(ordinary civil case)
o Beyond a preponderance of the evidence
Clear and Convincing evidence -- higher burden of proof used in specific civil cases (i.e. Fraud)
Zubulake
Presumption = responding party ordinarily bears the cost of discovery requests
Costs may be imposed on the requesting party when they impose an "undue burden or expense" on
the responding party
Only impose when the evidence is inaccessible
To determine whether cost-shifting is appropriate the court should consider (pg. 837):
The extent to which the request is specifically tailored to discover relevant info
The availability of such information from other sources
The total cost of production, compared to the amount
Rule 26(b)(2)(C)(iii) - incorporates the factors
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