1. 1 Agenda for 16th Class Admin – Name plates – Handouts Slides Supplemental Jurisdiction – Office hours this week Thursday 12-1PM Not Thursday 2-3PM – Order in all court visit cases posted to webpage – Thank you for electing me PILF bake sale judge Midsemester feedback Review of joinder Class Actions (continued) Subject matter jurisdiction – Federal question jurisdiction Introduction to – Diversity Jurisdiction – Supplemental Jurisdiction

2. Assignment for Next Class I -- Diversity 28 USC 1332 – Focus on 1332(a) – 1332(d) is the Class Action Fairness Act (2005) 28 USC 1369 (skim) Yeazell pp. 207-21 Questions to think about /Writing Assignment for Group 2 – Briefly summarize Redner – Yeazell Pp. 209 Q1, 3b, 4, – Suppose P is a citizen of Turkey, and D is a citizen of Egypt admitted to permanent residence in the US and domiciled in MA. P sues D in federal district court to collect a $100,000 debt. Is there federal jurisdiction? First consider this question under the current of 28 USC 1332(a) (the version in your Rules Pamphlet Now consider this question under 28 USC 1332(a) as it existed before 2011 (See next slide) – Does the older statute give you a different answer? – If so, is that answer constitutional under US Constitution, Article III, Section 2? – Would a purposivist interpretation of the text give you a different answer than a textualist interpretation? – Can you see why 28 USC 1332(a) was amended in 2011? Optional. Glannon Ch 5 2

3. 28 USC 1332(a) before 2011 Amendment The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between-- – (1) citizens of different States; – (2) citizens of a State and citizens or subjects of a foreign state; – (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties; and – (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States. For the purposes of this section, section 1335, and section 1441, an alien admitted to the United States for permanent residence shall be deemed a citizen of the State in which such alien is domiciled. 3

4. Assignment for Next Class II – Supplemental Jurisdiction Supplemental Jurisdiction – Read 28 USC 1367 very carefully – Test for Supplemental Jurisdiction (handout) – Questions to think about / Writing Assignment for Group #3 Supplemental Jurisdiction Questions on pp. 3-4 of handout Optional – Glannon. Ch. 16, 17 4

5. Mid-semester Feedback – Slow down – More time explaining new material – Shorter assignments Remember that if you have written two full pages, you can stop and get full credit even if you have not answered all questions – Unfortunately, very hard to Make assignments more equal 5

6. Review of Joinder – Tradeoff Efficiency of processing claims together versus complexity – In general Easier to add claims against persons already part of law suit Harder to add new parties – Joinder always allowed (and mandatory if same transaction or occurrence) Joinder of claims. Rule 18 Counter claims. Rule 13 – Joinder allowed if same transaction or occurrence Joinder of parties. Rule 20 Cross-claim. Rule 13(g) Addition of party to counterclaim or crossclaim. Rule 13(h) Claim by 3 rd party defendant against original plaintiff. Rule 14(a)(2)(D) Claim by original plaintiff against 3 rd party defendant. Rule 14(a)(3) – Impleader. Rule 14(a) Impleading of 3 rd party defendant allowed if 3 rd party defendant would be liable to 3 rd party plaintiff for some or all of judgment, if original plaintiff prevailed against 3 rd party plaintiff (original defendant. Rule 14 Indemnity or contribution – Judge always has discretion to sever or consolidate. See FRCP 21, 42 6

7. Review of Class Actions – Advantages of class actions Lower litigation costs, allows small claims to go forward – Disadvantages Agency problem - lawyer may not litigate in best interest of class Pressure to settle non-meritorious claims? Certification requirements FRCP 23(a). Numerosity, commonality, typicality, adequacy FRCP 23(b)(2). Injunctions FRCP 23(b)(3). Damages, e.g. mass torts, securities – Predominance: Common issues must predominate – Superiority: Class action must be superior to individual actions 7

8. 8 Class Actions Questions Summarize Walmart Why do you think the plaintiffs brought the case as a 23(b)(2) class action rather than a 26(b)(3) class action? What do you think the plaintiffs lawyers in Walmart should have done after the Supreme Court decision in Walmart? Enrom manipulated the price of its stock by failing to disclose information that would cause share prices to fall. Would a class action alleging violation of federal securities law against Enrom on behalf of all shareholders who purchased stock during the period when the information was being withheld be appropriate? RhinePool supplied blood to hemophiliacs, but failed to screen adequately for HIV. As a result, many hemophiliacs in dozens of states got AIDS and some died. Would a product liability class action against RhinePool on behalf of all hemophiliacs who contracted AIDS as a result of contaminated blood produced by RhinePool be appropriate?

9. Introduction to Subject Matter Jurisdiction I – Federal courts have limited jurisdiction Can hear only cases allowed by Constitution and statute Constitution sets outer limit of jurisdiction – But congress can choose to give courts less Constitution is not “self-executing” – Need statutory as well as constitutional authority – 2 principle categories Diversity – Plaintiff and defendant are citizens of different states – Complete diversity rules » No plaintiff is citizen of the same state as any defendant – Alienage » One party is US citizen, other party is foreign citizen Federal question – Cases arising out of federal statute or constitution – Other categories Admiralty Special statutes, such as 28 USC 1338 (patents, copyrights, etc) 9

10. Introduction to Subject Matter Jurisdiction II – Federal jurisdiction is usually “concurrent” Plaintiff can bring case either in federal court or state court – State courts can adjudicate issues of federal law or relating to treaties or the US Constitution – Sometimes, federal jurisdiction is “exclusive” Plaintiff cannot bring case in state court – If statute is silent on whether jurisdiction is concurrent or exclusive, it is concurrent See 28 USC 1331. Federal question jurisdiction – If jurisdiction is exclusive, statute will be explicit 28 USC 1338. “No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents… or copyrights” – But does not specifically exclude state jurisdiction over trademarks, so states have concurrent jurisdiction. 10

11. Introduction to Subject Matter Jurisdiction III – Subject matter jurisdiction must be plead. See FRCP 8(a) & Form 7 Jurisdictional statement is about subject matter jurisdiction (not personal jurisdiction) – If court does not have subject matter jurisdiction Defendant can bring motion to dismiss under FRCP 12(b)(1) Court can (and must) dismiss, even if defendant does not make motion – Judge Snyder mentioned that her clerks (or externs) perform a subject matter jurisdiction check of every case – Case can be dismissed for lack of subject matter jurisdiction at any time Issue is never waived. Issue can be raised for the first time in appellate court – By judge or party 11

12. Removal – If jurisdiction is concurrent, plaintiff can choose federal or state court But if defendant prefers federal court, it can “remove” the case to federal court. 28 USC 1441 – Removal is proper whenever a case could have been brought initially in federal court. 28 USC 1441(a) Except, in diversity cases, when the defendant is a citizen of the state in which sued. 28 USC 1441(b) 12

13. Federal Question Jurisdiction – Permissible because allowed by US Constitution, Article III “The judicial Power shall extent to all Cases …. Arising under this Constitution, the Laws of the United States, and Treaties….” – Authorized by 28 USC 1331 “The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties….” – What are cases “arising under” the US Constitution, federal law, or treaties Same words used in Article III and 28 USC 1331, but have different meaning In Article III: any case in which US constitution, federal statute, or treaty needs to be interpreted In 28 USC 1331: any case in which US constitution, federal statute, or treaty created the cause of action – E.g. if complaint would mention or implicitly refer to US Constitution, federal statute, or treaty » Well-pleaded complaint rule. Louisville & Nashville Railroad v Mottley – Not sufficient that federal issue is a defense » Defense would be raised in answer, not complaint 13

14. 14 Federal Question Jurisdiction Questions Summarize Louisville. – Your summary should include the answer to Yeazell. P. 199 Q1 Under the FRCP as it exists today – If plaintiff had drafted a “well pleaded complaint,” what would have been the key allegations of that complaint? – If plaintiff had drafted a well-pleaded complaint, what paper would defendant have filed in response? What would have been the key elements of that paper? – How would plaintiff have raised the unconstitutionality the Act of Congress which the defendant alleges prohibited giving the passes that the railroad gave the Mottleys? – If defendant’s answer had admitted that it had given passes to the Mottleys, but argued that they were invalid, what motion would the plaintiff have had to make in order to get the Court to grant the Mottleys the relief they requested without discovery or trial? Yeazell pp. 199ff Qs 3, 4b,

15. 15 Subject Matter Jurisdiction in State Court A 2 nd meaning of subject matter jurisdiction is the jurisdiction of a specialized court – E.g. jurisdiction of family court, bankruptcy court, tax court, probate court, small claims court 2 nd meaning is generally more important in state court Unlike federal courts, state courts can generally hear any cause of action – U.S. Constitution does not limit jurisdiction of state courts – Although some statutes give federal courts exclusive jurisdiction And thus bar state court jurisdiction – So don’t need to think about diversity jurisdiction or federal question jurisdiction to determine state court subject matter jurisdiction – State constitutions or statutes may limit state court jurisdiction State are free to set up court systems as they please – Most have more specialized courts than federal courts Probate, small claims court, family court – Non-specialized state court is usually called “superior court” But in NY called “supreme court” – Highest appellate court in NY called “Court of Appeals”

16. 16 Diversity Jurisdiction I Federal subject matter jurisdiction if – Citizen of State A sues citizen of state B – AND “amount in controversy exceeds … $75,000” Rationale – Concern about state court bias against non-citizens – Concern about anti-corporate bias of state courts – Federal forum for disputes with inter-state/national implications US citizen is citizen of US state in which “domiciled” – Domicile = residence with intent to remain indefinitely “indefinitely” means no plans to leave, even if don’t plan to stay permanently – Individuals do not lose domicile in one state until establish domicile somewhere else – Student who grew up in MA and went to school in IL and CA may still be citizen of MA, even if hasn’t lived there for 10 years, as long as never intended to remain indefinitely in IL or CA Corporations are citizens of two places – State of incorporation – State of principal place of business (PPB) PPB = “nerve center” or headquarters. Hertz (2010) – Means LESS likely to get diversity jurisdiction If individual citizen of CA sues corporation incorporated in Delaware with PPB in CA, then no diversity jurisdiction Similarly, if individual citizen of Delaware sues….

17. 17 Diversity Jurisdiction II Removal allowed if case could have been brought initially in federal court AND defendant is NOT from forum state – CA sues MA in MA court for $80,000, MA defendant cannot remove to federal court, even though CA plaintiff could have brought case in federal court Complete diversity rule – No plaintiff can be a citizen of the same state as any defendant MA v CA & MA, no diversity jurisdiction MA & CA v MA, no diversity jurisdiction MA & CA v NV, diversity jurisdiction AL & AK & CA & DE v AL & FL & KS & MO & NH & NM & OH – NO diversity jurisdiction – Rationale In-state party protects out-of-state party – Doesn’t make sense, because co-defendants may have divergent interests Reduce federal caseload – Not constitutionally required Congress could change by statute…. and has – see CAFA Similar to status of well-pleaded complaint rule

18. 18 Diversity Jurisdiction III Also diversity jurisdiction if – Suit between citizen of US and foreigner (citizen or subject of foreign state). 28 USC 1332(2) CA v. France; MA v Germany, etc. Called “alienage jurisdiction” – Alien admitted to US for permanent residence treated like citizen of the state in which domiciled CA v French permanent resident domiciled in MA. Diversity CA v French permanent resident domiciled in CA. No diversity If no diversity, can, of course, still get federal jurisdiction through federal question Even if diversity of citizenship, must still show personal jurisdiction & venue

19. 19 SMJ in Complex Litigation I In general, subject matter jurisdiction determined independently for each claim – Unless there’s an exception that specifically covers the situation – Joinder does not give subject matter jurisdiction Some relaxation of complete diversity rule – In class actions, complete diversity is determined by considering ONLY citizenship of named plaintiff(s) Suppose named plaintiff is from CA and defendants are from NV and MA, there is diversity jurisdiction, even if plaintiff class includes plaintiffs from NV and/or MA Manipulable by plaintiff who wants or does not want federal jurisdiction – Federal SMJ in any non-securities class action where any member of plaintiff class is a citizen of a state different from any defendant, IF amount in controversy exceeds $5,000,000. 28 USC 1332(d). With discretion to decline jurisdiction for reasons in (d)(3) and (d)(4) Removable only if 100 or more plaintiffs. (d)(11)(A) This is relatively new statute. Class Actions Fairness Act (2005) – Federal SMJ in cases involving death of at least 75 people, if minimal diversity and “substantial part of accident” took place in state other than defendant’s residence, or any two defendants reside in different states, or substantial parts of the accident took place in different states. 28 USC 1369

20. 20 SMJ in Complex Litigation II Aggregation of amount in controversy – Can meet amount in controversy requirement by adding together amounts in controversy for several claims? – Relevant for diversity jurisdiction only – See Yeazell pp. 219ff – Single plaintiff may aggregate claims against single defendant – 2 or more plaintiffs may aggregate claims against 1 or more defendants only if their claims are part of a common undivided interest – In class actions, sufficient that one member’s claim meets the amount in controversy requirement But cannot aggregate if no member meets the amount in controversy requirement – Except under CAFA (5m total; removal only if 100 or more plaintiffs) – Origin and current status of aggregation rules unclear May be displaced by supplemental jurisdiction statute Supplemental Jurisdiction – Wednesday’s class Removal – All defendants must ordinarily consent to removal. 1446(b)(2)(A)