I appear to be on a civil procedure kick but will embrace it because finals and bar prep are approaching! To recap, before a federal court can hear and try a case, it needs personal jurisdiction over the defendant, subject matter jurisdiction over the matter, and finally, venue in the appropriate judicial district. In this post, we will further explore subject matter jurisdiction.
Subject matter jurisdiction focuses on the type of claim brought before a federal civil court and asks if the court has the power to hear and decide on it. Federal subject matter jurisdiction applies only to federal courts because federal courts are of limited jurisdiction.
I will focus on the two main methods of obtaining subject matter jurisdiction. I will explain federal question jurisdiction and then diversity jurisdiction. Either are sufficient to confer subject matter jurisdiction. Keep in mind, removal and supplemental jurisdiction are also viable methods of getting a case up to the federal courts.
1. Federal question jurisdiction: If the plaintiff brings a claim arising under federal law, a federal court has subject matter jurisdiction over it (regardless of the amount in controversy or the citizenship of the parties). Examples are claims brought under federal statutes relating to copyright law or patent law. The prompt will usually tell you that the plaintiff is bringing a claim under a certain federal statute (i.e. Title IX). A trick worth mentioning is that the complaint must arise under or depend on a substantial question of federal law (AKA the well pleaded complaint rule, see the Mottley and Grable cases). The plaintiff's anticipation of a defense arising under federal law is insufficient to give rise to federal question jurisdiction. So, if Plaintiff brings a wrongful termination claim solely rooted in state law and in response, Defendant raises a defense arising under federal law, Plaintiff cannot rely on that defense for federal question jurisdiction.
2. Diversity jurisdiction. First, you need complete diversity of citizenship and second, the amount in controversy must exceed $75,000. If the plaintiff satisfies both prongs, the case can be brought in a federal court under diversity jurisdiction.
· Diversity of citizenship: The citizenship of each plaintiff must differ from that of each defendant. Individuals are citizens of the state or country in which they reside and intend to remain indefinitely. Individuals, unlike corporations, can only have one domicile/citizenship. A corporation is a citizen of the state or country where its principal place of business (headquarters/nerve test) is located and where the entity is incorporated. Additionally, an unincorporated organization, like a union, is a citizen of any state in which any member is a citizen. Let’s apply these rules to some hypos:
- Plaintiff is from CT and the defendant is from WA; complete diversity exists. We will have diversity jurisdiction if the amount in controversy exceeds $75,000.
- There are 2 plaintiffs from WI and one from MI suing the defendant, Company, incorporated in DE and headquartered in MI. Diversity jurisdiction is destroyed because Company is a “citizen” of both DE and MI and therefore shares citizenship with
one of the plaintiffs.
· Amount in Controversy exceeds $75,000: The amount in controversy is the monetary value at stake in the suit. In your calculation, do not include lawyers' fees. Only account for interest that has accrued as part of the agreement, not interest resulting from litigation-related delays. Let's say Defendant from NJ negligently crashes her car into Plaintiff’s front porch. Plaintiff is a NY citizen. Plaintiff asks for two hundred thousand dollars in damages. Diversity jurisdiction exists; P and D have diversity of citizenship and the amount in controversy ($200,000) is well over the $75,000 threshold. If instead P sues D on one $45,000 claim for damage to the porch and another $40,000 for damage to her fence, can P aggregate the two claims to reach that <$75,000 threshold? Sure, for purposes of attaining the jurisdictional amount, any one plaintiff can aggregate their claims (related or unrelated) against a single defendant. Moreover, if a plaintiff sued three defendants jointly for $76,000, the total number of the claim can be used, regardless of how many defendants there are (you should not divide the joint claim by the number of defendants). Finally, in the unlikely event that your prompt includes a plaintiff asking for equitable relief against the defendant (i.e. for an injunction or specific performance), analyze the dollar amount of the benefit conferred plaintiff or the value of the detriment to the defendant. If either of those dollar values exceed $75,000, courts will likely find the amount in controversy requirement met.
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