Understanding Diversity and Federal Question Jurisdiction in US Courts, Exams of Civil procedure

Download Understanding Diversity and Federal Question Jurisdiction in US Courts and more Exams Civil procedure in PDF only on Docsity! Exam Name: CivPro_LS1_(Kibel)_Final_F08 Instructor: Mr. Paul S. Kibel 1) PART I (A) Federal Subject matter jurisdiction allows a plaintiff to bring a claim in a federal court based on either federal question jurisdiction or diversity jurisdiction. The basis of subject matter jurisdiction is the U.S. Constitution, Article III, section 2, which allows the federal court to hear actions arising under the constitution, or federal statutes or treaties, and also allows for federal courts to hear actions between citizens of different states. Federal question jurisdiction is codified in 28 U.S.C. section 1331, and diversity jurisdiction is codified in 28 U.S.C. section 1332. Diversity Jurisdiction Because Hardluck's claim does not contain any claims arising under or involving federal law, in order for the district court to have subject matter jurisdiction over his claim, it must be based on diversity jurisdiction. In order to establish diversity jurisdiction, Hardluck must prove that there is complete diversity, and that his claim reaches the requisite amount in controversy. Complete Diversity In order to establish complete diversity, no defendant and no plaintiff may be citizens of the same state. If a plaintiff and a defendant are found to be citizens of the same state, we say that diversity is 'wrecked'. Hardluck is a citizen of Colorado, so Lucky Penny (LP) must be determined to be a citizen of a different state in order for there to be complete diversity. A corporation is deemed to be a citizen of the state in which it was incorporated, and states in which it conducts business. Courts use three different tests to determine the citizenship of a corporation. 1) The "nerve center" test, looks to where the decision making part of the corporation is situated; 2) the "corporate activities" test looks to where the majority of the corporation's actual business is conducted; and 3) the "total activity" test determines citizenship based on a combination of the nerve center and corporate activities tests. Under the nerve center test, LP's citizenship would most likely be found to be in Colorado, as that's where it's corporate headquarters are located. Under the corporate activities test, LP's citizenship would probably be found to be in Wyoming, as that's the location of it's largest mine, and most of LP's employees work in its mines. Under the "total activity" test, citizenship would probably determined to be in Colorado, because both LP's corporate headquarters and one of its mines are situated there. If the court chooses to adopt either the total activity test or the nerve center test, then it is likely that LP will be found to be a Colorado citizen and diversity will be wrecked. In that case, the court should grant LP's motion to dismiss based on lack of subject-matter jurisdiction. Amount in Controversy In the case that it pleases the court to adopt the corporate activity test, and the court finds that LP is a Wyoming citizen, therefore preserving diversity, then the court will have to analyze whether the amount in controversy requirement has been met. For a diversity action, the court requires that the minimum amount in controversy be $75,000. The plaintiff's stated amount in controversy is based on a good-faith estimation of his damages. In this case, plaintiff will reach the requisite amount in controversy, as his compensation damages and punitive damages combine for a total of $80,000. The court will allow the plaintiff to aggregate his damages against a defendant so long as they are narrowly construed so as to avoid piecemeal litigation. PART II In determining questions of vertical choice of law, that is, where, solely based on diversity, a claim is brought in a federal court and there is a conflict between federal law and state law, this court utilizes a determination based on two prongs. One one prong, where there is a federal rule of procedure in direct collision with a state law, we use the Supreme Court's decision in Hanna v. Plumer as a guide. In Hanna, a state law required that in an action against an estate, the executor be personally served, while the federal rule of civil procedure stated that service could be satisfied in compliance with Federal Rule of Civil Procedure 4(e)(2)(?), which allows for process to be left at a defendant's domicile with another person domiciled there, as long as they are of reasonable age and competence. In Hanna, the court upheld service, even though it violated the state rule, as the matter was purely procedural. In Justice Scalia's rather sardonic decision, the court held that where there is a federal rule of civil procedure on point, that so long as the rule does not violate the U.S. Constitution or the tenants of the rules enabling act, by enlarging, diminishing, or modifying a substantive right, than the federal rule shall be upheld. The court found that the decision of Erie was founded on the basis of deterring forum shopping, and that the choice of federal court in this case had nothing to do with an attempt by plaintiff to avoid an adverse state law. In this case, there is no Federal Rule in direct collision with the California Probate Code statute of limitations, so this court will rely on the other prong, based on the Supreme Court's progressive decisions on vertical choice of law in Erie, York, and Byrd. In Erie, a man who was struck by a passing boxcar while walking on a path adjacent to the railroad tracks brought his claim in federal district court to avoid an adverse Pennsylvania law that would have left him without remedy. In it's decision, the Supreme Court overturned its ruling in Swift v. Tyson, interpreting state court common law to be considered 'law' under the Rules of Decision Act of the 1789 Judiciary Act, and therefore applicable to district court decisions. The district court's holding was largely meant to discourage the practice of forum shopping, whereby a plaintiff might bring his action to federal court to avoid the application of adverse state law. This decision has been codified in 28 U.S.C. 1657 - The Rules of Decision. The next progression of vertical choice of law took place in York v. Guarantee Trust, where a plaintiff sought to bring his claim in federal court, because the state statute of limitations had expired. Here, the court upheld the state law barring plaintiff's claim. The court based its ruling on the foundation of an 'outcome determinative' test, by which a court should not choose to apply federal law to a case, brought in federal court solely on the basis of diversity, where it would lead to a substantially different outcome than an application of state law. The third part of the test is from the Supreme Court's decision in Byrd v. Blueridge. Here, in a diversity action, state law called for the adjudication of plaintiff's workmen's comp claims by a judge sitting without a jury. The court decided to dismiss the state precedent, finding that a jury trial was so fundamental to the process of district court adjudication as to outweigh the substantial probability of a different outcome. The court established a rubric for determining whether state law should supercede, by which, if the law was substantive in nature ('bound up in the rights and obligations of the parties'), state law should be applied. At the other end of the spectrum, where the conflicting rule was purely procedural, the federal rule should be applied. And in the middle, an outcome determinative test a la York should be applied, albeit with a strong preference for federal rule. This formulation has long been referred to in this courtroom as the "Byrd Spectrum, With a Balancing Test in the Middle," and it is to the application of this venerable test that we now turn our attention. In the case at hand, the court will grant defendant's motion to dismiss. Although many of my learned colleagues in the District Court system have held that actions are timely unless there was an "inexcusable delay," I see no reason not to grant credence to a state rule that is obviously substantive. The preface to the California Probate Code states that the objective of the provision is to encourage prompt settlement of the estate, and to protect the assets of the heirs from potential third-party claims. Without this preface, the provision might be viewed as arbitrary, but in light of the preface, it is my opinion that the purpose of the provision is "bound up in the rights and obligations of the parties." The provision serves the clear purpose of protecting an estate from attenuated claims, and is in line with other statutory provisions promoting the efficiency of probate settlement. Further more, the case at hand is substantially factually similar to York, and I would have much trepidation about casting aside all notions of stare decisis and ruling against a famous holding of the Supreme Court. PART III Having read parties' motion papers, it is the decision of this court to grant defendant's motion for summary judgment on the grounds that this court lacks personal jurisdiction over the defendant. Our modern analysis of personal jurisdiction begins with the Supreme Court's 1945 decision of International Shoe. In International Shoe, the court established a two step approach for establishing personal jurisdiction over out-of-state defendants, relying