CONVISER MINI REVIEW

CIVIL PROCEDURE
 C CM R CONVISER MINI REVIEW i.

CIVIL PROCEDURE
TABLE OF CONTENTS

I. PERSONAL JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. Limitations on Personal Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Three Types of Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
B. STATUTORY LIMITATIONS ON IN PERSONAM JURISDICTION . . . . . . . . . . . 1
1. Defendant Is Present in Forum State and Is Personally Served with Process . . . 1
2. Defendant Is Domiciled in Forum State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Defendant Is a Citizen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4. Defendant Consents to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
5. Defendant Has Committed Acts Bringing Him Within Forum State’s Long Arm
Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
C. CONSTITUTIONAL LIMITATIONS ON IN PERSONAM JURISDICTION . . . . . 2
1. Sufficient Nexus with the Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
D. IN REM JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

II. DIVERSITY OF CITIZENSHIP JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A. DIVERSITY AMONG THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1. Complete Diversity When Action Commenced . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2. Questions of Citizenship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Collusion and Devices to Create or Defeat Diversity . . . . . . . . . . . . . . . . . . . . . . . 6
4. Realignment According to Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. Ancillary (Supplemental) Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. Addition of Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B. JURISDICTIONAL AMOUNT—IN EXCESS OF $75,000 . . . . . . . . . . . . . . . . . . . . . 8
1. What Is “In Controversy”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2. Aggregation of Separate Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3. Supplemental Jurisdiction over Claims Not Exceeding $75,000 in Diversity
Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Counterclaims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
C. ERIE DOCTRINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
1. Federal Statutes or Federal Rules of Civil Procedure . . . . . . . . . . . . . . . . . . . . . . 9
2. If There is No Federal Statute or Rule on Point, Is the Issue Substantive or
Procedural? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3. Statutes Involving Both Substance and Procedure . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Interpreting State Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
D. EXCEPTIONS TO DIVERSITY OF CITIZENSHIP JURISDICTION . . . . . . . . . . 9

III. FEDERAL QUESTION JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

A. FEDERAL QUESTION MUST APPEAR IN COMPLAINT . . . . . . . . . . . . . . . . . . 10
B. IMPLIED FEDERAL RIGHT OF ACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
C. FEDERAL CORPORATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
D. PENDENT (SUPPLEMENTAL) JURISDICTION OVER STATE CLAIMS . . . . . 10

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ii. CIVIL PROCEDURE

1. Pendent Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2. Pendent Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
E. SPECIFIC STATUTORY GRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

IV. VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
A. SUBJECT MATTER JURISDICTION DISTINGUISHED . . . . . . . . . . . . . . . . . . . 11
B. GENERAL RULES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
C. RESIDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1. Individuals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2. Business Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3. Nonresident of United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
D. IMPROPER VENUE MAY BE WAIVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
E. TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
F. LAW APPLICABLE UPON TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

V. REMOVAL JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
A. ORIGINAL JURISDICTION NECESSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1. Federal Defense Insufficient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2. State Court Need Not Have Had Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. ONLY DEFENDANTS MAY REMOVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
C. VENUE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
D. DEFENDANT MAY REMOVE FEDERAL QUESTION CLAIM . . . . . . . . . . . . . . 13
E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL . . . . . . . . . . . . . . 13
1. Limitations on Removal in Diversity of Citizenship Cases . . . . . . . . . . . . . . . . . 13
F. PROCEDURE FOR REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
1. Allegation of Amount in Controversy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3. Remand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

VI. ABSTENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
A. GROUNDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
B. PROCEDURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
C. FEDERAL INTERVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
 C CM R CONVISER MINI REVIEW 1.

CIVIL PROCEDURE
I. PERSONAL JURISDICTION
A. OVERVIEW
Personal jurisdiction refers to the ability of the court having subject matter jurisdiction (i.e., juris-
diction over the type of case) to exercise power over a particular defendant or item of property.
1. Limitations on Personal Jurisdiction
An exercise of personal jurisdiction must not exceed the limitations of either state statutes or
the United States Constitution. If no state statute grants the court the power over the parties
before the court, then the court lacks personal jurisdiction. Under the Due Process Clause,
parties directly affected by the court action must receive fair and adequate notice of the
action. Furthermore, there must be minimum contacts between the defendant or property
and the forum state so that the assumption of jurisdiction is fair and reasonable. Absent some
special federal provision, each federal court must analyze personal jurisdiction as if it were a
court of the state in which it is located.
2. Three Types of Jurisdiction
In personam jurisdiction exists when the forum has power over the person of a particular
defendant. An in personam judgment is entitled to full faith and credit in all other states. In
rem jurisdiction exists when the court has power to adjudicate the rights of all persons in the
world with respect to a particular item of property. Quasi in rem jurisdiction exists when the
court has power to determine the rights of particular individuals with respect to specific
property within the court’s control. Unlike in rem jurisdiction, quasi in rem jurisdiction
does not permit the court to determine the rights of all persons in the world. A quasi in rem
judgment does not bind the defendant personally and cannot be enforced against any other
property belonging to the defendant.
B. STATUTORY LIMITATIONS ON IN PERSONAM JURISDICTION
Most states have statutes granting their courts in personam jurisdiction based on the following five
situations:
1. Defendant Is Present in Forum State and Is Personally Served with Process
Service plus even transitory presence may be a sufficient basis for in personam jurisdiction.
Service by fraud or force is invalid. Most states grant immunity from personal jurisdiction to
nonresidents who are parties or witnesses in a judicial proceeding.
2. Defendant Is Domiciled in Forum State
Domicile refers to the place where a person maintains her permanent home. If a person lacks
capacity, domicile is determined by law.
3. Defendant Is a Citizen
A United States citizen, even though domiciled abroad, is subject to personal jurisdiction
in the United States. The extent of this jurisdiction is unclear, because no state has ever
attempted to enact a law or rule that enables such jurisdiction. The Supreme Court, however,
has ruled that a federal court may subpoena a United States citizen domiciled abroad to
return to give testimony.
4. Defendant Consents to Jurisdiction
Consent may be express or implied, or through the making of a general appearance. A

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2. CIVIL PROCEDURE

person can give advance consent by contract or by appointment of an agent to accept service
of process. Many states allow “special appearances” through which a defendant can object to
the court’s exercise of jurisdiction. This special appearance must be made in the defendant’s
initial pleading to the court.
5. Defendant Has Committed Acts Bringing Him Within Forum State’s Long Arm Statutes
The long arm statutes of a few states give their courts power over any person or property
over which the state can constitutionally exercise jurisdiction. Most states, however, have
long arm statutes that specify in detail the situations in which their courts can exercise juris-
diction, e.g., a “tort” occurs within the state, or a cause of action arises out of the “transac-
tion of business” or ownership of property in the state.
C. CONSTITUTIONAL LIMITATIONS ON IN PERSONAM JURISDICTION
1. Sufficient Nexus with the Forum
a. Traditional Rule: Physical Power
Traditionally, jurisdiction was based on the power to arrest the person (based on
presence, residence, or consent) to force compliance with a judgment.
b. Modern Due Process Standard: Contact and Fairness
The Supreme Court has listed several factors to use to assess the constitutionality of
personal jurisdiction. In general, the factors fall under two headings: contact and fairness.
1) Contact
In personam jurisdiction requires that the defendant have “such minimum contacts”
with the forum such that the exercise of jurisdiction would be fair and reasonable.
The contacts cannot be accidental; the court must find that, through these contacts,
the defendant purposefully availed herself “of the privilege of conducting activi-
ties in the forum state, thus invoking the benefits and protections of its laws.” The
defendant also must know or reasonably anticipate that her activities in the forum
render it foreseeable that she may be “haled into court” there.
a) Stream of Commerce Cases
There is great difficulty in assessing purposeful availment in cases in which a
defendant manufactures its product in one state (or even in a foreign country),
then sells it to a second party in another state (thereby placing the product in
the “stream of commerce”), and the product eventually winds up in a third
state in which it causes injury. Generally speaking, there will be personal
jurisdiction over a defendant if the defendant, in addition to placing the
product in the stream of commerce, does some other act to show its intent to
serve a particular state.

b) Internet Cases
Generally, the maintenance of a passive website (i.e., only for information
purposes), without more activity in the forum, is insufficient for general
jurisdiction, but may be sufficient for specific jurisdiction if the defendant is
targeting readers in the forum. The maintenance of an active website may
be sufficient for general jurisdiction if the defendant is conducting significant
business in the jurisdiction. As with passive websites, specific jurisdiction will
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C CM R CONVISER MINI REVIEW 3.

hinge on whether the defendant was purposefully directing his activities to

the forum.

2) Relatedness of Claim to Contact

If the claim is related to the defendant’s contacts with the forum, a court is more
likely to find that jurisdiction as to that claim (“specific jurisdiction”) is fair and
reasonable. If the defendant engages in systematic and continuous activity in
the forum state such that the defendant is “essentially at home” therein, the court
could find this activity a sufficient basis for exercising in personam jurisdiction
over any cause of action (“general jurisdiction”). General jurisdiction cannot be
based on purchases or sales in the jurisdiction; some physical presence is required.

3) Fairness
The exercise of jurisdiction must not offend the “traditional notions of fair play and
substantial justice.” The court has listed several factors relevant to fairness. One
factor is whether the claim arises from the defendant’s contacts with the forum.
Convenience to the defendant is another factor. A forum is constitutionally accept-
able unless it is “so gravely difficult and inconvenient” that the defendant is put
at a severe disadvantage. The forum state may also have a legitimate interest in
providing redress for its resident. Other factors include the plaintiff’s interest in
obtaining convenient and effective relief, the interstate judicial system’s interest in
efficiency, and the shared interest of the states in furthering social policies.

CCM R Exam Tip Some authorities discuss the relationship of the contact to the claim as part of
the “contact” assessment, while others consider it to be part of the “fairness” assessment.
Yet others discuss it separately, as we do here. On your exam, the important point is that you
address the issue, whether under the contact prong, fairness prong, or separately.

CCM R Exam Tip It is far more likely that you’ll encounter a question on the exam calling for an
answer centering on specific (long arm) jurisdiction rather than on general jurisdiction.
If a plaintiff is injured in State A by a defendant, he may still sue in State A regardless of
whether the defendant is “essentially at home” there.

2. Notice
In addition to the contact, relatedness, and fairness requirements, there is also a due process
requirement that a reasonable method be used to notify the defendant of a pending lawsuit so
that she may have an opportunity to appear and be heard.

a. Requirement that Agent Notify Defendant

If the plaintiff appointed the defendant’s agent for the service of process under a
contractual right for the plaintiff’s benefit or the appointment is by operation of law, the
agent’s failure to notify the defendant will prohibit jurisdiction.

b. Requirements for Cases Involving Multiple or Unknown Parties

When there are multiple or unknown parties, the best practical means of notice avail-
able must be used. However, if certified mail is used, and the mail is returned as
unclaimed, the plaintiff cannot proceed in the face of such knowledge when other practi-
cable means to serve the defendant exist.
CMR
SUMMARY LIMITS ON IN PERSONAM JURISDICTION
CHART

Statutory Constitutional

States generally require that the There must be sufficient minimum contacts so that the exercise of in personam jurisdiction over the
defendant: defendant is fair.
4. CIVIL PROCEDURE

1. Is present in the forum state at 1. Contacts

the time of service;
The contacts must show that the defendant:
2. Is domiciled in the forum state;
a. Purposefully availed herself of the forum state’s laws; and
3. Has given express or implied b. Knew or reasonably should have anticipated that her activities in the forum made it
consent to jurisdiction; or foreseeable that she may be “haled into court” there.
4. Meets the requirements of the 2. Relatedness
forum state’s long arm or
other statute. a. If the claim is related to the defendant’s contact with the forum, a court is more likely to
find that jurisdiction as to that claim (“specific jurisdiction”) is fair and reasonable; or
b. If the defendant engages in systematic and continuous activity in the forum state such
that it is “essentially at home” therein, the court could find this activity a sufficient basis for
exercising in personam jurisdiction over any cause of action (“general jurisdiction”); and
3. Fairness
The court will also consider:

a. Whether the forum is “so gravely difficult and inconvenient” that the defendant is put
at a severe disadvantage;

b. The forum state’s legitimate interest in providing redress for its resident;

c. The plaintiff’s interest in obtaining convenient and effective relief;

d. The interstate judicial system’s interest in efficiency; and

e. The shared interest of the states in furthering social policies.
4. Notice
Defendant must be notified of the lawsuit by a reasonable method and given an
opportunity to appear and be heard.
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C CM R CONVISER MINI REVIEW 5.

D. IN REM JURISDICTION
Most states have statutes providing for in rem jurisdiction in actions for condemnation, title regis-
tration, distribution of estate assets, grant of divorce when only the complaining spouse is present
and subject to personal jurisdiction, etc. The presence of the property in the state is constitution-
ally sufficient for the exercise of jurisdiction over the property. A court has no in rem power over
property outside the state or when property is brought into the state by fraud or force. Persons whose
interests are affected and whose addresses are known must at least be notified by ordinary mail.

II. DIVERSITY OF CITIZENSHIP JURISDICTION

A. DIVERSITY AMONG THE PARTIES

1. Complete Diversity When Action Commenced

Every plaintiff must be of diverse citizenship from every defendant. If one defendant and
one plaintiff are co-citizens of the same state, there is no diversity jurisdiction. This is the
rule of “complete diversity.” The matter in controversy must also exceed the sum or value of
$75,000, exclusive of interest and costs.

CCM R Exam Tip If the facts of a bar exam question describe in detail the citizenship of the parties
and present an elaborate amount in controversy scenario, you should, of course, analyze
whether the requirements for diversity jurisdiction are present. Do not be misled, however,
into failing to also check for the presence of a federal question. Even if the court does not have
diversity jurisdiction, it might have federal question jurisdiction (see III., infra).

a. Interpleader Exception
There is a federal interpleader statute exception where “minimal diversity” and an
amount in controversy of $500 or more are sufficient to confer jurisdiction.

b. Alienage Jurisdiction
A federal court has subject matter jurisdiction over disputes between a citizen of a U.S.
state and an alien. However, jurisdiction is denied when the alien has been admitted to
the United States for permanent residence and is domiciled in the same state as the U.S.
citizen-opponent. There is no federal jurisdiction over an action by an alien against an
alien, but aliens may appear as additional parties.

c. Diversity When Action Commenced

Diversity of citizenship must exist as of the time the suit is instituted. It need not exist at
the time the cause of action arose, and it is not defeated if, after commencement of the
action, a party later becomes a citizen of the same state as one of his opponents.

2. Questions of Citizenship

a. Individuals
The determination of the state of citizenship of a natural person depends on the perma-
nent home to which he intends to return. The citizenship of a child is that of her parents.
6. CIVIL PROCEDURE

b. Corporations
A corporation is deemed a citizen of every U.S. state and foreign country in which it
is incorporated and the one U.S. state or foreign country in which it has its principal
place of business. A corporation’s principal place of business is the U.S. state or foreign
country from which its high level officers direct, control, and coordinate its activities,
which will usually be the U.S. state or foreign country in which its corporate headquar-
ters are located.
CCM R Exam Tip Do not confuse the issue of the citizenship of a corporation for purposes of
determining diversity with the issue of where a corporate defendant is deemed to reside
for venue purposes, i.e., in any judicial district in which it is subject to personal juris-
diction with respect to such action (discussed infra).
1) Incorporation or Principal Place of Business in Foreign Country
Because of the potential of multiple citizenships for a corporation, a corpora-
tion might simultaneously be an alien and a citizen of a U.S. state. The fact that a
corporation is an alien will defeat jurisdiction in a suit against another alien, even
though the corporation may also have U.S. state citizenship.
c. Unincorporated Associations and Limited Liability Companies
For diversity purposes, an unincorporated association, such as a partnership or labor
union, is considered a citizen of each state of which any member is a citizen. A limited
liability company is treated like an unincorporated association for citizenship purposes.
d. Legal Representatives
The legal representative of the estate of a decedent, an infant, or an incompetent is
deemed to have the same citizenship as the decedent, infant, or incompetent.
e. Class Actions
For class actions, diversity is determined on the basis of the citizenship of the named
members of the class who are suing.
3. Collusion and Devices to Create or Defeat Diversity
If a party attempts to create diversity by a sham transaction, such as assigning a claim for
collection purposes only to create diversity, the courts look through the transaction and
declare that diversity does not exist.

a. Class Actions and Voluntary Changes of Citizenship

In class action suits, diversity may be created by properly selecting named plaintiffs to
bring the action on behalf of others. A plaintiff can also create diversity by changing
his state citizenship after the cause of action accrued but before suit is commenced;
however, the change must be genuine and not temporary.
4. Realignment According to Interest
In determining whether diversity exists, the court will look beyond the nominal designa-
tion of the parties in the pleadings and realign them according to their true interests in the
dispute. Thus, realignment may create diversity or destroy it.
a. Shareholder Derivative Actions
In shareholder derivative actions, the court will realign the corporation as a defendant to
determine diversity.
 C CM R CONVISER MINI REVIEW 7.

5. Ancillary (Supplemental) Jurisdiction

Under the doctrine of ancillary jurisdiction (now codified under the rubric “supplemental
jurisdiction”), a court may entertain claims that could not, by themselves, invoke federal
question jurisdiction or diversity jurisdiction if the claims arise from a common nucleus of
operative fact as the claim that invoked federal subject matter jurisdiction.

CCM R Exam Tip On your exam, sometimes how you get to an answer is as important as the
answer itself. For example, on an essay question, it would be a huge omission to merely state
that “the supplemental jurisdiction statute would allow the claim” without first addressing
whether the claim has an independent basis for subject matter jurisdiction (i.e., federal
question jurisdiction or diversity of citizenship jurisdiction).
6. Addition of Parties
A claim by or against an additional party, like any claim in federal court, must satisfy some
basis of federal subject matter jurisdiction such as diversity or federal question jurisdiction.
If the claim does not satisfy either of these, it might invoke supplemental jurisdiction if the
common nucleus test described above can be satisfied. However, for cases based solely on
diversity, supplemental jurisdiction may not be used to support claims (i) by plaintiffs against
impleaded parties, compulsorily or permissively joined parties, or intervening parties; (ii)
by persons who are to be compulsorily joined as plaintiffs; and (iii) by persons seeking to
intervene as plaintiffs.
a. Compulsory Joinder (Indispensable Parties)
In certain situations, a plaintiff must join all interested parties or face dismissal of the
lawsuit. There is no supplemental jurisdiction over claims by or against parties joined
under the compulsory joinder rules.
b. Permissive Joinder
Parties may join as plaintiffs or be joined as defendants whenever: (i) some claim is
made by each plaintiff and against each defendant relating to or arising out of the same
series of occurrences or transactions; and (ii) there is a question of fact or law common
to all the parties. The rule permitting broad joinder does not alter the requirements of
jurisdiction: there must be complete diversity and each claim must satisfy the juris-
dictional amount, except that plaintiffs with a common undivided interest in a claim
exceeding $75,000 may join in asserting it even if their individual share in the interest
is $75,000 or less. However, there may be supplemental jurisdiction over claims by
permissively joined plaintiffs.
c. Intervention of Right
Traditionally, a person seeking to intervene in a case as of right did not have to show an
independent basis for jurisdiction as long as the requirements for intervention were met.
Under the supplemental jurisdiction statute, however, there is no supplemental jurisdic-
tion for claims by or against intervenors in diversity cases, and such a claim can proceed
only if an independent basis for jurisdiction can be shown.
d. Substitution of Parties
When a party is substituted, the citizenship of the substituted party is disregarded, and
that of the original party controls; thus, diversity jurisdiction is not affected. Compare:
If a party is replaced (e.g., because plaintiff sued the wrong party) rather than substituted,
the citizenship of the replacement party controls, and diversity jurisdiction could be lost.
8. CIVIL PROCEDURE

e. Third-Party Practice—Impleader
Generally, no diversity or specific amount in controversy is required in third-party
practice between the third-party defendant and the third-party plaintiff or the original
plaintiff unless the plaintiff asserts a claim against the third-party defendant.

f. Cross-Claims
A cross-claim is a claim by one co-party against another, and it may be asserted if
the claim arises from the same transaction or occurrence as the underlying dispute. If
the cross-claimant does not have an independent subject matter basis (i.e., diversity of
citizenship or federal question jurisdiction), the cross-claim may nonetheless be asserted
in federal court through the ancillary form of supplemental jurisdiction.

B. JURISDICTIONAL AMOUNT—IN EXCESS OF $75,000

Actions brought in federal court under the diversity statute must be in excess of $75,000,
exclusive of interest and costs. The amount is determined from the plaintiff’s good faith allega-
tion. The complaint can be dismissed only if it appears there is no legal possibility of a recovery
exceeding the jurisdictional amount. Jurisdiction is not retroactively defeated by the fact that the
amount actually recovered is less than the jurisdictional amount.

1. What Is “In Controversy”?

Collateral consequences of the judgment (e.g., rights to payment of future installments on
disability policy) may not be considered. Interest and costs are also excluded. However, attor-
neys’ fees that are recoverable by contract or by statute are considered part of the matter in
controversy. Interest that constitutes a part of the claim itself, as distinguished from interest
payable by virtue of a delay in payment, is also part of the jurisdictional amount. A punitive
damage claim permitted under state substantive law may be used in meeting the dollar
amount requirement.

2. Aggregation of Separate Claims

For purposes of meeting the jurisdictional amount, a plaintiff may aggregate all her claims
against a single defendant. A plaintiff who has an action against several defendants can
aggregate her claims against them only if the defendants are jointly liable to the plaintiff. She
cannot aggregate liabilities based on separate claims or concurrent liabilities. Several plain-
tiffs can aggregate their claims only if they are seeking “to enforce a single title or right in
which they have a common or undivided interest . . . .”

3. Supplemental Jurisdiction over Claims Not Exceeding $75,000 in Diversity Cases

Claims that do not meet the amount in controversy requirement may invoke supplemental
jurisdiction if they arise from the same nucleus of operative fact as a claim that invoked
diversity of citizenship jurisdiction. However, supplemental jurisdiction cannot be used to
override the complete diversity requirement.

4. Counterclaims
A defendant’s counterclaim cannot be combined with the plaintiff’s claim to reach the jurisdic-
tional amount. A compulsory counterclaim need not meet the jurisdictional amount require-
ment, as the court may hear it under its supplemental jurisdiction. However, a permissive
 C CM R CONVISER MINI REVIEW 9.

counterclaim (one arising out of an unrelated transaction) must have an independent juris-
dictional basis, and thus must meet the jurisdictional amount requirement.

a. Removal from State Courts

A plaintiff who claims $75,000 or less in a state court action who is met with a counter-
claim for more than $75,000 may not remove the suit to federal court, regardless of
whether the counterclaim is compulsory or permissive, because removal is permitted
only by defendants. Also, a plaintiff with a small claim can require a defendant with a
large claim to litigate it in state court simply by being the first to file. Even though this
is the traditional rule, there is a trend allowing removal.

C. ERIE DOCTRINE
Under the Erie doctrine, a federal court in a diversity case will apply its own procedural law, but
must apply the substantive law of the state in which it is sitting.

1. Federal Statutes or Federal Rules of Civil Procedure

The first question to ask is whether there is a federal law on point (e.g., Constitutional provi-
sion, federal statute, or Federal Rule of Civil Procedure). If there is, it applies, provided that
it is valid (and, since the Supreme Court reviews and forwards changes to the Federal Rules
to Congress, it is very unlikely that a Federal Rule would ever be held invalid).

2. If There Is No Federal Statute or Rule on Point, Is the Issue Substantive or Procedural?

If there is no federal statute or rule on point, a federal judge may refuse to follow the state
law rule if the matter is procedural rather than substantive. Statutes of limitations, rules for
tolling statutes of limitations, choice of law rules, and elements of a claim or defense are
clearly substantive. Outside of these areas, the court will use an outcome determinative test
(an issue is substantive if it substantially affects the outcome), a balance of interest test (if
the state has the greater interest, the issue is substantive), or forum shopping deterrence (if
failing to apply state law would increase litigation in federal court, the issue is substantive) to
decide whether an issue is substantive or procedural.

3. Statutes Involving Both Substance and Procedure

Sometimes, a state statute or rule may contain both substantive and procedural elements.
In such a case, the federal court will apply the state substantive provisions and any federal
procedural provisions.

4. Interpreting State Law

The federal court is bound to apply the substantive state law that would be applied by the
highest court of the state. On appeal, the federal appellate court reviews the federal trial’s
decision as to state law de novo. If the highest state court renders a decision on an issue after
the federal court has made its determination, the decision of the trial court may be changed
to conform to the new decision, up until the disposition of the final appeal.

D. EXCEPTIONS TO DIVERSITY OF CITIZENSHIP JURISDICTION

For historical reasons, federal courts generally will not exercise diversity jurisdiction over
domestic relations or probate proceedings. To fall within the probate exception, the claim asserted
must involve the actual probate or annulment of a will, or seek to reach property in the custody of
a state probate court.
10. CIVIL PROCEDURE

III. FEDERAL QUESTION JURISDICTION

A. FEDERAL QUESTION MUST APPEAR IN COMPLAINT

The district courts have original jurisdiction over all civil actions arising under the Constitution,
laws, or treaties of the United States. The federal question must appear as part of the plaintiff’s
cause of action as set out in a well‑pleaded complaint. The existence of a defense based on federal
law will not create federal question jurisdiction. A complaint does not raise a federal question if it
does so only in anticipation of some defense.

B. IMPLIED FEDERAL RIGHT OF ACTION

There can be an implied federal right of action—it is not essential that the federal statute
expressly provide for a civil cause of action for a violation.

C. FEDERAL CORPORATIONS
Federal question jurisdiction does not arise merely from the fact that a corporate party was incor-
porated by an act of Congress unless the United States owns more than one-half of the corpora-
tion’s capital stock.

D. PENDENT (SUPPLEMENTAL) JURISDICTION OVER STATE CLAIMS

1. Pendent Claims
If a plaintiff has both federal and state claims, the federal court has discretion to exercise
pendent jurisdiction over the claim based on state law if the two claims “derive from a
common nucleus of operative fact” and are such that a plaintiff “would ordinarily be
expected to try them all in one judicial proceeding.” Pendent jurisdiction, along with ancil-
lary jurisdiction, is now codified under the name “supplemental jurisdiction.”

a. Effect of Dismissal of Federal Claim on Pendent Claim

The court may exercise pendent jurisdiction over the state claim even if the federal
claim is dismissed on the merits. However, the state claim should probably also be
dismissed without prejudice if the federal claim is dismissed before trial.

2. Pendent Parties
Pendent parties jurisdiction can arise in cases in which (i) the plaintiff sues more than one
defendant, (ii) there is federal jurisdiction over the claim against one defendant, and (iii) the
claim against the second defendant does not invoke federal question or diversity of citizenship
jurisdiction. The claim against the second defendant might invoke supplemental jurisdiction
if it arises from the same nucleus of common fact as the claim against the defendant. Pendent
parties jurisdiction can also arise when multiple plaintiffs assert claims against one defen-
dant. Here, assuming again the second plaintiff’s claim is derived from the same nucleus of
fact, the second plaintiff might invoke supplemental jurisdiction to support a state law claim
in a federal question case.

E. SPECIFIC STATUTORY GRANTS

There is no amount in controversy requirement in federal question cases (with the limited exception
for cases brought against private parties under the Consumer Product Safety Act). Jurisdiction of
 C CM R CONVISER MINI REVIEW 11.

the federal courts is exclusive of the state courts in: (i) bankruptcy proceedings; (ii) patent and
copyright cases; (iii) many cases where the United States is involved; (iv) cases where consuls and
vice-consuls are sued as defendants; (v) antitrust cases; (vi) actions against foreign states removed
from state courts to federal court; (vii) postal matters; (viii) Internal Revenue Service cases; (ix)
Securities Exchange Act cases; and (x) admiralty cases (only in limitation of liability proceedings
and maritime actions in rem).

IV. VENUE

A. SUBJECT MATTER JURISDICTION DISTINGUISHED

Subject matter jurisdiction is the power of the court to adjudicate the matter before it. Venue
relates to the proper district in which to bring the action. Subject matter jurisdiction is a question
of power or authority; venue is a question of geography. Subject matter jurisdiction cannot be
conferred by agreement; venue can be. A court can have subject matter jurisdiction without
having proper venue.

B. GENERAL RULES
Venue in civil actions in the federal courts is proper in:

1. A judicial district where any defendant resides, if all defendants reside in the same state;

2. A judicial district in which a substantial part of the events or omissions giving rise to the
claim occurred, or a substantial part of property that is the subject of the action is situated;
or

3. If there is no district anywhere in the United States that satisfies 1. or 2., a judicial district in
which any defendant is subject to personal jurisdiction with respect to such action.

C. RESIDENCE

1. Individuals
For venue purposes, an individual, including an alien lawfully admitted for permanent
residence in the United States, resides in the judicial district in which he is domiciled.

2. Business Entities
An entity with the capacity to sue and be sued in its common name under applicable law,
whether or not incorporated, is deemed to reside in any judicial district in which it is subject
to the court’s personal jurisdiction with respect to the civil action in question.

3. Nonresident of United States

A defendant who is not a resident of the United States—whether a U.S. citizen or alien—may
be sued in any judicial district. The joinder of such a defendant, however, is disregarded in
determining where the action may be brought with respect to any other defendants.
 12. CIVIL PROCEDURE

D. IMPROPER VENUE MAY BE WAIVED

Unlike jurisdiction over the subject matter, venue may be waived by the parties. Venue is consid-
ered to be waived unless timely objection is made to the improper venue.

E. TRANSFER
If venue is proper, the court may nonetheless transfer the case for the convenience of the parties
or witnesses to any court where it could have originally been filed (meaning that the trans-
feree forum must have subject matter jurisdiction, personal jurisdiction over the defendants, and
venue must be proper). Alternatively, all parties may consent to transfer to a particular district. If
original venue is improper, transfer (to a district court that has subject matter and in personam
jurisdiction and is a proper venue) is more appropriate than dismissal except in extraordinary
circumstances. The standard for transfer in such a case is in “the interest of justice.” The court
does not have to have personal jurisdiction to transfer.

F. LAW APPLICABLE UPON TRANSFER

If original venue was proper, apply the law of the state in which the transferor court sits.
If original venue was improper, apply the law of the state in which the transferee court sits.

CCM R      
Exam Tip Note that the law of the transferor court applies even where the plaintiff, having
chosen an inconvenient (but proper) venue in the first place, later seeks a transfer for convenience.

V. REMOVAL JURISDICTION

A. ORIGINAL JURISDICTION NECESSARY

An action originally filed in a state court may be removed by a defendant to federal court if: (i)
the case could have originally been filed in a federal court; and (ii) for cases removed on the basis
of diversity, no defendant is a citizen of the state where the action is filed. The prevailing rule is
that jurisdiction is tested as of the date of removal.

1. Federal Defense Insufficient

A defendant cannot remove on the basis that he has a defense grounded in federal law, since the
existence of a federal defense is insufficient to confer original federal question jurisdiction.

2. State Court Need Not Have Had Jurisdiction

Even when the state court has no jurisdiction because the action is exclusively federal, the
federal court may hear and decide the case under its removal jurisdiction.

B. ONLY DEFENDANTS MAY REMOVE

Only defendants can exercise the right of removal. If there is more than one defendant, all defen-
dants who have been properly joined and served must join in the petition for removal.

C. VENUE
Venue lies in the federal district court “embracing the place where such [state] action is pending.”
 C CM R CONVISER MINI REVIEW 13.

D. DEFENDANT MAY REMOVE FEDERAL QUESTION CLAIM

If a case filed in state court contains a claim that would arise under federal law, and it is joined
with state law claims that do not invoke diversity or supplemental jurisdiction, the entire case can
be removed to federal court. The federal court, however, must then sever and remand the state law
claims to state court. Only those defendants against whom a federal claim is asserted are required
to join in the removal.

E. DISMISSAL OF NONDIVERSE PARTY ALLOWS REMOVAL

If no federal question is involved and diversity does not exist because a party is a co-citizen of an
opposing party, removal will be permitted if the nondiverse parties are thereafter dismissed from
the action and there is complete diversity between the remaining parties, subject to the limitations
discussed below.

1. Limitations on Removal in Diversity of Citizenship Cases

When jurisdiction of the federal court is based on diversity and one of the defendants is a
citizen of the state in which the state action was brought, the action is not removable. Also,
a case may not be removed on the basis of diversity jurisdiction more than one year after it
was commenced in state court unless the district court finds that the plaintiff has acted in
bad faith (e.g., by intentionally failing to disclose the true amount in controversy) in order to
prevent a defendant from removing the action.

F. PROCEDURE FOR REMOVAL

A defendant seeking removal must file a notice of removal in the federal district court in the district
and division within which the action is pending. A copy of the notice should be sent to the other
parties and to the state court. Once this is done, the state court can no longer deal with the case.

1. Allegation of Amount in Controversy

If removal is based on diversity, and the plaintiff is seeking nonmonetary relief or is not
required to state an amount in controversy, or recovery may be in excess of the damages
stated, the defendant may state that the amount in controversy exceeds $75,000, and the
district court may keep the case if it finds, by a preponderance of the evidence, that the
amount does exceed $75,000.

2. Time
The notice of removal must be filed within 30 days after defendant receives notice, through
service of a summons, pleading, amended pleading, etc., that the case is or has become remov-
able. If defendants are served at different times, and a later served defendant initiates timely
removal, the earlier served defendant may join in the removal even though his 30 day period
for initiating removal may have expired.

3. Remand
The plaintiff can file a motion to have the case remanded to the state court. A case will be
remanded if there is no federal jurisdiction. The federal court has discretion to remand a
case to state court once all federal claims have been resolved, leaving only state claims over
which there is no diversity jurisdiction.
14. CIVIL PROCEDURE

CMR
SUMMARY REMOVAL ISSUES
CHART

The key points to remember are:

❏ A federal court must have jurisdiction over the case; jurisdiction need not have
been proper in the state court.

❏ Removal is to the federal district court whose territory encompasses the state court.

❏ Only defendants can remove; all defendants generally must join in the removal.
(When state law and federal question claims are mixed, only those defendants who
have a federal question claim asserted against them must join.)

❏ A case based on diversity may not be removed if any defendant is a citizen of the
forum state.

❏ Notice of removal must be filed within 30 days of the date defendant receives a copy
of the initial pleading.

❏ If a case later becomes removable (as by dismissal of a nondiverse defendant), the

case may be removed within 30 days of the date it becomes removable, but (for
diversity cases) not more than one year after it was brought in state court.

❏ The one year rule may be disregarded if the plaintiff has acted in bad faith to defeat
removal.

❏ If the case contains a claim arising under federal law that is joined with state law
claims, defendant may remove the whole case. However, the federal court must sever
and remand any state law claims to state court.

VI. ABSTENTION

Unless abstention applies, nothing prohibits a federal court from hearing a case that is pending in state
court.

A. GROUNDS
A federal court will abstain and require a litigant to seek relief in a state court (while retaining
jurisdiction):
1. If the state law is unclear and could be interpreted to avoid the federal constitutional
question; or
2. If there is a state administrative regulatory plan that would be disturbed by the federal court
taking the case.
 C CM R CONVISER MINI REVIEW 15.

B. PROCEDURE
After the federal court abstains, the litigants must present their issues to the state court in light
of their federal contentions. The federal court will ordinarily stay the federal action rather than
dismiss it.

C. FEDERAL INTERVENTION
Federal intervention on constitutional grounds may occur if the federal plaintiff can demonstrate:
(i) great and immediate irreparable injury; (ii) bad faith in the prosecution of state action; or (iii)
harassment or other unusual circumstances calling for federal equitable relief.