Tackling the most important topics of law school, Part 10a: Federal subject-matter jurisdiction, the doors into federal court

October 2, 2013

Law School 101a(Editor’s note: Over the next ten weeks, we’ll be covering some of the most prominent legal concepts taught in law school to help students faced with these topics, whether for the first time or as part of a review, better comprehend them.)

In this final topic, we’ll be looking back at civil procedure.

The previous topic on the subject covered in this series was Rule 12(b)(6), which allows for a motion to dismiss a complaint for failure to state a claim.

However, the civil procedure topic covered this week is also part of Rule 12(b), but instead of section (6), this week’s topic – federal jurisdiction – looks to sections (1) and (2).

Section (1) allows for a motion to dismiss for “lack of subject-matter jurisdiction,” while section (2) allows for a dismissal motion for “lack of personal jurisdiction.”  The subject matter encompassed by section (1) will be covered in Part A of this topic, while section (2) will be left for Part B.

So, what does “subject-matter jurisdiction” mean?

The most basic definition, and the one that best distinguishes it from personal jurisdiction, is the authority of a court to hear a particular type of case or cases on a specific type of subject matter.  Personal jurisdiction, by contrast, is the authority of a court to enforce its decisions on the parties to a lawsuit.

Federal courts are courts of “limited jurisdiction” – meaning that they may only hear certain types of cases as provided by Congress or as identified in the Constitution.  In other words, you can’t get into federal court unless one of two different “doors” is used.

The first of these “doors” is “federal question” jurisdiction.  This type of subject-matter jurisdiction can be invoked in “cases or controversies arising under the Constitution and laws of the United States.”  That is, the lawsuit’s claims must be based on federal law or the Constitution.

There is a presumption against federal jurisdiction, and to establish that it exists, the complaint must state that the action arises under the Constitution or federal law, and then must detail which laws or section of the Constitution it arises under.  This is known as the “well-pleaded complaint rule.”

It’s important to note that the complaint’s cause or causes of action themselves must arise under federal law; it is insufficient to base this jurisdiction in the complaint on a defendant’s anticipated defense arising under federal law.  The original cause of action must “arise under,” or there is no federal question jurisdiction.

Here are some examples of cases “arising under” federal law or the Constitution:

  • A lawsuit filed under 42 U.S.C. § 1983 for violation of a federally-protected right by a state actor.
  • An individual sues an apartment complex for refusing to rent to him because of his religion (which is prohibited under the Fair Housing Act).
  • A worker files a lawsuit against his employer claiming a failure to pay overtime as required by the federal Fair Labor Standards Act.

Some of those examples are claims that may also “arise under” some state laws.  So what happens then?

The state law claims may be heard in federal court along with the federal law claims, as long as the state law claims are so related to the federal ones “that they form part of the same case or controversy.”  For a federal court to exercise supplemental jurisdiction, the Supreme Court has required that both the federal and state claims must arise “from the same set of operative facts” (i.e. the same facts that produced the federal claim must have also produced any state law claims).

And that’s federal question jurisdiction in a nutshell.  The other “door” into federal court is “diversity” jurisdiction.

This type of subject-matter jurisdiction requires that the opposing parties are citizens of different states and the amount in controversy exceeds $75,000 exclusive of interests and costs.  “Citizenship” in diversity jurisdiction means both the physical presence in a particular state and the intent to reside there indefinitely.

Those two requirements may seem simple enough at first blush, but each can get rather complex in its own respective fashion.

First, the diverse citizenship requirement is clear-cut when there is only one plaintiff and one defendant and each is from a different state.  But what happens when there are two or more plaintiffs and/or defendants, and one of the plaintiffs is from the same state as one of the defendants?

In this scenario, diversity jurisdiction cannot be invoked.  There must be “perfect diversity” – meaning, all of the plaintiffs must be citizens of different states than all of the defendants.

What happens if one of the parties is a corporation that operates across state lines?

For diversity purposes, corporations have what is referred to as “dual citizenship:” the corporation is considered to be a citizen of both the state of its incorporation and the state in which the corporation has its chief place of business.  It is unusual for a corporation to have more than one “chief place of business.”

As for the minimum “amount in controversy:” for diversity jurisdiction to attach, more than $75,000 in damages, exclusive of interests and costs, must be pleaded in the complaint.

Again, this is easy enough when there is only one plaintiff and one defendant.  But if there is more than one plaintiff or defendant, it gets a bit trickier: even if all of the plaintiffs’ claims together add up to over $75,000, diversity jurisdiction is not established unless an individual plaintiff’s claims against an individual defendant’s claims are in excess of $75,000.  In addition, that individual plaintiff’s claims may be aggregated together to add up to an amount in excess of $75,000, but those claims must all arise “from the same set of operative facts.”

If there are several plaintiffs, but only one has claims that aggregate more than $75,000, the Supreme Court ruled in 2005’s Exxon Mobil Corp. v. Allapattah Services, Inc that a federal court may exercise supplemental jurisdiction over the claims of those other plaintiffs – again, only if those claims arise from the same set of operative facts as the claims of the plaintiff with over $75,000 in claims.

And that about wraps up our section on federal diversity jurisdiction.  Part B will cover personal jurisdiction, so stay tuned for it – our final installment in this series!

If you have any specific questions about subject-matter jurisdiction, feel free to post them in the comments below!