1. Agenda for 16th Class Admin Name plates Handouts Slides
Supplemental Jurisdiction in 7 Steps
Fees
Problems
A Civil Action
Joinder
Class Actions
Subject matter jurisdiction
Introduction to Subject Matter Jurisdiction
Federal question jurisdiction
Diversity Jurisdiction
Supplemental Jurisdiction

2. Assignment for Next Class I
Federal Question Jurisdiction
US Constitution Article III
28 USC 1331, 1338, 1441(a)-(b)
FRCP 8(a)(1), 12(b)(1), 12(h)(3)
Yeazell pp
4 Blackboard Questions on Federal Question Jurisdiction
Questions to think about
Summarize Louisville. (WG1)
Your summary should include the answer to Yeazell. P. 213 Q1
Questions on the next slide
Optional -- Glannon Chapter 4

3. Assignment for Next Class II
Under the FRCP as it exists today, answer the following questions about Louisville
If plaintiffs had drafted a “well pleaded complaint,” what would have been the key allegations of that complaint? (WG2&3)
If plaintiffs had drafted a well-pleaded complaint and the case had not been dismissed for lack of subject matter jurisdiction, what pleading would defendant have filed in response? What would have been the most important part of that pleading? (WG4)
How would plaintiffs have raised the unconstitutionality the Act of Congress which the defendant alleges prohibited giving the passes that the railroad gave the Mottleys? (WG5)
If defendant’s answer had admitted that it had given passes to the Mottleys and had not honored them, but asserted as an affirmative defense that the passes were invalidated by an Act of Congress, what motion could the plaintiff have made in order to get judgment without discovery or trial? (WG6)
Yeazell p. 213 Q. 3 (WG7)

4. Assignment for Next Class III
Diversity Jurisdiction
28 USC 1332
Focus on 1332(a)
1332(d) is the Class Action Fairness Act (2005)
28 USC 1369 (skim)
Yeazell p. 220.
Optional. Glannon Ch 5
Supplemental Jurisdiction
Read 28 USC 1367 very carefully
Supplemental Jurisdiction in 7 Steps (handout)
4 Blackboard Questions on Supplemental Jurisdiction
Supplemental Jurisdiction Questions 5-16 on pp. 4-5 of handout
5 (WG1), 6 (WG2), 7 (WG3), 8 (WG4), 9 (WG5), 10 (WG6), 11 (WG7), 12 (WG1&2), 13 (WG3&4), 14 (WG5), 15 (WG6), 16 (WG7)
Blackboard Questions on Subject Matter Jurisdiction
Need not do by Friday, but should do eventually
Going through cases discussed so far in class and figuring out basis of SMJ
Will not review in class, but highly recommended
Optional
Glannon. Ch. 16, 17

5. Mid-Semester Feedback
Liked
Discussion
Organization & structure
Slides
Writing assignments
Practice exams
Questions in advance
Suggestions
Less writing
Post slides/assignments earlier
More practice exams, including multiple choice
More lecture / less rushed

6. Costs & Fees
Costs
Usually pretty minor– filing fees, court reporter, non-expert witness fees
According to 28 USC 1920 always paid by losing party
Fees
Lawyers fees
Usually large
American rule: each party pays own attorneys’ fees
British rule. Loser pays
If plaintiff wins, then defendant pays plaintiff’s lawyer’s fees
If defendant wins, then plaintiff pays defendant’s lawyers fees
Fee shifting always subject to judicial inquiry into reasonableness
Expenses
Expert witnesses, paralegal & secretarial time, photocopying, etc.
Usually paid by client along with lawyers’ fees
Not generally shifted under British rule
Usually subtracted from judgment or settlement before calculating lawyer’s fee percentage under contingent fee
Fee shifting problems

7. Fees & Costs II 3 ways lawyers are paid
Hourly fee. (most common for defense)
Contingent fee (most common for plaintiffs
Lawyer gets nothing if loses; gets percentage (now usually 40%) of any amount the plaintiff wins after subtracting expenses
Salary. (most common for government or public interest lawyers)
When party who hired lawyer on contingent fee or salary is entitled to lawyer’s fees, then courts estimate hourly rate (lodestar method)
Fees and costs are usually folded into settlement amount
But, if not mentioned specifically in settlement agreement, then prevailing party can still claim costs
Fees in A Civil Action
Given the settlement, how did they calculate how much Schlichtmann and the other lawyers received?

8. Joinder
Rules start from assumption that suits may involve a single plaintiff suing a single defendant on a single claim
Multiple parties and claims are allowed ONLY if explicitly permitted by a rule
Proper joinder does NOT mean case properly in court, still need:
Personal jurisdiction
Subject matter jurisdiction
Venue
Note that joinder expands possible pleadings. FRCP 7
3rd party complaint
Answer to counter claim
Answer to cross-claim
Answer to 3rd party complaint

9. Joinder of Claims Joinder of claims always allowed. FRCP 18(a)
Plaintiff
Defendant
Claim 2
Joinder of claims always allowed. FRCP 18(a)
But judge can, in discretion, always sever.
Joinder is compulsory, if arises out of same transaction or occurrence
Not in FRCP, but part of res judicata
If related claim is brought in later action, defendant can have the case dismissed by raising the defense of res judicata

10. Counterclaims (FRCP 13(a) &(b))
Original Claim
Original plaintiff
Original defendant
Counterclaim
Counterclaims are always allowed. FRCP 13(a) and (b)
Counterclaims are “compulsory” if they arise out of the same “transaction or occurrence” as the original claim. FRCP 13(a)
If compulsory counterclaim is not asserted, cannot be asserted in separate suit

11. Joinder of Parties
Defendant 1
Plaintiff 1
Claim 1
Plaintiff
Claim 1
Defendant
Claim 2
Claim 2
Plaintiff 2
Defendant 2
Joinder of parties allowed, if claims arise out of the same transaction or occurrence AND there is a question of law or fact in common. FRCP 20
FRCP19 addresses compulsory joinder of “necessary parties,” but not part of this course

12. Crossclaims
Defendant 1
Original claim 1
Original plaintiff
Crossclaim
Original claim 2
Defendant 2
Crossclaims are allowed only if they arise out of the same transaction or occurrence as the original action. FRCP 13(g)
Crossclaimant can join unrelated claim(s). FRCP 18(a)

13. 3rd Party Claims
Original claim
Original plaintiff
Original Defendant
3rd party plaintiff
3rd party claim
3rd party defendant
3rd party claims allowed only if 3rd party plaintiff claims that 3rd party defendant is liable to 3rd party plaintiff for some or all of liability that original defendant may owe to original plaintiff. FRCP 14(a)(1)
Indemnity – Contract in which one party (e.g. parts supplier) agrees to reimburse another party (e.g. final manufacturer) for liaiblity (e.g. liability final manufacturer may incur to consumer)
Contribution – Part of tort law which allows jointly liable defendants to sue one another to apportion liability
Different from cross-claim, because 3rd party defendant wasn’t sued by original plaintiff

14. 3rd Party Claims (cont.)
Original claim
Original plaintiff
Original Defendant
3rd party plaintiff
3rd party claim
3rd party defendant
3rd party plaintiff may join any claims it has against the 3rd party defendant. FRCP 18(a)
3rd party defendant can assert any counterclaim against 3rd party plaintiff. 14(a)(2)(B)
3rd party defendant can assert claim against original plaintiff, if it arises out of the same transaction or occurrence as the plaintiff’s claim against third-party plaintiff. 14(a)(2)(D)
Plaintiff may assert claims against 3rd party defendant that arise out of the same transaction or occurrence as the original claim
Then 3rd party defendant may then assert any counterclaims. FRCP 14(a)(3)
Including permissive counterclaims, not part of same transaction or occ.

15. Joinder Questions
Briefly summarize Price
Pp. 807ff. Qs 2b, 2c, 3b

16. Class Actions I Class Action is super joinder device
Way of joining lots of plaintiffs (or defendants)
Single lawyer represents all
Consent from each plaintiff not required
“Class representative” is “named plaintiff”
Usually chosen by class lawyer
Advantages
Low cost as compared to lots of individual suits
Allows case to be brought where each plaintiff has stake that is too small to justify individual suit
But where, in aggregate, significant wrong has been done
Disadvantages
Class lawyer does not always act in interest of class
May be more interested in fees for self than in relief for class
Large magnitude of potential liability may “coerce” defendants into settling weak claims

17. Class Actions II Class actions must be “certified”
Plaintiff’s lawyer first brings regular (non-class-action) case on behalf of named plaintiff(s)
Plaintiff’s lawyer then petitions judge to certify class
Prerequisites for class action
1. Numerosity. Class is so large that joinder (under Rule 20) is not practical. 23(a)(1)
2. Commonality. There are questions of law or fact common to all class members. 23(a)(2)
3. Typicality. The class representative(s) have claims which are typical. 23(a)(3)
4. Adequacy. The class representative(s) can adequately represent class. 23(a)(4)
Technically about parties.
In reality, about class lawyers.
Also, no conflicts of interest.
5. Case must fit into one of 23(b) categories
See next page

18. Class Actions III 23(b) categories (b)(3). Primarily for money damages
E.g. mass tort
Common issues must “predominate”
Class action must be “superior to other available methods for fairly and efficiently adjudicating the controversy”
(b)(2). Injunctive or declaratory relief appropriate for whole class
E.g. desegregation, prison conditions
(b)(1). Risk of inconsistent litigation
E.g. limited fund or conflicting injunctions
Not very common
Interlocutory appeal of certification decision. 23(f)
Grant or denial
Discretionary with court of appeals

19. Class Actions IV Notice and Opt-Out. 23(c)(2)
Only (b)(3) requires “best notice that is practical under the circumstances”
Only (b)(3) requires the class members be given the opportunity to “opt out”
Settlement with court approval only. 23(e)

20. Class Action Qs Yeazell Pp. 865ff. Qs 1, 2 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?

21. 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)

22. 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 Federal question jurisdiction
If jurisdiction is exclusive, statute will be explicit
28 USC “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.

23. 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
Law clerks are often asked to check jurisdiction in every case when filed
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

24. 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 & Nashvill Railroad v Mottley
Not sufficient that federal issue is a defense
Defense would be raised in answer, not complaint

25. 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)

26. Subject Matter Jurisdiction in State Court
A 2nd meaning of subject matter jurisdiction is the jurisdiction of a specialized court
E.g. jurisdiction of bankruptcy court, tax court, probate court, small claims court
2nd 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”

27. 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….

28. 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

29. 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

30. 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, 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

31. 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. 232ff
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 – Friday’s class
Removal
All defendants must ordinarily consent to removal. 1446(b)(2)(A)