1. 1 Agenda for 25th Class Name plates out Introduction to Diversity Jurisdiction Discussion of mediation & court visit Settlement (continued) Fees Next class: Diversity Jurisdiction –28 USC 1332(a)-(c) –Yeazell pp. 207-19 excluding materials on complex litigation E.g. excluding pp. 211ff Notes 5-9 and pp. 219ff Notes 1-2 –Questions to think about / Writing Assignment Pp. 209 Q1, 3b, 4, Suppose P is a citizen of Turkey, and D is a citizen of Egypt admitted to permanent residence in the US. P sues D in federal district court to collect a $100,000 debt. Is there federal jurisdiction? –Be sure to consider both 28 USC 1332(a) and the US Constitution, Article III, Section 2

2. 2 Mock Mediation & Court Visit

3. 3 Diversity Jurisdiction I Under Article III, sec 2, “The Judicial Power shall extend … to Controversies …. between Citizens of different States …. and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.” Concerned that judges and juries would be biased against people from out of state Federal judges and Congress don’t like, so cut back 28 USC 1332(a) –Similar to constitutional grant, except amount in controversy must be over $75,000 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

4. 4 Diversity Jurisdiction II Corporations are citizens of two places –State of incorporation –State of principal place of business (corporate headquarters) (PPB) –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…. Also diversity jurisdiction if –Suit between citizen of US and foreigner (citizen or subject of foreign state). 28 USC 1332(a)(2) CA v. France; MA v Germany, etc. Called “alienage jurisdiction” –Alien admitted to US for permanent residence deemed a 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

5. 5 Diversity Jurisdiction III If no diversity, can, of course, still get federal jurisdiction through federal question 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 Must still show personal jurisdiction & venue

6. 6 Economic Model of Settlement Plaintiff and defendant estimate their expected recovery/liability –Plaintiff minimum acceptable offer: probability x damages – litigation costs –Defendant maximum acceptable offer: probability x damages + litigation costs If plaintiff’s minimum acceptable offer is higher than defendant’s maximum offer, then settlement is impossible If plaintiff’s minimum acceptable offer is lower than defendant’s maximum offer, then settlement is possible –But still might not happen, if parties engage in strategic behavior and fail to reach agreement an exact settlement amount Settlement problems continued

7. 7 Fees Shifting Costs –Usually pretty minor– filing fees, court reporter, non-expert witness fees –According to statute, 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 Fee shifting problems