Subject Matter Jurisdiction

Federal Question

1. Article III section 2 provides that federal courts may hear cases arising under federal law.

2. 28 USC 1331: The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.

   1. Well-pleaded complaint rule (Mottley): For a case to arise under federal law, federal question should arise in the plaintiff's well-pleaded complaint. The federal issue should be the a necessary, substantial element in the original complaint, not merely marginal. (Substantial rule). It should also be in the original complaint rather than in an anticipated defense or a counterclaim.

      1. Rationale of Mottley:

         1. it serves as a sorting function, and permits the sorting to occur at the start of the lawsuit before the parties and court have invested much time.

         2. It promotes efficiency;

         3. jurisdictional issues should not rely on contingency;

         4. it promotes federalism and division of authority.

   2. Smith exception: even if federal law does not create the right to sue, the claim satisfies arising under jurisdiction if the P, in order to establish a state law claim, must prove a proposition of federal law (that is, the federal issue is embedded in a state claim).

   3. However, the need to resolve a federal question to decide a state law claim will not always support arising-under jurisdiction. The embedded federal issue must be substantial to support jurisdiction. Grable three part test: the state law claim (1) necessarily raises a federal issue; (2) actually disputed and substantial; (3) which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities.

3. Bound by determination: Parties who appear, challenge the subject matter jurisdiction of a federal court, and lose are bound by that determination; they may not thereafter challenge the judgment in a second action.

4. Settlement: Parties can ask the court to include the settlement in a consent decree in order to preserve federal jurisdiction should a breach of settlement occurs.

5. Declaratory relief: whether or not a declaratory relief arises under federal law depends on the underlying claim. If the underlying claim arises under federal law, then the declaratory relief is under federal law. The declaratory relief statute cannot, in and of itself, provide a basis for federal question jurisdiction.

6. Rationale for not considering counterclaims:

   1. For permissive counterclaims, D can always bring the permissive counterclaim in another lawsuit

   2. For compulsory counterclaims, D should have brought the lawsuit first

Diversity

1. 28 USC 1332: (a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between--

   1. (1) citizens of different States;

   2. (2) citizens of a State and citizens or subjects of a foreign state, except that the district courts shall not have original jurisdiction under this subsection of an action between citizens of a State and citizens or subjects of a foreign state who are lawfully admitted for permanent residence in the United States and are domiciled in the same State;

   3. (3) citizens of different States and in which citizens or subjects of a foreign state are additional parties (must have citizens of different U.S. states on different sides of the v.) ; and

   4. (4) a foreign state, defined in section 1603(a) of this title, as plaintiff and citizens of a State or of different States.

2. State citizenship in diversity cases:

   1. The citizenship of a person is determined by the domicile, the place he resided in with the intent to remain...

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