Learning Outcomes
This article reviews the fundamental principles of jurisdiction essential for the MBE Civil Procedure section. It covers the distinct concepts of Personal Jurisdiction (a court's power over the parties) and Subject Matter Jurisdiction (a court's power over the type of case). After reading this article, you will be able to differentiate between these jurisdictional types, analyze the requirements for establishing each, including constitutional limits on personal jurisdiction (minimum contacts) and statutory bases for federal subject matter jurisdiction (diversity and federal question), and apply these rules to MBE fact patterns.
MBE Syllabus
For the MBE, you are required to understand the principles governing a court's power over both the parties (personal jurisdiction) and the type of case (subject matter jurisdiction). This involves analyzing constitutional limitations, statutory grants of authority, and related doctrines like venue, service, removal, and supplemental jurisdiction. You should be prepared to:
- Distinguish personal jurisdiction (PJ) from subject matter jurisdiction (SMJ).
- Analyze the constitutional "minimum contacts" test for PJ (International Shoe).
- Identify traditional bases for PJ (domicile, presence, consent).
- Apply state long-arm statutes.
- Differentiate general and specific personal jurisdiction.
- Assess federal diversity jurisdiction requirements (complete diversity, amount in controversy).
- Assess federal question jurisdiction requirements ("arising under").
- Apply rules for supplemental jurisdiction.
- Apply rules for removal jurisdiction.
- Understand basic venue rules and transfer.
- Recognize constitutional notice requirements (Mullane).
- Understand the Erie doctrine's application in diversity cases.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
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For a federal court to exercise diversity jurisdiction, which requirement must generally be met?
- The claim must arise under federal law.
- The amount in controversy must exceed $75,000, and there must be complete diversity between opposing parties.
- The defendant must have minimum contacts with the forum state.
- At least one plaintiff must be diverse from at least one defendant.
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A defendant's purposeful availment of the forum state is most relevant to analyzing:
- Federal question jurisdiction.
- The amount in controversy for diversity jurisdiction.
- Constitutional limitations on personal jurisdiction.
- Venue.
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A state court action may generally be removed to federal court by the defendant if:
- The state court lacks personal jurisdiction over the defendant.
- The plaintiff consents to removal.
- The case could have originally been filed in federal court.
- The defendant asserts a federal defense.
Introduction
Before a court can validly adjudicate a dispute, it must have jurisdiction. Jurisdiction refers to the power of the court to hear a case and issue a binding judgment. For the MBE, you must understand two primary types of jurisdiction: Personal Jurisdiction (PJ), concerning the court's power over the specific parties (or property) involved, and Subject Matter Jurisdiction (SMJ), concerning the court's power over the type of claim being asserted. Federal courts must have both PJ and SMJ. State courts must have PJ; they typically have broad SMJ over most types of cases.
Personal Jurisdiction (PJ)
Personal jurisdiction refers to the court's ability to exercise authority over a particular defendant. The exercise of PJ must satisfy both statutory and constitutional requirements.
Statutory Analysis
First, a statute must exist that grants the court the power to assert jurisdiction over the defendant. In federal court, under FRCP 4(k)(1)(A), jurisdiction is typically established if the defendant could be subjected to the jurisdiction of a court of general jurisdiction in the state where the district court is located. This analysis usually involves applying the forum state's statutes. State statutes typically authorize jurisdiction based on:
- Traditional Bases:
- Presence: Service of process on the defendant while physically present within the forum state (Burnham).
- Domicile: The defendant is domiciled within the forum state.
- Consent: The defendant consents to jurisdiction (expressly, impliedly, or by voluntary appearance without timely objection).
- Long-Arm Statutes: These statutes allow courts to exercise jurisdiction over non-resident defendants based on specific contacts or activities within the state (e.g., transacting business, committing a tortious act).
Key Term: Personal Jurisdiction The court's power over a specific defendant or item of property, necessary for the court to issue an enforceable judgment against that defendant or affecting that property interest.
Key Term: Long Arm Statute A state law that permits a court to exercise personal jurisdiction over an out-of-state defendant based on specified contacts the defendant has with the forum state.
Constitutional Analysis
Even if a statute grants jurisdiction, the exercise of that jurisdiction must also satisfy the Due Process Clause of the Constitution. The modern constitutional analysis focuses on minimum contacts, relatedness, and fairness.
Minimum Contacts
The basis is the International Shoe test: Does the defendant have "such minimum contacts with the forum state that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice"? This requires analyzing:
- Purposeful Availment: The defendant must have purposefully availed itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws (Hanson v. Denckla). The contact cannot be accidental or the result of the unilateral activity of the plaintiff.
- Stream of Commerce: Placing an item in the stream of commerce, without more, is generally insufficient. Additional conduct indicating an intent to serve the forum state market is needed (Asahi, McIntyre).
- Internet: The level of interactivity of a website is relevant. Active websites conducting business usually support jurisdiction for related claims; passive websites providing information generally do not.
- Foreseeability: It must be foreseeable that the defendant’s activities make it potentially subject to suit in the forum state. The defendant must reasonably anticipate being haled into court there.
Key Term: Minimum Contacts The constitutional requirement under the Due Process Clause that a defendant have sufficient connections with the forum state before a court in that state may exercise personal jurisdiction over the defendant.
Relatedness
The relationship between the defendant's contacts with the forum and the plaintiff's claim determines whether specific or general jurisdiction applies.
- Specific Jurisdiction: Jurisdiction is based on the defendant's specific contacts with the forum state that gave rise to the claim. The claim must arise out of or relate to the defendant's forum contacts. If specific jurisdiction exists, the defendant can be sued in the forum only for claims related to those specific contacts.
- General Jurisdiction: Jurisdiction is based on the defendant being essentially "at home" in the forum state. This requires continuous and systematic contacts with the forum. If general jurisdiction exists, the defendant can be sued in the forum on any claim, even one unrelated to its forum contacts.
- Individuals: "At home" where domiciled.
- Corporations: "At home" where incorporated and where it has its principal place of business (Daimler, Goodyear). Merely doing substantial business in a state is not sufficient for general jurisdiction.
Key Term: Specific Jurisdiction Personal jurisdiction over a defendant that is based on the defendant's specific activities or contacts within the forum state, where the lawsuit arises out of or relates to those contacts.
Key Term: General Jurisdiction Personal jurisdiction over a defendant that allows a court to hear any claim against that defendant, regardless of where the claim arose, because the defendant's contacts with the forum state are so continuous and systematic as to render the defendant essentially "at home" there.
Fairness
If minimum contacts and relatedness are established (primarily for specific jurisdiction), the court must also consider whether exercising jurisdiction would be fair and reasonable. Factors include:
- Burden on the defendant.
- Forum state's interest in adjudicating the dispute.
- Plaintiff's interest in obtaining convenient and effective relief.
- Interstate judicial system's interest in efficient resolution.
- Shared interest of the states in furthering substantive social policies.
Constitutional Notice Requirement
Due process also requires that the defendant receive adequate notice of the action. Notice must be "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections" (Mullane v. Central Hanover Bank & Trust Co.). Service of process conforming to the Federal Rules or state rules generally satisfies this requirement. Publication notice is usually insufficient if the defendant's address is known or reasonably ascertainable.
Key Term: Notice The constitutional requirement that a defendant must be properly informed of a pending lawsuit through a method reasonably calculated to succeed, allowing them an opportunity to defend.
Worked Example 1.1
A company, incorporated and headquartered in Delaware, manufactures widgets and sells them nationwide through its website and through independent distributors. A resident of California purchased a widget directly from the company's website while in California. The widget malfunctioned and injured the California resident in California. The resident sues the company in federal court in California. The company has no offices or employees in California but makes numerous sales to California residents via its interactive website. Does the California court have personal jurisdiction over the company?
Answer: Yes, likely specific personal jurisdiction. The company purposefully availed itself of the California market by operating an interactive website through which it solicited and completed sales with California residents. The resident's claim arises directly from the purchase and use of a widget bought through this website contact with California. Exercising jurisdiction would likely be fair, considering California's interest in providing a forum for its injured resident and the company's deliberate engagement with the California market. General jurisdiction is unlikely as the company is "at home" in Delaware.
Subject Matter Jurisdiction (SMJ)
Subject matter jurisdiction refers to the court's power to hear the type of case being presented. State courts generally have broad SMJ, capable of hearing most types of claims. Federal courts, however, are courts of limited SMJ and can only hear cases authorized by the Constitution and federal statutes. The two main bases for federal SMJ are Diversity Jurisdiction and Federal Question Jurisdiction. SMJ cannot be waived by the parties and can be challenged at any stage of the litigation, even on appeal.
Key Term: Subject Matter Jurisdiction The power of a court to adjudicate a particular type of case or controversy. Federal courts have limited subject matter jurisdiction, primarily based on diversity of citizenship or the presence of a federal question.
Diversity Jurisdiction (28 U.S.C. § 1332)
Federal courts have SMJ over cases where (1) there is complete diversity of citizenship between the plaintiffs and defendants, and (2) the amount in controversy exceeds $75,000, exclusive of interest and costs.
- Complete Diversity: No plaintiff can be a citizen of the same state as any defendant. Citizenship for individuals is determined by domicile (residence + intent to remain indefinitely). Citizenship for corporations is the state(s) of incorporation AND the state where it has its principal place of business (nerve center). Unincorporated associations (like partnerships, LLCs) are citizens of every state where their members/partners are citizens. Diversity must exist at the time the suit is filed.
- Amount in Controversy: The plaintiff's good faith claim must exceed $75,000. Aggregation rules apply:
- One plaintiff can aggregate all claims against one defendant.
- One plaintiff cannot aggregate claims against multiple defendants unless they are jointly liable.
- Multiple plaintiffs generally cannot aggregate claims against one defendant unless enforcing a single title or right (e.g., joint property interest).
Key Term: Diversity Jurisdiction Federal court subject matter jurisdiction based on the parties being citizens of different states (or a citizen of a state and a citizen of a foreign country), provided the amount in controversy exceeds $75,000. Requires complete diversity.
Federal Question Jurisdiction (28 U.S.C. § 1331)
Federal courts have SMJ over cases "arising under the Constitution, laws, or treaties of the United States." The determination is made based on the plaintiff's well-pleaded complaint. It is not sufficient that the defendant raises a federal defense or that the case involves federal issues peripherally. The plaintiff's cause of action itself must be based on federal law. There is no amount in controversy requirement for federal question jurisdiction.
Key Term: Federal Question Jurisdiction Federal court subject matter jurisdiction over cases involving claims that arise under the U.S. Constitution, federal statutes, or treaties. Determined by the plaintiff's well-pleaded complaint.
Supplemental Jurisdiction (28 U.S.C. § 1367)
Allows a federal court with SMJ over one claim (the "anchor" claim) to hear additional claims over which it would not independently have SMJ, provided the additional claims arise from the same common nucleus of operative fact as the anchor claim (i.e., part of the same constitutional "case").
- Limitations in Diversity Cases: Crucially, in cases based solely based on diversity jurisdiction, supplemental jurisdiction cannot be used for claims by plaintiffs against persons joined under Rules 14 (impleader), 19 (compulsory joinder), 20 (permissive joinder), or 24 (intervention), or for claims by persons joined as plaintiffs under Rule 19 or intervening as plaintiffs under Rule 24, if exercising such jurisdiction would destroy complete diversity.
Key Term: Supplemental Jurisdiction Authority of a federal court to hear additional claims substantially related to an original claim over which the court has subject matter jurisdiction, even if the additional claims lack an independent basis for federal jurisdiction. Subject to statutory limitations, especially in diversity cases.
Removal Jurisdiction (28 U.S.C. § 1441)
Allows a defendant to move a case from state court to federal court if the case could have originally been filed in federal court (i.e., federal SMJ exists).
- Limitations:
- Generally, all defendants must agree to remove.
- In diversity cases only, removal is improper if any defendant is a citizen of the forum state (the "in-state defendant rule").
- Removal must typically occur within 30 days of the defendant receiving the initial pleading or summons.
- For diversity cases, removal is generally barred if more than one year has passed since the action commenced in state court.
Key Term: Removal Jurisdiction The right of a defendant to move a lawsuit filed in state court to the federal district court for the district where the state court action is pending, provided the federal court would have had original subject matter jurisdiction.
The Erie Doctrine
In diversity cases, federal courts must apply state substantive law (including state conflict of laws rules) but federal procedural law. Determining whether a law is substantive or procedural involves analyzing whether it affects substantive rights or is merely a matter of judicial administration, considering outcome determination, balancing state and federal interests, and avoiding forum shopping (Erie R.R. v. Tompkins). However, if a valid Federal Rule of Civil Procedure is on point, it applies even if it conflicts with state law (Hanna v. Plumer).
Key Term: Erie Doctrine The principle requiring federal courts exercising diversity jurisdiction to apply state substantive law and federal procedural law. Aims to prevent forum shopping and ensure consistent outcomes.
Worked Example 1.2
Plaintiff (Citizen of State A) sues Defendant (Citizen of State B) in federal court for State A, asserting a state-law breach of contract claim for 40,000. Does the federal court have subject matter jurisdiction over the entire case?
Answer: Yes. The court has federal question jurisdiction over the claim arising under the federal statute (§ 1331). The state-law contract claim does not meet the amount in controversy for diversity jurisdiction. However, assuming the state claim arises from the same common nucleus of operative fact as the federal claim, the court can exercise supplemental jurisdiction (§ 1367) over the state-law claim. The limitations on supplemental jurisdiction in diversity cases do not apply because the anchor claim is based on federal question jurisdiction.
Key Point Checklist
This article has covered the following key knowledge points:
- Jurisdiction requires both power over the parties/property (PJ) and the type of case (SMJ).
- PJ analysis involves statutory authority (traditional bases, long-arm statutes) and constitutional limits (minimum contacts, fairness, notice).
- Minimum contacts require purposeful availment and foreseeability.
- Relatedness distinguishes specific jurisdiction (claim arises from contacts) from general jurisdiction (defendant "at home").
- Notice must be reasonably calculated (Mullane).
- Federal SMJ primarily relies on Diversity (§ 1332) or Federal Question (§ 1331).
- Diversity requires complete diversity and amount in controversy > $75,000.
- Federal question jurisdiction requires the claim to arise under federal law (well-pleaded complaint rule).
- Supplemental jurisdiction (§ 1367) allows related claims lacking independent SMJ, but is limited in diversity cases.
- Removal (§ 1441) allows defendants to move cases from state to federal court if original federal SMJ exists, subject to limitations (e.g., in-state defendant rule in diversity cases).
- The Erie doctrine governs the choice between state substantive law and federal procedural law in diversity cases.
Key Terms and Concepts
- Personal Jurisdiction
- Long Arm Statute
- Minimum Contacts
- Specific Jurisdiction
- General Jurisdiction
- Notice
- Subject Matter Jurisdiction
- Diversity Jurisdiction
- Federal Question Jurisdiction
- Supplemental Jurisdiction
- Removal Jurisdiction
- Erie Doctrine
