Essay Question 3 (30 points)
Assume Insurer Corp. and Jane Jones make motions to dismiss for lack of subject matter jurisdiction, personal jurisdiction and venue. Will the motions be successful?
Again, this question concerns following complaint [sorry if the formatting is off here]
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
- - - - - - - - - - - - - - - - - - - - - - - - - -x
JOE SMITH, :
Plaintiff, : 00 Civ. 1001
- against - :
INSURER CORP., :
Defendant, : JURY TRIAL DEMANDED
- and – :
JANE JONES, :
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Plaintiff, Joe Smith, by his attorney, alleges as follows:
1. Insurer Corp. is incorporated in Delaware.
2. Insurer Corp. provides term life insurance to hundreds of thousands of individuals in New York, New Jersey, and Connecticut. Joe Smith is Insurer Corp.’s only customer in Florida.
3. Insurer Corp. has sales offices and agents in New York, New Jersey, and Connecticut.
4. Insurer Corp.’s claims processing office, and 2/3 of its employees, are located at 100 1st St., Greenwich, Connecticut, in the District of Connecticut.
5. Around 1/10 of Insurer Corp.’s employees work at an office at 1000 5th Ave., New York, New York, in the Southern District of New York. The Chief Executive Officer and most of the other high-level officers work at this office. The board of directors meets there as well.
6. Jane Jones, an employee of Insurer Corp., lives at 100 North St., Greenwich, Connecticut, in the District of Connecticut.
7. Jane Jones’s office is at the Insurer Corp.’s offices at 1000 5th Ave., New York, New York.
8. Since June 30, 2010, Joe Smith has been living at 10 7th St., Miami, Florida, in the Southern District of Florida.
9. Joe Smith entered into his term life insurance contract with Insurer Corp. at Insurer Corp.’s Greenwich Connecticut office, while he was living in Connecticut. On June 30, 2010, he moved to Miami, Florida and continued to pay his premiums from there.
10. On January 12, 2011, Jane Jones, who was updating Joe Smith’s files, negligently left her laptop computer on a bench outside her office building at 1000 5th Ave., New York, New York.
11. Sensitive financial information concerning Joe Smith, including his Social Security Number and credit card numbers, were negligently left unencrypted on Jane Jones’s laptop.
12 Joe Smith is himself careful with his financial information.
13. Six weeks after the loss of the laptop, Joe Smith was the victim of identity theft, perpetrated by someone as yet unknown, in which a fake credit card was created under his name.
14. Joe Smith’s damages from the identity theft has been $78,000.
15. Joe Smith’s damages were proximately caused by the defendants’ negligence.
JURISDICTION AND VENUE
16. This Court has jurisdiction over the subject matter of this Complaint pursuant to 28 U.S.C. § 1332.
17. Venue in this District is proper under 28 U.S.C. § 1391.
STATEMENT OF CLAIM
18. By reason of the foregoing, Insurer Corp. is liable for negligence to Joe Smith.
19. By reason of the foregoing, Jane Jones is liable for negligence to Joe Smith.
PRAYER FOR RELIEF
Wherefore, plaintiff respectfully requests that this Court award
a. $78,000 in compensatory damages to Joe Smith
b. $100,000 in punitive damages to Joe Smith and
c. any further relief that this court deems appropriate.
Dated: Miami, Florida
January 6, 2012
Stivith & Gardner,
Paul Stivith (PS-2001)
Attorney for the Plaintiff,
200 2nd St.
The following (in italics) would be an ideal answer.
The motion to dismiss for lack of SMJ will not succeed. The plaintiff is completely diverse from the defendants, so there is SMJ under 28 USC 1332. Smith, although originally domiciled in CT, had apparently established a new domicile in FL by the time of the filing of the suit. Jones is a domiciliary of CT and the I Corp. has the citizenship of its state of incorporation (DE) and its principal place of business, which under the nerve center test accepted by the SCt in Hertz is NY. The amount in controversy is probably also satisfied concerning each defendant – Smith is probably asking for $178K in the alternative, from either Jones or the I Corp. So the amount in controversy concerning each is $178K.
Under FRCP 4(k)(1)(A), a federal court in FL can have PJ over the defendants only if a state court in FL would. We know nothing about restrictions on PJ under Florida law, such as its state constitution or long-arm statute, so these can be ignored. The question is solely whether a FL state court would have PJ under the 14th Amendment.
As for PJ over Jones, the only option is specific PJ. (There is no evidence she was tagged in Florida.) The only act that could be a source of specific PJ is her negligently leaving Smith’s information on the bench in NY, knowing that he was a Floridian (she was updating his information) and that any harm that resulted from the information being stolen would be felt in FL. This is not like most cases of specific PJ, in which the defendant reached out to the forum state to get the protection of its laws, creating a reciprocal obligation to return and answer for her activities. But in cases where a defendant performs an act out of state that she knows or should have known would create a harm in the forum state, courts have sometimes concluded that there is PJ in the forum state. An example is the Wyandotte case, in which the defendant was subject to PJ in Ohio after dumping pollutants in Michigan, in circumstances where it knew or should have known that they would make their way into Ohio.
As for the McGee factors, they are not that helpful for PJ in FL. The burdens on the plaintiff to go to NY and the burden on Jones to go to FL are about equal. FL does have a manifest interest in jurisdiction in FL courts for causes of action in which Floridians are harmed from identity theft. As for witnesses, most would be in NY, although some witnesses or evidence concerning the identity theft might be in FL.
[Here I would expect you to take a stand on PJ. I am personally on the fence. What mattered is not your decision on the matter but whether you identified and discussed the most promising considerations in favor of PJ.]
As for PJ over the I Corp., the first basis for specific PJ is the acts of the I Corp.’s employee, Jones, described above. The acts of an employee of a corporation can subject the corporation to PJ, particularly when the employee is acting in the course of his job – as Jones arguably was. But there are other contacts between the I Corp. and FL that could strengthen the argument for PJ. To be sure, this case is not like McGee, where the defendant mailed an insurance contract to the forum state and the cause of action concerned that contract. Here the I Corp. did not mail an insurance contract to Florida and, in any event, the cause of action does not concern the contract. Nevertheless, the I Corp. did choose to maintain a relationship with a person it knew to be a Floridian (presumably it could have broken the relationship off when Smith moved to Florida), and maintaining this relationship meant maintaining a duty to protect his information, a duty that was (allegedly) breached, albeit through acts in NY.
The McGee factors are basically the same as they were concerning Jones, although the burden on an insurance corporation to go to FL would less than it would be for Jones.
[Here I would expect you to take a stand. Once again, I am personally on the fence. And again, what mattered is not your decision on the matter but whether you identified and discussed the most promising considerations in favor of PJ.]
Finally venue. There is no venue in the S.D. Fla. on the basis of the defendants’ residence. But there is arguably venue in the S.D. Fla. because that is a district where “a substantial part of the events or omissions giving rise to the claim occurred” – namely Smith’s financial loss from identity theft that gave rise to his negligence claim against the defendants.
[Here I would expect you to take a stand. I am personally inclined to say that there is venue. Again, what is most important is that you identified and discussed the most promising considerations in favor of venue.]