3. Which of the following cases is most likely to have federal subject matter jurisdiction? In each case, the amount in controversy for each plaintiff’s claim against each defendant is $100,000.
a. P is a French citizen admitted for permanent residency in the U.S. who is domiciled in New York. P sues D, a German admitted for permanent residency in the U.S. who is domiciled in New Jersey. P’s suit is for violation of New York negligence law.
b. P, a French citizen domiciled in France, sues D, a German domiciled in Germany. P’s suit is for violation of federal securities law.
c. P1, a New York citizen, and P2, a California citizen, sue D, a California citizen, for violations of New York negligence law.
d. P, a California citizen, claims to be a beneficiary of the estate of X, a California citizen who recently died. P’s suit is under California law and names D, the executor of X’s estate, as the defendant. D is a citizen of Nevada.
e. P, a California citizen, sues D1, a New York citizen, and D2, a California citizen, for violations of New York negligence law.
Answer a is clearly wrong due to the Clarification Act (it was only probably wrong in 2007). 1332(a) now states:
(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) citizens of different States;
The bit about being lawfully admitted for permanent residence is now clearly applicable only to remove alienage jurisdiction not to create it.Answers c and e are clearly wrong. There isn’t complete diversity. It is important to see that in c there is no supplemental jurisdiction because of Kennedy’s contamination theory. See Allapattah.
Answer d is also not the best. Under 28 USC 1332(c)(2), “the legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent.” We never discussed this in class, nor was this section of 1332 assigned reading. So I expected you to be in doubt about whether, in a diversity suit against an estate, one looked to the domicile of the decedent or of the executor. In fact, you could have guessed that one looks to the domicile of the decedent, if you thought about the purposes of the diversity statute. A state court would likely be biased in favor of an in-state decedent (and biased against an out-of-state decedent) wherever the executor was from. After all, it is the interests of the decedent, not the executor, that are at issue in the suit. But I didn’t expect you to know this.
So how should you know that d isn’t the best answer? Because answer b is so obviously correct. The suit in answer b is under federal securities law. A suit under federal securities law obviously has federal question subject matter jurisdiction (indeed it has exclusive federal subject matter jurisdiction), no matter what the domicile of the parties. So when forced to choose between b (which clearly has subject matter jurisdiction) and d, you should choose b. The point biserial for b was .27.