Lessons in Diversity Jurisdiction from the First Circuit

The importance of subject-matter jurisdiction is axiomatic in federal courts. Parties must either get to federal court via a federal question or on the basis of diversity of citizenship. Given the centrality of subject-matter jurisdiction, Federal Rule of Civil Procedure 12(h)(3) mandates that cases that lack subject-matter jurisdiction must be dismissed. Even when issues of subject-matter jurisdiction are thought to be settled, new concerns can be raised at any time and force the court to reverse itself. Such was the case in an April 27, 2017 case from the First Circuit. Rule 12(h)(3) enables litigants to raise challenges to the court’s subject-matter jurisdiction at any time. As the First Circuit recently found in Hearts with Haiti, Inc. v. Kendrick, “any time” can even mean after the trial and during the pendency of an appeal. The case’s subject-matter jurisdiction was predicated on the diversity of citizenship, as it raised state tort law issues, rather than a federal question. In the underlying action, the founder of an orphanage in Haiti brought suit against Paul Kendrick for defamation claiming that Kendrick had falsely accused him of sexually abusing the boys in the orphanage. Kendrick further accused Hearts with Haiti—a non-profit charity raising funds [read more]

Microsoft v. Baker

Without the class action, many consumers would have no practical remedy for damages suffered no matter how good a claim they may have. For instance, when a consumer believes he is sold a faulty Xbox 360 that damages his $30 videogame disc, it makes no sense for him to pay the $400 filing fee to go to federal court—let alone hire a lawyer. As a result, without the class action, many consumers would not bother going to court, and giant companies that mass-produce products would be left with potentially millions in undeserved profits. Once a class action lawsuit is filed, the Federal Rules of Civil Procedure require the court to grant or deny class certification of the potential class. Last month, the Supreme Court heard oral arguments for Microsoft v. Baker. In January 2016, the Court granted certiorari to review the Ninth Circuit’s decision. The issue in the case is “Whether a federal court of appeals has jurisdiction under both Article III and 28 U.S.C. § 1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their claims…” Baker v. Microsoft, 797 F.3d 607 (9 th  Cir. 2015). The district court denied the plaintiffs’ motion for class [read more]

Vanishing Venue: Poof! And You Lose by Stephen Brown

I.  Disparate Results for Similarly Situated Plaintiffs Imagine two plaintiffs in Georgia, Alice and Belinda, with very similar claims.  Alice was injured by a product that was manufactured and sold in Fulton County, Georgia.  Belinda was injured by a similar product, which was manufactured in Fulton County, but which was sold in nearby de Kalb County.  Both plaintiffs live in Fulton County and were injured in Fulton County.  Alice sues both the seller and the manufacturer as joint tortfeasors in Fulton County, as that is the only county where she may sue.[1] Belinda, who may sue in either Fulton County or de Kalb County,[2] decides to sue both defendants in Fulton County, since that is where she lives. Although it was not immediately apparent at the time that their suits began, it becomes clear during the course of their respective trials that the defect in these products arose in the hands of the sellers, not the manufacturer.  Thus, the Fulton County Court relieves the manufacturers of all liability in both Alice’s and Belinda’s cases.  That presents no problem for Alice, as long as the seller is solvent—the Fulton County Court can still enter judgment against the seller for Alice’s injuries, [read more]