Cases
Case
Strawbridge v. Curtiss
Diversity Jurisdiction
Mas v. Perry
Diversity Jurisdiction
Randazzo v. Eagle-Picher
Industries, Inc.
Diversity Jurisdiction
Hertz Corporation v. Friend
Diversity Jurisdiction
Belleville
LSF
Plaintiff and all but one defendant alleged to be citizens of the state of
Mass. One defendant, Curtiss, was not a citizen of Mass., nut of Vermont.
Def landlord watched Ptfs tenants via 2-way mirror in their apartment.
Ptfs were living in Louisiana as graduate students at LSU.
Def – citizen of LA
Mr. Mas – citizen of France
Mrs. Mas – Uncertain. Mrs. Mas had residence in LA but doesn't have
intent to stay indefinitely. She has not lived in Mississippi since she was a
child, but has not developed intent to indefinitely stay elsewhere.
College/Grad School – usually you go without intent to stay indefinitely
$ pleaded in excess of jurisdictional amount.
Asbestos, products liability
- Plaintiffs have obligation to plead subject matter jurisdiction
- Plead for one defendant as state of incorporation + registered
office
- Plead for second defendant as where organized to do business +
domiciled
- Judge dismissed complaint with leave to amend
- Plaintiff filed same complaint
- This opinion dismisses Plaintiff's complaint with prejudice
Ptf filed in state court, alleging Hertz’s PPB is CA. Hertz removed to federal
ourt, contending its PPB is not CA. Bc Hertz asserted DJ, it bears burden of
proof.
Before this Supreme Court decision, lower courts didn't know how to
interpret "principal place of business". Developed 3 tests to determine the
one principal place of business
- Nerve center test – HQs
- Total activities test - Where they do their activities that earn
them their money
- Totality of circumstances test - HQs + corporate activity; center
of gravity; wherever most
Complaint alleged Ptf corporation incorporated in MO and PPB in MO;
Holding / Take Away
Jurisdiction can’t be supported
*Strawbridge established the complete diversity rule --> diversity jurisdiction exists
only if all plaintiffs are of diverse citizenship from all defendants. (i.e., no party on one
side may be a citizen of the same State as any party on the other side)
Until you acquire a new domicile, your domicile remains the same. It doesn't change
until you change both residence and intent to stay indefinitely
Fact that you win less $ than needed for jurisdiction does not mean that you lose
jurisdiction. May have to pay some costs though.
*If you are a US citizen and domiciled in another country, no basis for diversity
jurisdiction
Federal Judges have a lot of discretion
Example of malpractice, especially bc dismissed with prejudice. Although books says
dismissal without leave to refile and Ptf can re-file in state, judge is dismissing with
prejudice as a sanction, not a procedural dismissal.
Federal Court is obligated to determine whether has SMJ, sua sponte, even without
motion contesting by a party
Supreme Court adopts nerve center test to determine PPB: "principal place of
business" refers to the place where the corporation's high level officers direct,
control, and coordinate the corporation's activities. ("nerve center")
Purpose of this rule is to make it easy
HQ is efficient
Court says (1) statute language supports it, (2) administrative simplicity, need certainty
(crutch argument); and (3) legislative history involves simplicity interpretation
7th Circuit is upset Ptf didn’t double. Could have easily searched on line.
Diversity Jurisdiction
Mottley
Federal Question Jurisdiction
Grable & Sons Metal
Products, Inc. v. Darue
Engineering & Manufacturing
individuals MO citizens, and Def DE LLC with PPB in IL. Ptf misstated state
where incorporated. Ptf looked at lease btw Ptf and Def, which stated Ptf
incorporated in MO. Lease was wrong.
Railroad gave Mottleys lifetime passes. Railroad honored for 30 years until
federal statute prohibiting passed. Railroad stopped. Mottleys sued
railroad.
Disputed issues: state claim alleging breach of contract claim but more
importantly, is statute constitutional (taking away Ptfs’ property without
due process) and is it retrospective
Breach of contract not disputed.
Only 2 Qs at issue: (1) Does the federal law apply in this part and (2) if so,
is it constitutional?
No one disputes federal question jurisdiction. Supreme Court identifies
the issue
What happens when state law claim is nonetheless involved with federal
law
Rule 11 violation: inadequate investifation of own client’s PPB
ALSO treated LLC as corporation – wrong. LLC is an unincorporated business. Citizenship
in every state in which its partners are citizens (mere employees don’t count for this).
Court also irritated bc Def asks court to decide case on merits and affirm judgment,
despite no jurisdiction. Def says court has done this in the past. Court says never done
it.
Court orders lawyers to re-try case in state court, proceeding free of cost to clients. Not
a sanctions; a suggestion to clients to file malpractice suit.
"Well-pleaded" complaint rule: look at only the part of the complaint where claim
alleged to set forth claim; look only at what's necessary to state claim for which relief
may be granted, without anticipating response and defenses
if federal question is only in latter, no federal question jurisdiction
Pursuant to FRCP, all plaintiffs have to say is they had a contract and defendant
breached it. Not always clear that in cases where defendant could raise federal defense
that they actually will raise it
Supreme Court wants bright line rule; don't want to wait for defendant to have to
respond
Only going to take cases where federal issue is necessary based on claim asserted by
plaintiff
Supreme court allows the claim, setting forth a new 4-part conjunctive test (extension
of Well Works)

Federal Question Jurisdiction
Bates v. C & S Adjusters
Venue
Piper Aircraft v. Reyno
Intersystem Change of Venue
Ptf filed suit to quiet title (to get land back)
Fails under American Well Works test: Not a claim arising under federal
law
 Fair Debt Collection Practices Act - prohibits debt collectors from
abusing debt practices
 Defendant is alleged to have violated this statute by a letter sent
to Plaintiff
 Defendant sent letter to Plaintiff in PA, but unknown to Def, Ptf
had moved to NY. Letter was forwarded by Postal Service to Ptf's
new address in NY. Ptf filed suit in NY
 Defendant MTD on grounds of improper venue
o Arguing events in Western District of PA - that's where
Plaintiff accrued the debt at issue
 District Court grants MTD
 Appealed to Second Circuit
 Plane crash in Scotland killing Scottish citizens
 Family members of the deceased hire CA law firm to
 Secretary from law firm assigned as representative of the estates of
(1) State law claim necessarily raises a federal law issue
(2) Federal law issue is actually disputed
(3) The federal law issue is substantial (something on which the case turns into
significant federal issue; not trivial; use best judgment)
(4) Does not disturb congressionally mandated division of jurisdictional responsibility =
doesn’t create a flood of litigation into federal court that Congress wouldn’t have
wanted
^This is in reference to Merrell Dow case. Supreme Court stated Congress didn’t want a
flood of new federal court litigation.
In this case, once the issue is decided, the rule is clear and it doesn’t have to be
considered again. This won’t cause a flood of litigation.
Issue: Does this qualify under 1391(b)(2)
Test: action may be brought in "a judicial district in which a substantial part of the
events or omissions giving rise to the claim occurred.
One of the elements of the claim is where the harm occurred.
Harm occurred in Western Dist of NY and that's where substantial part of events
occurred.
District Court erred in focusing on PJ argument
- Def had no intentional contact with NY is a PJ argument and Def didn't raise a
PJ argument
- Doesn't matter if Def was aware of contact with NY
Second Circuit's point about "do not forward" is ancillary
Supreme Court holds district court got it right
 If applied standard COA set forth, then these cases would never be
dismissed ---> flooding already crowded court system
/ Forum Non Conveniens the decedents in the plane crash at issue
 File in CA state court - hoping American substantive law will govern
this. It's much more demanding of manufacturers - strict liability, just
prove defect. In Scotland and England, still have to prove negligence.
American system perceived worldwide as much more plaintiff
friendly than any other system
 Removed to federal court under alienage provisions of diversity
statute (dispute between citizens of US and citizens of foreign state) -
thinking federal judge and jury less plaintiff oriented.
 Transferred to Middle District of PA where pj and venue proper for
defs
 Piper transferred under 1404(A) bc pj and venue proper
 Hartzell transferred under 1406(a) bc pj and venue
improper
 They could have moved for a forum non conveniens dismissal in CA
state court without going through all of this. They wanted to get the
most sympathetic forum for this motion. State courts don't like
sending cases to other countries
 Piper will be governed by CA choice of law rules - transferor forum
 Hartzell will be governed by PA choice of law rules, which point to
using Scottish law
 Supreme Court later rules that complexity of using two different
types of law as part of reason for case to be dismissed under forum
non conveniens
 Defendants move for dismissal under forum non conveniens
 Trial Court uses common law rule set forth in Gilbert
 Supreme Court gets power to create common
law from the Constitution - Art III Sec 2 grant to hear certain
kinds of cases, necessarily carries with it a number of implied
powers in order to carry out the express power
 Gilbert standard: court weighs private interests
of litigants; public interests; potential burden on court
 COA reverses, saying trial court abused its discretion
applying the Gilbert standard
 Holds never appropriate to dismiss when law of
alternative forum is less favorable to Plaintiff
Baldwin v. Iowa State o Defendant challenged PJ, MTD dismissed. Defendant later
Taveling Men’s Ass’n failed to appeal.
Challenging PJ o Defendant then filed collateral attack
United Mine Workers v. Gibbs's three claims
Gibbs - Secondary boycotts under Taft Hartley Act - unions can't engage
 Standard to use: satisfy all 3 factors
 Minimally acceptable alternative forum (SMJ, PJ, Venue,
proper; if statute of limitations has run, defendant has to waive)
 Private interests of the litigants - ease of access to sources
of proof (this case, wreckage of plane in England; accident site); accessibility
to witnesses (Cheap to get them here or possibility of compulsion); possibility
of viewing; and all other things that make trial convenient and expeditious
 Public factors - how much of an interest does this particular
court have in adjudicating this case; does the US care about this case; what
law is going to govern and who is best to apply it; are we going to burden
jurors to hear case without US interest
 Scottish citizens, Scottish plane crash, Scottish law, Scottish
experts/witnesses
 What if decedents had been American?
 Still have evidence in Scotland but American family members
will testify as to ongoing damages, American psychologists would have been
treated the American family members of the decedents
 The result would be entirely different - both private and
public balance would shift
 Really want to provide American plaintiff with American
forum
In collateral attack, court said this would only be proper if failed to appear at all. In this
case, res judicata. Case already heard. Defendant failed to complete the attack.
Supreme Court
- Parties are not diverse. Claims aren't federal question claims
 in secondary boycotts and if they do, person can sue under the - Did the District Court properly exercise jurisdiction over the state claims?
Supplemental/Pendent act - Rule: Pendent jurisdiction when state law and federal law claims arise from
Jurisdiction - State conspiracy claim common nucleus of operative fact (same transaction or occurrence)
- State boycott claim Why would the Constitution allow this?
Verdict entered for Plaintiff under federal and state theories - If these are transactionally related claims and get to final judgment under
Post-verdict motion for judgment as matter of law some, can't bring the remainder because of res judicata
Court kicks out federal claim - Constitution allows jurisdiction over cases arising under federal question and
these claims arise under one transactional occurrence. For the purposes of
the Constitution, this is one Constitutional case.
- *anything arising under common nucleus operative fact is one Constitutional
case
Supreme Court says there are two parts to this
- Power - if state laws arise out of same common nucleus of operative fact,
court has power to hear them
- Discretionary factors - court must also consider to determine whether to
bring state law claims together
Schwartz v. Swan Regarding state rule, but very similar to federal rule 20 Appellate Court
2 separate car accidents - Should have been joined bc Plaintiff asserts liability arising out of series of
Permissive Party Joinder Legal Issue: transactions alleged
- Are they properly joined? - Common question of fact: How do you apportion damages between accident
- If so, did the court abuse its discretion in severing them bc it was 1 and accident 2
prejudicial in some way to the plaintiffs - Testimony will be from experts who examined plaintiff after both accidents
- Significant overlap of major issue between both cases and both cases are
related in a series that makes it more efficient to try together in front of same
jury
- Trial court abused its discretion: Severed prior to discovery
- If separate, one jury could find Aug 23 accident more responsible
- Problem if Def from Aug 23 is bound by what happens in Aug 13 accident bc
Aug 23 Def was unable to defend himself. Violates due process.
- Whipsaw - Defendant points finger at party not in case

Dindo v. Whitney Whitney passenger in car owned by Whitney driven by Dindo Court remands to determine whether Dindo violated insurance contract
- First case: Whitney v. Dindo
Compulsory Counterclaims - Dindo rep by Whitney's ins as driver of Whitney's car
- Dindo doesn't file counterclaim.
- Insurance layer doesn't tell him he has a counterclaim or that
it’s compulsory
- 2d case: Dindo v. Whitney
- Is this barred by compulsory counterclaim?
Carteret Savings & Loan - In front of same judge as Dindo
Assn. v. Jackson - Def being sued by bank bc Def bought yacht in FL
- Note provided by bank funded purchase
Compulsory Counterclaim - Def defaults on note
- Ptf sues in FL bc that's where yacht is
- Def, believing it is a nonrecourse note (that the sole remedy Ptf
bank would have is to seize the collateral for the loan) gives the
boat
- But then bank sues Def where Def lives and has $
- Def alleges fraud and various misleading things re transaction
- Was there a compulsory counterclaim?
Arises from same transaction. Why isn't this barred?
- First case settled. Not much burden on court.
- Dindo filed Answer. Compulsory counterclaim required to be filed with
Answer.
- Let off hook - policy issue. Dindo got screwed over by insurance company
which happens to represent both sides.
**rare situation. Insurance defense lawyers know they have to tell defendant they
have to file counterclaim and to get own counsel
- If it's a matter of res judicata, failure to comply with rule = claim gone
- Theory of estoppel = for the convenience of the court system, need you to do
this and if waive it generally barred from court system from doing it again.
However, there may be reasons as matter of equity to allow you to bring
claim
*seems to many this claim should have been barred
Court says yes - FRCP 1 - speedy, just, inexpensive determination in every action
- *Nothing in the rule that suggests the reason for the rule that Ptf can be secure
that all the claims against it are done
- ^^This is Def's right
- The policy is the opposite - Def is the one who has the right to control where he
brings his own clam. Reason under res judicata law.
- Sole reason for overriding Ptf's claim autonomy is judicial efficiency
- In this case, not losing that judicial efficient bc no time spent. Case 1 merely
entered default judgment. Would have taken more time for Def to litigate
counterclaim in case 1
- In case 1, Jackson never filed a pleading. Therefore, 13(a)(1) does not apply
because the rule provides "A pleading must state as a counterclaim any claim
that--at the time of its service--the pleader has against an opposing party if the
claim"
- Court says at time Def was supposed to file a pleading, should have filed
counterclaim
- But the rule doesn't say that. Drafters could have easily included this in the rule if
they wanted to. They didn't
o **This decision is wrong!
 Wrong as matter interpreting language of 13(a)(1)
 Deprives defendant of claim autonomy
 Makes up policy under line 13a
 Completely wrong
Here, Def not contesting default judgment (that's res judicata). Bringing substantive
claims that would have been compulsory counterclaims in the original case if they had
filed a responsive pleading
Markvicka v. Brodhead-
Garrett Co.
Third Party/Impleader Claims
Kroger
Third Party/Impleader Claims
Haas v. Jefferson National
Bank
Kid suffered injury while using machine at school
- Third Party Complaint: Alleges indemnity from the School
District
- Accident occurred during class in school
- Claiming School District is at fault
- Claiming if found jointly and severally liable to Ptf, wants
contribution from person who was jointly and severally liable so
that each pays their share
Kroger widow of individual who dies in industrial accident. Sues OPPD.
(Iowa v. Nebraska). OPPD impleads Owen; a least joint and several liability
and OPPD wants contribution. Kroger amends and names Owen as regular
Def (Iowa v. Nebraska, but really Iowa). Ptf's Amended Complaint says
Owen is Nebraska. Owen responds it’s a co organized and operating under
laws of NE. At trial, disclosed Owen is Iowa corp. Everyone should have
looked at Answer. Owen only talked about half requirements under 1332c
- incomplete response
- 2 people who believe they have jointly purchased shares in Bank
- Glueck has all shares and is supposed to hand half of them over to
Haas
Court says this isn't indemnity action bc Third Party Complaint is not alleging School
District owed them something or is solely responsible
- Simply mislabeled contribution claim
Nebraska has contribution statute
- If didn't and common law rule of no contribution of joint tortfeasors applied,
then claim wouldn't be allowed
Assume OPPD still in case for purposes of case
- Ancillary Jurisdiction over all 3d party claims - so ancillary jurisdiction over OPPD's
3d party claim against Owen
- No independent basis for jurisdiction - state law claim and no diversity
- Court allows OPPD's impleader claim against Owen despite the fact that it violates
diversity jurisdiction set forth in 1332
- However, Court doesn't allow Kroger's case against Owen because it violates
diversity jurisdiction under 1332
- Once OPPD brought Owen in, Rule 14(a) allows Kroger to bring claim against
Owen
- Court says we know under Strawbridge v. Curtiss the claim can't go forward
because must have complete diversity. The case is the same as Kroger v. OPPD,
Owen
- The only possible basis for SMJ is ancillary
- Why does court allow it for OPPD's claim and not Kroger's?
 Kroger brought case in and had choice over what forum to
bring it in
 OPPD had no choice in the forum; they were stuck with it
 *it's different when Ptf is filing its own affirmative court
where it had choice to bring in state court and bring both parties
 *once suit filed, Def doesn't have a choice
 If they allowed ancillary jurisdiction, conniving Ptfs would
file suit invoking diversity and then bring in another Def under ancillary
jurisdiction which would otherwise void diversity jurisdiction
o Other relief for Ptf: Dismissal w.o. prejudice and refile in state court
against both defs
o This case is before 1367**
- Drafters of supplemental jurisdiction statute trying to incorporate Owen and
not change it. See 1367(b)(3)
Court says Glueck is a necessary & indispensable party
- Problem under 19a: (1) impact on absent party (Glueck could be deprived of his
shares) and (2) Multiple inconsistent verdict
Compulsory Joinder - Glueck is supposed to give back to Bank and have them reissue in - Court dismisses case bc can't shape relief in any way, will be practical impact on
Haas absent party or present, and ptf can sue in state court. Wouldn't deprive ptf of
- Glueck withdraws and uses as collateral for other loan relief. Clear case in that have necessary and indispensable party. As a practical
- Is Glueck a necessary and indispensable party? matter, court can't do anything to fix the problem - 2 people are claiming same
shares of stock. Either impacts Bank or absent party
- Yes, necessary under 19a
 Want absent party
 Can't get absent party - would destroy diversity
 Will not proceed without them

Temple v. Synthes o Suit by patient against manufacturer of medical device put into Supreme Court says lower court is wrong about them being necessary, and wrong
his back; screws broke off in his back about being indispensable under 194
Compulsory Joinder o Suit against manufacturer in federal court  As joint and several tortfeasors, Synthes is liable for entire amount
 diversity of judgment
o Ptf also has parallel action in state court against the doctor and  No problem with absent parties. They're not there; they're not
hospital bound
 No diversity  Synthes could pursue doctor or hospital in separate action
o Are the absent parties necessary?  Synthes probably had no indemnity claim. Only claim
o Lower court says they are necessary and they are indispensable would be contribution. NOLA hospital. LA law governs; totally different.
bc of adverse impact on Ptf Probably no contribution claim under law. Rule 14a probably didn't
o *Temple rule: Joint and several torfeasors are never necessary parties
because plaintiff can get complete relief; absent parties not bound; and no
prejudice to present defendant
o If they're not necessary, by definition they're not indispensable