Subject Matter Jurisdiction, Supplemental Jurisdiction, and Erie: The Civ Pro Trio

Civil Procedure is tested on both the MBE and the MEE, and three topics account for a large share of the questions: subject matter jurisdiction, supplemental jurisdiction, and Erie. Here are the rules.

Subject matter jurisdiction

Federal courts have limited subject matter jurisdiction. The two main bases:

Federal question (28 U.S.C. § 1331). The claim arises under federal law. Under the well-pleaded complaint rule, the federal issue must appear in the plaintiff's own claim, not in an anticipated defense.

Diversity (28 U.S.C. § 1332). Two requirements:

• Complete diversity: no plaintiff can be a citizen of the same state as any defendant.
• Amount in controversy must exceed $75,000, exclusive of interest and costs. A plaintiff can aggregate all claims against a single defendant.

Citizenship rules:

• Individuals: the state of domicile (physical presence plus intent to remain indefinitely).
• Corporations: every state of incorporation and the state of the principal place of business, which is the "nerve center" where high-level officers direct and control the business.
• Unincorporated associations, including LLCs and partnerships: the citizenship of every member.

Diversity is determined when the complaint is filed. A later move doesn't destroy it.

Supplemental jurisdiction (28 U.S.C. § 1367)

Once a federal court has jurisdiction over one claim, it can hear additional claims that are so related that they form part of the same case or controversy, meaning they arise from a common nucleus of operative fact.

The diversity limit (§ 1367(b)): In a case based only on diversity, the court can't exercise supplemental jurisdiction over claims by plaintiffs against persons made parties under Rules 14, 19, 20, or 24 when doing so would be inconsistent with the diversity requirements. This stops plaintiffs from using supplemental jurisdiction to get around complete diversity.

Discretion (§ 1367(c)): The court may decline supplemental jurisdiction if the claim raises a novel or complex issue of state law, substantially predominates, the court dismissed all original-jurisdiction claims, or in other exceptional circumstances.

Erie

In a diversity case, a federal court applies state substantive law and federal procedural law.

The analysis:

1. Is there a valid Federal Rule of Civil Procedure or federal statute on point? If a valid Federal Rule directly covers the issue, the federal court applies it (Hanna v. Plumer). A Federal Rule is valid if it's arguably procedural and doesn't abridge, enlarge, or modify a substantive right.
2. If not, is the issue substantive or procedural? Courts consider whether ignoring state law would lead to different outcomes (outcome determination), whether it would encourage forum shopping or inequitable administration of the law (the twin aims of Erie), and whether there are countervailing federal interests.

Areas the bar treats as substantive include statutes of limitations, elements of claims and defenses, burdens of proof, choice-of-law rules (Klaxon), and tolling rules.

The common traps

• Treating an LLC like a corporation for citizenship. It isn't.
• Forgetting that the amount must exceed $75,000, not equal it.
• Allowing a plaintiff to use supplemental jurisdiction against a non-diverse third-party defendant.

Where Lexora Prep fits

These rules have exact numbers and conditions, which is where memory slips cost points. Lexora Prep is a Black Letter Law rule-training platform where you practice Civil Procedure rules like these from memory, with fill-in-the-blank and ordering modes that catch the small errors. Lexora tracks missed elements and weak rules and brings them back until they're solid.

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About Lexora Prep

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