3.1 Jurisdiction & Venue

Before a federal court can hear a single word of a case, two separate jurisdictional questions must be answered: does the court have power over the TYPE of case (subject-matter jurisdiction), and does it have power over the PARTIES (personal jurisdiction)? The NALA Certified Paralegal (CP) exam tests both, along with venue and removal, because paralegals routinely verify these issues before a complaint is filed or an answer is calendared.

Subject-Matter Jurisdiction

Federal courts are courts of limited jurisdiction — they may hear only cases authorized by the Constitution and Congress. The two main statutory doors are in Title 28 of the United States Code.

Federal Question — 28 U.S.C. § 1331

Federal courts may hear cases arising under the Constitution, laws, or treaties of the United States. There is NO minimum dollar amount. The key exam trap is the well-pleaded complaint rule: the federal issue must appear on the face of the plaintiff's own properly pleaded complaint. An anticipated federal DEFENSE does not create federal question jurisdiction. If a plaintiff sues in state court for breach of contract and the defendant intends to raise a federal statute as a defense, that alone does not get the case into federal court.

Diversity of Citizenship — 28 U.S.C. § 1332

Diversity jurisdiction has two independent requirements, and both must be satisfied:

1. Complete diversity — no plaintiff may be a citizen of the same state as any defendant (the rule from Strawbridge v. Curtiss). Diversity is measured when the complaint is filed.
2. Amount in controversy exceeding $75,000, exclusive of interest and costs. 'Exceeds' is exact: a claim for precisely $75,000 does NOT qualify. The plaintiff's good-faith alleged amount controls unless it is legally impossible to recover that much.

Citizenship rules to memorize:

• An individual is a citizen of the state of his or her domicile — physical presence plus intent to remain. A person has only one domicile at a time.
• A corporation is a citizen of BOTH its state of incorporation AND its principal place of business, which under the Supreme Court's Hertz decision is the 'nerve center' — typically the headquarters where high-level officers direct and coordinate the company's activities. A corporation with factories in ten states is still a citizen of only two.
• Unincorporated associations (partnerships, LLCs) take the citizenship of EVERY member — a frequent trap, because a 50-member LLC can easily destroy complete diversity.

Aggregation: a single plaintiff may aggregate all claims against a single defendant to reach $75,000, even unrelated claims. Multiple plaintiffs generally may NOT combine their separate claims.

Supplemental Jurisdiction — 28 U.S.C. § 1367

Once one claim properly anchors the case in federal court, related state-law claims that form part of the same case or controversy may come along under supplemental jurisdiction. In diversity cases, § 1367(b) limits supplemental claims by plaintiffs that would destroy complete diversity.

Personal Jurisdiction

Even with subject-matter jurisdiction, the court must have power over the defendant. The constitutional test comes from International Shoe Co. v. Washington: the defendant must have minimum contacts with the forum state such that maintaining the suit does not offend traditional notions of fair play and substantial justice. Procedurally, a state must also have a long-arm statute authorizing its courts to reach out-of-state defendants, and the exercise of jurisdiction must satisfy due process.

• General jurisdiction — the defendant's contacts are so continuous and systematic that it is 'at home' in the state (for a corporation, its place of incorporation and principal place of business). The defendant can be sued there for anything.
• Specific jurisdiction — the suit arises out of or relates to the defendant's purposeful contacts with the forum, and exercising jurisdiction is reasonable.

Venue

Subject-matter jurisdiction decides WHETHER a federal court can hear the case; venue decides WHICH federal district is the proper geographic location. Under 28 U.S.C. § 1391(b), venue is proper in:

1. A district where any defendant resides, if ALL defendants reside in the same state;
2. A district where a substantial part of the events or omissions giving rise to the claim occurred, or where a substantial part of the property is situated; or
3. A fallback district where any defendant is subject to personal jurisdiction, used only if no other district qualifies.

A corporate defendant 'resides' in any district where it would be subject to personal jurisdiction. Under 28 U.S.C. § 1404(a), a court may transfer a case to another proper district for the convenience of parties and witnesses and in the interest of justice; the doctrine of forum non conveniens applies when the convenient forum is in a different judicial system entirely (often another country).

Removal and Remand

Removal under 28 U.S.C. § 1441 lets a DEFENDANT move a case filed in state court into the federal district court embracing the state court, if the case could originally have been filed in federal court. Rules the exam loves:

• The notice of removal must be filed within 30 days after the defendant receives the initial pleading or summons (§ 1446(b)). A case may not be removed on diversity grounds more than one year after it was commenced.
• ALL defendants who have been properly joined and served must consent to removal.
• The forum-defendant rule: a diversity case cannot be removed if any properly joined and served defendant is a citizen of the state where the action was brought — a home-state defendant is presumed not to need diversity protection.
• Only defendants remove; plaintiffs who chose state court are stuck with it.

Remand sends the case back to state court. If removal was procedurally defective, a motion to remand must be made within 30 days of the notice of removal; lack of subject-matter jurisdiction can be raised at any time.

Paralegal Scenario

Your firm's client, a Texas-domiciled plaintiff, wants to sue a defendant incorporated in Delaware with headquarters in Illinois for $75,000 even. Before filing you flag three problems: exactly $75,000 fails the amount requirement; the corporation is a citizen of Delaware AND Illinois, so if the plaintiff were domiciled in either state diversity would fail; and if suit is filed in Illinois state court, the defendant cannot remove on diversity grounds because it is a citizen of the forum. This is precisely the kind of pre-filing jurisdiction memo the CP exam rewards.

Exam traps: confusing jurisdiction (power) with venue (location); forgetting that removal is a defendant's tool; and assuming the one-year removal bar applies to federal question cases (it does not).