Agenda for 25th Class

1
Agenda for 25th Class

• Name plates out
• Introduction to Diversity Jurisdiction
• Discussion of mediation court visit
• Settlement (continued)
• Fees
• Next class Diversity Jurisdiction
• 28 USC 1332(a)-(c)
• Yeazell pp. 207-19 excluding materials on complex
  litigation
• E.g. excluding pp. 211ff Notes 5-9 and pp. 219ff
  Notes 1-2
• Questions to think about / Writing Assignment
• Pp. 209 Q1, 3b, 4,
• Suppose P is a citizen of Turkey, and D is a
  citizen of Egypt admitted to permanent residence
  in the US. P sues D in federal district court to
  collect a 100,000 debt. Is there federal
  jurisdiction?
• Be sure to consider both 28 USC 1332(a) and the
  US Constitution, Article III, Section 2

2
Mock Mediation Court Visit
3
Diversity Jurisdiction I

• Under Article III, sec 2, The Judicial Power
  shall extend to Controversies . between
  Citizens of different States . and between a
  State, or the Citizens thereof, and foreign
  States, Citizens or Subjects.
• Concerned that judges and juries would be biased
  against people from out of state
• Federal judges and Congress dont like, so cut
  back
• 28 USC 1332(a)
• Similar to constitutional grant, except amount in
  controversy must be over 75,000
• US citizen is citizen of US state in which
  domiciled
• Domicile residence with intent to remain
  indefinitely
• indefinitely means no plans to leave, even if
  dont plan to stay permanently
• Individuals do not lose domicile in one state
  until establish domicile somewhere else
• Student who grew up in MA and went to school in
  IL and CA may still be citizen of MA, even if
  hasnt lived there for 10 years, as long as never
  intended to remain indefinitely in IL or CA

4
Diversity Jurisdiction II

• Corporations are citizens of two places
• State of incorporation
• State of principal place of business (corporate
  headquarters) (PPB)
• Means LESS likely to get diversity jurisdiction
• If individual citizen of CA sues corporation
  incorporated in Delaware with PPB in CA, then no
  diversity jurisdiction
• Similarly, if individual citizen of Delaware
  sues.
• Also diversity jurisdiction if
• Suit between citizen of US and foreigner (citizen
  or subject of foreign state). 28 USC 1332(a)(2)
• CA v. France MA v Germany, etc.
• Called alienage jurisdiction
• Alien admitted to US for permanent residence
  deemed a citizen of the state in which domiciled
• CA v French permanent resident domiciled in MA.
  Diversity
• CA v French permanent resident domiciled in CA.
  No diversity

5
Diversity Jurisdiction III

• If no diversity, can, of course, still get
  federal jurisdiction through federal question
• Removal allowed if case could have been brought
  initially in federal court AND defendant is NOT
  from forum state
• CA sues MA in MA court for 80,000, MA defendant
  cannot remove to federal court, even though CA
  plaintiff could have brought case in federal
  court
• Must still show personal jurisdiction venue

6
Economic Model of Settlement

• Plaintiff and defendant estimate their expected
  recovery/liability
• Plaintiff minimum acceptable offer probability x
  damages litigation costs
• Defendant maximum acceptable offer probability x
  damages litigation costs
• If plaintiffs minimum acceptable offer is higher
  than defendants maximum offer, then settlement
  is impossible
• If plaintiffs minimum acceptable offer is lower
  than defendants maximum offer, then settlement
  is possible
• But still might not happen, if parties engage in
  strategic behavior and fail to reach agreement an
  exact settlement amount
• Settlement problems continued

7
Fees Shifting

• Costs
• Usually pretty minor filing fees, court
  reporter, non-expert witness fees
• According to statute, always paid by losing party
• Fees
• Lawyers fees.
• Usually large
• American rule each party pays own attorneys
  fees
• British rule. Loser pays
• If plaintiff wins, then defendant pays
  plaintiffs lawyers fees
• If defendant wins, then plaintiff pays
  defendants lawyers fees
• Fee shifting always subject to judicial inquiry
  into reasonableness
• Fee shifting problems