Disclaimer and Prefatory Comments
None of the material presented herein shall be understood to constitute legal advice, nor to create an attorney-client relationship.
Practitioners should conduct their own research on any topic addressed herein to determine the latest statutes and precedents.
The issues addressed herein are treated according to the author’s interests, rather than comprehensively.
Those with questions regarding any issues addressed herein should obtain advice of legal counsel.
Agenda
State vs Federal Court
Subject Matter Jurisdiction
Justiciabilty: Mootness, Standing
FRCP 12: Personal Jurisdiction, Failure to State a Claim
Duties to the Court regarding Pleadings: FRCP 11
Closing comments and questions
Why File in Federal Court vs State Court?
Advantages of Federal Court:
Shorter deadlines/faster decisions
Early Discovery
Mandatory Settlement Meetings
Higher Costs May Provide Leverage to Settle
Lifetime tenure of appointed judges - More stability and consistency; less local bias (?)
Disadvantages:
More likely to dismiss
More strict pleading and witness disclosure requirements
More limited discovery
Need 12 jurors to agree to a verdict in federal court; only 9 in state court
More suburban juries – more conservative– maybe less plaintiff-friendly
Subject Matter Jurisdiction: State/Federal
State Jurisdiction – General, e.g., Criminal, Probate, Family, Juvenile, Contract, Tort
Federal Jurisdiction - Limited
1. Federal Question Jurisdiction - U.S. Const, Art III, § 2
"all cases, in law and equity, arising under" the Constitution, federal laws, &
treaties.
2. Diversity Jurisdiction May Allow State Claims - 28 U.S.C. § 1332
Complete diversity, and
Amount in Controversy ˃$75K
3. Supplemental Jurisdiction – 28 USC §1367
State claims that derive from the same transaction or occurrence as another claim over which the court has jurisdiction;
Discretionary
4. Removal (from state to federal) by Defendant 28 USC §1441(a)
Federal Question Jurisdiction: Exclusive
Bankruptcy – 28 USC §1334
Antitrust – 28 USC §1397
Admiralty, maritime - 28 USC §1333
Patents, copyrights, trademarks, unfair competition - 28 USC § 1338
US involved (subject to waiver of Sovereign Immunity)
Postal Matters - 28 USC §1339
Internal Revenue - 28 USC §1340
Security Exchange Act - 15 USC §78aa
Foreign states and common carriers - 28 U.S.C. §§ 1330(a), 1605–1607; 49
U.S.C. §§ 11704(a)
Consuls and Vice Consuls as Defendants
Subject Matter Jurisdiction: Statutory Construction
Background: A taxpayer who receives a notice of intent to levy from the IRS can petition to receive a “collection due process hearing” before the IRS’ Independent Office of Appeals.
Statute: “[A] person may, within 30 days of a determination under this section, petition the Tax Court for review of such determination (and the Tax Court shall have jurisdiction with respect to such matter).” 26 U. S. C. 6330(d)(1)’s (emphasis added).
Holding: The term “such matter” refers to the petition, not the entire preceding phrase. Thus, the 30-day time limit to file a petition for review of a collection due process determination is an ordinary, nonjurisdictional deadline subject to equitable tolling.
See, Boechler, P.C. v. Comm'r, 2022 U.S. LEXIS 2095 (2022)
Subject Matter Jurisdiction: Declaratory Judgment Act
“In a case of actual controversy within its jurisdiction… any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought. Any such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such.”
28 USC §2201(a).
BTW: The circuit and county courts have jurisdiction within their respective jurisdictional amounts to declare rights, status, and other equitable or legal relations whether or not further relief is or could be claimed.
Fla. Stat. § 86.011
Test for Jurisdiction under The Declaratory Judgment Act
Previously, both:
(1) an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit; and,
(2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity.
See, BP Chems. Ltd. v. Union Carbide Corp., 4 F.3d 975, 978 (Fed. Cir. 1993).
Now:
Where a plaintiff's self-avoidance of imminent injury is coerced by threatened enforcement action of a private party, that plaintiff may invoke jurisdiction under the Declaratory Judgment Act.
A licensee of a patent was not required by Article III to break or terminate its license agreement before seeking a declaratory judgment in federal court that the underlying patent is invalid, unenforceable, or not infringed.
MedImmune, Inc. v. Genentech, Inc.,
549 U.S. 118, 137 (2007) (emphasis added).
Can You Get in To (And Stay In) Federal Court?
1. Justiciability - Case or Controversy Requirement of Article III
a) No Advisory Opinions [but OK in FL under Fla. Const. Art. V, § 3]
b) Ripeness
c) Mootness
d) Standing
e) Adequate and Independent State Grounds
f) Eleventh Amendment Limitations
2. FRCP 12
Justiciability: Lack of Ripeness
Policy: To avoid advisory opinions, and involvement in abstract disagreements over government policies
Test:
(1) the fitness of the issues for judicial decision (issue must not rely solely on uncertain or contingent events); and,
(2) the hardship to the parties of withholding court consideration. See, Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149, 18 L. Ed. 2d 681, 87 S. Ct. 1507 (1967).
Ripeness: Regulation
Where the National Park Service (NPS) issued a regulation that was found to be a general statement of policy designed to inform the public of NPS's views on the proper application of the Contract Disputes Act of 1978 (CDA), which:
did not command anyone to do anything or to refrain from doing anything;
did not grant, withhold, or modify any formal legal license, power, or authority;
did not subject anyone to any civil or criminal liability; and,
created no legal rights or obligations,
a trade group representing concessionaires was found not to have suffered undue hardship for want of a court consideration, and the suit was found to lack ripeness.
See, Nat'l Park Hospitality Ass'n v. Dept. of Interior,
538 U.S. 803, 808 (2003).
Ripeness: Landmark Designation
The designation by a municipal preservation board of a temple as historic site (undermining the plans of the owners of the temple to demolish and rebuild it to conform with religious dictates) caused the owners immediate hardship (delay, uncertainty and expense) sufficient to satisfy the ripeness requirement.
See, Temple B'Nai Zion, Inc. v. City of Sunny Isles Beach, 727 F.3d 1349 (11th Cir. 2013).
Justiciability: Mootness
A real, live controversy must exist at all stages of review not merely when the complaint is filed.
See, DeFunis v. Odegard, 416 US 312 (1974).
“[The] opposing party also must have an ongoing interest in the dispute, so that the case features “ 'that concrete adverseness which sharpens the presentation of issues.’
Los Angeles v. Lyons, 461 U.S. 95, 101, 103 S. Ct. 1660, 75 L. Ed. 2d 675 (1983). A court does not lose jurisdiction for mootness merely by dissolution of a respondent corporate party.
See, Walling v. James V. Reuter, Inc., 321 U.S. 671, 675 (1944).
Exception: Capable of repetition, but evading review
See, Weinstein v Bradford, 423 US 147 (1975)
Mootness: Termination of Challenged Government Policy
A challenge to a government policy that has been unambiguously terminated will be moot in the absence of some reasonable basis to believe that the policy will be reinstated if the suit is terminated."
See, Troiano v. Supervisor of Elections, 382 F.3d 1276, 1285 (11th Cir. 2004).
Three broad factors in applying an exception:
1) Did the change in conduct result from substantial deliberation or is it merely an attempt to manipulate our jurisdiction?
2) Was the government's decision to terminate the challenged conduct "unambiguous"?
3) Has the government consistently maintained its commitment to the new policy or legislative scheme?
See, Flanigan's Enters. v. City of Sandy Springs, 868 F.3d 1248, 1257 (11th Cir. 2017).
Justiciability: Standing
“Cases” and “Controversies” – not collusive actions brought to determine a point of law, or to settle the rights of a third person who is not a party.
Plaintiffs must demonstrate a "personal stake in the outcome" in order to "assure that concrete adverseness which sharpens the presentation of issues" necessary for the proper resolution of constitutional questions.
See, Baker v. Carr, 369 U.S. 186, 204 (1962).
“Injury in Fact” Suffered by P, or Imminently Threatened
Concrete and particularized
Traceable to the challenged action of the defendant; and
Redressable by a favorable judicial decision.
See, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Statutory Standing
“Cases” and “Controversies” – not collusive actions brought to determine a point of law, or to settle the rights of a third person who is not a party.
Plaintiffs must demonstrate a "personal stake in the outcome" in order to "assure that concrete adverseness which sharpens the presentation of issues" necessary for the proper resolution of constitutional questions.
See, Baker v. Carr, 369 U.S. 186, 204 (1962).
“Injury in Fact” Suffered by P, or Imminently Threatened
Concrete and particularized
Traceable to the challenged action of the defendant; and
Redressable by a favorable judicial decision.
See, Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Statutory Standing
Two relevant background principles:
1) Zone of interests - a statutory cause of action extends only to plaintiffs whose interests “fall within the zone of interests protected by the law invoked.”
Allen v. Wright, 468 U.S. 737, 751, 104 S. Ct. 3315, 82 L. Ed. 2d 556 (1984).
2) Proximate causality - plaintiffs whose injuries are proximately caused by violations of the statute, not to any remote cause.”
See, Waters v. Merchants’ Louisville Ins. Co., 36 U.S. 213 (1837).
Standing: Patent Infringement & False Advertising
Background:
In a liquidation plan under a bankruptcy action, unsecured creditors received rights to bring and prosecute causes of action, but legal title to the patents was given to the plan agent. Holding:
A plaintiff who does not hold the exclusionary right lacks Constitutional standing to enforce the patent.
See, Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir, 2007). Standing to Bring a Claim of False Advertising under the Lanham Act §1125(a) Zone of interests: plaintiff must allege an injury to a commercial interest in reputation or sales. Proximate causality: plaintiff must show economic or reputational injury flowing directly from defendant’s deceptive advertising; deception of consumers causes them to withhold trade from the plaintiff.
See, Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 331-333 (2014).
Standing: Cognizable Claim, Traceability
Parents of black public school students in districts undergoing desegregation lacked standing to challenge the procedures of the Internal Revenue Service (IRS) regarding the granting of tax-exempt status to private schools.
No pleading of a judicially cognizable injury, and
The alleged injury was not fairly traceable to the challenged government conduct.
See, Allen v. Wright, 468 U.S. 737 (1984).
Standing: Concrete Harm
Member of a class whose credit reports, which contained alerts that labeled the class members as potential terrorists, drug traffickers, or serious criminals, were disseminated to third parties, suffered reputational damage, a concrete injury in fact, and thus had standing.
However other class members whose credit reports were not communicated to third parties yet lacked standing.
See, TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021).
Can You Survive a Motion to Dismiss under FRCP 12?
lack of subject-matter jurisdiction;
lack of personal jurisdiction;
improper venue;
insufficient process;
insufficient service of process;
failure to state a claim upon
which relief can be granted; and,
failure to join a party under Rule 19.
USCS Fed Rules Civ Proc R 12
Personal Jurisdiction
The Fourteenth Amendment’s Due Process Clause “limits the power of a state court to render a valid personal judgment against a nonresident defendant.”
World-Wide Volkswagen Corp. v. Woodson, 444 U. S. 286, 291, 100 S. Ct. 559, 62 L. Ed. 2d 490 (1980).
Two types of personal jurisdiction:
General jurisdiction
Specific jurisdiction
Personal Jurisdiction: General Jurisdiction
For an individual: the individual’s domicile
For a corporation: whether that corporation’s “affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State.”
Goodyear Dunlop Tires Operations, S. A. v. Brown, 564 U. S. 915, 919, 131 S. Ct. 2846, 180 L. Ed. 2d 796 (2011).
A court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.
Goodyear, at 919 (emphasis in original).
But only a limited set of affiliations with a forum will render a defendant amenable to” general jurisdiction in that State.
See, Daimler AG v. Bauman, 571 U.S. 117 (2014).
Test for Specific Personal Jurisdiction
Previously: A tribunal's jurisdiction over persons is necessarily limited by the geographic bounds of the forum. See, Pennoyer v. Neff, 95 U. S. 714, 24 L. Ed. 565 (1878).
Now: In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant’s contacts with the forum.
See, Burger King Corp. v. Rudzewicz, 471 U. S. 462, 472-473 (1985). Where a defendant out-of-state corporation's only connection with New York was for the occasional purchase of merchandise, the court was found to lack personal jurisdiction over the defendant.
See, Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516 (1923). The fact that a foreign corporation sent personnel into the forum state for training in connection with the purchase of equipment in that State was held to be insufficient to find personal jurisdiction.
See, Helicopteros Nacionales De Colombia v. Hall, 466 U.S. 408, 418 (1984). A California district court lacked personal jurisdiction over German corporation Daimler for injuries allegedly caused by conduct of subsidiary MB Argentina that took place entirely outside the United States. See, Daimler.
Personal Jurisdiction: Patent
The Northern Dist. of Alabama had no personal jurisdiction over a Taiwanese patentee who sent infringement warning letters to an alleged infringer (who later filed a Declaratory Judgment action) concerning its competing keyboard video-mouse switches, but who otherwise had no substantial contacts with the forum state.
But, the US Dist. Ct. for the District of Columbia would have personal jurisdiction over the patent claims under 35 USCS § 293, and pendent personal jurisdiction over the non-patent claims under 28 USC § 1367(a). Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1326 (Fed. Cir. 2008).
Failure to State a Claim: Liberal
Pleading A pleading that states a claim for relief must contain:
(1) a short and plain statement of the grounds for the court’s jurisdiction, unless the court already has jurisdiction and the claim needs no new jurisdictional support;
(2) a short and plain statement of the claim showing that the pleader is entitled to relief; and
(3) a demand for the relief sought, which may include relief in the alternative or different types of relief.
USCS Fed Rules Civ Proc R 8 (emphasis added).
Failure to State a Claim: Test of Factual Allegations
"Rule 12(b)(6) does not countenance. . . dismissals based on a judge's disbelief of a complaint's factual allegations."
Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974). On any motion to dismiss for failure to plead a claim on which relief can be granted, courts must accept all factual allegations in the complaint as true.
See, Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
Prior standard;
“[A] complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief."
Conley v. Gibson, 355 U.S. 41, 45-46 (1957) (emphasis added).
Current standard:
To overcome a 12(b)(6) challenge, plaintiff’s complaint must contain “enough facts to state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (emphasis added).
Duties to the Court: Rule 11
(b) By presenting to the court a pleading, written motion, or other paper… an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:
it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;
the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and
the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.
(c) Sanctions.
USCS Fed Rules Civ Proc R 11.
Reinhardt’s Rules for Consideration Prior to Filing in Federal Court
Before communicating the possibility of litigation to a potential defendant, consider the prospect of her as a declaratory judgment plaintiff.
Include all applicable state causes of action in the complaint.
Consider the universe of potential counterclaims.
Test all contentions of fact and law that will be in the complaint, and that may likely be required in future filings, by Rule 11.
In case of an out-of-state plaintiff or defendant, carefully consider the question of personal jurisdiction, either general or specific.
If a claim is to be based on a statute, explore the statute and case law for relevant subject matter and personal jurisdiction standards.
If time-pressured to file a complaint, be mindful of the 12(b)(6) plausibility requirement. Also, see 4, supra.
