07011
Question Analysis
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Outline
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Model Answer
I. Trial Court's Denial of Don's Market's Motion to Dismiss for Lack of Subject Matter Jurisdiction
The federal courts are courts of limited subject matter jurisdiction (SMJ). The subject matter jurisdiction of the federal courts must be based on either a federal question or on diversity of citizenship.
A. Federal Question Jurisdiction
A federal question exists when the plaintiff sues to vindicate a federal right, often under a federal statute or the U.S. Constitution. Here, Pam's suit involves a car accident in a private parking lot, so it is probably a negligence action, which does not involve not a federal question. Therefore, the federal court does not have subject matter jurisdiction under federal question.
B. Diversity of Citizenship SMJ
For a federal court to have SMJ based on diversity, each plaintiff must be diverse from each defendant and the amount in controversy must exceed $75,000.
1. Diversity of Citizenship
a. Rita
Rita (R) is a resident of State C. An individual's citizenship is that of their domicile; since R appears to be domiciled in C, where she resides, R is a citizen of C.
b. Don’s Market
Don's Market (DM) is probably a corporation. A corporation's citizenship includes its state of incorporation and the state in which it has its principal place of business. We are not told in which state Don's Market (DM) is incorporated. The market itself is in State B. If this is the only store DM operates, then its principal place of business is in State B and so it is a citizen of State B. Accordingly, DM is probably a citizen of B.
c. Pam
Pam, as an individual, is a citizen of the state of her domicile. Pam originally lived in State A, but left her job there indefinitely, subletting her apartment, to come to care for her mother in State B. Domicile is determined by physical residence combined with intent to make the state a permanent home. Pam (P) is physically residing in B. Her indefinite leave of absence from her job in State A may indicate she intends to eventually move back to A. If she intended to make B her permanent home, she probably would have quit her job in A and terminated her lease rather than subletting it. Accordingly, P probably does not have the intent to make B her permanent home. She is therefore still domiciled in State A and is a citizen of A.
d. Conclusion
Because P is a citizen of A, and R is a citizen of C, and DM is a citizen of B, complete diversity exists.
2. Amount in Controversy
a. Joint Tortfeasors
Here, P is claiming $60,000 from each defendant. A plaintiff may only aggregate claims against multiple defendants if they are joint tortfeasors. Here, P appears to be claiming that R and DM jointly caused her injury through their individual negligence: R's negligence in driving and DM's negligence in placing the concrete column. Since these acts of negligence combined to cause P's injury, DM and R are joint tortfeasors. Accordingly, P may aggregate her separate $60,000 claims together, making $120,000, in excess of $75,000.
b. Injunction
Additionally, P is seeking an injunction. An injunction may be valued by either the value of the benefit to plaintiff or the cost of compliance for defendant. The value of removing the column to P is probably not great. However, if the cost to DM of removing the column is over $15,000, then the injunction against DM plus the damages claim would exceed $75,000.
c. Conclusion
Accordingly, since the parties are all diverse, and the amount in controversy exceeds $75,000 through aggregation, subject matter jurisdiction was proper. The motion was therefore properly denied.
II. Denial of Motion for Change in Venue
A. Proper Venue in State B
To determine if R's motion should have been granted, we must see if venue was originally proper. In a diversity case, venue is proper in any district where all defendants reside; or where a substantial part of the claim arose; or, if neither is possible, any district where any defendant is subject to personal jurisdiction.
1. Residence
A corporation resides where it is subject to personal jurisdiction. Jurisdiction is proper under traditional bases, such as presence or citizenship in a state, or under minimum contacts analysis, in which the exercise of jurisdiction would not offend traditional notions of fair play and substantial justice.
Here, DM is a citizen of B since it has its principal place of business there. Personal jurisdiction will be proper under traditional grounds over a corporation present as a citizen in a state. Accordingly, DM is subject to personal jurisdiction in B as a citizen. Additionally, DM certainly has minimum contacts with State B. It does substantial business there, purposefully availing itself of State B's laws, since its market is in State B. Also, the accident arose directly out of DM's contacts with B, since its market parking lot is in State B and it was certainly foreseeable that DM could be sued in State B arising out of incidents involving its market in State B. Accordingly, DM is subject to personal jurisdiction in State B, and so, for venue purposes, it resides in State B as well. R, as a citizen and domiciliary of State C, resides in State C.
Accordingly, since DM resides in B and R resides in C, there is no district in which all defendants reside.
2. Substantial Part of the Claim
The accident occurred entirely in State B, in the DM parking lot. Accordingly, a substantial (indeed, all) part of the claim arose in the district in which DM's store is located. We are not told whether P's suit was filed in the district encompassing DM's market (sic). If State B only has one district, then venue is proper since the accident necessarily occurred within that district. If the accident and lawsuit are in different districts, then venue may not be proper where filed. More information is needed.
3. Any District Where Any Defendant is Subject to Personal Jurisdiction
Here, R, as a citizen of C, is subject to personal jurisdiction in C; as noted above, DM is subject to personal jurisdiction in B. Accordingly, if no district fulfilling either of the first two requirements exists, then venue would be proper in R's home district or in B. However, as explained above, venue is proper in the district encompassing DM's market (sic), where the accident occurred. Accordingly, assuming the lawsuit was filed in the same district encompassing DM's market (sic), venue was proper. Thus R's motion was properly denied on this basis.
B. Transfer of Venue
Where venue is proper to begin with, a court may transfer to any other venue where the case could originally have been brought for the convenience of the parties or witnesses or in the interests of justice.
1. Convenience
Here, Rita argues for transfer to State C on convenience grounds because that is where she resides, and it would be a hardship for her and her witnesses to defend in State B. It is true that Rita and the three primary eye witnesses, who also reside in State C (her friends who were in the car at the time of the accident and allege they saw Pam reading a magazine and not watching her step), would incur hardship in coming to State B to defend.
However, this hardship will be balanced against the hardship Pam and Don's Market will face in having to defend in State C, a foreign state for them. Pam is caring for her elderly mother and will find it hard to leave, and it will be hard for Don's Market to leave its business, especially as it is likely a sole proprietorship. Also, witnesses regarding the construction of the column, police who were called to the scene afterwards, and doctors who treated Pam are all located in State B. These factors weigh in favor of denying the motion to transfer.
2. Venue Proper in State C
Moreover, venue may not be proper in State C because the case could not have originally been brought there, nor did the claim arise there.
a SMJ in C
Diversity of citizenship would provide valid SMJ in C.
b. Personal Jurisdiction
R ,a citizen and domiciliary of State C, is subject to personal jurisdiction in C under traditional bases.
DM may not be subject to personal jurisdiction in State C. We are not told State C's long-arm statute, but it does not appear that DM is a citizen of C, or even that it does any business there. Without any contacts with State C, DM cannot be said to have purposefully availed itself of C's laws, nor is it foreseeable that DM would be sued in C if it has no contacts there. Finally, the accident occurred in State B, so not only does State C have little interest in exercising jurisdiction over DM, but there is no relationship between DM and State C and the cause of action. Accordingly, it is highly unlikely that State C could exercise personal jurisdiction over DM, since no traditional bases exist, and there are apparently no contacts between DM and C, much less the constitutionally required minimum contacts.
Since DM is not subject to personal jurisdiction in State C, then the action could not have been brought originally in State C. Therefore, venue cannot be transferred to State C.
c. Venue
As explained previously, a district exists where a substantial part of the claim arose: the district encompassing DM's market (sic), in State B. Therefore, since such a district exists, venue would not be proper in State C, since the only means of proper venue in State C would be under the "last resort" option of any district where any defendant is subject to personal jurisdiction. This option is unavailable where, as here, a district exists where a substantial part of the claim arose.
Accordingly, since transfer of venue to State C could not have been proper since neither venue nor personal jurisdiction over DM existed in C, the trial court properly denied R's motion to transfer venue.
III. Did the Appellate Court Correctly Dismiss Rita's Appeal?
A. Final Judgement
Appellate courts generally review final judgments. Here, the denial of R's motion to transfer venue was not a final judgment. An appellate court may consider interlocutory appeals on certain matters, particularly if the matter is of great importance and, if not settled immediately by the appellate court, will substantially affect subsequent litigation.
Here, the denial of the motion to transfer venue was not a final judgment. In addition, since venue was proper in State B, since the accident occurred there and so the claim arose there (see previous analysis),the denial of transfer of venue did not confer improper jurisdiction on the trial court. Accordingly, there was no compelling need to consider the denial of the motion on immediate appeal.
Even had the appellate court heard the appeal, it would have reviewed the denial on an abuse of discretion basis. While the requirements of personal jurisdiction must be properly met, and cannot be waived,the determination of whether transfer would be in the interests of justice is for the discretion of the trial court. The court could have found that, while R and her witnesses would be inconvenienced in State B, that P and DM would be more inconvenienced in State C, especially since P cares for her elderly mother in State B. Since this decision would be one of the trial court's discretion, the appellate court would have been unlikely to overturn it.
Therefore, the dismissal of R's appeal was proper.