Subject Matter Jurisdiction in Antitrust and Business Tort Litigation

Pages269-302
269
CHAPTER IX
SUBJECT MATTER JURISDICTION IN
ANTITRUST AND BUSINESS TORT LITIGATION
This chapter opens the discussion of procedural issues
frequently encountered in business tort litigation. When
evaluating choices among federal and state sta tutory and
common law claims potentia lly available to address
marketplace conduct, subject matter jurisdiction often is a
threshold issue. Personal jurisdiction, process, a nd venue are
treated in the next chapter. Eds.
A. Introduction
This chapter examines issues that frequently arise in connection with
the subject matter jurisdiction of the state and federal courts in antitrust
and business tort litigation. While relatively straightforward, the
principles involved often influence the outcome of a variety of
procedural issues that may arise in the initial stages of business litigation,
such as removal and remand, transfer of venue, and preemption, which
are addressed in subsequent chapters.
B. Types of Federal Subject Matter Jurisdiction
Subject matter jurisdiction is the power of a court to entertain and
adjudicate certain types of disputes.
1
A judgment rendered in a court
without subject matter jurisdiction is void.
2
While many state courts
generally possess subject matter jurisdiction over actions brought under
either federal or state law unless a statute excludes it, a federal court may
exercise subject matter jurisdiction only when it is specifically
1
. 1 ROBERT L. HAIG, BUSINESS AND COMMERCIAL LITIGATION IN FEDERAL
COURTS § 1.1 at 4 (3d ed. 2011).
2
. Caterpillar Inc. v. Lewis, 519 U.S. 61, 76-77 (1996) (federal district court
must po ssess federal court subject matter jurisdiction when judgment is
rendered for it to b e valid); Cunningham v. BHP Petroleum Gr. Brit., 427
F.3d 1238, 1245 (10th Cir. 2005) (judgment of court lacking subject
matter jurisdiction is void); Orff v. United States, 358 F.3d 1137, 1149
(9th Cir. 2004 ) (same); General Star Nat’l Ins. Co. v. Administratia
Asigurararilor de Stat, 28 9 F.3d 434, 437 (6th Cir. 2002) (same);
Antoine v. Atlas Turner, Inc., 66 F.3d 105, 108 (6th Cir. 1995) (same).
270 Business Torts and Unfair Competition Hand book
authorized to do so.
3
Federal courts are thus commonly referred to as
courts of “limited,” rather than “general,” jurisdiction.
4
A party intending
to litigate in federal court, either by initiating the lawsuit or seeking
removal, bears the burden of establishing the court’s jurisdictional
authority over the case.
5
Federal subject matter jurisdiction over a particular controversy must
derive from the Constitution or an act of Congress.
6
Contracting parties
cannot confer subject matter jurisdiction by agreement on a federal
court.
7
The principal federal statutes relevant to subject matter
3
. Enochs v. Lampasas Cnty., 641 F.3d 155 (5th Cir. 2011).
4
. Mims v. Arrow Fin. Servs., 132 S. Ct. 740, 747 (2012); Bender v.
Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986); Delalla v.
Hanover Ins., 660 F.3d 180, 184 (3d Cir. 2011) (quoting Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994)); Arkansas Blue
Cross & Blue Shield v. Little Ro ck Cardiology Clinic, P.A., 551 F.3d
812, 816 (8th Cir. 2009); Empagran S.A. v. F. Hoffman-LaRoche, Ltd.,
388 F.3d 337, 346 (D.C. Cir. 2004); Tsegay v. Ashcroft, 386 F.3d 1347,
1353 (10 th Cir. 2004); De Asencio v. Tyson Foods, 342 F.3d 301, 310
n.14 (3d Cir. 2003); Marine Equip. Mgmt. Co. v. United States, 4 F.3d
643, 646 (8th Cir. 1993). See genera lly 13 CHARLES ALAN WRIGHT ET
AL., FEDERAL PRACTICE AND PROCEDURE § 3522 (3d ed. 2008).
5
. See, e.g., Hertz Corp. v. Friend, 130 S. Ct. 1181, 1194 (2010) (noting that
“[t]he burden of persuasion for establishing diversit y jurisdiction . . .
remains on the party asserting it”); Kokkonen, 511 U.S. at 377 (party
asserting federal jurisdiction b ears burden of establishing jurisdiction);
McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)
(party seeking to litigate in federal court bears burden of establishing
jurisdictional basis for doing so); McCann v. Newman Irrevocable Trust,
458F.3d 281, 286 (3d Cir. 2006) (same); Samuel-Bassett v. KIA Moto rs
Am., 357 F.3d 392, 396 (3d Cir. 2004) (same); Herrick Co. v. SCS
Commc’ns, 251 F.3d 31 5, 323 (2d Cir. 2001) (burden lies with party
attempting to bring action to federal court).
6
. See Kokkonen, 511 U.S. at 377; McNutt, 298 U.S. at 189; Lindstrom v.
United States, 510 F.3d 1191, 1193 (10th Cir. 2007); McCann, 458 F.3d
at 286 (original jurisdiction for diversity is granted by statute).
7
. Sosna v. Iowa, 419 U.S. 39 3, 398 (1975); see also Hastings v. Wilson,
516 F.3d 1055, 1060 (8th Cir. 2008) (parties cannot vest federal subject
matter jurisdiction by contract); Mires v. United States, 466 F.3d 1208,
1212 (10th Cir. 2006) (noting that “lack of federal jurisdiction cannot
be . . . overcome b y an agreement of the parties”) (quoting Mitchell v.
Maurer, 293 U.S. 237, 244 (1934)); Binder v. Price Waterhouse & Co. ( In
re Resorts Int’l, Inc.), 372 F.3d 154, 161 (3d Cir. 2004 ) (parties cannot
create subject matter jurisdiction by their own agreement).
Subject Matter Jur isdiction 271
jurisdiction in federal court business tort litigation are set out in Chapter
85 of the Judicial Code (codified at Title 28 of the United States Code),
and deal with the three main types of federal subject matter jurisdiction:
federal question,
8
diversity,
9
and supplemental jurisdiction.
10
Although
often considered a subset of diversity jurisdiction, the passage of the
Class Action Fairness Act of 2005
11
has expanded the availability of the
federal courts to business tort litigants and now typically is labeled as
another type of federal subject matter jurisdiction.
12
1.
Federal Question Jurisdiction
Federal question jurisdiction derives from the nature of the asserted
claim. The general federal question statute provides that federal district
courts shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States, without regard to the
amount in controversy between the parties.
13
A cause of action is generally deemed to “arise under” federal law
either when the cause of action is created by federal law or is grounded
in state law but requires the resolution of a substantial question of federal
law involving a significant federal interest.
14
“Federal law” includes
8
9
. See id. § 1332.
10
. See id. § 1367.
11
. Class Action Fairness Act, 28 U.S.C. §§ 1332(d), 1453, 17 11-15
[hereinafter CAFA].
12
. See id. § 1332(d).
13
. Id. § 1331. The elimination of the amount -in-controversy requirement has
rendered statutes, such as those that confer federal subject matter
jurisdiction over claims arising under feder al antitrust laws, largely
redundant. See 13D WRIGHT ET AL., supra note 4, § 3574.
14
. See Empire HealthChoice Assurance, Inc. v. McVeigh, 547 U.S. 677,
689-90 (2006) (case “arises under” federal law when right to r elief is
dependent on “resolution of a substantial question of federal law”)
(quoting Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for
S. Cal., 463 U.S. 1, 27-28 (1983)) ; Grable & Sons Metal Pro ds. v. Darue
Eng’g & Mfg., 545 U.S. 308, 312 (2005) (federal q uestion jurisdiction
may arise when “state -law clai ms . . . implicate significant federal
issues”); Franchise Tax Bd. of Cal., 463 U.S. at 9-10, 13 (case “arises
under” federal law when substantial d isputed issue of federal law is
necessary element of state law claim); Bernhard v. Whitney Nat’l Bank,
523 F.3d 546, 551 (5th Cir. 2008) (federal question jurisdiction may be
conferred when a state law claim necessarily implicates substantial and
disputed federal issue); Pinney v. No kia, Inc., 402 F.3d 430, 442 (4th Cir.

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT