Subject Matter Jurisdiction In Antitrust and Business Tort Litigation

• Pages: 237-260

CHAPTER IX

SUBJECT MATTER JURISDICTION IN

ANTITRUST AND BUSINESS TORT LITIGATION

This chapter opens the discussion of procedural issues

commonly encountered in antitrust and business tort litigation.

When evaluating choices among federal and state statutory and

common law claims potentially available to address

marketplace conduct, subject matter jurisdiction often becomes

a threshold issue. Personal jurisdiction, process, and venue

are treated in the next chapter. – Eds.

A. Introduction

This chapter examines issues that typically arise in assessing subject

matter jurisdiction of the state and federal courts in antitrust and business

tort litigation. While relatively straightforward, the authorities governing

subject matter jurisdiction and the strategy involved in determining when

to pursue the subject matter jurisdiction of a particular court often

determine the outcome of a variety of procedural issues related to the

initial stages of business litigation, such as removal and remand, transfer

of venue, and preemption, which are treated in subsequent chapters.

B. Types of Federal Subject Matter Jurisdiction

Subject matter jurisdiction is literally 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 invalid.2 While most

state courts generally possess subject matter jurisdiction over actions

brought under federal or state law unless a statute excludes it, a federal

1. 1 ROBERT L. HAIG, BUSINESS AND COMMERCIAL LITIGATION IN FEDERAL

COURTS § 1.1, at 3 (1998).

2. Caterpillar Inc. v. Lewis, 519 U.S. 61, 77 (1996) (district court must

possess federal court subject matter jurisdiction when judgment is rendered

for it to be valid); Gen. Star Nat’l Ins. Co. v. Administratia Asiguararilor

de Stat, 289 F.3d 434, 437 (6th Cir. 2002) (judgment is void if rendered by

court lacking subject matter jurisdiction); Antoine v. Atlas Turner, Inc., 66

F.3d 105, 108 (6th Cir. 1995) (same).

238 Business Tort Law

court may exercise subject matter jurisdiction only when it is specifically

authorized to do so. Federal courts are thus commonly referred to as

courts of “limited,” rather than “general,” jurisdiction.3 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.4

Federal subject matter jurisdiction over a particular controversy

must derive from an act of Congress.5 Even a contractual agreement

between parties is incapable of conferring subject matter jurisdiction on a

federal court.6 The principal federal statutes relating to business tort

litigation and conferring subject matter jurisdiction on federal courts 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,7 diversity,8 and

supplemental jurisdiction.9

3. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986);

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 (10th Cir. 2004); De

Asencio v. Tyson Foods, Inc., 343 F.3d 301, 310 n.14 (3d Cir. 2003);

Marine Equip. Mgmt. Co. v. United States, 4 F.3d 643, 646 (8th Cir.

1993); United States v. Chambers, 944 F.2d 1253, 1258 (6th Cir. 1991);

see generally 13 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND

PROCEDURE § 3522 (2d ed. 1997).

4. See, e.g., 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); Herrick Co. v. SCS

Commc’ns, Inc., 251 F.3d 315, 323 (2d Cir. 2001) (burden lies with party

attempting to bring action to federal court).

5. See McNutt, 298 U.S. at 189.

6. Sosna v. Iowa, 419 U.S. 393, 398 (1975); see also Binder v. Price

Waterhouse & Co., LLP (In re Resorts Int’l, Inc.), 372 F.3d 154, 161 (3d

Cir. 2004) (parties cannot create subject matter jurisdiction by their own

agreement).

7. See 28 U.S.C. § 1331.

8. See id. § 1332.

9. See id. § 1367.