The jurisdiction of the US courts

In the USA, jurisdiction generally covers: (i) subject matter jurisdiction; (ii) personal jurisdiction; and (iii) venue. This Note focuses on the first two.

Subject matter jurisdiction refers to “the power of the court to decide this type of case.” Here, federal courts and state courts tend to be different. While federal courts have limited subject matter jurisdiction, state courts on the other hand are generally courts of unlimited subject matter jurisdiction.

Federal courts have 5 main congressional grants of subject matter jurisdiction: (i) federal question jurisdiction — a claim that arises under federal law and is based on the plaintiff’s “well-pleaded complaint” but never on a defence; (ii) diversity jurisdiction — complete diversity between opposing parties in a case (subject to minimal diversity exceptions) with the amount in controversy being more than $75,000 exclusive of interest and costs; (iii) supplemental jurisdiction — where claims which ordinarily would not qualify are brought in on the basis that they constitute the same case or controversy because “they arise from the some common nucleus of operative fact.”; (iv) removal jurisdiction — where a case moves from a state court to a federal court; and (v) legislative jurisdiction — covering specific types of cases.

Personal jurisdiction refers to “the power of the court to decide the rights and liabilities of this defendant.” These are (i) in personam; (ii) in rem; and (iii) quasi in rem. Generally, the rules are the same in both the federal and state courts. Under the Erie Doctrine, in a diversity case, the federal courts apply federal procedural law but the substantive law of the state where they sit for fairness, consistency and the avoidance of outcome determinative forum shopping.

Under the Klaxon Doctrine, in conflict of law cases under diversity jurisdiction, a federal court must apply the choice of law rules of the state where it sits. That is testament of the fact that state rules and bases for personal jurisdiction may differ from state to state.

In general terms, physical presence in the state, domicile and consent empower courts to exercise personal jurisdiction over a defendant. In the case of corporations, considerations of the nature and extent of “doing business” in the state, being at home in the state, incorporation and principal place of business are key considerations.

In specific personal jurisdiction terms, all states have “long-arm statutes” which give their courts in personam jurisdiction over out-of-state defendants with respect to particular transactions involving the state. Certain states extend this “as far as the Constitution allows.”

Some list specific activities such as an act or omission in the state or if done outside the state, that causes injury in the state, a contractual provision, ownership or use of property in the state, committing certain torts in the state etc.

The exercise of personal jurisdiction over the defendant must be permitted by the Due Process Clause of the US Constitution — the defendant must have “minimum contacts” with the forum state such that it is consistent with the traditional notions of fair play and substantial justice. The courts look for a purposeful availment by the defendant of the protections of the forum’s law such that it should be reasonably foreseeable that the defendant could be sued in that state.

By Robert Nii Arday Clegg

{BA, LLB (Ghana); LL.M. (Harvard)}

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