STUDY SHEET QUESTIONS AND
CORRECT ANSWERS UPDATED
◉ A plaintiff domiciled in State A brought a wrongful death
action in a federal court in State A against a State B parent
corporation and one of its foreign subsidiaries. The plaintiff
alleged that a tire manufactured by the subsidiary in Europe had
caused his wife's death in an automobile accident in Europe.
The parent corporation does significant business throughout the
United States, including in State A. The subsidiary conducts no
business and has no employees or bank accounts in State A. The
subsidiary manufactures its tires for the European market, but
2% of its tires are distributed in State A by the parent
corporation. The subsidiary has moved to dismiss for lack of
personal jurisdiction. Should the court grant the subsidiary's
motion?
A: No, because 2% of the subsidiary's tires entered State A
through the stream of commerce.
B: No, because of the general personal jurisdiction established
over the parent. Answer: D: Yes, because the subsidiary lacks
continuous, systematic, and substantial contacts with State A
D is correct. Although the subsidiary put tires into the stream of
commerce, this is not enough to establish the minimum contacts
necessary for personal jurisdiction. The cause of action is not
related to the activity in the state because the accident occurred
in Europe, not in State A
◉ A senator from State A became upset when he learned that
residents of State A are not permitted to bring state law products
liability suits against State A companies in State A federal
courts, but that residents of State B may do so.
,The senator plans to introduce legislation that states: "Federal
courts shall have jurisdiction when the plaintiff's cause of action
shows that it is based upon a state products liability law." Is the
proposed legislation constitutional?
A: Yes, because Congress has plenary power to extend federal
jurisdiction to any questions arising under federal law or the U.S.
Constitution.
B: Yes, because Congress has plenary power to create federal
courts and determine their jurisdiction.
C: No, because it would extend federal jurisdiction to state law
claims without requiring diversity of citizenship among the
parties.
D: No, because it would not extend federal jurisdiction to
defendants. Answer: C: No, because it would extend federal
jurisdiction to state law claims without requiring diversity of
citizenship among the parties.
C is correct. If the senator's proposed legislation were to pass, it
would allow a plaintiff to bring suit and avoid the diversity
requirement, which would be unconstitutional.
◉ A pilot from State A sued a librarian from State B in a
federal district court in State A. The librarian sold the pilot an
expensive collectible watch through a website that generated a
valid sales contract. The pilot's complaint alleged that the
librarian breached the contract's terms because the librarian sold
the pilot a watch that materially varied from the description the
librarian had provided. The pilot is seeking $175,000 in
damages.
Shortly after selling the watch, the librarian went to State A on
vacation with her family. This was the librarian's first time ever
, in State A. While visiting State A, the librarian was served with
the pilot's complaint and a summons in accordance with State A
law. The librarian filed a motion to dismiss for lack of
jurisdiction.
Should the court grant the librarian's motion to dismiss?
A: Yes, because only federal courts have jurisdiction to hear
disputes between citizens. Answer: D: No, because the
librarian's physical presence in State A when she was served is
sufficient to establish personal jurisdiction.
D is correct. The court should not grant the motion because both
subject-matter and personal jurisdiction are satisfied. The facts
support diversity jurisdiction based on the citizenship of the
parties and amount in controversy. Furthermore, under Pennoyer
v. Neff, 95 U.S. 714 (1878), a court may exercise personal
jurisdiction over a non-resident defendant if she is present in the
forum state when personally served with process. This occurred
here, when the librarian was in State A on vacation and
personally served with the complaint and summons in
accordance with State A law
◉ A beneficiary of a trust, who is a citizen of State A, has sued
the trustee in federal court in State A for failing to correctly
distribute the income from the trust, seeking an accounting. The
trustee was personally served with process and the complaint by
the beneficiary's attorney while the trustee was vacationing in
State A. The trustee is a citizen of State B, and the accounts that
are the subject of the trust are located in State B.
What is the trustee's best response to the complaint?
A: Answer the complaint and counterclaim for abuse of process.
B: File an action in a State B court and move to enjoin the State
A action.