Federal Court

Federal Court in United States

Plain-English Law

Federal Court as defined by Nolo’s Encyclopedia of Everyday Law (p. 437-455):

A branch of the United States government with power derived directly from the U.S. Constitution. Federal courts decide cases involving the U.S. Constitution, federal law, and some cases where the parties are from different states.

Practical Information

By Bryant Y. Yang and Emerson H. Kim. Bryant Y. Yang is a litigation associate at Irell and Manella in Los Angeles. Emerson H. Kim, a 2012 graduate of Loyola Law School, is a former extern for U.S. District Judge S. James Otero.

When defendants remove cases to federal court on diversity grounds, a number of procedural and jurisdictional issues are sure to arise.

Seasoned litigators know that defendants will often remove a civil case to federal court. The most common reason for this tactic is that state court procedural rules are more favorable to plaintiffs. For example, California requires parties (usually defendants) to file their motions for summary judgment at least 105 days prior to trial – a minimum notice of 75 days and a hearing no later than 30 days before trial. (Cal. Code Civ. Proc. § 437c(a).) In federal court, the window for filing stays open much longer: Defendants may move for summary judgment at any time until 30 days after the end of discovery. (Fed. R. Civ. P. 56(b).)

Jurisdictional Prerequisites

In their rush to change venue to what they perceive as a more favorable forum, defendants often fail to determine whether removal jurisdiction exists. Pursuant to statute, defendants may remove a state civil action to federal court if original jurisdiction exists. (See 28 U.S.C. § 1441.) Federal courts most commonly have original jurisdiction where:
– the action arises under the U.S. Constitution, federal law, or treaties of the United States;
– the dispute is an admiralty or maritime case; and
– the amount in controversy exceeds $75,000 and there is complete diversity in the parties’ citizenships.

Defendants seem to encounter the most difficulty when removing diversity jurisdiction cases. They forget that “the core principle of federal removal jurisdiction on the basis of diversity … is determined (and must exist) as of the time the complaint is filed and removal is effected.” (Strotek Corp. v. Air Transp. Ass’n of Am., 300 F.3d 1129, 1131 (9th Cir. 2002).) This “time-of-filing” rule mandates that diversity jurisdiction must exist when the complaint is filed and when the action is removed.

There are two general exceptions to the time-of-filing rule. The rule does not apply if there is a voluntary dismissal of the nondiverse parties, and also if a “fraudulent joinder” exists.

The voluntary-dismissal exception provides that “a voluntary act by a plaintiff,” such as the dismissal of a nondiverse defendant through settlement, “could create diversity removal jurisdiction where none existed from the complaint.” It is crucial to note that this exception applies only to voluntary dismissals; it has no application in cases where the court has ordered that a party be removed from the case. Thus, the rule “does not allow creation of diversity removal jurisdiction by court order dismissing [a] nondiverse defendant.” (Gould v. Mut. Life Ins. Co. of N.Y., 790 F.2d 769, 773 (9th Cir. 1986) (citations omitted).)

The fraudulent-joinder exception permits removal of cases where the plaintiffs joined sham or nominal nondiverse defendants. (Ritchey v. Upjohn Drug Co., 139 F.3d 1313, 1318 (9th Cir. 1998).)

Failure to Remand

Often times, these two exceptions don’t apply and removal is improper. Yet, despite improper removal, many plaintiffs do not move for remand to state court. Instead, they remain silent and proceed to litigate. The problem arises when a plaintiff who has acquiesced to faulty removal later seeks to assert a jurisdictional challenge to an unfavorable outcome on the merits.

The U.S. Supreme Court has ruled that once a judgment is entered, it will not be disturbed so long as diversity jurisdiction existed at the time of judgment. (See Caterpillar Inc. v. Lewis, 519 U.S. 61, 73 (1996).) Consequently, even if removal jurisdiction did not exist and the case should have remained in state court, the judgment will be upheld. “[A] district court’s error in failing to remand a case improperly removed is not fatal to the ensuing adjudication if federal jurisdictional requirements are met at the time judgment is entered.” (Caterpillar, 519 U.S. at 64.) In fact, regardless of whether plaintiffs moved for remand or the district court improperly denied the motion, the judgment will be affirmed if original jurisdiction existed at the time of judgment.

Defendants who wish to remove on the basis of diversity should be mindful of the time-of-filing rule and its exceptions. Equally important, if there is no proper basis for removal, a plaintiff needs to promptly seek a remand to state court and, if the district court denies the request, seek interlocutory appeal. Otherwise, the plaintiff risks a double-barreled calamity: being stuck with an unfavorable result, imposed in an improper forum that was not of the plaintiff’s own choosing.

What is Federal Court?

For a meaning of it, read Federal Court in the Legal Dictionary here. Browse and search more U.S. and international free legal definitions and legal terms related to Federal Court.

Federal Court Subject Matter Jurisdiction Explained

References

See Also

  • Civil Procedure
  • Federal Courts

Federal Court Background

Resources

See Also

  • American court system (in U.S. law)
  • Federal Reporter
  • Federal Rules Decisions
  • Court Register
  • Court Of Appeal
  • Court Of Last Resort
  • Federal Tax Citator
  • Court Bond
  • Chancery Court
  • Review Court
  • Municipal Court

Federal Court: Open and Free Legal Research of US Law

Federal Primary Materials

The U.S. federal government system consists of executive, legislative, and judicial branches, each of which creates information that can be the subject of legal research about Federal Court. This part provides references, in relation to Federal Court, to the legislative process, the federal judiciary, and the primary sources of federal law (cases, statutes, and regulations).

Federal primary materials about Federal Court by content types:

Laws and Regulations

US Constitution
Federal Statutory Codes and Legislation

Federal Case Law and Court Materials

U.S. Courts of Appeals
United States courts of appeals, inclouding bankruptcy courts and bankcruptcy appellate panels:

Federal Administrative Materials and Resources

Presidential Materials

Materials that emanate from the President’s lawmaking function include executive orders for officers in departments and agencies and proclamations for announcing ceremonial or commemorative policies. Presidential materials available include:

Executive Materials

Federal Legislative History Materials

Legislative history traces the legislative process of a particular bill (about Federal Court and other subjects) for the main purpose of determining the legislators’ intent behind the enactment of a law to explain or clarify ambiguities in the language or the perceived meaning of that law (about Federal Court or other topics), or locating the current status of a bill and monitoring its progress.

State Administrative Materials and Resources

State regulations are rules and procedures promulgated by state agencies (which may apply to Federal Court and other topics); they are a binding source of law. In addition to promulgating regulations, state administrative boards and agencies often have judicial or quasi-judicial authority and may issue administrative decisions affecting Federal Court. Finding these decisions can be challenging. In many cases, researchers about Federal Court should check state agency web sites for their regulations, decisions, forms, and other information of interest.

State rules and regulations are found in codes of regulations and administrative codes (official compilation of all rules and regulations, organized by subject matter). Search here:

State opinions of the Attorney General (official written advisory opinions on issues of state law related to Federal Court when formerly requested by a designated government officer):

Tools and Forms

Law in Other Regions

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