Hussian V. U.S. Bank National Association A Concise Primer On Federal Court Jurisdiction For Non-Lawyers

• Posted on: Jun 15 2018

Not every case can be brought in the federal court system.  Supreme Court Justice Antonin Scalia, in explaining the limited nature of federal court jurisdiction, stated that “[t]hey possess only that power authorized by the Constitution and statute, which is not to be expanded by judicial decree.” (Kokkonen v. Guardian Life Insurance Company of America, 114 S.Ct. 1673, 1675 (1994) (citations omitted).)   Stressing his point, Justice Scalia continued by pointing out that, “[i]t is to be presumed that a cause lies outside this limited jurisdiction and the burden of establishing the contrary rests upon the party asserting jurisdiction.”  (Kokkonen, 114 S.Ct. at 1675 (citations omitted).)

The plaintiff in Hussian v. U.S. Bank National Assoc. (E.D.N.Y. June 7, 2018), brought an action in federal court seeking an emergency temporary restraining  order to stop the defendants from selling his home at a foreclosure sale after a judgment of foreclosure and sale was issued in a state court foreclosure action.  Hussian, the plaintiff, appeared in the federal action, pro se —  meaning that he represented himself without the assistance of legal counsel.  It seems that Mr. Hussian’s pro se status led the court to write an easy to understand opinion addressing the basics of federal court jurisdiction.

Hussian attempted to invoke the Court’s federal question jurisdiction pursuant to 28 U.S.C. §1331 and diversity jurisdiction pursuant to 28 U.S.C. §1332.  Section 1331 provides that federal district courts “…shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States”.  Section 1332 provides that federal district courts “shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000…” and involves: (1) “citizens of different States;” (2) citizens of a State and citizens of a foreign state; (3) “citizens of different States and in which citizens or subjects of a foreign state are parties; and, a foreign state, as plaintiff, citizens of a State or different States.”  Jurisdiction under 28 U.S.C. 1332(1) (citizens of different States) generally requires “complete diversity between all plaintiffs and all defendants,” meaning that none of the plaintiffs can be from the same state as any of the defendants.  (Lincoln Property Co. v. Roche, 126 S.Ct. 606, 613 (2005) (Ginsburg, J.) (citations omitted).)  State (as defined with a capital “S”) includes the fifty states, the District of Columbia, Puerto Rico and the Territories of the Unites States.

In determining that diversity jurisdiction does not exist, the Hussian court found that while Hussian “alleges diversity jurisdiction … complete diversity does not exist between the parties as Hussian [the plaintiff] and RAS [one of the defendants] are residents of New York, and thus appear to be citizens of the same state.”

The Hussian court also found that there was no federal question jurisdiction under 28 U.S.C. 1331.  Hussian urged that 42 U.S.C. 1983, a civil rights statute, provided the requisite “federal question” to be in federal court. The court disagreed, stating that “Section 1983 requires that the conduct complained of must have been committed by a person acting under the color of state law and the conduct complained of must have deprived a person of rights, privileges or immunities secured by the Constitution or laws of the United States.”  (Internal quotation marks omitted.)  Acts of private individuals are not covered by Section 1983 and Hussian’s complaint did not allege that any of the defendants are “state actors.”

Subject matter jurisdiction is so important, that “[l]ack of subject matter jurisdiction cannot be waived and may be raised at any time by a party or by the court sua sponte.” (Citation omitted.)  An action brought in federal court in the absence of subject matter jurisdiction “must” be dismissed.  The Hussian court did, however, grant plaintiff leave to serve an amended complaint, recognizing that “courts should allow plaintiffs to amend complaints to drop dispensable nondiverse defendants whose presence would defeat diversity of citizenship.” (Citation and internal quotation marks omitted.)

The Hussian court also determined that plaintiff’s claim for injunctive relief challenging the state court foreclosure proceedings should be dismissed under the Younger abstention doctrine. Younger prohibits federal courts from hearing cases that “would disrupt state proceedings that: (1) are pending; (2) implicate important state interests; and (3) provide the plaintiffs an adequate opportunity to litigate federal claims.” (Citations and internal quotation marks omitted.)  The scope of the Younger abstention doctrine has been limited to three types of state court proceedings including “civil proceedings that implicate a State’s interest in enforcing the orders and judgments of its courts.”  (Citations and internal quotation marks omitted.)  “The Younger requirements are more than adequately satisfied when mortgage foreclosure proceedings, which concern the disposition of real property and hence implicate important state interests, are pending in state court, and there is no reason to doubt that the state proceedings provide the would-be federal plaintiff with an adequate forum to make the arguments he seeks to raise in federal court.”  (Citations omitted.)

Similarly, the Hussian court recognized that it was without jurisdiction to intervene in plaintiff’s dispute concerning the judgment of foreclosure and sale because “judgments of foreclosure are fundamentally matters of state law.  (Citations omitted.)

Tagged with: Commercial Litigation, Federal Court Jurisdiction., Mortgage Foreclosure