An Economic Analysis of Subject Matter Jurisdiction Waiver: A Response to Professor Buehler

10 Pages Posted: 27 Aug 2014 Last revised: 17 Dec 2014

See all articles by Daniel M. Klerman

Daniel M. Klerman

University of Southern California Gould School of Law

Date Written: August 24, 2014

Abstract

For nearly a century, it has been black letter law that federal subject matter jurisdiction is non-waivable. Both parties and judges can raise subject matter jurisdiction problems at any time, even on appeal. This doctrine has been criticized as wasteful, because cases are sometimes dismissed after trial and relitigated in state court. Dustin Buehler proposes that federal judges be required to issue a subject matter certification order near the beginning of every federal case, but that judges no longer routinely dismiss cases if it later becomes apparent that subject matter jurisdiction is lacking. While this proposal has much merit, its costs are likely to exceed its benefits. Judges and their clerks will have to prepare certification orders in all cases in order to prevent relitigation of a very small number of cases. Because the number of certification orders prepared will exceed the number of relitigations avoided by about a 500-to-1 ratio, the aggregate cost of certification orders (even though individually each order will require relatively little effort) is likely to be greater than the aggregate benefit of cases where relitigation in state court is avoided (even though each relitigated case imposes significant costs on parties and courts). While an economic analysis of the federalism concerns underlying the current non-waivability of subject matter jurisdiction suggests that the costs of occasional jurisdictional mistakes is low, there are better alternatives than requiring jurisdictional certification in every case. One alternative is notifying the relevant state Attorney General when subject matter jurisdiction defects are belatedly discovered; such cases would be dismissed only if the Attorney General asserts a state interest in having the case resolved in state court. In addition, the benefits of the current rule should not be ignored. The non-waivability of subject matter jurisdiction may, paradoxically, have the salutary effect of encouraging parties to be more careful about jurisdiction early in each case.

Keywords: jurisdiction, subject matter jurisdiction, waiver, federal courts

Suggested Citation

Klerman, Daniel M., An Economic Analysis of Subject Matter Jurisdiction Waiver: A Response to Professor Buehler (August 24, 2014). 89 Washington Law Review Online 1 (2014); USC CLASS Research Paper No. 14-29; USC Law Legal Studies Paper No. 14-37. Available at SSRN: https://ssrn.com/abstract=2487445

Daniel M. Klerman (Contact Author)

University of Southern California Gould School of Law ( email )

699 Exposition Boulevard
Los Angeles, CA 90089
United States
213-740-7973 (Phone)
213-740-5502 (Fax)

HOME PAGE: http://weblaw.usc.edu/contact/contactInfo.cfm?detailID=227

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