General instructions.

This is a closed book exam.

Do not remove the exam, blue books, or any exam materials from the room in which you are taking the exam.

Do not speak with any person other than the faculty member who is administering this exam until you have turned in your exam.
This exam consists of two parts. You will have three hours to complete the exam. Answer all questions. Do not answer a question by referring to an answer to a different question.

Identify yourself on your blue books only by your exam number. By placing the exam number on your blue book and by submitting your blue book for credit, you are agreeing to the following pledge as required by law school policy:

"On my honor I have neither given nor received improper assistance. And I will report any improper assistance that I am made aware of."

I. SHORT ANSWERS (suggested time: two hours)

Instructions. Answer each of the following questions in your blue book. Each question in this part can be answered adequately with a short well-written answer that is not longer than one paragraph.

1. Give examples of three kinds of cases in which federal courts have jurisdiction exclusive of the states, and give examples of two kinds of cases in which state courts have jurisdiction exclusive of federal courts.

2. Arkie, citizen of Arkansas, owned Lawngacre, a house with a large lawn located in Louisiana. Arkie contracted with Tex, a citizen of Texas, to provide lawn service at Lawngacre. Under the contract, Tex agreed to spray the lawn at Lawngacre every month during the summer with chemicals that included herbicides and insecticides.

Unfortunately, Tex forgot to treat Arkie's lawn during the months of June and July, so in August he covered the lawn with three times as much chemical spray as normal. Two days later, the entire lawn was dead.

Arkie learned that nothing would grow on his lawn for years. He spent over $75,000 adding new top soil to the property surrounding his house. Arkie commenced a civil action against Tex in federal court for the district in Texas in which Tex resides stating a claim for damage to the real property. Tex responded by filing a motion to dismiss citing the local action rule. The trial court denied the motion to dismiss. You are Tex's lawyer, and he wants to file an immediate appeal from the denial of his motion. Please advise him and explain.

3. Banking Corporation of the World, a Delaware corporation with its principal place of business in New York, operated banks all over the United States, including the Southern Charme Bank in Friars Point, Mississippi. It employed Bill Smith, a citizen of Arkansas, to operate the Southern Charme Bank. After Smith was arrested and charged with embezzlement, Banking Corporation of the World fired him. Smith was convicted of embezzlement, but his conviction was eventually overturned by the Mississippi Supreme Court.

Banking Corporation of the World commenced a civil action in Mississippi Circuit Court against Smith to recover $12,000, the amount he was accused of stealing from the bank. Smith answered the complaint and added a counterclaim against the bank for damages in the amount of $1,000,000 for wrongful discharge, libel, slander, and malicious prosecution.

Banking Corporation of the World has retained you as its new lawyer and wants to know whether it can remove the action to federal court. It received the counterclaim less that 20 days ago. Please advise and explain.


4. One morning in Lamarville, Mississippi, Bo walked up to Bubba and punched him in the face. Bubba subsequently commenced a civil action for assault and battery, seeking $5000 damages. Bubba filed the action in Chancery Court.

Bo filed a motion to transfer the action to Circuit Court, protesting that the Chancellor lacks subject matter jurisdiction and that he will be deprived of a jury trial. But the Chancellor told Bo that whether or not he has jurisdiction, he will not transfer the action to Circuit Court.

Bo has come to you for legal advice. What, if anything, can he do have the case transferred to Circuit Court?

5. In 1976 Bigg Insurance Corporation, a Delaware corporation with its principal place of business in New York, issued a life insurance policy to John Doe. When Doe purchased the policy in 1976 he resided in New York, but at the time of his death he resided in Alabama. Under the policy, Bigg agreed to pay $50000 at Doe's death to whomever Doe designated or (in the even he failed to designate a beneficiary) to Doe's estate.

In 1992 Doe wrote a letter to his two sisters Sissy and Missy, promising to give them the life insurance proceeds. The sisters claim that his letter constituted a "designation" of them as beneficiaries of the policy. But Sonny, Doe's son and executor of his estate, claims that no valid designation was made and that the proceeds are an asset of the estate.

Sonny and Sissy have always lived in Alabama. Missy lived in New York in 1992 but she moved and became a resident of Alabama in 1995.

The Insurance company has commenced an action for interpleader in federal court in New York, depositing $50000 cash with the clerk and joining as parties the claimants to the proceeds, Sonny, Missy, and Sissy. Sonny has moved to dismiss for lack of subject matter jurisdiction. Rule on his motion and explain.

6. Suppose that as an effort to reduce the spread of the A.I.D.S. disease, the United States Supreme Court enacts a new Federal Rule of Civil Procedure under the Rules Enabling Act. This new rule provides:

Rule 88. A.I.D.S. Control.

Any party commencing a civil action in any United States district court must file, within ten days of commencing the action, an affidavit from a licensed nurse or medical doctor stating that the party has been tested for A.I.D.S. The court shall dismiss the action if the party fails to file such an affidavit within ten days.

After the effective date of the new rule, Dave Crocker, citizen of Tennessee, sues Howie Yee, citizen of Hawaii, in federal court in Hawaii for breach of contract, demanding $100,000 damages. Crocker does not file the affidavit required by the federal rule.

After 10 days, Yee files a motion to dismiss pursuant to Rule 88.

Hawaii law does not require the filing of any such certificate. You are clerking for the federal judge before whom the motion to dismiss is pending. She asks you what to do. Please advise and explain.

7. In McDonald v. Mabee, 243 U.S. 90 92 (1917), the Supreme Court stated, "To dispense with personal service the substitute that is most likely to reach the defendant is the least that ought to be required if substantial justice is to be done." Agree or disagree and explain.

8. Mr. and Mrs. Jones, after years of a very unhappy marriage, separated. Two years later Mrs. Jones filed an action for divorce in Mississippi Circuit Court. Mr. Jones filed a motion to dismiss for lack of subject matter jurisdiction. The court denied the motion to dismiss and, after trial, entered a decree for Mrs. Jones. Mr. Jones wants to appeal only one issue: the lack of divorce jurisdiction in the Circuit Court. He has come to you for advice and wants to know whether he can appeal this error either to the Supreme Court or Court of Appeals. Please advise and explain.

9. Tom Trucker, citizen of Arkansas, drove a big truck for Bigg Trucking, Inc., a Delaware corporation with its principal place of business in Conway, Arkansas.

While driving in Tennessee, Trucker collided with a car, injuring Pam, Patty, and Polly. Pam, Patty, and Polly were Mississippi citizens.

Pam, Patty and Polly have commenced a civil action in federal court in the district in Tennessee where the accident occurred. Their action names both Tom Trucker and Big Trucking as defendants, alleging that defendants are jointly and severally liable for damages that total $60,000 stemming from the accident. (Pam demands damages of $20,000, Patty demands damages of $30,000, and Polly demands damages of $10,000.) The plaintiffs are aware that their claims may not be added together to satisfy the amount in controversy requirement for diversity jurisdiction. Accordingly, they invoke the supplemental jurisdiction of the district court.

Defendant Trucker moves to dismiss for lack of subject matter jurisdiction. Rule on the motion and explain.

10. On June 12, 1994, Chad and his girlfriend Heather were sitting at the Bad News Bar in Oxford, Mississippi. After they had had several drinks, Heather's old boyfriend, Jim, entered the bar. Jim came to the table and offered to buy Heather a drink. Although she refused, she was polite to Jim. Chad, who was extremely jealous, began to argue with Heather after Chip left the table. Heather announced that she wanted to leave. This made Chad even angrier, and he began to shout at Heather and call her names. In a loud tone of voice, audible to everyone in the bar, Chad stated that Heather had "V.D." (sexually transmitted disease). The statement was false.

Heather was furious and left the bar. Several days later, when her good friend Vickie (who was not at the bar) called to ask if Heather really was infected with a sexually transmitted disease, Heather decided she would have to sue to clear her name.

Heather is a citizen of Mississippi. Chad is a citizen of Tennessee. On June 11, 1995, Heather filed a complaint against Chad in federal district court for the northern district of Mississippi, stating a cause of action for slander and demanded compensatory damages of $10,000 and punitive damages in the amount of $45,000.

Chad was in Tennessee during the summer. On June 13, 1995, Heather's lawyer sent Chad a copy of the complaint together with a waiver of service form at his Tennessee address. Chad refused to sign and return the waiver of service form. But when he returned to Mississippi on August 15, 1995, he was served with process by personal service by a process server.

Mississippi law provides:

All actions for assault, assault and battery, maiming, false imprisonment, malicious arrest, or menance [sic], and all actions for slanderous words concerning the person or title, for failure to employ, and for libels, shall be commenced within one (1) year next after the cause of such action accrued, and not after.

Miss. Rev. Code Ann. § 15-1-35.

Chad files a motion to dismiss arguing that the statute of limitations has expired. You may assume that the cause of action accrued on June 12, 1994. Rule on Chad's motion and explain.

11. What were three reasons that the Court gave in support of its holding in the Erie case?

12. In an effort to protect plaintiffs from defendants who may try to hide their assets when they have learned they have been sued, Frank Dooley, a state legislator, has drafted a bill that would allow the pretrial "freezing" of a defendant's bank accounts. The bill allows bank accounts to be frozen by a court order before the defendant knows about the lawsuit whenever a plaintiff, at the time he files the original lawsuit, files a special freeze petition. The petition must be presented to a judge. The petition must be accompanied by an affidavit by the plaintiff alleging specific facts that show that he or she may win the relief sought after a full trial. The bill further provides that the defendant may demand a prompt hearing to challenge the freezing of the account and to have the assets released. The defendant can also automatically get the assets released by filing a bond with the court for the amount of the frozen account or for the amount of damages sought in the lawsuit (whichever is less).

Dooley has asked you whether his bill would be constitutional if enacted. Please advise and explain.

II. Long Answers (suggested time one hour)

Instructions. Consider the following problem carefully and write a coherent, literate essay in your blue book that responds to it.

The Case of the Bad Bolt

Roy and Dale grew up and got married in Texas. They were both working and living in Houston in 1995 when Roy got an offer to coach the Hockey Team at the University of Mississippi. Dale was very reluctant to leave Texas, which she loved, but she agreed to try living in Mississippi for one year.

In August of 1995 they moved to Oxford, Mississippi, where they rented a house with a month-to-month lease. As time passed, Roy like Mississippi more and more, but Dale still missed Texas. Roy registered to vote and voted in Mississippi elections in November, but Dale continued to vote by absentee ballet in Texas elections.

Because the house they rented was unfurnished, Roy and Dale needed to buy furniture. They liked none of the couches they saw in Oxford, but they subscribed to the Sunday Memphis Appeal and looked for advertisements for couches in it. The Memphis Appeal is a newspaper published in Memphis, Tennessee. Every Sunday, the paper prints 100,000 copies. Most of theses copies (92,000) are distributed to readers in Memphis or other towns in Tennessee. The remaining 8000 copies are delivered to readers in Arkansas, Mississippi, and elsewhere. A total of 3000 copies are delivered every Sunday in Mississippi.

In January 1996, Roy and Dale saw a lovely bright red couch advertised in the Memphis Appeal by Silversmiths, a department store. Roy and Dale made a long distance telephone call to Silversmiths in Memphis. They spoke to a salesperson who informed them that Silversmiths has two stores in Memphis but no stores in Mississippi. They also learned that Silversmiths will deliver items to Mississippi. Consequently, they ordered the couch over the phone, charging the purchase to their Mastercard credit card. The couch was delivered later that week by a Silversmiths delivery truck.

The day after receiving the couch, Roy and Dale discovered that the bright red coloring on its fabric rubbed off onto everything that touched it. Furious, they called Silversmiths and demanded the return of their purchase money. Silversmith's refused.

Silversmiths is a Texas corporation with its principal place of business in Memphis, Tennessee. In February 1996, Roy and Dale commenced a civil action for breach of contract against Silversmiths in federal district court for the northern district of Mississippi, demanding compensatory damages of $1000 and punitive damages of $50,000.

After being served by certified mail, Silversmiths answered the complaint and denied liability. It also moved to dismiss for lack of personal jurisdiction, lack of subject matter jurisdiction, and improper venue. In addition, Silversmiths filed and served a third-party complaint for impleader against Badd Boltmaker Company, the company from which it had purchased the allegedly defective red cloth used in the couch. Badd Boltmaker is a Delaware corporation with its principal place of business in Memphis. Silversmiths claims that Badd Boltmaker should be liable to it for any damages for which may be liable to Roy and Dale.

Badd Boltmaker has no agents or facilities in the state of Mississippi and has never done anything in the state. Accordingly the process server took the summons and copy of the complaint directly from the federal court in Mississippi and drove 80 miles to the Badd Boltmaker offices in Memphis where she delivered the process personally to the Vice President.

After Badd Boltmaker was joined as a third-party defendant, Roy and Dale filed a motion to amend their complaint to state a claim against it. Badd Boltmaker has opposed this motion, arguing that the court would lack subject matter jurisdiction over the amended complaint against it.

Pretrial research and discovery have disclosed the following additional information. Silversmiths regularly advertises in the Memphis Appeal; it sells about $7500 worth of merchandise annually to Mississippi customers; it makes approximately 50 deliveries annually to addresses in Mississippi. The total sales to Mississippi purchasers amount less than five per cent of its annual business. The President of Silversmiths filed an affidavit in which he avers that he was aware that some sales were made to Mississippi customers and some deliveries were made in Mississippi; but he denies that he ever anticipated that the corporation would be subject to personal jurisdiction in Mississippi. Legal research has disclosed that punitive damages are not recoverable for breach of contract under the law of Mississippi.

The following motions have been filed: 1) defendant Silversmiths' motion to dismiss for lack of personal jurisdiction; 2) defendant Silversmiths' motion to dismiss for lack of subject matter jurisdiction; 3) defendant Silversmiths' motion to dismiss for improper venue; 4) third-party defendant Badd Boltmaker's motion to dismiss Silversmith's impleader claim for lack of personal jurisdiction; 5) third-party defendant Badd Boltmaker's motion to dismiss Silversmith's impleader claim for lack of subject matter jurisdiction; 6) plaintiffs' motion to amend their complaint to state a claim against Badd Boltmaker, and Badd Boltmaker's argument that the court would lack jurisdiction over this amended complaint against it.

Please rule on each motion in order and explain your ruling fully.

1. Examples of cases in which federal courts have jurisdiction exclusive of the states are actions for copyright infringement, to enforce patents, and for bankruptcy. Others include disputes between states, actions against the United States. States have jurisdiction exclusive of federal courts over actions to probate wills and for divorce.

2. The trial court lacks venue and its denial of the motion to dismiss is error. But the ruling cannot be appealed from immediately because it is not a final judgment.

3. A plaintiff cannot remove.

4. The Chancellor lacks subject matter jurisdiction, but the denial of the motion to transfer is not immediately appealable because it is not a final judgment. Moreover, the defendant cannot wait for a final judgment to appeal, because the errors regarding jurisdiction and denial of jury trial will not be reversible if they are the only errors. Thus he must to bring the matter before the supreme court before judgment by petitioning for an extraordinary writ of mandamus.

5. Motion to dismiss for lack of subject matter jurisdiction is granted. First, there is no interpleader under Rule 22 because there in no diversity jurisdiction. (There is complete diversity but the amount in controversy does not exceed $50000.) Second, there is no statutory interpleader because the claimants are not from different states (not even minimal diversity).

6. The rule is probably invalid. The Rules Enabling Act authorizes the Supreme Court to promulgate only rules of "practice and procedure." But this rule is designed to promote medical exams completely unrelated to litigation in order to achieve certain public health goals. The rule may also abridge or modify substantive rights as prohibited by the Act. Because the rule is valid, the court should follow state law.

7. Disagree, the Supreme Court's most recent authoritative holding does not require the best method of service or the service most likely to reach a defendant but only a method reasonably calculated under the facts of a particular case to apprize the parties of the pendency of proceedings in time to afford them an opportunity to appear. [Ordinary mail and even publication will satisfy this requirement in many cases where methods that are "most likely to reach a defendant" are not reasonable because of difficulty or cost.]

8. Appeal it to the Supreme Court. The Mississippi Constitution prohibits the Supreme Court from reversing a Chancery or Circuit Court judgment when the only error is whether the case was one of law or equity jurisdiction. But divorce jurisdiction does not fall under the Chancery Court's equity jurisdiction, so the Supreme Court is not prevented from reversing. It cannot be appealed directly to the Court of Appeals but may be assigned to that court after appeal to the Supreme Court.

9. Motion to dismiss granted. There is no supplemental jurisdiction because the court does not have original jurisdiction over some part of the same case.

10. Motion to dismiss denied. The federal court will apply Mississippi law as to whether the action was commenced within the statute of limitations. Under Mississippi law the action was commenced for purposes of the statute of limitations when it was filed (June 11, 1995), provided that service was made within 120 days (which it was when the defendant was served August 15, 1995).

11. Reasons supporting the holding in Erie included: 1) policy objectives of federal general common law were not being achieved (instead federal general common law encouraged forum shopping and discriminated against in-state defendants); 2) the word "laws" in the Rules of Decision Act had been misinterpreted not to apply to state court decisions and not just positive laws; and 3) federal courts did not have power to make general common law under article III of the Constitution.

12. This prejudgment seizure of defendant's assets is unconstitutional. It does not contain the requirement that the plaintiff post a bond, which was an important safeguard against unmerited seizures approved in the Mitchell case. It also fails the Doehr test: the risk of error is great; the defendant's interest in the assets is seriously impaired; and no exigent circumstances are present to establish that plaintiffs have a strong interest in this special.

Second, the exercise of personal jurisdiction is constitutional as it is supported by minimum contacts so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. This is a case of specific jurisdiction because the dispute arises out of the defendant's contacts in the state that support the court's personal jurisdiction. In such cases even one contact may be enough. But here the defendant circulated advertisements in Mississippi that caused the plaintiffs to enter the contract, the defendant entered into the contract by long-distance telephone conversation with persons living in Mississippi, and the defendant agreed to deliver the goods to Mississippi. This is far more activity in the forum than was present in Burger King, where the court found that a contracting party was subject to state court personal jurisdiction. Because there are more than enough contacts to support jurisdiction for a lawsuit arising from this particular transaction, we need not consider whether the more extensive but unrelated contacts that defendant has in Mississippi will support general personal jurisdiction over unrelated lawsuits.

2. Subject matter jurisdiction over action against Silversmiths. Defendant Silversmiths motion to dismiss for lack of subject matter jurisdiction must be granted. First, there may not be complete diversity. Defendant is a citizen of Texas (place of incorporation); and plaintiffs remain citizens of Texas (where they were citizens in 1995) unless they have effected a valid change of domicile to Mississippi before commencing the action. To change domicile they must be physically present in the state and must also have the intent to make Mississippi their new home. The test is subjective. The one-year commitment to the job and wait-and-see attitude weigh strongly against such and intent. But Roy's enthusiasm for Mississippi (his registering to vote) might show his intent to make it his new home. And there is an older rule that imputes the husband's domicile to his wife, in which case there is complete diversity.

Second, even if there is complete diversity, the amount in controversy is not met. Although the plaintiffs claim over $50,000, damages claimed over $1000 are not recoverable as a matter of Mississippi law (which obviously applies under Erie). Because the plaintiffs' claim fails to a legal certainty to state an amount in controversy over the statutory amount, the court must dismiss.

3. Venue over action against Silversmiths. Defendant Silversmiths' motion to dismiss for lack of venue is denied. Venue in an action based on diversity of citizenship jurisdiction is proper in a district where a substantial part of the events or omissions giving rise to the claim occurred. The Northern District of Mississippi is proper because parties to the contract entered into the contract there, because part of the contract (delivery) was performed there, and because damages occurred there. Venue is also proper in a district where a defendant resides (if all defendants reside in the state), and a defendant corporation is a resident where it is subject to personal jurisdiction.

4. Personal jurisdiction over impleaded party. Badd Boltmaker's motion to dismiss the third-party complaint for impleader is denied. Personal service was obtained, and Federal Rule of Civil Procedure 4 authorizes personal jurisdiction over a defendant served within 100 miles of the courthouse.

5. Subject matter jurisdiction over impleader claim. Badd Boltmaker's motion to dismiss for lack of subject matter jurisdiction over the impleader claim would be denied only if it is considered independently of the court's subject matter jurisdiction over plaintiffs' case against defendant. Even though there is no diversity between Silversmiths' (citizen of Tennessee, principal place of business) and Badd Boltmaker (citizen of Tennessee, principal place of business), and even though the amount in controversy does not exceed the statutory amount (since plaintiffs claim against defendant does not), supplemental jurisdiction and federal rules will support personal jurisdiction over a third-party claim for impleader. But because the supplement jurisdiction statute also requires original jurisdiction over some part of the case, there will be no subject matter jurisdiction over the impleader action because there is not subject matter jurisdiction over the principal claim.

6. Motion to amend to add claim against impleaded defendant. Denied. The supplemental jurisdiction statute permits plaintiffs in diversity cases to add claims against impleaded parties only if there is diversity jurisdiction over the plaintiffs' claim against the impleaded party. In this case there is complete diversity (plaintiffs are either citizens of Texas or Mississippi) and the impleaded party is a citizen of Delaware and Tennessee. But because plaintiffs claim cannot support a recovery above the statutory amount to a legal certainty, there is no diversity jurisdiction over the claim.

I. SHORT ANSWERS

1. Examples of cases in which federal courts have jurisdiction exclusive of the states are actions for copyright infringement, to enforce patents, and for bankruptcy. Others include disputes between states, actions against the United States. States have jurisdiction exclusive of federal courts over actions to probate wills and for divorce.

2. The trial court lacks venue and its denial of the motion to dismiss is error. But the ruling cannot be appealed from immediately because it is not a final judgment.

3. A plaintiff cannot remove.

4. The Chancellor lacks subject matter jurisdiction, but the denial of the motion to transfer is not immediately appealable because it is not a final judgment. Moreover, the defendant cannot wait for a final judgment to appeal, because the errors regarding jurisdiction and denial of jury trial will not be reversible if they are the only errors. Thus he must to bring the matter before the supreme court before judgment by petitioning for an extraordinary writ of mandamus.

5. Motion to dismiss for lack of subject matter jurisdiction is granted. First, there is no interpleader under Rule 22 because there in no diversity jurisdiction. (There is complete diversity but the amount in controversy does not exceed $50000.) Second, there is no statutory interpleader because the claimants are not from different states (not even minimal diversity).

6. The rule is probably invalid. The Rules Enabling Act authorizes the Supreme Court to promulgate only rules of "practice and procedure." But this rule is designed to promote medical exams completely unrelated to litigation in order to achieve certain public health goals. The rule may also abridge or modify substantive rights as prohibited by the Act. Because the rule is valid, the court should follow state law.

7. Disagree, the Supreme Court's most recent authoritative holding does not require the best method of service or the service most likely to reach a defendant but only a method reasonably calculated under the facts of a particular case to apprize the parties of the pendency of proceedings in time to afford them an opportunity to appear. [Ordinary mail and even publication will satisfy this requirement in many cases where methods that are "most likely to reach a defendant" are not reasonable because of difficulty or cost.]

8. Appeal it to the Supreme Court. The Mississippi Constitution prohibits the Supreme Court from reversing a Chancery or Circuit Court judgment when the only error is whether the case was one of law or equity jurisdiction. But divorce jurisdiction does not fall under the Chancery Court's equity jurisdiction, so the Supreme Court is not prevented from reversing. It cannot be appealed directly to the Court of Appeals but may be assigned to that court after appeal to the Supreme Court.

9. Motion to dismiss granted. There is no supplemental jurisdiction because the court does not have original jurisdiction over some part of the same case.

10. Motion to dismiss denied. The federal court will apply Mississippi law as to whether the action was commenced within the statute of limitations. Under Mississippi law the action was commenced for purposes of the statute of limitations when it was filed (June 11, 1995), provided that service was made within 120 days (which it was when the defendant was served August 15, 1995).

11. Reasons supporting the holding in Erie included: 1) policy objectives of federal general common law were not being achieved (instead federal general common law encouraged forum shopping and discriminated against in-state defendants); 2) the word "laws" in the Rules of Decision Act had been misinterpreted not to apply to state court decisions and not just positive laws; and 3) federal courts did not have power to make general common law under article III of the Constitution.

12. This prejudgment seizure of defendant's assets is unconstitutional. It does not contain the requirement that the plaintiff post a bond, which was an important safeguard against unmerited seizures approved in the Mitchell case. It also fails the Doehr test: the risk of error is great; the defendant's interest in the assets is seriously impaired; and no exigent circumstances are present to establish that plaintiffs have a strong interest in this special.

II. Long Answers

I will rule on each of the motions in order, considering them independently. But my conclusion is that this action must be dismissed for lack of subject matter jurisdiction.

1. Personal jurisdiction over defendant Silversmiths. Defendant Silversmiths motion to dismiss for lack of personal jurisdiction is denied. First, the Mississippi long-arm statute gives jurisdiction because the defendant is engaged in work or service in the state. If the plaintiffs are residents of Mississippi, then another provision of the long arm statute also applies because Silversmith's entered into a contract (sale and delivery of couch) with a resident of Mississippi to be performed in part in the state.

Second, the exercise of personal jurisdiction is constitutional as it is supported by minimum contacts so that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. This is a case of specific jurisdiction because the dispute arises out of the defendant's contacts in the state that support the court's personal jurisdiction. In such cases even one contact may be enough. But here the defendant circulated advertisements in Mississippi that caused the plaintiffs to enter the contract, the defendant entered into the contract by long-distance telephone conversation with persons living in Mississippi, and the defendant agreed to deliver the goods to Mississippi. This is far more activity in the forum than was present in Burger King, where the court found that a contracting party was subject to state court personal jurisdiction. Because there are more than enough contacts to support jurisdiction for a lawsuit arising from this particular transaction, we need not consider whether the more extensive but unrelated contacts that defendant has in Mississippi will support general personal jurisdiction over unrelated lawsuits.

2. Subject matter jurisdiction over action against Silversmiths. Defendant Silversmiths motion to dismiss for lack of subject matter jurisdiction must be granted. First, there may not be complete diversity. Defendant is a citizen of Texas (place of incorporation); and plaintiffs remain citizens of Texas (where they were citizens in 1995) unless they have effected a valid change of domicile to Mississippi before commencing the action. To change domicile they must be physically present in the state and must also have the intent to make Mississippi their new home. The test is subjective. The one-year commitment to the job and wait-and-see attitude weigh strongly against such and intent. But Roy's enthusiasm for Mississippi (his registering to vote) might show his intent to make it his new home. And there is an older rule that imputes the husband's domicile to his wife, in which case there is complete diversity.

Second, even if there is complete diversity, the amount in controversy is not met. Although the plaintiffs claim over $50,000, damages claimed over $1000 are not recoverable as a matter of Mississippi law (which obviously applies under Erie). Because the plaintiffs' claim fails to a legal certainty to state an amount in controversy over the statutory amount, the court must dismiss.

3. Venue over action against Silversmiths. Defendant Silversmiths' motion to dismiss for lack of venue is denied. Venue in an action based on diversity of citizenship jurisdiction is proper in a district where a substantial part of the events or omissions giving rise to the claim occurred. The Northern District of Mississippi is proper because parties to the contract entered into the contract there, because part of the contract (delivery) was performed there, and because damages occurred there. Venue is also proper in a district where a defendant resides (if all defendants reside in the state), and a defendant corporation is a resident where it is subject to personal jurisdiction.

4. Personal jurisdiction over impleaded party. Badd Boltmaker's motion to dismiss the third-party complaint for impleader is denied. Personal service was obtained, and Federal Rule of Civil Procedure 4 authorizes personal jurisdiction over a defendant served within 100 miles of the courthouse.

5. Subject matter jurisdiction over impleader claim. Badd Boltmaker's motion to dismiss for lack of subject matter jurisdiction over the impleader claim would be denied only if it is considered independently of the court's subject matter jurisdiction over plaintiffs' case against defendant. Even though there is no diversity between Silversmiths' (citizen of Tennessee, principal place of business) and Badd Boltmaker (citizen of Tennessee, principal place of business), and even though the amount in controversy does not exceed the statutory amount (since plaintiffs claim against defendant does not), supplemental jurisdiction and federal rules will support personal jurisdiction over a third-party claim for impleader. But because the supplement jurisdiction statute also requires original jurisdiction over some part of the case, there will be no subject matter jurisdiction over the impleader action because there is not subject matter jurisdiction over the principal claim.

6. Motion to amend to add claim against impleaded defendant. Denied. The supplemental jurisdiction statute permits plaintiffs in diversity cases to add claims against impleaded parties only if there is diversity jurisdiction over the plaintiffs' claim against the impleaded party. In this case there is complete diversity (plaintiffs are either citizens of Texas or Mississippi) and the impleaded party is a citizen of Delaware and Tennessee. But because plaintiffs claim cannot support a recovery above the statutory amount to a legal certainty, there is no diversity jurisdiction over the claim.