Official July 2015 Bar Prep Megathread

The plaintiff, a State D citizen, is a shareholder of a corporation incorporated and having its principal place of business in State D. She brought an action in the U.S. District Court in State D requesting an injunction against the corporation, which allegedly was violating a State D law that required corporations to invest only in lawful commercial paper and that gave shareholders a right to sue over alleged violations of this law. The plaintiff claims that the defendant corporation had been purchasing commercial paper that had been issued by the federal government in violation of the U.S. Constitution. The corporation denies this claim and moves to dismiss on the ground that the U.S. District Court lacks jurisdiction.

What would the court be most likely to do?

A Exercise general federal-question jurisdiction because federal law created the plaintiff’s cause of action.

B Exercise general federal-question jurisdiction because the plaintiff has a real and substantial issue of federal law and her right to relief depends upon the resolution of this issue.

C Dismiss for lack of jurisdiction because the plaintiff’s claim arose under state law because state law created her cause of action, and there is no diversity of citizenship.

D Dismiss for lack of jurisdiction because shareholders cannot sue their corporations in federal court, except for violations of federal securities law.

So she has beef with the federal government issuing commercial paper in violation on the Constitution, but apparently can sue the defendant corporation in federal court because it had been violating state law??? How does that make sense?

/r/LawSchool Thread