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State A and State B border each other. While driving in State B, X is involved in an automobile accident with Y. X is a citizen of State A, and Y is a citizen of State B.
Y lives in Newtown, a city in State B located 10 miles from the border with State A. X sues Y for personal injury in the U.S. District Court for the District of State B, Newtown Division. The federal courthouse is located in the center of Newtown. Assume that venue is proper, and that X properly serves Y with the summons and complaint. For damages, X seeks to recover $5,000 in medical expenses, $25,000 in property damage to X’s vehicle, and $50,000 in pain and suffering, for total damages of $80,000. X cites 28 U.S.C. § 1332 as the jurisdictional basis for the suit.
When the accident occurred, Y was traveling on an errand for Z, who is a client of Y’s business. Y believes that Z would be obligated to indemnify Y if Y is found liable to X. Y therefore impleads Z under Fed. R. Civ. P. 14. Z is a citizen of State A.
Y then hires a process server to perfect service on Z. Assume that Z is not subject to the long-arm statute of State B, and that Z has no connections with State B other than Y’s errand. Z lives in Oldtown, a city in State A that is 50 miles away from Newtown. The clerk at the federal courthouse in Newtown issues the summons, and Y’s process server serves Z with the summons and complaint personally at Z’s place of business in Oldtown.
Z appears and files a motion to dismiss Y’s third-party complaint against it under Fed. R. Civ. P. (Rule) 12(b)(2), for lack of personal jurisdiction.
Y answers X’s complaint and proceeds with discovery, in the course of which Y’s attorney deposes X. At the deposition, Y’s attorney asks X to provide a detailed explanation for each element of X’s damages. X identifies the $5,000 in medical expenses as an ambulance ride from the accident scene to the nearest hospital, an emergency examination, and diagnostic tests. X then identifies the $25,000 in property damage as towing charges and extensive repairs to her vehicle.
When Y’s attorney asks about the pain and suffering, X responds that after the accident, she experienced severe migraine headaches for three weeks, which she attributes to the force of the collision. X states that she has experienced no other pain and suffering, but she insists that the headaches were so severe that she had to miss work and remain in bed for many days.
Based on this testimony, Y files a motion to dismiss under Rule 12(b)(1) for lack of subject-matter jurisdiction. Y argues that X’s alleged pain and suffering is so minor that it is not worth enough money for her claimed damages to reach the required amount in controversy. Thus, Y argues, the court lacks subject-matter jurisdiction under 28 U.S.C. § 1332. X opposes the motion, presenting X’s deposition testimony as to the severity of the headaches, plus documentation to show that X was forced to take ten days off from work during the three weeks when the headaches occurred.