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Failure To Demonstrate Basis For Subject Matter Jurisdiction Can Lead To Monetary Sanctions

If you're going to file a lawsuit against someone, you'd better explain the basis for it. A complaint doesn't need to include much detail, but it must at least allege facts showing that you've been wronged and that you are entitled to a remedy of some sort. In federal court, you must also demonstrate a basis to invoke the court's jurisdiction. Failure to do so can result in monetary sanctions.

Take the case of Michael Harris v. Jeffrey Seto, brought in the Harrisonburg Division of the Western District of Virginia. Michael F. Harris and his company, M. F. Harris Research, Inc., filed a complaint against Jeffrey K. Seto, Matthew S. Johnson, and others, alleging fraud, breach of fiduciary duty, and corporate diversion. Harris stated in conclusory fashion that Seto and others defrauded him by scheming to take over his company and steal confidential information and business opportunities.

The complaint consisted of a two-page handwritten document. (Hint: that's not the best way to make a good first impression with the judges). The complaint alleged nine counts but did not set forth the factual basis supporting them. According to the civil cover sheet filed with the complaint, Harris asserted the court's jurisdiction was based on a federal question. He checked boxes describing the case as being in the nature of "Assault, Libel & Slander," "Property Damage Product Liability," and "Patent." Defendant Johnson was the only defendant served and he wisely moved to dismiss the action for failure to state a claim.

Read the rest of the article at the Virginia Business Litigation Lawyer blog

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