INTRODUCTION:

This article examines the civil procedure aspect of the Hans Moke Niemann defamation chess lawsuit. To familiarize yourself with the claims of that lawsuit, you can read my defamation article:

Royal Defamation

The goal of this article is to impart a basic understanding of whether and why this case, or any case, can be brought in a federal court.

Hans Nieman filed a case in federal court, the U.S. District Court for the Eastern District of Missouri. His claim

(https://www.courthousenews.com/wp-content/uploads/2022/10/niemann-carlsen-chess-complaint-usdc-missouri.pdf)

stated that, upon information and belief, the Court has jurisdiction over his action pursuant to a federal law governing “diversity jurisdiction,” 28 U.S.C. § 1332 https://www.law.cornell.edu/uscode/text/28/1332, because none of the Defendants reside in Niemann’s home state of Connecticut.

Diversity jurisdiction is established if, when there are multiple plaintiffs and multiple defendants, no plaintiff is domiciled in the same state as any defendant. Additionally, the claim must exceed $75,000, which signifies that the case is of considerable magnitude to hear (and lowers the amount of cases in the busy federal courts). Here, there is one plaintiff, Hans Niemann, and many defendants, all of whom must be domiciled in a different state. If established, a federal court may hear the case even if there is no federal issue being claimed by the plaintiff (although, as to be discussed, there may also be a federal issue in this case). The judge found the complaint defective in establishing diversity jurisdiction and gave the plaintiff another chance to assert it properly.

POTENTIAL ISSUES:

The first issue is whether the plaintiff established the domicile of the plaintiff and defendants in establishing diversity jurisdiction. Domicile refers to a place where a person has physically lived and intends to return even if currently residing elsewhere; it is often the place they regard as home.  

The second issue is whether the case can be brought under a federal claim (and thus in federal court), even if there is no diversity jurisdiction (ie, the first issue is not resolved). The complaint states that the court has jurisdiction pursuant to 28 U.S.C. § 1331 and §1337 in addition to diversity jurisdiction because at least one of  Niemann’s claims arise out of a federal law. Together, 1331 and 1337 cover constitutional questions and federal regulations to be heard by federal courts. In other words, even if there is no diversity of citizenship, the plaintiff argues that the federal court nevertheless has jurisdiction under what is called supplemental jurisdiction because there is a federal question under the Sherman Act, 15 U.S.C. § 1 (to be discussed).

The third issue is why the case is being brought before a Missouri court if no parties are from Missouri.

APPLICATION OF LAW

As to domicile/residence

The plaintiff attempts to establish where Hans Niemann resides and where the defendants reside, instead of where the plaintiff and defendants are domiciled. Furthermore, the residencies are not thoroughly established and explained. This is not truly a big deal, but the plaintiff should have done a better job at establishing the domiciles. The factors courts consider to determine domicile could be listed in the complaint to cement and aid the court in determining whether diversity jurisdiction exists. A few factors a court considers to determine domicile can include current residence, voting registration, location of personal and real property, and location of financial accounts.

Furthermore, for defendant Chess.com LLC, each and every member of the LLC should be listed, one by one. Instead, the plaintiff writes that, “Upon information and belief, Chess.com’s members reside in Utah and California” without listing any of the members. The judge was correct to ask the Plaintiff to make corrections, just to ensure there is no issue further down the road. However, the plaintiff is correct in that the members must all be examined. 

The citizenship of an LLC is determined by the “citizenship” of each of its members. Bayerische Landesbank, New York Branch v. Aladdin Capital Management LLC, 692 F.3d 42, 49 (2d Cir. 2012). Citizenship is determined by domicile; essentially they are one in the same. 

As to a federal claim

Supplemental jurisdiction is a second way, and the only other way, for a federal court to have jurisdiction over the subject matter of a case. While the case may have a claim under the Sherman Act 15 U.S.C. § 1, the judge nevertheless found the complaint defective and gave the plaintiff another chance to assert diversity jurisdiction. The second chance will just make it more certain that the plaintiff will indeed have the opportunity to bring the case to federal court. Furthermore, it is possible that the case would not be heard in federal court under the Sherman Act, so the judge is allowing the plaintiff to assert diversity jurisdiction again.

15 U.S.C. § 1 relates to antitrust laws that prevent controlling trusts or monopolies, in order to promote business competition. The Plaintiff’s idea here is to claim that Nieman is essentially barred from competing in chess because he has been globally blacklisted from chess tournaments due to defendants Chess.com, Play Magnus, Hikaru Nakamara and Magnus Carlsen; and because he is barred, his damages are that he cannot win prize money, obtain sponsorships, or have marketing opportunities. An example the plaintiff provides is that Carlsen refuses to play Nieman and Nieman has already been banned from several tournaments. The Sherman Act is typically used in price-fixing cases where multiple entities work together to fix prices. Since this is a less common utilization of the Sherman Act, it makes sense that the judge would have the plaintiff retry establishing diversity jurisdiction so it may be heard in a correct court.

The complaint states that the Court should apply the state law of Missouri to the non-federal state claims laid out in addition to the federal claim (the claim under the Sherman Act). It should be noted that this indeed is true under the Eerie doctrine (which today has been applied to both diversity jurisdiction and supplemental jurisdiction). 

It should finally be noted that Hans Nieman could choose to bring the action in state court even if there is diversity jurisdiction, as long as there is no federal issue. Plaintiffs often decide between federal and state court when there is concurrent jurisditction. For example, sometimes a plaintiff may believe that a local state jury would be more sympathetic than a federal jury. Interestingly,  a defendant may actually choose to move a case from state court to federal when there is concurrent jurisdiction – that would happen if the defendant fears state bias, like if the defendant was from out of state. Here, however, it makes sense for Hans Nieman to go to federal court because he is asserting at least one federal claim under the Sherman Act which cannot be heard in state court. Having the case in federal court also may give the case more social media exposure, of course.

As to a court in Missouri

Up until now we have been discussing subject matter jurisdiction. Subject-matter jurisdiction is the requirement that a given court have power to hear the specific kind of claim that is brought to that court – here, whether a federal court may hear this claim under diversity jurisdiction or supplemental jurisdiction.

Whether the case can be brought in Missouri is a different matter; instead, it is a matter of personal jurisdiction. Personal jurisdiction concerns whether a state may hear a case. To hear a case, either the defendant must be served with a copy while presently in the forum state, the lawsuit must be brought in the domicile state of the defendant, there must be “minimum contacts”, or consent.

Here, the plaintiff is attempting to argue that the defendants have minimum contacts with the state of Missouri. The famous Supreme Court case International Shoe v Washington, 326 US 310 (1945) establishes the requirements of minimum contacts. In the case at hand, Hans Nieman played Magnus Carlsen in chess in St. Louis, Missouri, the Sinquefield Cup, and he is accused of having cheated in that tournament. However, the only defendant to potentially have minimum contacts is Magnus; for instance, Hikaru, named as a defendant, was clearly not in Missouri. Chess.com was not either – the games were played by board not electronically via Chess.com (although if Chess.com hosted the match it would lead to an interesting analysis of minimum contacts!) Nieman’s home state of Connecticut has a strong anti-slap statute, which dismisses lawsuits that are brought to retaliate against defendants exercising free speech before they have a chance to ripen; this would require Nieman to detail all his claims effectively upfront at the case’s start. It is likely the Missouri court does not have personal jurisdiction over the defendants because the defendants will not consent. Interestingly, there may be no single state that has personal jurisdiction over all defendants. This may cause Hans Nieman to break up the lawsuit and divide the plaintiffs – which itself is problematic since the lawsuit claims the defendant parties are working together (Sherman antitrust and tortious interference). Solutions to this are complicated and it will be interesting to see what transpires.