By way of introduction to this material, keep in mind the maximum possible extent of Art. III jurisdiction, i.e., the BIG CIRCLE in our class discussion
By way of introduction to this material, keep in mind the maximum possible extent of Art. III jurisdiction, i.e., the BIG CIRCLE in our class discussion
We think, then, that when a question to which the judicial power of the Union is extended by the constitution, forms an ingredient of the original cause, it is in the power of Congress to give the Circuit Courts jurisdiction of that case, although other questions of fact or of law may be involved in it.
[868-69]
Where a case in this court can be decided without reference to questions arising under the Federal Constitution, that course is usually pursued and is not departed from without important reasons. In this case we think it much better to decide it with regard to the question of a local nature, involving the construction of the state statute and the authority therein given to the commission to make the order in question, rather than to unnecessarily decide the various constitutional questions appearing in the record.
This reasoning was the starting point for the idea of pendent jurisdiction. Going beyond deciding state law issues raised by a federal question claim, PENDENT JURISDICTION permits a federal court to decide separate state law claims because of a relation between those claims and federal question claims.
ANCILLARY JURISDICTION, by way of contrast, usually referred to the opportunity for one in the posture of a defendant (including intervenors or third party defendants) to assert claims, either against the plaintiff or against third parties, over which the federal court did not have original jurisdiction but which are related to the claims over which the court has original jurisdiction.
[871] [S]ince the pertinent state claim [in Local 20] was based on peaceful secondary activities and we held that state law based on such activities had been pre-empted by Sec. 303. But here respondent's claim is based in part on proofs of violence and intimidation. "[W]e have allowed the States to grant compensation for the consequences, as defined by the traditional law of torts, of conduct marked by violence and imminent threats to the public order.... State jurisdiction has prevailed in these situations because the compelling state interest, in the scheme of our federalism, in the maintenance of domestic peace is not overridden in the absence of clearly expressed congressional direction."
[871] The Court held in Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148, that state law claims are appropriate for federal court determination if they form a separate but parallel ground for relief also sought in a substantial claim based on federal law. The Court distinguished permissible from non-permissible exercises of federal judicial power over state law claims by contrasting [1. PERMISSIBLE] "a case where two distinct grounds in support of a single cause of action are alleged, one only of which presents a federal question, and [2 NON-PERMISSIBLE] a case where two separate and distinct causes of action are alleged, one only of which is federal in character. In the former, where the federal question averred is not plainly wanting in substance, the federal court, even though the federal ground be not established, may nevertheless retain and dispose of the case upon the nonfederal ground; in the latter it may not do so upon the nonfederal cause of action."
[872] This limited approach is unnecessarily grudging. Pendent jurisdiction, in the sense of judicial power, exists whenever there is a [1. FEDERAL] claim "arising under [the] Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority ...," U.S.Const., Art. III, Sec. 2, and [2. COMMONALITY] the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional "case." (FN12) [1. SUBSTANTIAL] The federal claim must have substance sufficient to confer subject matter jurisdiction on the court. Levering & Garrigues Co. v. Morrin, 289 U.S. 103, 53 S.Ct. 549, 77 L.Ed. 1062. [2. COMMONALITY] The state and federal claims must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issues, there is power in federal courts to hear the whole.
[872 DISCRETION] Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law. (FN15) Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well. [Actually, as we see in Palmer, they really did not mean that.] Similarly, if it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals. There may, on the other hand, be situations in which the state claim is so closely tied to questions of federal policy that the argument for exercise of pendent jurisdiction is particularly strong.
[873] The question of power will ordinarily be resolved on the pleadings. But the issue whether pendent jurisdiction has been properly assumed is one which remains open throughout the litigation. Pretrial procedures or even the trial itself may reveal a substantial hegemony of state law claims, or likelihood of jury confusion, which could not have been anticipated at the pleading stage. Although it will of course be appropriate to take account in this circumstance of the already completed course of the litigation, dismissal of the state claim might even then be merited.
It is true that the Sec. 303 claims ultimately failed and that the only recovery allowed respondent was on the state claim. We cannot confidently say, however, that the federal issues were so remote or played such a minor role at the trial that in effect the state claim only was tried. Although the District Court dismissed as unproved the Sec. 303 claims that petitioner's secondary activities included attempts to induce coal operators other than Grundy to cease doing business with respondent, the court submitted the Sec. 303 claims relating to Grundy to the jury.
[I will leave you to explore the notes at pages 876-77 on your own.]
Consider what the proper standard for commonality between the federal claim and the pendent claim might be. In other words, what constitutes a single constitutional case? Consider how that might relate to the relatedness tests of the Federal Rules of Civil Procedure:
Owen v. Kroger and 28 USC § 1367(b) and Finley v. U.S. [CB-886], the Catalysts for Statutory Supplemental Jurisdiction.
PERSPECTIVE:
The focus of today's class was, of course, supplemental jurisdiction. However, we discussed how the Federal Rules of Civil Procedure applicable to joinder of parties and claims relate to the 1367(a) standard for the exercise of supplemental jurisdiction. This discussion can be very enlightening when it helps to bring the material we covered during the "Federal Rules" part of course, together with the current material, to form "the big picture". It can also drive you crazy. The important thing is for you to see how the separate standards for application of the rule relate to the subject-matter jurisdiction material.
INTRODUCTION:
By way of introduction to the material today, note again how Article III, Section 2, Clause 1 provides, generally, the maximum extent of jurisdiction of the federal courts. Implementing or enabling legislation has consistently been interpreted more narrowly than Article III, hence the big circle and the little circle graphic I have been using. However, for 200 years, there were a series of claims and parties who fell outside of the statutory grants of jurisdiction who were nonetheless allowed or compelled to participate in federal litigation. Ancillary and pendent jurisdiction were within the allowable extension of Art. III, but outside the Congressional enactment of original subject matter jurisdiction. Finley changed that.
Review of Section 1332:
28 USC § 1332
(c) For the purposes of this section and section 1441 of this title
(1) a corporation shall be deemed to be a citizen of [a] any State by which it has been incorporated and [b] of the State where it has its ***principal*** place of business, except that in any ***direct action*** against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action ***the insured is not joined as a party-defendant***, such insurer shall be deemed a citizen of the [i-1] State of which the insured is a citizen, as well as [i-2] of any State by which the insurer has been incorporated and [i-3] of the State where it has its principal place of business; and
(2) the [a] legal representative of the estate of a decedent shall be deemed to be a citizen only of the same State as the decedent, and [b] the legal representative of an infant or incompetent shall be deemed to be a citizen only of the same State as the infant or incompetent.Several students asked about the meaning of "Direct Action" in 1332(c)(1). The example would be if Minnie Mouse in our Project had her car insured by an Insurance Company incorporated in Delaware with its principal (note that it is p-r-i-n-c-i-p-a-l NOT princip-l-e) place of business in Georgia. Assume further that all the persons involved in the accident are citizens of Florida, and that Florida allows the plaintiff, Daffy Duck, to sue the Insurance Company, ***without*** suing the insured. In that case, prior to the amendment to 1332(c)(1), the case could be filed in Florida US District Court on diversity grounds. The language of 1332(c)(1) was added expressly to prevent that from happening. Additionally, note what is NOT a direct action, a case like McGee, where the beneficiary of a life policy sues the insurance company. Additionally, a case in which the insured is suing to get coverage is not a direct action (it would also not be a case in which the insured is joined as a party-defendant).
The joinder rules lead to ironic results regarding aggregation of claims to satisfy the jurisdictional minimum. Thus, not only does Rule 18 allow plaintiff to combine all the claims he has against defendant, no matter how unrelated, into one suit, but the jurisdictional amount issue is resolved with reference to the aggregate total of all the claims. Where several plaintiffs can join under Rule 20 because their claims all derive from the same transaction or occurrence, however, they cannot aggregate these related claims to satisfy the jurisdictional minimum. Similarly, in class actions the claims of class members may not be aggregated to meet the jurisdictional minimum. Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969); see generally C. Wright, Law of Federal Courts Sec. 36 (5th ed. 1994).
[H-1] These consolidated cases present the question whether a federal court in a diversity action may exercise supplemental jurisdiction over additional plaintiffs whose claims do not satisfy the minimum amount-in-controversy requirement, provided the claims are part of the same case or controversy as the claims of plaintiffs who do allege a sufficient amount in controversy. Our decision turns on the correct interpretation of 28 U.S.C. § 1367. The question has divided the Courts of Appeals, and we granted certiorari to resolve the conflict.
[H-2] Rule
We hold that, where the [1] other elements of jurisdiction are present [, i.e., complete diversity exists] and [2] at least one named plaintiff in the action satisfies the amount-in-controversy requirement, § 1367 does authorize supplemental jurisdiction over the claims of other plaintiffs in the same Article III case or controversy, even if those claims are for less than the jurisdictional amount specified in the statute setting forth the requirements for diversity jurisdiction. We affirm the judgment of the Court of Appeals for the Eleventh Circuit in No. 04-70, and we reverse the judgment of the Court of Appeals for the First Circuit in No. 04-79.[Note that the Court addresses Rule 23 class action joinder of multiple plaintiffs and Rule 20 joinder of multiple plaintiffs. This is important, because the application of 1367 applies in both instances, though in the Rule 23 context you now have the amended language of 1332(d)].
[H-1]The Court of Appeals for the Eleventh Circuit upheld the District Court's extension of supplemental jurisdiction to these class members [who were diverse but failed to meet the jurisdictional amount in controversy requirement]. Allapattah Services, Inc. v. Exxon Corp., 333 F.3d 1248 (2003). "[W]e find," the court held, "that § 1367 clearly and unambiguously provides district courts with the authority in diversity class actions to
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exercise supplemental jurisdiction over the claims of class members who do not meet the minimum amount in controversy as long as the district court has original jurisdiction over the claims of at least one of the class representatives." This decision accords with the views of the Courts of Appeals for the Fourth, Sixth, and Seventh Circuits. * * *In the other case now before us the Court of Appeals for the First Circuit took a different position on the meaning of § 1367(a). [Rosario Ortega v. Star-Kist Foods, Inc.,] 370 F.3d 124 (2004). In that case, a 9-year-old girl sued Star-Kist in a diversity action in the United States District Court for the District of Puerto Rico, seeking damages for unusually severe injuries she received when she sliced her finger on a tuna can. Her family joined in the suit, seeking damages for emotional distress and certain medical expenses. The District Court granted summary judgment to Star-Kist, finding that none of the plaintiffs met the minimum amount-in-controversy requirement. The Court of Appeals for the First Circuit, however, ruled that the injured girl, but not her family members, had made allegations of damages in the requisite amount.
[H-2]II
A [Limited Jurisdiction of the Federal Courts]
The district courts of the United States, as we have said many times, are "courts of limited jurisdiction. They possess only that power authorized by [1] Constitution and [2] statute." * * *
Although the district courts may not exercise jurisdiction absent a statutory basis, it is well established —in certain classes of cases— that, once a court has original jurisdiction over some claims in the action, it may exercise supplemental jurisdiction over additional claims that are part of the same case or controversy. The leading modern case for this principle is Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). In Gibbs, the plaintiff alleged the defendant's conduct violated both federal and state law. The District Court, Gibbs held, had original jurisdiction over the action based on the federal claims. Gibbs confirmed that the District Court had the additional power (though not the obligation) to exercise supplemental jurisdiction over related state claims that arose from the same Article III case or controversy.
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* * *
We have not, however, applied Gibbs' expansive interpretive approach to other aspects of the jurisdictional statutes. For instance, we have consistently interpreted § 1332 as requiring complete diversity: In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original diversity jurisdiction over the entire action. Strawbridge v. Curtiss, 3 Cranch 267, 2 L.Ed. 435 (1806); Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 375, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978). The complete diversity requirement is not mandated by the Constitution, State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 530-531, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967), or by the plain text of § 1332(a).[H-4] Finley held that in the context of parties, in contrast to claims, "we will not assume that the full constitutional power has been congressionally authorized, and will not read jurisdictional statutes broadly." [Compare]
As the jurisdictional statutes existed in 1989, then, here is how matters stood: First, the diversity requirement in § 1332(a) required complete diversity; absent complete diversity, the district court lacked original jurisdiction over all of the claims in the action. Strawbridge, 3 Cranch, at 267-268, 2 L.Ed. 435; Kroger, 437 U.S., at 373-374, 98 S.Ct. 2396. Second, if the district court had original jurisdiction over at least one claim, the jurisdictional statutes implicitly authorized supplemental jurisdiction over all other claims between the same parties arising out of the same Article III case or controversy. Gibbs, 383 U.S., at 725, 86 S.Ct. 1130. Third, even when the district court had original jurisdiction over one or more claims between particular parties, the jurisdictional statutes did not authorize supplemental jurisdiction over additional claims involving other parties. Clark, supra, at 590, 59 S.Ct. 744; Zahn, supra, at 300-301, 94 S.Ct. 505; Finley, supra, at 556, 109 S.Ct. 2003.
B [The Supplemental Jurisdiction Statute]
In Finley we emphasized that "[w]hatever we say regarding the scope of jurisdiction conferred by a particular statute can of course be changed by Congress." 490 U.S., at 556, 109 S.Ct. 2003. In 1990, Congress accepted the invitation. It passed the Judicial Improvements Act, 104 Stat. 5089, which enacted § 1367, the provision which controls these cases.All parties to this litigation and all courts to consider the question agree that § 1367 overturned the result in Finley. There is no warrant, however, for assuming that § 1367 did no more than to overrule Finley and otherwise to codify the existing state of the law of supplemental jurisdiction. * * *
Section 1367(a) is a broad grant of supplemental jurisdiction over other claims within the same case or controversy, as long as the action is one in which the district courts would have original jurisdiction. The last sentence of § 1367(a) makes it clear that the grant of supplemental jurisdiction extends to claims involving joinder or intervention of additional parties. The single question before us, therefore, is whether a diversity case in which the claims of some plaintiffs satisfy the amount-in-controversy requirement, but the claims of other plaintiffs do not, presents a "civil action of which the district courts have original jurisdiction."We now conclude the answer must be yes. When the well-pleaded complaint contains at least one claim that satisfies the amount-in-controversy requirement, and there are no other relevant jurisdictional defects, the district court, beyond all question, has original jurisdiction over that claim. The presence of other claims in the complaint, over which the district court may lack original jurisdiction, is of no moment. If the court has original jurisdiction over a single claim in the complaint, it has original jurisdiction over a "civil action" within the meaning of § 1367(a), even if the civil action over which it has jurisdiction comprises fewer claims than were included in the complaint. Once the court determines it has original jurisdiction over the civil action, it can turn to the question whether it has a constitutional and statutory basis for exercising supplemental jurisdiction over the other claims in the action.
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* * *
1367(b) and claims BY plaintiffs
If § 1367(a) were the sum total of the relevant statutory language, our holding would rest on that language alone. The statute, of course, instructs us to examine § 1367(b) to determine if any of its exceptions apply, so we proceed to that section. While § 1367(b) qualifies the broad rule of § 1367(a), it does not withdraw supplemental jurisdiction over the claims of the additional parties at issue here. The specific exceptions to § 1367(a) contained in § 1367(b), moreover, provide additional support for our conclusion that § 1367(a) confers supplemental jurisdiction over these claims. Section 1367(b), which applies only to diversity cases, withholds supplemental jurisdiction over the claims of plaintiffs proposed to be joined as indispensable parties under Federal Rule of Civil Procedure 19, or who seek to intervene pursuant to Rule 24. Nothing in the text of § 1367(b), however, withholds supplemental jurisdiction over the claims of plaintiffs permissively joined under Rule 20 (like the additional plaintiffs in No. 04-79) or certified as class-action members pursuant to Rule 23 (like the additional plaintiffs in No. 04-70). The natural, indeed the necessary, inference is that § 1367 confers supplemental jurisdiction over claims by Rule 20 and Rule 23 plaintiffs. This inference, at least with respect to Rule 20 plaintiffs, is strengthened by the fact that § 1367(b) explicitly excludes supplemental jurisdiction over claims against defendants joined under Rule 20.
Indivisibility
The indivisibility theory is easily dismissed, as it is inconsistent with the whole notion of supplemental jurisdiction. If a district court must have original jurisdiction over every claim in the complaint in order to have "original jurisdiction" over a "civil action," then in Gibbs there was no civil action of which the district court could assume original jurisdiction under § 1331, and so no basis for exercising supplemental jurisdiction over any of the claims. The indivisibility theory is further belied by our practice--in both federal-question and diversity cases--of allowing federal courts to cure jurisdictional defects by dismissing the offending parties rather than dismissing the entire action.[H-7] Contamination Theory
The contamination theory, as we have noted, can make some sense in the special context of the complete diversity requirement because the presence of nondiverse parties on both sides of a lawsuit eliminates the justification for providing a federal forum. The theory, however, makes little sense with respect to the amount-in-controversy requirement, which is meant to ensure that a dispute is sufficiently important to warrant federal-court attention. The presence of a single nondiverse party may eliminate the fear of bias with respect to all claims, but the presence of a claim that falls short of the minimum amount in controversy does nothing to reduce the importance of the claims that do meet this requirement.
It is fallacious to suppose, simply from the proposition that § 1332 imposes both the diversity requirement and the amount-in-controversy requirement, that the contamination theory germane to the former is also relevant to the latter. There is no inherent logical connection between the amount-in-controversy requirement and § 1332 diversity jurisdiction. After all, federal-question jurisdiction once had an amount-in-controversy requirement as well.[But even if you do not apply contamination theory, Rule 20 treatment is a result of how the statute is drafted and the majority will live with it]
1367(b) and Rule 20
Finally, it is suggested that our interpretation of § 1367(a) creates an anomaly regarding the exceptions listed in § 1367(b): It is not immediately obvious why Congress would withhold supplemental jurisdiction over plaintiffs joined as parties "needed for just adjudication" under Rule 19 but would allow supplemental jurisdiction over plaintiffs permissively joined under Rule 20. The omission of Rule 20 plaintiffs from the list of exceptions in § 1367(b) may have been an "unintentional drafting gap." If that is the case, it is up to Congress rather than the courts to fix it.[H-9] We hold that § 1367 by its plain text overruled Clark and Zahn and authorized supplemental jurisdiction over all claims by diverse parties arising out of the same Article III case or controversy, subject only to enumerated exceptions not applicable in the cases now before us.
Legislative History
As we have repeatedly held, the authoritative statement is the statutory text, not the legislative history or any other extrinsic material. Extrinsic materials have a role in statutory interpretation only to the extent they shed a reliable light on the enacting Legislature's understanding of otherwise ambiguous terms.
What is the Citizenship of:
a. Kroger?
b. OPPD?
c. Owen?As to each party, explain why, by identifying the proper statutory source.
What is the source of original subject-matter jurisdiction for the claims:
a. by Kroger against OPPD?
b. by OPPD against Owen?
c. by Kroger against Owen?What is the source in the Federal Rules of Civil Procedure that allow the claims:
a. by Kroger against OPPD?
b. by OPPD against Owen?
c. by Kroger against Owen?
[CB-877] On January 18, 1972, James Kroger was electrocuted when the boom of a steel crane next to which he was walking came too close to a high-tension electric power line. The respondent (his widow, who is the administratrix of his estate) filed a wrongful-death action in the United States District Court for the District of Nebraska against the Omaha Public Power District (OPPD). Her complaint alleged that OPPD's negligent construction, maintenance, and operation of the power line had caused Kroger's death. Federal jurisdiction was based on diversity of citizenship, since the respondent was a citizen of Iowa and OPPD was a Nebraska corporation.
[CB-877] OPPD then filed a third-party complaint pursuant to Fed.Rule Civ.Proc. 14(a) against the petitioner, Owen Equipment and Erection Co. (Owen), alleging that the crane was owned and operated by Owen, and that Owen's negligence had been the proximate cause of Kroger's death. (FN3) OPPD later moved for summary judgment on the respondent's complaint against it. While this motion was pending, the respondent was granted leave to file an amended complaint naming Owen as an additional defendant. Thereafter, the District Court granted OPPD's motion for summary judgment in an unreported opinion. The case thus went to trial between the respondent and the petitioner alone.[CB-877-78] The respondent's amended complaint alleged that Owen was "a Nebraska corporation with its principal place of business in Nebraska." Owen's answer admitted that it was "a corporation organized and existing under the laws of the State of Nebraska," and denied every other allegation of the complaint. On the third day of trial, however, it was disclosed that the petitioner's principal place of business was in Iowa, not Nebraska, (FN5) and that the petitioner and the respondent were thus both citizens of Iowa. ***
[CB-878] It is undisputed that there was no independent basis of federal jurisdiction over the respondent's state-law tort action against the petitioner, since both are citizens of Iowa. And although Fed.Rule Civ.Proc. 14(a) permits a plaintiff to assert a claim against a third-party defendant, it does not purport to say whether or not such a claim requires an independent basis of federal jurisdiction. Indeed, it could not determine that question, since it is axiomatic that the Federal Rules of Civil Procedure do not create or withdraw federal jurisdiction.
[CB-879] It is apparent that Gibbs delineated the constitutional limits of federal judicial power. But even if it be assumed that the District Court in the present case had constitutional power to decide the respondent's lawsuit against the petitioner, (FN10) it does not follow that the decision of the Court of Appeals was correct. Constitutional power is merely the first hurdle that must be overcome in determining that a federal court has jurisdiction over a particular controversy. For the jurisdiction of the federal courts is limited not only by the provisions of Art. III of the Constitution, but also by Acts of Congress.
[CB-880] The relevant statute in this case, 28 U.S.C. Sec. 1332(a)(1), confers upon federal courts jurisdiction over "civil actions where the matter in controversy exceeds the sum or value of $10,000 ... and is between ... citizens of different States." This statute and its predecessors have consistently been held to require complete diversity of citizenship. That is, diversity jurisdiction does not exist unless each defendant is a citizen of a different State from each plaintiff. Over the years Congress has repeatedly re-enacted or amended the statute conferring diversity jurisdiction, leaving intact this rule of complete diversity. ***
[CB-880] Thus it is clear that the respondent could not originally have brought suit in federal court naming Owen and OPPD as codefendants, since citizens of Iowa would have been on both sides of the litigation. ***
[CB-880] It is a fundamental precept that federal courts are courts of limited jurisdiction. The limits upon federal jurisdiction, whether imposed by the Constitution or by Congress, must be neither disregarded nor evaded.***
[CB-881-882] It is not unreasonable to assume that, in generally requiring complete diversity, Congress did not intend to confine the jurisdiction of federal courts so inflexibly that they are unable to protect legal rights or effectively to resolve an entire, logically entwined lawsuit. Those practical needs are the basis of the doctrine of ancillary jurisdiction. But neither the convenience of litigants nor considerations of judicial economy can suffice to justify extension of the doctrine of ancillary jurisdiction to a plaintiff's cause of action against a citizen of the same State in a diversity case. Congress has established the basic rule that diversity jurisdiction exists under 28 U.S.C. Sec. 1332 only when there is complete diversity of citizenship. "The policy of the statute calls for its strict construction." Snyder v. Harris, 394 U.S., at 340, 89 S.Ct., at 1058. To allow the requirement of complete diversity to be circumvented as it was in this case would simply flout the congressional command.
As to the claims by OPPD against OWEN and the claims by OWEN against OPPD, as well as as to the claims by OWEN against KROGER and claims by KROGER against OWEN, there are obvious defects in original subject-matter jurisdiction under section 1332, because the parties are not diverse. The question is: Is there Ancillary (now Supplemental) Jurisdiction over those claims in this scenario?
If those claims were made, what would be the source of original subject-matter jurisdiction for the claims:
a. by Kroger against OPPD?
b. by OPPD against Kroger?
c. by OPPD against Owen?
d. by Owen against OPPD?
e. by Owen against Kroger?
f. by Kroger against Owen?If those claims were made, what would be the source in the Federal Rules of Civil Procedure that allow the claims:
a. by Kroger against OPPD?
b. by OPPD against Kroger?
c. by OPPD against Owen?
d. by Owen against OPPD?
e. by Owen against Kroger?
f. by Kroger against Owen?
[The introductory notes are terribly important. Note 4 at 885 and 886 explains pendent party jurisdiction. Notes 5 and 6 explain the need for and reasoning behind the codification of supplemental jurisdiction.]
[886] 5. The Finley decision: In Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989), the Court refused to allow pendent party jurisdiction over a co-defendant even though the original claim fell within exclusive federal jurisdiction and could not be brought in state court. Unlike its prior decisions, in Finley the Court emphasized that federal jurisdiction can only be based on a statutory grant from Congress: "As regards all courts of the United States inferior to this tribunal, two things are necessary to create jurisdiction, whether original or appellate. The Constitution must have given to the court the capacity to take it, and an act of Congress must have supplied it .... To the extent that such action is not taken, the power lies dormant." 490 U.S. at 548, 109 S.Ct. at 2006 (quoting The Mayor v. Cooper, 73 U.S. (6 Wall.) 247, 252, 18 L.Ed. 851 (1867)) (emphasis in original).
Finley theoretically "took the breath away from all forms of supplemental jurisdiction," Mengler, The Demise of Pendent and Ancillary Jurisdiction, 1990 BYU L.Rev. 247, 255, but the Court did not declare that more traditional uses of pendent and ancillary jurisdiction were invalid. Instead, it announced a "clear interpretative rule," limited to pendent party jurisdiction, that "a grant of jurisdiction over claims involving particular parties does not itself confer jurisdiction over additional claims by or against different parties." 490 U.S. at 556, 109 S.Ct. at 2010. The problem was that "there is no principled basis for holding the line here." Mengler, supra, 1990 BYU L.Rev. at 259, and the absence of statutory authorization for one kind of pendent or ancillary jurisdiction imperilled all types.
6. The Supplemental Jurisdiction Statute: Congress responded to this problem in 1990 by enacting 28 U.S.C.A. Sec. 1367. Read the statute with care. The House Judiciary Committee report accompanying the statute stated that "this section would authorize jurisdiction in a case like Finley, as well as essentially restore the pre-Finley understanding of the authorization for and limits on other forms of supplemental jurisdiction." H.R.Rep. No. 734, 101st Cong., 2d Sess., at 28 (1990). The drafters also said that Sec. 1367(b) was designed to "implement the principal rationale of Owen Equipment & Erection Co. v. Kroger." Id. at 29 n.16. The courts have now begun to interpret this new statute.
[Tomorrow we will discuss how in trying to extend jurisdiction to the limits allowed by Article III AND attempting to codify the result in Owen, the Congress may have crafted a flawed statute, in spite of obviously careful and thoughtful attempts to get it right.]
[895] 1. Recall that the statutory grants of jurisdiction in 28 U.S.C.A. Secs. 1331 and 1332 have both been interpreted to be significantly narrower than the scope of jurisdiction authorized by the Constitution. In Sec. 1367(a), however, Congress has gone to the constitutional limit. What is the limit? Professor Redish is concerned that there has been "a good deal of circularity and question-begging": [Dean Matasar is indeed the author of the piece criticizing Gibbs, if you were curious. Note that more recently the courts continue to have difficulty with the definition of what a constitutional "case or controversy" means. One major concern is that 1367(a), to the extent that it is imperfectly limited by 1367(b), may create simple jurisdiction through the back door.]
[896] 2. [Despite their arguments that the legislative history clearly makes it improper, the drafters of the statute admit that "Literally, though, section 1367(b) does not bar an original complete diversity filing and subsequent amendments to add a non-diverse co-plaintiff under Rule 20, taking advantage over the claim of the new plaintiff against the existing defendant." Note that the saving language regarding adding a plaintiff is limited to additional plaintiffs pursuant to Rule 19 or 24, it does not mention 20. And when 20 is mentioned, if prohibits claims against newly-joined defendants. Silly? Yes. But see In Re Abbott Laboratories, 51 F3d 524 (5th Cir. 1995) ("Omitting the class action from the exception [in sec. 1367(b)] may have been a clerical error. But the statute is the sole repository of congressional intent where the statute is clear and does not demand an absurd result." The court therefore refused to reach the legislative history.) Silly is OK, absurd is not.]
3. [The debate regarding the omission of Rule 23 has in fact only increased in recent years.]
By way of updating our discussion of Impleader and Joinder, and how that relates to jurisdiction, here is the following update:
JURISDICTION:
Generally. In the Post-Finley and post-1367 world, the thoughtful analysis to be applied in federal court, when evaluating subject-matter jurisdiction, should be phrased as follows: A source of subject-matter jurisdiction must be found for each claim, by each party against each defendant. Federal subject-matter jurisdiction may be subdivided into:
(1) Original Subject-Matter jurisdiction, e.g., 28 USC §§ 1332 (Diversity, original subject matter jurisdiction) and 1331 (federal question, original subject-matter jurisdiction) AND
(2) Supplemental Subject Matter jurisdiction, 28 USC § 1367.
Impleader and Compulsory Counter-Claims. The traditional view was that bringing a claim under 13(a) or under Rule 14, generally gave the claiming party a big advantage, because any defects in original subject-matter jurisidiction were saved by ancillary/pendent jurisdiction. However, it would be more analytically accurate to say that the subject-matter jurisdiction of the U.S. District courts is limited and must always be justified. Therefore, a source of original subject matter jurisdiction is usually needed, and, in its abscence, supplemental subject-matter jurisdiction must be available. Generally speaking, in regard to claims brought pursuant to Rule 13(a) and 14(a), provided there is a legitimate anchor claim, as we discussed in relation to the Palmer case, defects in original subject-matter jurisdiction are saved by supplemental subject-matter jurisdiction under 28 USC § 1367. The test under Rule 14(a)[1] for a claim for indemnity or contribution is very narrow, and narrower than any other test under the rules. (See illustration 2). The standard for a Rule 13(a) claim, "same transaction or occurrence" is a narrower test than the "same constitutional case" requirement of 1367(a) (the test for which in Palmer is "each claim involves the same facts, occurrences, witnesses, and evidence"), therefore, if they meet the requirements of 14(a)[1] or 13(a), they will easily meet the requirements of 1367(a).
Joinder of Claims under Rule 18(a). Rule 18(a) would allow the defendant in Illustration 1 above, to join his claims for personal injury and damages against the third-party defendants impleaded for contribution only. To the extent that these claims arise out of the same transaction or occurrence, an assumption under our hypothetical, they would fall under the same constitutional case requirement of section 1367(a). To the extent that claims do not arise out of the same transaction or occurrence, so that they are rule 18(a) claims, BUT are part of the same constitutional case, they may also fall under supplemental jurisdiction of 1367(a). The graphic above, presents how the different Rule tests relate to each other, as the previous discussion shows, it is possible that some claims that do arise out of the same transaction or occurrence may be joined under Rule 18(a).
Exception. Claims by plaintiff. Even if they meet the requirements of 1367(a), claims by the Plaintiff against someone made a party pursuant to Rule 14(a), even Rule 13(a) compulsory counterclaims, are expressly precluded by 1367(b). A reasonable argument might be made that to preclude compulsory counterclaims is a ridiculous result, but it is a ridiculous result required by the literal language of 1367(b), and, as I mentioned in the highlights, some courts read it the way it is written, not the way it was intended to be written.
Venue. Additionally, a venue objection is not available to the impleaded third parties, as to matters that are within the supplemental jurisidiction of the court. This could include Rule 13(a), Rule 14(a) and certain Rule 18(a) claims. It is also deemed waived when the defendant removes a case to the Federal Court.
[It is crucial that you understand that a single person, the surviving spouse, is acting in four different capacities in this case, and that the analysis is based on treating each as a separate legal person. Only the Georgia Plaintiffs have a COBRA claim, the Alabama Plaintiffs do not.]
[Another possibly helpful way to approach this case is to remember that parties and/or claims are not PROPERLY in the case just because they are named in a complaint. For a party or claim PROPERLY to be in a case, all applicable requirements must be met. It is not until that happens that the party or claim is EFFECTIVELY as opposed to merely NOMINALLY in the litigation. The court goes about the analysis of this case in a very deliberate ORDER.]
[Note that the analysis under 1367 goes something like this: (1) Supplemental Subject-Matter Jurisdiction applies: (a) There is a defect in original subject-matter jurisdiction for the claims being discussed; (b) At least one anchor-claim must exist, i.e., one claim that is properly within the original subject-matter jurisdiction of the Federal Courts; (c) The pertinent claims fall within the "same case or controversy" standard of Art. III, as codified in section 1367; (2) The exercise of jurisdiction allowed by 1367(a) is not precluded by 1367(b); and (3) the District court chooses not to exercise its discretion to dismiss pursuant to 1367(c).]
[In the Post-Finley and post-1367 world, the thoughtful analysis to be applied in federal court, when evaluating subject-matter jurisdiction should be phrased as follows: A source of subject-matter jurisdiction must be found for each claim, by each party against each defendant. Subject-matter jurisdiction may be subdivided into: (1) Original Subject-Matter jurisdiction, e.g., 28 USC §§ 1332 and 1331 AND (2) Supplemental Subject Matter jurisdiction, 28 USC § 1367.]
[Additionally, consider how the tests of joinder of parties and/or claims under the Federal Rules, and their accompanying tests, fit into the application of the standard used in Section 1367. In this case, think of Rule 18(a) as to the joinder of claims, Rule 20(a) as to the joinder of parties. This is what the FOUR CIRCLES graph about.]
[888] This court, however, has not decided the applicability of COBRA to parties such as Bates, and, at the time the suit was filed, the law in that area was unsettled in other circuits as well. As a result, the ***Georgia*** Plaintiffs originally asserted a non-frivolous federal question claim against both Bates and Patterson. [Even though the one against Bates was dismissed.]
[889] Gibbs divided the analysis into two sections: the power of a federal court to exercise pendent claim jurisdiction, and its discretion not to do so despite having the power.
Section 1367 retains the same dichotomy, though its scope is somewhat different than the Gibbs tests. Under section 1367(a), unless section 1367(b) or (c) applies, the district court "shall have" supplemental jurisdiction over both additional claims and additional parties when those claims "are so related to claims in the action within [the] original jurisdiction [of the court] that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. Sec. 1367(a). Section 1367(c), however, allows a federal court to exercise some discretion in refusing to hear a case otherwise within its supplemental jurisdiction.
[890] [S]upplemental jurisdiction * * * might be anchored to either the COBRA claim by the Georgia Plaintiffs against Patterson or the now-dismissed COBRA claim by the Georgia Plaintiffs against Bates.
[890] First, the only basis of original federal jurisdiction in this case, following the dismissal of the COBRA claim against Bates, is the COBRA claim against Patterson. The Georgia Plaintiffs are the only plaintiffs involved in this claim. Hence, the Georgia Plaintiffs and Patterson are properly before the district court on that COBRA claim. See 28 U.S.C. Sec. 1331.
* * * Hence, the Georgia Plaintiffs and Patterson are properly before the district court on that COBRA claim. See 28 U.S.C. Sec. 1331.
[890-891] Secondly, we examine the jurisdiction of the court to hear the state- law claims of the Georgia Plaintiffs against Patterson. This is the exercise of what was traditionally known as pendent claim jurisdiction. Such exercise in this case is entirely proper. The relevant parties are before the court on an independent ground of original federal jurisdiction. By its language, section 1367(a) authorizes a court to hear supplemental claims to the full extent allowed by the "case or controversy" standard of Article III. See 28 U.S.C. Sec. 1367(a). * * * While all the elements of the federal and state claims are certainly not identical, and in some cases are quite different, each claim involves the same facts, occurrences, witnesses, and evidence. This commonality is sufficient to satisfy the constitutional minimum required by section 1367(a). Hence, jurisdiction over the Georgia Plaintiffs' state-law claims against Patterson was within the power of the district court.
[891] The third inquiry involves the state-law claims of the Alabama Plaintiffs against Patterson. * * * Finley v. United States, * * * (1989). Because the federal courts are courts of limited jurisdiction, the boundaries of which are set by Congress, subject to the Constitution, congressional authorization was required for pendent party jurisdiction. Such authorization was specifically provided by section 1367(a), which states, "supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties." 28 U.S.C. Sec. 1367(a). In this case there is no original federal jurisdiction for any claims by the Alabama Plaintiffs against Patterson. However, Patterson is properly in federal court on the COBRA claims, and the state-law claims are validly raised against Patterson by the Georgia Plaintiffs, as discussed above. Hence, these causes of action were already properly present in federal court. These claims by the Alabama Plaintiffs involve the same facts, occurrences, witnesses, and evidence as the Georgia Plaintiffs' state-law claims against Patterson. The district court therefore had the power to exercise jurisdiction over these claims by the Alabama Plaintiffs against Patterson.
[892] Supplemental Jurisdiction Based on the COBRA Claim of the Georgia Plaintiffs Against Patterson
* * * [The] supplemental state-law claims are not required to be dismissed along with the underlying claim. Rosado v. Wyman, 397 U.S. 397, 403-05, 90 S.Ct. 1207, 1213-14, 25 L.Ed.2d 442 (1970). Section 1367(a) provides no such mandate. Indeed, we have recently held that such dismissal may be an abuse of discretion where the state statute of limitations expired prior to dismissal of the anchor federal claim. Edwards v. Okaloosa County, 5 F.3d 1431, 1433-35 (11th Cir.1993). This power to retain jurisdiction after the dismissal of the underlying federal claim has not been altered by section 1367. Section 1367(c) gives a court discretion to dismiss a supplemental claim or party when "the district court has dismissed all claims over which it has original jurisdiction." 28 U.S.C. Sec. 1367(c)(3). * * *
[892] Supplemental Jurisdiction Based on the COBRA Claim of the Georgia Plaintiffs Against Patterson
[893] * * * [T]he Georgia Plaintiffs have properly invoked supplemental claim jurisdiction to present their state- law claims against Patterson in federal court. These are identical to the claims the Georgia Plaintiffs have raised against Bates. They include precisely the same facts, occurrences, witnesses, and evidence. Such claims are properly considered to be the joinder of an additional party to claims that "form part of the same case or controversy under Article III." 28 U.S.C. Sec. 1367(a). Therefore, this direct application of supplemental or pendent party jurisdiction is within the power of the district court.
[893, This is the really surreal part of the opinion. You are welcome to think of it as surreal, difficult, bootstrapping, take your pick.] There are no new claims or parties affirmatively being brought before the court by this exercise of supplemental jurisdiction. The Alabama Plaintiffs are legitimately before the court on claims against Patterson. Bates is within the court's jurisdictional reach, subject to its discretion, on the state-law claims of the Georgia Plaintiffs. Finally, the claims asserted by the Alabama Plaintiffs against Bates are nearly identical to those asserted by the Georgia Plaintiff against Bates. * * * Once again, the same facts, occurrences, witnesses, and evidence are present in these claims as in those previously discussed. Hence, they are within the court's power, as "form[ing] part of the same case or controversy under Article III."
[My personal view is that the Circuit court was anticipating that it will decide the issue of COBRA claims against doctors as other circuits have. This would deprive plaintiffs of a viable Federal anchor-claim connected to the doctors. Therefore, the Circuit court chose to take 1367 to its most extreme, so as to allow these claims to be entertained by the Federal Courts. I don't think that their argument is without logic, but there is an awfully big ship hanging on to this anchor, and the wind is blowing fast!]
[Since the Circuit is remanding to the District for a determination of whether 1367(c) should be used to dismiss, it explains that provision as follows]
[894] Specifically, it provides for four occasions when a federal court may decline to exercise supplemental jurisdiction otherwise within its power. See 28 U.S.C. Sec. 1367(c). The remaining considerations articulated in Gibbs, however, have not become useless to federal courts in exercising this discretion. Rather, while supplemental jurisdiction must be exercised in the absence of any of the four factors of section 1367(c), when one or more of these factors is present, the additional Gibbs considerations may, by their presence or absence, influence the court in its decision concerning the exercise of such discretion. Such factors include judicial economy, convenience, fairness to the parties, and whether all the claims would be expected to be tried together.
[897] 6. [Note the different views expressed as to the survival of Gibbs in the discretion area by the 11th circuit in Palmer and by the 9th in Executive Software.]
[895] 1. Recall that the statutory grants of jurisdiction in 28 U.S.C.A. Secs. 1331 and 1332 have both been interpreted to be significantly narrower than the scope of jurisdiction authorized by the Constitution. In Sec. 1367(a), however, Congress has gone to the constitutional limit. What is the limit? Professor Redish is concerned that there has been "a good deal of circularity and question-begging": [Dean Matasar is indeed the author of the piece criticizing Gibbs, if you were curious. Note that more recently the courts continue to have difficulty with the definition of what a constitutional "case or controversy" means. One major concern is that 1367(a), to the extent that it is imperfectly limited by 1367(b), may create simple jurisdiction through the back door.]
[896] 2. [Despite their arguments that the legislative history clearly makes it improper, the drafters of the statute admit that "Literally, though, section 1367(b) does not bar an original complete diversity filing and subsequent amendments to add a non-diverse co-plaintiff under Rule 20, taking advantage over the claim of the new plaintiff against the existing defendant." Note that the saving language regarding adding a plaintiff is limited to additional plaintiffs pursuant to Rule 19 or 24, it does not mention 20. And when 20 is mentioned, if prohibits claims against newly-joined defendants. Silly? Yes. But see In Re Abbott Laboratories, 51 F3d 524 (5th Cir. 1995) ("Omitting the class action from the exception [in sec. 1367(b)] may have been a clerical error. But the statute is the sole repository of congressional intent where the statute is clear and does not demand an absurd result." The court therefore refused to reach the legislative history.) Silly is OK, absurd is not.]
3. [The debate regarding the omission of Rule 23 has in fact only increased in recent years.]