Subject Matter JXN

Courts of general vs limited JDXN

• General vs. Limited jxn courts: Courts of general jxn may hear any kind of case that is not specifically excluded from its jxn. Every state has courts of general jxn. Federal courts are courts of limited jxn that require subject matter jxn to have been conferred by the Constitution or federal statute. In many cases, there is concurrent jxn between state and federal courts. 

3 bases of federal subject matter jxn

1. General federal question jxn (aka statutory “arising under” jxn) 28 U.S.C. § 1331

2. Diversity jxn 28 U.S.C. § 1332

3. Supplemental jxn 28 U.S.C. § 1367

General Federal Question Jxn (where it comes from)

• 28 U.S.C. § 1331: Provides that all federal “district courts have original jurisdiction of all civil actions arising under the Constitution, law, or treaties of the US,” which is virtually identical to the language in Article III § 2. However,  § 1331 grants less federal question jxn than the Constitution could grant under Article III. 

  • A case arises under Constitution, laws, or treaties of the United States within the meaning of §1331, only if a federal question would appear on the face of a well pleaded complaint

Well-Pleaded Complaint Rule (WPCR)

 A case/claim arises under the Constitution, Law, or Treaties in the US within the meaning of § 1331 only if a federal question appears on the face of a well-pleaded complaint. Satisfying the WPCR is required but not sufficient to establish general federal question jxn. However, satisfying the WPCR will almost always establish federal question jxn.

Louisville & Nashville RR. Co. v. Mottley

• Facts: P sued D for negligence, but released the claim in exchange for a lifetime train pass → D stopped renewing said pass b/c state anti-corruption statute prohibited free passes for transportation → P sued in equity for specific performance, alleging the statute didn’t bar renewal of the pass, and if it did, it was an unconstitutional taking under the 5th A. DPC → P sued in Federal Circuit court → P won → D appealed → SCOTUS pointed out the subject matter jxn issue

• Legal Issue: Both of the issues raised by P, breach of contract and inadequacy of legal remedies, lacked subject matter jxn b/c neither included a federal question on the face of  a well-pleaded complaint, so SCOTUS dismissed the case → Established that if a federal court becomes aware of lack of subject matter jurisdiction, the court must dismiss the case even if neither of the parties raises the issue

  • The Constitutional issue regarding the 5th A. was a response to D’s affirmative defense, not part of P’s claim, so the WPCR was not satisfied

• 28 U.S.C. § 1257: Allowed SCOTUS to try Mottley again after P refiled and won in state court b/c § 1257 grants SCOTUS broad appellate jxn to review state supreme court decisions that involve a federal question without requiring WPCR.

WPCR in Counterclaims & Holmes Group

• Before Holmes Group, it was taken for granted that an answer asserting a counterclaim could be taken as a figurative complaint for the purposes of satisfying the WPCR and gaining federal question jxn. After Holmes Group, a court may exercise federal question jurisdiction over a counterclaim if: (1) the plaintiff in his complaint has satisfied the WPCR, and (2) the defendant’s counterclaim would have satisfied the WPCR if the defendant had sued first. 

WPCR in Declaratory Judgments

WPCR does not apply to P’s complaint in a declaratory judgment; WPCR applies to what D’s complaint would have been had P not sued first.

Claims Created by Federal Law

Recall: If federal law creates a claim, there will almost always be federal question jxn if the WPCR is satisfied, but not if the federal claim at issue is wholly insubstantial and frivolous. Bell v. Hood.

Hybrid Claims

• Hybrid Claim: When (a) state law has created the cause of action, and (b) liability under state law is determined by applying a federal law. Merrell Dow Pharmaceuticals, Inc. v. Thompson; Smith v. Kansas City Title & Trust Co.. 

  • Although § 1331 is interpreted to confer federal questions jurisdiction over hybrid claims, it’s a judgment call based on a four-part test outlined in Gunn v. Minton, which greatly limits the availability of federal question jxn on hybrid claims. Gunn: “Federal jxn over a state law claim will lie if a federal issue is:

    • Necessarily raised,

    • Actually disputed

    • Substantial, and

    • Capable of resolution in federal court without disrupting the federal-state balance approved by Congress. 

  • Also, state negligence per se claims based on alleged violations of federal safety regulations rarely qualify for federal question jurisdiction b/c there are thousands of federal safety standards, and there would be a flood of litigation. 

  • However, Chicago v. International College of Surgeons establishes that the law likely authorizes federal question jxn if the federal law incorporated into the state-created claim could be brought as an independent federal claim b/c the independence of the federal claim makes the federal relation important enough to justify a federal hearing. 

• Legislative Plagiarism: Copying the wording of a federal law is not the same as incorporating a federal law because there would be no need to look to the federal law to determine the success of a legislatively plagiarized claim, and the state’s supreme court would have the final say in interpreting the claim. Legislative plagiarism never satisfies federal question jxn.

Removal when based on fedQ JDXN (1331)

•  1441(a): Provides the general rule that allows D to remove the suit from state to federal court if the suit could have been brought in federal court under § 1331, which means: 

1. The WPCR applies to removal that is based on federal question jxn

2. Since P is the master of his suit, P can ensure that his case is not removable by relying solely on state causes of action

• Complete Preemption: Per Beneficial National Bank v. Anderson, any federal statute that (1) preempts state law and (2) provides a substitute federal remedy creates an ‘exclusive cause of action.’

  • Rationale for complete preemption is that P’s complaint obtains federal question jxn because the only cause of action they can plead is a federal cause of action (even if they rely on state law grounds since those grounds are preempted).

    • However, note that complete federal preemption is rare since Congress does not ordinarily provide alternative federal remedies when preempting.

  • Per Mottley, a preemptive defense does not create federal question jxn because a preemptive defense will not appear on the face of a WPC.

• Removal of Federal Question joined with State-Law claims: Allowed via § 1441(a) if there is a basis for supplemental jxn over the state-law claim or via § 1441(c). If a civil action is removed under (c), the court must sever the claims where it lacks subject matter jxn and remand them back to the state.

Removal Procedure

• Notice of Removal [§§ 1446(a), 1446(d)]: D seeking removal must file notices of removal in the destination federal district court and the state court where the action is pending. § 1446(a). After filing, D must notify all adverse parties.

  • Generally, you must file a notice before you answer.

• Should a party think that a subject matter jxn issue exists, they can move to remand the case back to state court. § 1447(c). Under, § 1447(c) a party seeking remand can bring a motion to remand for subject matter jxn at any time, but must bring a motion for remand for a procedural defect w/in 30 days . 

• The Unanimity Rule [§ 1446(b)(2)(A)]: defendants must unanimously agree to remove, and if one defendant wants the case to stay in state court, that defendant will prevail. § 1446(b)(2)(A). 

  • However, removal under § 1441(c) does not require unanimous consent. Removal under § 1441(c) involves actions with federal and state claims. There, unanimous consent is only required from parties joined in a federal claim. § 1441 (c)(2). Consent from those not joined is irrelevant since the state claim will be remanded. 

• The 30-day Rule: 

  • § 1446(b)(1): D has 30 days to file notice of removal after being served. 

    • When there are multiple Ds, § 1446(b)(2)(B) says each D shall have thirty days after receipt or service of the complaint to file notice of removal. 

  • If Ds are served at different times and a later-served D initiates removal, § 1446(b)(2)(C) says that an earlier-served D may consent even if they did not initiate removal. 

  • § 1446(b)(3) D has 30 days to file a notice of removal when: (1) an action was not previously removable, and (2) D receives some document that allows them to ascertain that a case is removable. Time starts from receipt of document.

Diversity Jxn

• The Constitution: Provides that controversies between a state and citizens of another state, between citizens of different states, and between a state or citizens thereof and foreign state citizens or subjects are all entitled to diversity jxn. Per Hodgson, SCOTUS held it cannot exercise diversity jxn in a suit solely between citizens of foreign states. 

• § 1332(a): Much like § 1331, § 1332 grants narrower exercise of diversity jxn than the Constitution allows via (1) the complete diversity requirement and (2) the amount in controversy requirement. Available on four different bases, but we won’t cover fourth.

  • Bases for diversity under § 1332(a)

    • Citizens of different states

    • Citizens of a state and citizens of a foreign state

    • Citizens of different states where citizens of a foreign state are joined as additional parties

Mas v. Perry

• Facts: Citizen of France and citizen of Mississippi were married and living in Louisiana sued Louisiana LL b/c LL installed a two-way mirror to watch them → Both made a claim in excess of 10K and there was diversity jxn →  LL tried to file a 12(b)(1) motion b/c lack of diversity jxn → 5th circuit rejected the motion

  • Mr. Mas’s claim: Even if it were alone, there would be diversity jxn under § 1332(a)(2) b/c: (1) Mr. Mas is considered domiciled in a foreign state (France), (2) he sought an amount in excess of the amount in controversy requirement, and (3) Mr. Perry is a citizen of Louisiana. The fact that he was granted less damages than required for amount in controversy does not matter.. 

• Mrs. Mas’s claim: The court rejects the sexist rule that a wife’s domicile must be attributed to her by the husband’s domicile, which would have been an issue b/c Mrs. Mas would have been domiciled in France and therefore stripped of her state citizenship…1332(a) applies only to citizens of a state or citizens of a foreign state. Marriage can affect domicile, but it is not dispositive. The court decides that Mrs. Mas is domiciled in Mississippi, which satisfies the diversity of citizenship requirement under § 1332(a)(1). 

  • New domicile is established by: (1) taking up residence in a place (2) with the intent to establish a permanent residence. 

• Permanent Resident Aliens: Non-US citizen w/ a green card. Included in § 1332(a)(2) after amendment. 2011 Amendment also prohibits original jxn over citizens of a state and citizens or subjects of a foreign state domiciled in the same state. 

• Complete Diversity Requirement: When there is more than one P and/or more than one D, there must be complete diversity. Strawbridge v. Curtiss.

  • Mandates that all plaintiffs be diverse from all defendants in a civil action. Doesn’t matter whether Ps share citizenship or Ds share citizenship. 

  • Rule 21: Lack of complete diversity does not mean the civil action must be dismissed. A defect in diversity jxn can be cured by dropping any non-diverse party via Rule 21 “on just terms.” However, consent from P is needed to remove a properly-joined D. Hain Celestial Group v. Palmquist.

• There is no complete diversity within the meaning of § 1332(a)(1) or (2) for Mas because the suit is not wholly between citizens of different states or between a citizen of a state and a citizen of a foreign state. 

  • However, if two claims in a suit can obtain diversity jxn by severing them because both obtain diversity jxn under different subsections, courts hold there is diversity jxn and that severing the claims to make them a precise fit is unnecessary. 

  • Assume that “civil action,” for complete diversity requirement includes all the Ps and Ds in the complaint whose joinder is authorized. 

• Another way Mas can conceptually achieve diversity jxn is through § 1332(a)(3). Section  1332(a)(3) is a basis for complete jxn when complete diversity is satisfied under (a)(1). The diverse parties can “add” a citizen of a foreign state, even if foreign citizens are on both sides of the “V” or those foreign citizens are non-diverse to each other. 

Citizenship of Artificial Persons

• Artificial persons (corporations) are domiciled in two places: their state of incorporation or the state where the principal place of business is. 

  • A corporation’s place of business is where it makes administrative decisions (called its “nerve center”). Hertz Corp. v. Friend. 

• Unincorporated associations are citizens of the states where each of its members reside. . 

  • Diversity suits against unincorporated associations are much harder to exercise diversity jxn over b/c there is rarely complete diversity. See Gibbs.

The Amount-in-Controversy Requirement

• The amount in controversy requirement has increased from in excess of $10K, to $50K, to $75K

• Aggregation Rules: All the claims asserted by one party against another can be aggregated for purposes of satisfying the amount-in-controversy requirement, even if the claims are unrelated. When a suit involves a P suing multiple Ds or a D being sued by multiple Ps,  EACH CLAIM must satisfy the amount in controversy requirement. 

  • In rare cases, aggregation of claims asserted by more than one plaintiff or against more than one defendant may be appropriate when plaintiffs are asserting a joint right or defendants are alleged to have a joint obligation.

• Counterclaims: Conventional wisdom is that a claim and counterclaim cannot be aggregated to satisfy the amount in controversy requirement. For a court to have diversity jxn over a counterclaim, the counterclaim must satisfy the amount in controversy requirement. 

  • However, another view, supported by some Supreme Court authority, is that counterclaims and claims can be aggregated provided that there is no “double counting of damages.” Note both views on the exam.

• Legal Certainty Test: Unless it can be shown to a legal certainty that a claim is for less than the amount in controversy requirement, it will be treated as a valid claim under diversity jxn . See Mas (P earned less than requirement).

  • LCT is rarely invoked b/c it’s hard to prove “to a legal certainty” that P won’t be able to obtain an amount in excess of the amount in controversy requirement. The best opportunity is when a statute caps damages.

Removal based on § 1332(a)

• The Forum-Defendant Rule: § 1441(b)(2) limits removal based on diversity jxn by barring removal if any of the defendants reside in the state where the suit is brought. 

  • Snap Removal: However, the plain text of § 1441(b)(2) indicates that removal is proper and remand is unnecessary if removal is effected before a forum defendant is served. Snap removal is not settled as a matter of law, but it is increasingly common for courts to give 1441(b)(2) its plain meaning.

    • Sophisticated repeat Ds monitor state dockets to gain notice of filings against them and seek snap removal immediately. 

• The Fraudulent Joinder Doctrine: Applies when P includes a D who destroys complete diversity or by including a forum solely to prevent removal D.. FJD allows a D seeking removal to obtain dismissal of the fraudulently-joined non-diverse or forum D under Rule 21 by showing P has not stated and cannot state a claim for relief against the non-diverse or forum D. After dismissal, D can file for removal provided that there are no other reasons preventing removal under diversity jxn (e.g., another non-diverse D or insufficient amount in controversy). 

  • SCOTUS in Hain Celestial Group v. Palmquist said:  “If a court erroneously dismisses a defendant because that defendant was improperly joined, any decision on the merits will be void for lack of subject matter jxn.” 

• When a Notice of Removal may state the amount-in-controversy: Per §1446(c)(2), the amount sought by P is treated as the amount in controversy, but there are some exceptions that protect a D seeking removal, such as: 

  • § 1446(c)(2)(B), which allows D to state the amount in controversy in the notice of removal when (1) P seeks nonmonetary relief or monetary relief when State practice does not allow demand for a specific sum or allows P to recover more, and (2) the district court finds by a “preponderance of the evidence” that the amount-in-controversy requirement is met.

  • § 1446(c)(3)(A): D normally has 30 days after service of the complaint to remove a suit to federal court. But if a suit is not initially removable because it fails the amount-in-controversy requirement and a paper is later filed in the case which allows the case to satisfy the amount-in-controversy, the 30-day clock begins to run with the receipt of that paper under §§ 1446(b)(3) 1446(c)(3)(A). 

• One-Year Time Limit on Diversity Removal: One-year limit on removal under diversity jxn unless district court finds P acted in bad faith to prevent removal. § 1446(c)(1). 

• Judicial Gloss on § 1446(b)(3) and the Voluntary-Involuntary Rule: § 1446(b)(3) provides that a D has 30 days to remove an action that was not initially removable. However,  courts have placed a non-textual limit, the voluntary-involuntary rule, on when a case becomes removable b/c of the dismissal of a non-diverse D from the action. Under the voluntary-involuntary rule, courts categorize the dismissal of the non-diverse D as either: voluntary or involuntary.

  • If the dismissal was voluntary (e.g., settlement, P won SJ, etc.), the remaining diverse D may file a notice of removal.

  • If the dismissal was involuntary (e.g., non-diverse D won 12(b) motion, SJ, or etc.), some courts hold either that:

    • The remaining diverse D may not file a notice of removal, or

    • The remaining diverse D may file a notice of removal after P’s ability to appeal the involuntary dismissal has lapsed.

  • In practice, the split among courts regarding involuntary dismissal rarely matters because of the one-year limit on removal based on diversity jxn. Under the “more relaxed view,” the remaining diverse D is unlikely to gain their ability to remove within one year and after P’s ability to appeal lapses.

Diversity Jxn and Removal in Class Litigation

• Class Action: A representative action typically brought by one or more named plaintiffs in the complaint on behalf of several other absentees. Any named plaintiff has a responsibility to the absentees.

• Two Bases for Diversity Jxn for Class Actions: 1332(a) and CAFA [1332(d)]

  • 1332(a): Only the named Ps must be completely diverse from the Ds. The citizenship of the absentees doesn’t matter. Supreme Tribe of Ben Hur v. Cauble. However, each class member must independently satisfy the amount-in-controversy requirement. Zahn v. International Paper Co.

  • Class Action Fairness Act [1332(d)]: Only one P must be diverse from one D. The aggregate amount in controversy must exceed $5,000,000. 

    • However, 1332(d) does not apply when there are fewer than 100 class members, and federal courts may/should decline diversity jxn in certain circumstances to protect a state court’s interest. 

    • Mass actions, cases where every P is individually joined, may also be treated as a class action for purposes of 1332(d) as long as they meet the other requirements of subsections (2) through (10). 1332(d)(11).

• Removal on CAFA: § 1453(b) provides that “A class action may be removed to a district court . . . in accordance with section 1446 [1] (except that the 1-year limitation under section 1446(c)(1) shall not apply), [2] without regard to whether any defendant is a citizen of the State in which the action is brought, [3] except that such action may be removed by any defendant without the consent of all defendants.” (i.e., no 1-year limit on removal, no forum-defendant rule, and no unanimity rule)

Supplemental Jxn [§ 1367]

Permits a court to decide a claim over which it does not have statutory federal question or diversity jxn when the claim is closely related to another claim over which the court does have statutory federal question or diversity jxn.

United Mineworkers v. Gibbs

• Facts: P claimed that D violated a federal act and state common law → Federal question jxn over the federal act, and only supplemental jxn was possible on the common law 

• Legal Question: Are the federal and state law claims part of the same constitutional case? 

• The Power Prong – The Requirements of Supplemental Jxn: (1) There must be a claim over which there is an independent basis for subject matter jxn, (2) when that basis is federal question jxn, the claim must have substance sufficient to confer subject matter jxn (i.e. not “wholly insubstantial and frivolous) and (3) the state and federal claims must arise from a “common nucleus of operative fact” (CNOF).

  • CNOF requires that the state and federal claims are sufficiently connected to justify viewing them as one constitutional case (i.e. “so related one would expect to try them all in one judicial proceeding”). We will not be asked to apply it. 

  • Power prong is ordinarily resolved on the pleadings.

• The Discretion Prong: § 1367(c) lists four considerations a federal district court may weigh to decline exercising supplemental jxn even though the power prong is met. 

  • Courts have discretion to decline supplemental jxn at any time.

  • Royal Canin U.S.A. v. Wullschleger seems to indicate that § 1367(c) factors control, but Gibbs factors do not necessarily conflict with § 1367(c).

  • Will not be tested. Our focus is exclusively on the power prong.

Diversity Jxn and Supplemental Jxn

• The Constitution permits supplemental jxn over a constitutional case when there is minimal diversity but availability is also limited by § 1332(a). 

  • How should § 1332(a) limit supplemental jxn? If it requires complete diversity, then there’s no need for supplemental jxn. If it does not, then § 1367 becomes effectively powerless.

Owen Equipment and Erection Co. v. Kroger

• Facts: Kroger = IA citizen and OPPD = NE citizen → OPPD impleads Owen, who was a citizen of NE and IA → at this stage, there is still diversity jxn b/c 2 separate V.’s (Kroger v. OPPD v. Owen) → OPPD then obtained  SJ and was dismissed, leaving two non-diverse parties because Kroger amended pleadings to include Owen

• Legal Question: Can there be supplemental jxn on a case that originally had supplemental jxn, but no longer has a basis for original jxn? 

• Majority: Treats the impleader claim as the same as P suing both Ds at the same time. Therefore, no diversity or supplemental jxn. Harsh result for P, but protects the complete diversity requirement. Additionally, less sympathetic b/c P chose to sue in federal court. 

  • However, Gibbs specifies that supplemental jxn does not disappear just b/c the claim over which the court had original jxn disappears, but the majority is commenting on the power prong even though it should be commenting on the discretion prong.  

• Dissent: Posit that the impleader claims makes a big difference in whether the court should or should not exercise its discretion. 

The Context Rationale

• The key to distinguishing between cases that satisfy 1332(a) and cases that don’t satisfy 1332(a) but that are consistent with 1332(a) is context (e.g., impleader, crossclaims, and counterclaims). Supplemental jxn is generally authorized only over claims made by a defending party haled into court against his will b/c these claims are consistent w/ 1332(a) even if they don’t satisfy 1332(a). 

  • Does this mean a P can never invoke supplemental jxn? What if the P’s claim is removed to federal court (not a defending party but haled into court)? See below. 

• 3 Different Readings of Kroger: 

1. P may never rely on the context rationale. 

2. P may rely on the context rationale if he is haled into federal court against his will and is in the posture of a defending party

3. P may rely on the context rationale if he is haled into federal court against his will or is in the posture of a defending party

   1. SCOTUS has never resolved which reading is correct, but lower courts accept the most permissive reading

Supp JDX Statute

28 U.S.C. § 1367

• (a): Affords federal district courts the power to exercise supplemental jxn over claims that are part of the same constitutional case and over which the court has diversity or federal question jxn (i.e., original jxn). There must be original jxn upon the original or amended complaint. Supplemental jxn also includes claims that involve the joinder or intervention of additional parties.

  • If relying on federal question jxn, you only need one federal question in the claim

  • If relying on diversity jxn, there must be complete diversity and one of the Ps must have a claim in excess of $75K against one of the Ds

• (b): “In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) [1] over claims by plaintiffs {against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or [2] over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules}, [3] when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.”

  • No application to claims asserted by anyone other than plaintiffs and persons proposed to be joined as plaintiffs or seeking to intervene as plaintiffs.

  • Poorly drafted b/c leaves open Rule 20 and Rule 23 plaintiff gaps in single defendant suits, which could have been avoided if the wording were broader. 

The Meaning of “Civil Action of which the District Courts have Original Jurisdiction”

• Approaches before Allapattah: 

  • Single-Claim Approach: requires that only one P is diverse from one D and that the claim between them satisfies the amount-in-controversy requirement. So long as one claim meets this standard, there will be supplemental jxn over all claims in the action not subject to the exceptions of § 1367(b) and (c). .

    • Problematic b/c requires reference to § 1367(b), which is poorly drafted, b/c 1367(a) is much more easily met.  

  • Whole-Complaint Approach: All the claims asserted by a plaintiff in an action must satisfy the complete-diversity requirement and amount-in-controversy requirement before a court will have supplemental jxn over any of the claims.

    • While it avoids the godawful drafting of § 1367(b) it effectively destroys supplemental jxn for claims deriving original jxn from diversity jxn.

• After Allapattah: two things must be true for supplemental jxn based on diversity jxn: (1) There is complete diversity in the complaint or in the amended complaint, and (2) at least one claim in the complaint or in the amended complaint satisfies the amount in controversy requirement.

  • The court doesn’t seem to perceive the single-defendant gap issue, even though it’s absurd to treat those cases differently. 

The Gaps in Section 1367(b) and their Significance

• The Rule 20 Plaintiff Gap: 

  • Occurs in single-D cases under the single-claim approach. Does not appear under the whole-claim approach since it effectively destroys supplemental jxn under diversity jxn, which subsection (b) governs. Consider that A (TX, 80K) and B (CA, 50K) sue C (CA). Under the single-claim approach, there is diversity jxn over A’s claim. While the most lenient context rationale in Kroger would prevent supplemental jxn over B’s claim because B is neither in the posture of a defending party nor haled into court, § 1367(b) allows it because B is a Rule 20 P, which is not covered under the second half of (b).  

    • This gap will close anytime there is more than one D in an action since supplemental jxn over those claims will be barred by the first half of (b).

• The Rule 23 Plaintiff Gap: 

  • Occurs in single-D cases under the single-claim approach. Does not appear under the whole-claim approach since it effectively destroys supplemental jxn under diversity jxn, which subsection (b) governs. Consider that A, as named P, (TX, 80K) sues B (CA). None of the members of A’s class satisfy the amount in controversy requirement and the aggregate is less than the amount in controversy of § 1332(d). There is no diversity jxn under § 1332(a) or (d). Under the single-claim approach, there is diversity jxn when using § 1332(a) in combination with § 1367 because A’s claim against B satisfies both requirements, which allows the claims of the absentees to obtain supplemental jxn.

  • Again, the moment a D is joined under Rule 20, the gap closes.

Exxon Mobil v. Allapattah

• Facts: Two separate cases at issue—(1) Class action against Exxon where the named plaintiffs were diverse from the D, so there was complete diversity. However, some of the absent Ps could not satisfy the amount in controversy requirement. (2) Injured girl brought suit against Star Kist seeking damages in excess of the amount in controversy requirement, but her family, who joined the suit, did not meet the amount in controversy requirement. However, there was complete diversity.

• Legal Question in either case: Whether the federal district court could exercise supplemental jxn over the claims, even though not all Ps satisfied the amount in controversy requirement

• The Court’s Analysis: Majority dismissed legislative history erroneously and concludes, again erroneously, that congressional intent with respect to 1367 is unclear. The Majority then reaches its holding, which compromises between the single-claim and whole-complaint approaches even though there is no textual or policy reasons for treating the diversity of citizenship and amount in controversy requirements differently. 

  • Allapattah: Made clear that supplemental jxn requires original jxn over the complaint or amended complaint, but supplemental jxn can be exercised over claims asserted in the complaint or amended complaint as well as over claims asserted outside of the complaint or amended complaint. Ultimately, Allapattah illustrates the Rule 20 and 23 plaintiff gaps. 

• Two ambiguities of Allapattah: 

1. The Court did not notice the single-defendant gap, and it is arbitrary to treat single defendants differently than multiple. There is uncertainty as to how the Court will react in response to the single-defendant gap—Ignore? Overrule? 

2. The Court said there needs to be a claim in excess of $75K to meet the amount in controversy. Likely a mistake since there is no textual support.

The Context Rationale and 1367

• The context rationale is much less important after 1367’s enactment b/c there is no supplemental jxn without complete diversity, but the last clause of 1367(b) seems to call for the application of the context rationale (e.g., although impleader claims trigger Rule 14, exercise of supplemental jxn over impleader claims is still consistent with 1332(a)). However, courts have not distinguished between satisfaction of § 1332(a) and consistency with § 1332(a), even though failure to distinguish between the two renders the last clause of 1367(b) superfluous. 

Removal based on Supplemental Jxn

• Example: A, a citizen of Alabama, sues B, a citizen of Connecticut, in Alabama state court for damages in excess of $100,000. B removes the suit to Alabama federal court and then impleads C, a citizen of Connecticut. A amends his complaint to assert a $50,000 claim against C. A’s claim against C is part of the same constitutional case as A’s claim against B. Does a federal court have supplemental jurisdiction over A v. C?

  • At best, there is a decent argument for it. There is complete diversity and the amount-in-controversy requirement is satisfied in at least one claim, but A’s claim against C triggers Rule 14 and disallows supplemental jxn under 1367(b). However, the most permissive reading of the context rationale would demonstrate that exercising supplemental jxn over A’s claim against C is consistent w/ 1332 b/c A was haled into federal court against his will. 

• Final Question: Does the text of 1367(b) only apply to joinder under the federal rules of civil procedure, or to joinder under state rules of civil procedure too? 

  • Textually, no. Section 1367(b) should not apply to state joinder, but the only case that’s ever ruled on this theory rejected it. However, there’s still a strong textual argument. Textually? Clever. Instinctively? Repugnant.