2.8 Supplemental Jurisdiction

• Library: Federal Civil Practice in Virginia (Virginia CLE) (2023 Ed.)

2.8 SUPPLEMENTAL JURISDICTION

2.801 Supplemental Jurisdiction Under 28 U.S.C. § 1367.

As part of the Judicial Improvements Acts of 1990, ⁶¹¹ Congress codified the judicially created doctrines of "pendent" and "ancillary" jurisdiction under the unitary label of "supplemental jurisdiction" in 28 U.S.C. § 1367.

2.802 Related Claims.

Under 28 U.S.C. § 1367(a), district courts with original jurisdiction over one claim have "supplemental jurisdiction" over all other related claims. Related claims are those that are so related that they form part of the same case or controversy within the meaning of article III.

Congress intended to reverse Finley v. United States, ⁶¹² which had forbidden pendent party jurisdiction in federal question cases. The statute now permits the assertion of state law claims against additional defendants so long as these claims are "related" to a federal question claim. For example, a plaintiff may now bring in defendants solely on state law claims if they relate to a civil rights action under 42 U.S.C. § 1983 or a RICO claim under 18 U.S.C. § 1961.

A party is not required to plead supplemental jurisdiction for a party to hear related claims. In the Western District, a defendant argued that the claims must be dismissed because the complaint failed to cite to 28 U.S.C. § 1367(a), or otherwise invoke supplemental jurisdiction, but the court held that facts alone in the pleading sufficiently alleged jurisdiction. ⁶¹³

2.803 Limitations on Supplemental Jurisdiction in Diversity Cases.

28 U.S.C. § 1367(b) contains significant limitations on the use of supplemental jurisdiction in diversity cases so that the statute will not defeat the established rule of complete diversity.

Specifically, 28 U.S.C. § 1367(b) provides that "supplemental jurisdiction" does not exist over:

A. Claims by plaintiffs against parties added under R ule 14 (impleader), R ule 19 (mandatory joinder), R ule 20 (permissive joinder) or R ule 24 (intervention); or

B. Claims by persons proposed to be joined as additional plaintiffs under R ule 19 (mandatory joinder) or R ule 24 (intervention).

Supplemental jurisdiction does exist for diversity-destroying claims by defendants.

In restricting the availability of supplemental jurisdiction for claims by plaintiffs and not defendants, Congress codified the Supreme Court's concern in Owen Equipment & Erection Co. v. Kroger ⁶¹⁴ that the plaintiff could foil the complete diversity rule by omitting non-diverse defendants from its initial complaint, awaiting their predictable impleader (or joinder or intervention, as the case may be), and then amending the complaint to assert these previously omitted claims, relying on supplemental jurisdiction as the authority for doing so.

Such concerns do not exist for defendants brought involuntarily before the court.

An interesting question arises when complete diversity exists between the parties, but the supplemental claim does not independently satisfy the amount in controversy requirement of the diversity statute. Courts confronting this circumstance under 28 U.S.C. § 1367 have reached divergent conclusions.

Before the enactment of 28 U.S.C. § 1367, the Supreme Court had held, in Zahn v. International Paper Co., ⁶¹⁵ that every plaintiff in a federal diversity suit, including parties to a class action, must independently meet the amount in controversy requirement.

After the enactment of 28 U.S.C. § 1367, the Fourth Circuit, as well as at least the Fifth and Seventh Circuits, concluded that 28 U.S.C. § 1367 supersedes Zahn and grants supplemental jurisdiction over claims by plaintiffs who cannot satisfy the jurisdictional minimum. ⁶¹⁶ These courts have premised their holdings upon the conspicuous absence of any mention of Rule 23 (class action) or Rule 20 (permissive joinder) plaintiffs from 28 U.S.C. § 1367(b).

The Third and Tenth Circuits have held that 28 U.S.C. § 1367 has no effect on the court's holding in Zahn and that each plaintiff in a diversity suit must satisfy the jurisdictional minimum. ⁶¹⁷

These courts have premised their holdings on the absence of any express mention of the intent to overrule Zahn in the legislative history and the absence of any mention of Zahn in the statute itself.

The Fourth Circuit also has held, in a single-plaintiff case, that the summary disposition of one of three aggregated claims—a disposition bringing the amount that the plaintiff had claimed to below the jurisdictional amount—brought into play the discretionary power of the court under 28 U.S.C. § 1367 to decline to exercise jurisdiction over the remaining claims. ⁶¹⁸

The Second and Seventh Circuits have disagreed, holding that where a single plaintiff aggregates its claims to satisfy the jurisdictional amount, those claims are all within the original jurisdiction of the court. ⁶¹⁹ No one claim was supplemental to the other and, therefore, the dismissal of one claim did not give the court discretion under 28 U.S.C. § 1367(c) to decline jurisdiction.

2.804 Court's Discretion to Decline Jurisdiction.

In addition to the categories excluded from the court's jurisdiction in 28 U.S.C. § 1367(b), 28 U.S.C. § 1367(c) provides the court with some discretion not to exercise its jurisdiction under certain other enumerated circumstances. Subsection (c) essentially codifies the standards addressed in United Mine Workers v. Gibbs. ⁶²⁰

28 U.S.C. § 1367(c) provides that the court may decline to exercise supplemental jurisdiction if:

A. The claim raises a novel or complex issue of state law;

B. The claim substantially predominates over the claim or claims over which the district court has original jurisdiction;

C. The district court has dismissed all claims over which it had original jurisdiction; or

D. In exceptional circumstances, there are other compelling reasons for declining jurisdiction.

When federal claims are dismissed before trial, district courts will commonly dismiss the state claims under § 1367(c)(3). ⁶²¹

The Fourth Circuit has observed that "although a court's remand decision is somewhat circumscribed by § 1367(c) and relevant case law," the district court enjoys "wide latitude in determining whether or not to retain jurisdiction over state claims." ⁶²² The factors...