Source: https://www.povertylaw.org/clearinghouse/fpmd/chapter2/section6
Timestamp: 2019-04-25 03:50:26+00:00

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In order to understand the supplemental jurisdiction statute, the legal aid lawyer should first be familiar with the basic pre-codification principles of pendent and ancillary jurisdiction established by the Supreme Court.
Some federal courts subsequently used the Gibbs approach to support the exercise of jurisdiction over new parties over whom there was no independent basis of federal jurisdiction. When a plaintiff files a federal claim against a defendant, under what circumstances may the court entertain jurisdiction over a state claim against a second defendant when there is no independent basis for federal jurisdiction? Such state law claims might, for example, fall short of the amount in controversy requirement or be filed against a non-diverse second defendant. The Supreme Court first considered the question of pendent party jurisdiction in Aldinger v. Howard.11 The plaintiff there sued county officials under Section 1983, and asserted a pendent state law claim against the county. Because the state law claim against the county arose from the same nucleus of facts as the Section 1983 claim against its officials, the Gibbs test appeared to support the assertion of jurisdiction.
Nevertheless, the Court rejected the attempted use of pendent party jurisdiction and held the asserted expansion of subject matter jurisdiction to be inconsistent with congressional limitations on the exercise of jurisdiction. The Court observed that adding a transactionally related state law claim against a defendant subject to a properly filed federal claim was quite different from adding a pendent claim to a new defendant. The Court further held that Congress impliedly negated the exercise of pendent party jurisdiction over counties pursuant to 28 U.S.C. § 1343 because counties were not “persons” subject to Section 1983. The specific basis for this latter conclusion was later overruled in Monell v. New York City Department of Social Services.12 Still, Aldinger continued to stand for the proposition that, before exercising pendent party jurisdiction, the court must determine whether Congress had impliedly negated the authority for doing so.
In Owen Equipment and Erection Company v. Kroger, the Court extended the reasoning of Aldinger to a case involving Rule 14(a) of the Federal Rules of Civil Procedure.13 There, the plaintiff in a tort case over which the court had diversity jurisdiction amended her complaint to add claims arising from the same accident against a non-diverse third-party defendant. Reasoning that the exercise of jurisdiction would be inconsistent with the statutory requirement of complete diversity, the Court rejected jurisdiction over the claims.
However, the Court in Owen cautioned that satisfying the Gibbs constitutional test is necessary, but not sufficient, to confer ancillary jurisdiction. Jurisdiction may also be limited by statute. Thus, since the diversity statute has been interpreted to require complete diversity, the Owen Court held, a plaintiff may not advance even transactionally related state claims against a non-diverse third-party defendant. As noted above, the Finley Court’s insistence on an express legislative grant of ancillary jurisdiction effectively precluded most exercises of it.
The statute, then, has a framework that alternately uses mandatory commands and discretionary criteria for the exercise of supplemental jurisdiction. Section 1367(a) uses the term “shall,” indicating that once a supplemental claim is determined to be related to the federal claim within the court’s original jurisdiction such that they form the same case or controversy, the court must assert supplemental jurisdiction over the related claim. In contrast, the use of “may” in Section 1367(c) appears to confer on federal courts at least some discretion to decline to hear claims over which supplemental jurisdiction is potentially available. The circuits are split over the question of whether the word “may” in Section 1367(c) broadly incorporates the discretionary Gibbs factors or whether Section 1367(c) more narrowly sets forth the only bases for declining supplemental jurisdiction.
The Court has also addressed the applicability, in light of the Eleventh Amendment, of Sections 1367(a) and (d) in the context of claims against non-consenting states. In Raygor v. Regents of the University of Minnesota, the Court noted that Pennhurst had barred the adjudication of pendent state-law claims against non-consenting state defendants in federal court before the enactment of Section 1367.46 The Court held that Section 1367(a) did not alter this principle, “even though nothing in the statute expressly excludes such claims.”47 The Raygor48 Court further held that Section 1367(d), which tolls the period of limitations for supplemental claims while they are pending in federal court and for thirty days after they are dismissed, does not apply to toll the period of limitations for state law claims asserted against non-consenting state defendants and dismissed on Eleventh Amendment grounds.
A threshold question for advocates is whether to join federal and transactionally related state law claims in federal or state court. A recent Kansas Supreme Court Case, Rhoten v. Dickson, suggests caution before reflexively filing in federal court.49 In Rhoten, the plaintiff joined federal and related state law claims in federal court. The trial court granted the defendant's motion for summary judgment on the federal claim and the court dismissed the remaining state law claims pursuant to Section 1367(c). When the plaintiff refiled the state law claims in state court, the defendant moved to dismiss them on grounds of claim preclusion. The Kansas Supreme Court agreed, even though the plaintiff did not split its claims, the dismissal of the state claims was not a determination on the merits and the result left Section 1367(d) a dead letter. Were Rhoten reflective of the prevailing view of state courts,50 it is possible that federal courts would retain jurisdiction over state law claims to avoid the unfair application of claim preclusion, but there is no guarantee of this and advocates should consider state preclusion law when deciding the forum for anticipated litigation involving related federal and state law claims.
1. United Mine Workers v. Gibbs, 383 U.S. 715 (1966).
2. Carnegie-Mellon University v. Cohill, 484 U.S. 343, 349 (1988) (citing Gibbs, 383 U.S. at 725).
3. In determining whether a federal claim is sufficiently substantial to confer pendent jurisdiction, the Supreme Court requires federal courts to determine whether the claim is “so insubstantial, implausible, foreclosed by prior decisions of this Court or otherwise completely devoid of merit as not to involve a federal controversy within the jurisdiction of the District Court.” Hagans v. Levine, 415 U.S. 528, 543 (1974).
4. Gibbs, 383 U.S. at 725. Such an expectation would turn on the plaintiff's desire to avoid losing omitted claims on grounds of claim preclusion. Consequently the “common nucleus of operative fact” test is commonly equated to the “transaction or occurrence” standard employed in several federal rules of civil procedure and in preclusion law.
5. The Supreme Court has refused to read Gibbs to allow supplemental jurisdiction over transactionally related claims which fail to satisfy Article III case or controversy requirements, such as standing or mootness. DaimlerChrysler Corporation v. Cuno, 547 U.S. 332, 352 (2006).
6. Gibbs, 383 U.S. at 726.
8. See Rosado v. Wyman, 397 U.S. 397, 404 (1970).
9. Gibbs, 383 U.S. at 726.
11. Aldinger v. Howard, 427 U.S. 1 (1976).
12. Monell v. New York City Department of Social Services, 436 U.S. 658 (1978).
13. Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365, 372-73(1978).
14. Finley v. United States, 490 U.S. 545 (1989).
16. See Moore v. New York Cotton Exchange, 270 U.S. 593 (1926).
17. The Supreme Court, however, has made clear that the context in which the ancillary claim is asserted is important. In Owen, a diversity case, plaintiff asserted a state-law claim against a nondiverse third-party defendant arising out of the same transaction or occurrence. Although the court assumed that federal jurisdiction over the claim would be constitutional, Section 1332(a) negated jurisdiction.
18. See generally 6 Charles A. Wright et al., Federal Practice and Procedure § 1422 (5th ed. 2008); Jones v. Ford Motor Credit Co., 358 F.3d 205, 210-13 (2d Cir. 2004) (summarizing pre-Section 1983 law). But see Ambromovage v. United Mine Workers of America, 726 F.2d 972, 990 (3d Cir.1984) (suggesting that some permissive counterclaims may be constitutionally joined).
19. 28 U.S.C. § 1367.
20. McLaurin v. Prater, 30 F.3d 982, 984 (8th Cir. 1994) (“The [supplemental jurisdiction] statute’s use of the word ‘shall’ . . . is a mandatory command.”).
21. See Achtman v. Kirby, McInerney and Squire, LLP, 464 F.3d 328, 335 (2d Cir. 2006); MCI Telecommunications Corporation v. Teleconcepts, Incorporated, 71 F.3d 1086, 1102 (3d Cir. 1995), cert. denied, 519 U.S. 815 (1996); Rodriguez v. Doral Mortgage Corporation, 57 F.3d 1168, 1175 (1st Cir. 1995). The First, Second, and Seventh Circuits have held that the "case or controversy" requirement is broader than the common nucleus of operative fact standard and thus, does not align with the distinction between compulsory and permissive counterclaims. Global NAPS v. Verizon New England, Inc., 603 F.3d 71, 87-89 (1st Cir. 2010); Jones v. Ford Motor Credit Co., 358 F.3d 205, 213, n.5 (2d Cir. 2004) (expressing uncertainty as to whether this constitutional limit was congruent with Gibbs' "common nucleus" test, suggesting that it might be broader); Channell v. Citicorp National Services, 89 F.3d 379, 385 (7th Cir. 1996) (requiring only "[a] loose factual connection between the claims" to satisfy Section 1367(a)). See also Sparrow v. Mazda American Credit, 385 F. Supp. 2d 1063, 1067 (E.D. Cal. 2005). While the issue has been addressed by academic commentators, it is presented squarely in a practical context: whether a federal court has supplemental jurisdiction over any permissive counterclaims.
22. 28 U.S.C. § 1367(a); see Brazinski v. Amoco Petroleum Additives Co., 6 F.3d 1176, 1181 (7th Cir. 1993).
23. Exxon Mobil v. Allapattah Services, 545 U.S. 546 (2005).
24. 28 U.S.C. § 1367(a).
25. Exxon Mobil, 545 U.S. at 559.
26. Zahn v. International Paper Co., 414 U.S. 291 (1973).
27. See 28 U.S.C. § § 1332(d)(2) , (6) (establishing million amount in controversy requirement, aggregated among class members in class actions subject to Class Action Fairness Act).
28. Exxon Mobil, 545 U.S. at 560-61.
29. R. Hinkle, The Revision of 28 U.S.C. § 1367(c) and the Debate Over the District Court’s Discretion to Decline Supplemental Jurisdiction, 69 Tenn. L. Rev. 111, 120 (2001).
30. Compare Mendoza v. Murphy, 532 F.3d 342, 346 (5th Cir. 2008) (affirming decision to retain jurisdiction over state law claims, holding that court was familiar with case and it raised simple state law issues) with Hays County Guardian v. Supple, 969 F.2d 111, 125 (5th Cir. 1992), cert. denied, 506 U.S. 1087 (1993) (“exceptional circumstances” and “compelling reasons” existed to decline supplemental jurisdiction under Section 1367(c)(4) since deciding “state-law claims in federal court while identical claims are pending in state court would be a pointless waste of judicial resources”).
31. See Gibbs, 383 U.S. at 726; Carnegie-Mellon, 484 U.S. at 350 (“[A] federal court should consider and weigh in each case, and at every stage of the litigation, the values of judicial economy, convenience, fairness and comity in order to decide whether to exercise jurisdiction over a case . . . .”).
32. In Carlsbad Technology v. HIF Bio, Inc., 129 S. Ct. 1862 (2009), the Supreme Court held that an order remanding state law claims under Section 1367(c) is subject to appellate review because such a remand is not one for lack of subject matter jurisdiction. Had such a remand been interpreted as one for lack of subject matter jurisdiction, rather than an exercise of discretion, 28 U.S.C. §§ 1447(c) and (d) would bar appellate review.
33. See Carnegie-Mellon University v. Cohill, 484 U.S. 343, 357 (1988).
34. See Brazinski v. Amoco Petroleum Additives Co., 6 F.3d 1176, 1182 (7th Cir. 1993).
35. See O’Connor v. Commonwealth Gas, 251 F.3d 262, 272-73 (1st Cir. 2001); Rodriguez v. Doral Mortgage Corporation, 57 F.3d 1168, 1177 (1st Cir. 1995) (“the district court, in reaching its discretionary determination on the jurisdictional question, will have to assess the totality of the attendant circumstances”); Borough of West Mifflin v. Lancaster, 45 F.3d 780, 788 (3d Cir. 1995) (“Section 1367(c) . . . was intended simply to codify the preexisting pendent jurisdiction law, enunciated in Gibbs and its progeny . . . .”); Women Prisoners of District of Columbia Department of Corrections v. District of Columbia, 93 F.3d 910, 921 (D.C. Cir. 1996); Diven v. Amalgamated Transit Union and Local 689, 38 F.3d 598, 601 (D.C. Cir. 1994) (“Despite Congress’ use of ‘shall’ [in Section 1367(a)], the statute fairly exudes deference to judicial discretion—at least once the threshold determinations have been met and the court moves on to consider the exceptions.”).
36. Executive Software North America Inc. v. U.S. District Court, 24 F.3d 1545, 1556 (9th Cir. 1994) (citations omitted).
38. Id. at 1557 (citations and interior quotation marks omitted).
40. See Itar-Tass Russian News Agency v. Russian Kurier Inc., 140 F.3d 442, 447 (2d Cir. 1998); McLaurin v. Prater, 30 F.3d 982, 985 (8th Cir. 1994); Palmer v. Hospital Authority, 22 F.3d 1559, 1569 (11th Cir. 1994).
41. Enochs v. Lampasas County, 641 F.3d 155, 159-60 (11th Cir. 2011).
42. For additional characterizations of the circuits’ treatment of the Gibbs supplemental jurisdiction decisions, see J. Corey, The Discretionary Exercise of Supplemental Jurisdiction Under the Supplemental Jurisdiction Statute, 1995 BYU L. Rev. 1263, 1288-95 (1995), and Hinkle, supra note 29, at 120-35.
43. City of Chicago v. International College of Surgeons, 522 U.S. 156, 172(1997).
44. Id. at 172–73 (quoting Carnegie-Mellon, 484 U.S. at 357) (further citations omitted).
46. Raygor v. Regents of the University of Minnesota, 534 U.S. 533, 540-41 (2002); see Pennhurst State School and Hospital v. Halderman, 465 U.S. 89, 120 (1984).
47. Raygor, 534 U.S. at 541–42.
48. Id. at 546–48. The Supreme Court further noted that “serious doubts about the constitutionality” would be raised if Section 1367(d) did in fact toll state claims against state defendants when those claims were dismissed on Eleventh Amendment grounds. Id. at 542. The Court’s ruling did not reach “the application or constitutionality of Section 1367(d) when a State consents to suit or when a defendant is not a State.” Id. at 547. The tolling provision does, however, apply to suits against counties. Jinks v. Richland Co., 538 U.S. 456, 465-67 (2003).
49. Rhoten v. Dickson, 290 Kan. 92, 112, 223 P.3d 786, 800 (2010).
50. Rhoten is an outlier. A recent law review article assembled substantial authority to the contrary. See Patricia J. Kluin, Comment, Kansas' Rationale is Dust in the Wind: Why the Dismissed Supplemental Claim Exception to the General Rule of Claim Preclusion is Necessary, 50 Washburn L.J. 511, 525 n.148 (2011).
51. Restatement (Second) of Judgments § 25 cmt. e (1982).
52. See, e.g., Milone v. Nissan Motor Corporation, 594 A.2d 642, 644 (N.J. Super. Ct. App. Div. 1991).
53. E.g., Mayronne v.Vaught, 655 So. 2d 390, 392–93 (La. Ct. App. 1995); Craig v. County of Los Angeles, 221 Cal. App. 3d 1294, 1300 (Cal. Ct. App. 1990).
54. E.g., Morales v. Parish of Jefferson, 54 So. 3d 669, 674 (La. Ct. App. 2010); Toomey v. Blum, 54 N.Y.2d 669, 426 N.E.2d 181, 442 N.Y.S.2d 774 (1981). See Merry v. Coast Community College District, 158 Cal. Rptr. 603, 610 (Ct. App. 1979); Pierson Sand and Gravel, Incorporated v. Keeler Brass Co., 596 N.W.2d 153, 157-59 (Mich. 1999); Beutz v. A.O. Smith Harvestore Products, Incorporated, 431 N.W.2d 528, 532 (Minn. 1988).
55. E.g., Mancuso v. Kinchia, 60 Mass. App. Ct. 558, 566-67 (Mass. 2004); Berg v. Berg, 2008 Tex. App. LEXIS 2108 *10-14 (Tex. Mar. 28, 2008); Penn v. Iowa State Board of Regents, 577 N.W.2d 393, 401 (Iowa 1998); Anderson v. Phoenix Investment Counsel Incorporated, 440 N.E.2d 1164, 1168–69 (Mass. 1982); Rennie v. Freeway Transportation, 656 P.2d 919, 924 (Or. 1982).

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