Opinion ID: 700613
Heading Depth: 2
Heading Rank: 2

Heading: Jurisdiction over KMB's State Law Claims

Text: 24 After granting summary judgment in defendants' favor, the district court found no basis for retaining jurisdiction over KMB's state law claims. Accordingly, the district court dismissed the remaining claims without prejudice. KMB notes that the second and third claims involved only KMB, a citizen of New York and Connecticut, and Walker, a citizen of Delaware and Wisconsin, and each involved more than $50,000. Because diversity of citizenship provided an independent basis of jurisdiction over these claims (although not for the other state law claims), KMB contends, the district court erred in dismissing them. 25 KMB may be correct in claiming that, if jurisdiction over the second and third claims had been based upon diversity of citizenship, the district court would have erred in dismissing them. As a general rule, there must be complete diversity of citizenship between all plaintiffs and all defendants named in all claims in order for jurisdiction over any claim to be based upon diversity of citizenship. See Carden v. Arkoma Assocs., 494 U.S. 185, 187, 110 S.Ct. 1015, 1017, 108 L.Ed.2d 157 (1990); Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806). In this case complete diversity between all plaintiffs and all defendants was absent since defendants Prime and Woodbury Automotive Warehouse Enterprises, Inc. (Woodbury) and plaintiff KMB are all citizens of New York. If, however, an independent basis for jurisdiction over non-diverse defendants exists, such as federal question jurisdiction under 28 U.S.C. Sec. 1331, the district court should not dismiss the claims as to which diversity requirements have been met. Romero v. International Terminal Operating Co., 358 U.S. 354, 381, 79 S.Ct. 468, 485, 3 L.Ed.2d 368 (1959). The reasoning behind this exception is that plaintiffs should not be required to bring two suits in federal court solely in order to avoid destroying complete diversity. See Kauth v. Hartford Ins. Co., 852 F.2d 951, 959 (7th Cir.1988). 26 This case presents a slightly different situation from that in Romero. The federal Sherman Act claim did originally provide an independent basis for jurisdiction over non-diverse defendants Prime and Woodbury. But here, unlike in Romero, the district court dismissed that claim when it granted defendants' motions for summary judgment. KMB argues, however, that the claim's initial presence in the complaint provided a basis of jurisdiction over the state law claims involving Prime and Woodbury sufficient to trigger the exception articulated in Romero, and that jurisdiction cannot be defeated by the subsequent dismissal of the only basis for federal question jurisdiction. This position has apparently been adopted in the Seventh Circuit. See Kauth, 852 F.2d at 958-59 (reversing the dismissal of a claim based upon diversity jurisdiction in similar circumstances even though it affirmed the dismissal of the only claims based upon federal question jurisdiction). 27 We need not decide this issue in this case since KMB's argument suffers from another flaw. KMB did not actually base jurisdiction over its state law claims against Walker on diversity of citizenship in either its complaint or its argument to the district court. Rather, it premised jurisdiction solely on supplemental jurisdiction under 28 U.S.C. Sec. 1367. Section 1367 explicitly provides that a district court may decline to exercise supplemental jurisdiction if it has dismissed all claims over which it has original jurisdiction. 28 U.S.C. Sec. 1367(c)(3). The district court was thus well within its discretion when it dismissed KMB's state law claims. 28 Even though KMB did not raise diversity as a basis for jurisdiction until this appeal, we may consider its argument in order to avoid a miscarriage of justice. See C.H. Sanders Co. v. BHAP Hous. Dev. Fund Co., 903 F.2d 114, 121 (2d Cir.1990); Republic Nat'l Bank v. Eastern Airlines, Inc., 815 F.2d 232, 240 (2d Cir.1987). The district court dismissed KMB's remaining claims without prejudice, and KMB has not advanced any reason why being compelled to refile its second and third claims would cause a miscarriage of justice. Accordingly, we affirm the district court's dismissal of these claims.