Opinion ID: 760942
Heading Depth: 3
Heading Rank: 2

Heading: Shanaghan v. Cahill

Text: 18 In our view, the second case cited by the district court misapplies supplemental jurisdiction to cover multiple state law claims aggregated to form original jurisdiction. In Shanaghan, plaintiff alleged breach of contract on three loans that satisfied the amount in controversy requirement only when aggregated. Defendants invoked the statute of frauds to defeat the largest claim on summary judgment. The Fourth Circuit held that the district court had discretion to dismiss the remaining claims because under the doctrine of supplemental jurisdiction federal courts generally have discretion to retain or dismiss state law claims when the federal basis for jurisdiction drops away. Shanaghan, 58 F.3d at 109 (emphasis removed) (citing 28 U.S.C. § 1367 (1993)). The primary argument of the Shanaghan court was that the district court has discretion in all cases in which the same basic pattern exists--the jurisdictional basis of the action fades away and the court is left with what would otherwise be a state law case. Shanaghan, 58 F.3d at 110. 19 We believe the Shanaghan court, in so doing, confused (i) state-law claims that are supplemental to claims within the court's original jurisdiction (which are covered by 28 U.S.C. § 1367 and heard at the discretion of the district court) with (ii) state-law claims that are aggregated to satisfy the amount in controversy requirement for diversity (which are within the court's original jurisdiction). 20 For jurisdictional analysis of Wolde-Meskel's complaint, supplemental jurisdiction is beside the point. Section 1367(c) provides that [t]he district courts may decline to exercise supplemental jurisdiction over a claim ... if--... the district court has dismissed all claims over which it has original jurisdiction. 28 U.S.C. § 1367(c)(3). This can have no bearing on aggregated claims, because (for one thing) the dismissal of an individual claim that was aggregated to create original jurisdiction, is emphatically not the dismissal of all claims over which [the court] has original jurisdiction, so long as it can be said that the court had on the filing-date original jurisdiction over the dismissed claim and the disaggregated claims that remain. The Shanaghan court concluded that one or more of the aggregated claims supplied original jurisdiction and that one or more was supplemental to that claim. But aggregated claims have never been treated individually for jurisdictional purposes, and nothing in § 1367 suggests that Congress intended otherwise. When state law claims are aggregated, regardless of the amounts at issue, all of them together are original, and none of the constituent claims are supplemental. 21 The nature of a supplemental claim is that the district court lacks original jurisdiction over it, and that it is related to a claim over which the court has original jurisdiction. See 28 U.S.C. § 1367(a) (supplemental claim is so related to claims in the action within such original jurisdiction that they form part of the same case or controversy); Sriram v. Preferred Income Fund III Ltd. Partnership, 22 F.3d 498, 501 (2d Cir.1994) (Because all of the claims seek to vindicate a wrong arising out of the same course of conduct, the exercise of supplemental jurisdiction over the corresponding state claims was proper.). The nature of aggregated claims is that the district court has original jurisdiction over them by virtue of their aggregation; and relatedness, of course, is not a principle of aggregation under § 1332(a). 7