Opinion ID: 692986
Heading Depth: 1
Heading Rank: 3

Heading: diversity and supplemental jurisdiction

Text: 7
8 The court found it had diversity jurisdiction over the named plaintiffs' claims even though each named and unnamed plaintiff claimed only $20,000, less than the $50,000 minimum for diversity jurisdiction. 28 U.S.C. Sec. 1332(a). The district court found that Louisiana law attributed all of a class's attorney's fees to the named plaintiffs. It held that the claim of the named plaintiffs for $20,000--once swelled by attorney's fees--met the $50,000 amount-in-controversy requirement. 9 Plaintiffs argue that Louisiana statutes distribute the fees pro rata to all members of the class, with the result that none meets the amount-in-controversy requirement. 10 The distribution of attorney's fees centers on two Louisiana statutes. The first, Article 595 of the Louisiana Code of Civil Procedure, provides: 11 The court may allow the representative parties their reasonable expenses of litigation, including attorney's fees, when as a result of the class action a fund is made available, or a recovery or compromise is had which is beneficial, to the class. 12 . . . . . Official Revision Comments 13 (a) It is intended, in the first paragraph, that the reasonable expenses of litigation allowed the successful representative parties is to be paid out of the fund or benefits made available by their efforts. 14 The second key Louisiana statute is Section 51:137 of the Louisiana Revised Statutes, which provides: 15 Any person who is injured in his business or property by any person by reason of any act or thing forbidden by this Part may sue in any court of competent jurisdiction and shall recover threefold the damages sustained by him, the cost of suit, and a reasonable attorney's fee. 16 Article 595, plaintiffs contend, supports their argument that the fees are to be distributed among all class members. See, e.g., White v. Board of Trustees, 276 So.2d 714, 719 (La.Ct.App.) (deducting pro rata shares of an Article 595 attorney's fee from the awards due to each plaintiff), writ ref'd, 279 So.2d 694 (La.1973). 17 We disagree. Defendants pay attorney's fees and damages. The plain text of the first sentence of 595 awards the fees to the representative parties. (The language allowing the representative parties their fees is echoed in Comment (a).) 18 Finally, plaintiffs argue that construing Article 595 to attribute the fees to the named plaintiffs--rather than to distribute them among all the plaintiffs--renders the statute unconstitutional. The argument continues that the federal courts have generally held that Zahn forbids attributing the fees of class members to class representatives. The only circuit court to speak to this question held that attributing a class's attorney's fees only to the named plaintiffs instead of pro rata to each member of the class would conflict with the policy of Zahn. Goldberg v. CPC Int'l, Inc., 678 F.2d 1365, 1367 (9th Cir.), cert. denied, 459 U.S. 945, 103 S.Ct. 259, 74 L.Ed.2d 202 (1982). Many district courts have followed Goldberg. 3 But Goldberg 's reading of Zahn sheds little light on the distinct policy choices behind Louisiana's decision regarding rights of recovery by class members. That a state chooses a set of rules that result in an award in excess of $50,000 frustrates no policy of Zahn. Simply put, under the law of Louisiana the class representatives were entitled to fees. Their rights of recovery were not created by a judge's summing the discrete rights of class members. The district court applied the law of Louisiana. Because it did so, we are persuaded that the individual claims of the class representatives met the requisite jurisdictional amount. We turn now to the question of supplemental jurisdiction over the class members, confronting at its threshold Zahn 's current vitality. That is the question of Zahn. 19
20 Supplemental jurisdiction over the unnamed plaintiffs' claims has been an open question since Congress passed the Judicial Improvements Act of 1990. 4 21 Congress enacted Sec. 1367 against the background of Zahn, in which the Supreme Court had held that the claim of each member of a class action must meet the amount-in-controversy requirement. Zahn, 414 U.S. at 301, 94 S.Ct. at 511-12. Zahn forbade the exercise of supplemental jurisdiction over the claims of class members who did not do so. 22 Defendants argue that Congress changed the jurisdictional landscape in 1990 by enacting Sec. 1367. Section 1367(a) grants district courts supplemental jurisdiction over related claims generally, and Sec. 1367(b) carves exceptions. Significantly, class actions are not among the exceptions. 23 Some commentators have interpreted this silence to mean that Congress overruled Zahn and granted supplemental jurisdiction over the claims of class members who individually do not demand the necessary amount in controversy. 5 Some of Sec. 1367's drafters disagree. 6 No appellate court has ruled on the question yet. 7 The district courts are split even within this circuit, although the majority appear to hold that Zahn survives the enactment of Sec. 1367. 8 24 Perhaps, by some measure transcending its language, Congress did not intend the Judicial Improvements Act to overrule Zahn. The House Committee on the Judiciary considered the bill that became Sec. 1367 to be a noncontroversial collection of relatively modest proposals, not the sort of legislative action that would upset any long-established precedent like Zahn. 1990 U.S.C.C.A.N. at 6860, 6861. Plaintiffs argue that the Act was prompted not by a congressional desire for wholesale revisions of the jurisdictional rules, but by the more limited desire to restore traditional understandings of federal jurisdiction, which were upset by Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989). In Finley, the Supreme Court held that federal courts could not exercise pendent-party jurisdiction without an express legislative grant, a grant never thought necessary before. Id. at 556, 109 S.Ct. at 2010-11. In short, Congress intended the Act to essentially restore the pre-Finley understandings of the authorization for and limits on other forms of supplemental jurisdiction, not, arguably, to alter Zahn. 1990 U.S.C.C.A.N. at 6860, 6874. A disclaimer in the legislative history strives to make this point clear by stating: [T]he section is not intended to affect the jurisdictional requirements of 28 U.S.C. Sec. 1332 in diversity-only class actions, as those requirements were interpreted prior to Finley. 1990 U.S.C.C.A.N. at 6860, 6875. The passage cites Zahn as a pre-Finley case untouched by the Act. 1990 U.S.C.C.A.N. at 6860, 6875 n. 17; see also Rowe et al., supra, 40 Emory L.J. at 960 n. 90 (stating that this passage was intended to demonstrate that Zahn was to survive the enactment of Sec. 1367). 25 We cannot search legislative history for congressional intent unless we find the statute unclear or ambiguous. Here, it is neither. The statute's first section vests federal courts with the power to hear supplemental claims generally, subject to limited exceptions set forth in the statute's second section. Class actions are not among the enumerated exceptions. 26 Omitting the class action from the exception may have been a clerical error. 9 But the statute is the sole repository of congressional intent where the statute is clear and does not demand an absurd result. See West Virginia Univ. Hosps., Inc. v. Casey, 499 U.S. 83, 99-100, 111 S.Ct. 1138, 1147, 113 L.Ed.2d 68 (1991) (refusing to permit the Court's perception of the 'policy' of the statute to overcome its 'plain language' ); United States v. X-Citement Video, Inc., --- U.S. ----, ---- - ----, 115 S.Ct. 464, 467-68, 130 L.Ed.2d 372 (1994) (rejecting lower court's plain language reading of a statute where that reading would create a positively absurd result). Abolishing the strictures of Zahn is not an absurd result. Justice Brennan's dissent joined by Justices Douglas and Marshall states the counterposition. Some respected commentators would welcome Zahn 's demise. See, e.g., 1 Moore et al., supra, Sec. 0.97, at 928; Arthur & Freer, supra, 40 Emory L.J. at 1008 n. 6 (Abrogating Zahn would hardly be absurd since doing so would harmonize case law and enable federal courts to resolve complex interstate disputes in mass tort situations.). But the wisdom of the statute is not our affair beyond determining that overturning Zahn is not absurd. We are persuaded that under Sec. 1367 a district court can exercise supplemental jurisdiction over members of a class, although they did not meet the amount-in-controversy requirement, as did the class representatives. 27