Court Opinion

ID: 9458917
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:05:18.439836+00
Date Added: 2024-06-11T17:35:56.380729
License: Public Domain

TIMBERS, Circuit Judge
(dissenting) :
With deference, it seems to me that the majority reads the Supreme Court’s decision in Snyder v. Harris, 394 U.S. 332 (1969), for all it might be worth, rather than for the least it has to be worth. More significantly, the majority decision here ignores the well-established principle that if a case is properly in a federal court, that court has subject matter jurisdiction over the case or controversy in its entirety and therefore can adjudicate related claims of ancillary parties who have no independent jurisdictional grounds.
I.
The concept of “ancillary jurisdiction” has been a part of the jurisprudence of the federal courts for many years. It originally was used to allow parties otherwise without grounds for jurisdiction to assert rights in property that had come under a federal court’s control. Freeman v. Howe, 65 U.S. (24 How.) 450 (1861). Similarly, the doctrine was utilized to enable federal courts to effectuate their judgments in suits that had properly been before them. Supreme Tribe of Ben-Hur v. Cauble, 255 U.S. 356 (1921). During this early period, the concept of ancillary jurisdiction was applied only to situations in which its use was necessary to the effective operation of the federal courts.
Since the Supreme Court’s decision in Moore v. New York Cotton Exchange, 270 U.S. 593 (1926), however, the concept has been used primarily to promote judicial economy through the avoidance of piecemeal litigation. In Moore, a state claim not independently cognizable in a federal court was asserted by way of compulsory counterclaim to a federal claim. The Court held that the state claim could be heard in the federal court even though the federal claim was eventually dismissed on the merits. The Moore decision was one of the major inspirations for the development of a general principle that federal courts can invoke ancillary jurisdiction to resolve in a single action any disputes, regardless of jurisdictional sufficiency, arising out of the facts supporting the plaintiff’s “cause of action”. See, e. g., Hurn v. Oursler, 289 U.S. 238 (1933).
The enactment of the Federal Rules of Civil Procedure, with their provisions for liberal joinder of parties and claims, especially stimulated the growth of the ancillary jurisdiction doctrine. The Rules broadened the concept of a single triable case or controversy by allowing to be joined in one action all parties and claims related to the main action. Also, courts found the ancillary jurisdiction doctrine helpful in putting to use some of the new joinder devices, particularly Rules 14, 20 and 24. Lower federal courts, including ours, were quick to recognize that ancillary jurisdiction was available to solve jurisdictional problems, such as lack of diversity or amount in controversy, which were often attendant upon utilization of joinder procedures. See, e. g., Dery v. Wyer, 265 F.2d 804 *1037(2 Cir. 1959) (impleader of third party defendant); Formulabs, Inc. v. Hartley Pen Co., 318 F.2d 485 (9 Cir. 1963) (intervention as of right); Jacobson v. Atlantic City Hosp., 392 F.2d 149 (3 Cir. 1968) (simple joinder of parties). But see Hymes v. Chai, 407 F.2d 136 (9 Cir. 1969) (simple joinder of parties).1 These developments impelled one commentator to say recently that the ancillary jurisdiction doctrine “is in a process of evolution from a rule of prevention of basic unfairness to a rule of convenience for resolving all issues involved in the subject of the matter before the court”. Note, Federal Practice: Jurisdiction of Third-Party Claims, 11 Okla.L.Rev. 326, 329 (1958), quoted in 7A Wright & Miller, Federal Practice and Procedure § 1917, at 590 n. 29 (1969). The majority’s decision today greatly retards this “process of evolution”.
An extension of the ancillary jurisdiction doctrine to permit an adjudication of the claims of the unnamed plaintiffs in this action would be unquestionably harmonious with this development.2 For example, although in the past courts have held that they could not invoke ancillary jurisdiction to hear claims for less than $10,000 asserted by parties joined under Rule 20, the majority of recent decisions are to the contrary. See, e. g., General Research, Inc. v. American Employers’ Ins. Co., 289 F.Supp. 735 (W.D.Mich.1968); Lucas v. Seagrave Corp., 277 F.Supp. 338 (D.Minn.1967); Johns-Manville Sales Corp. v. Chicago Title & Trust Co., 261 F.Supp. 905 (N.D.Ill. 1966). This change in position reflects growing realization that the disposition of jurisdictionally insufficient claims along with reasonably related claims having an independent jurisdictional basis is expeditious and not unduly burdensome. There is, of course, a limit on the number and nature of claims that can be conveniently tried together, but that limit would not be exceeded by adjudicating all the class members’ claims here. Indeed, the purpose of the Rule 23(b)(3) class action device was to provide an efficient and economically effective procedure for adjudicating numerous small, closely related claims. See Eisen v. Carlisle & Jacquelin, 391 F.2d 555 (2 Cir. 1968); Escott v. Barchris Construction Corp., 340 F.2d 731 (2 Cir. 1965).
II.
The Supreme Court has not yet dealt with the ancillary jurisdiction doctrine in the context of a decision involving the Federal Rules of Civil Procedure. But in United Mine Workers v. Gibbs, 383 U.S. 715 (1966), the Court commented on the impact of the Rules while approving the liberal use of “pendent jurisdiction”, a particularized application of the ancillary jurisdiction concept. In Gibbs, the plaintiff asserted a claim under § 303 of the Labor Management Relations Act and a state claim of unlawful conspiracy and boycott. The Court held that by means of pendent jurisdiction the federal court had adjudicative power over the state claim. Writing the opinion for the Court, Justice Brennan said:
“ . . . Under the [Federal Civil] Rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and *1038remedies is strongly encouraged. Yet because the Hum question involves issues of jurisdiction as well as convenience, there has been some tendency to limit its application to cases in which the state and federal claims are, as in Hum, ‘little more than the equivalent of different epithets to characterize the same group of circumstances.’ 289 U.S., at 246.
This limited approach is unnecessarily grudging. Pendent jurisdiction, in the sense of judicial power, exists whenever there is a claim ‘arising under [the] Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority . . .,’ U.S.Const., Art. III, § 2, and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional ‘case.’ The federal claim must have substance sufficient to confer subject matter jurisdiction on the court. Levering & Garrigues Co. v. Morrin, 289 U.S. 103. The state and federal claims must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff’s claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then assuming substantiality of the federal issues, there is power in federal courts to hear the whole.” 383 U.S. at 724-25.
These principles as expressed by the Gibbs court apply equally to a situation where the claims of named plaintiffs in a class action are properly before the court but the similar claims of other members of the class lack subject matter jurisdiction: judicial authority over the ancillary claims exists if the relationship between the claims having independent jurisdictional grounds and the pendent claims “permits the conclusion that the entire action before the court comprises but one constitutional ‘case’ ”; or, as applied to the jurisdictional deficiency in the instant case, “if, considered without regard to” the amount in controversy, the claims satisfying the jurisdictional amount requirement and those that do not “are such that [the parties] would ordinarily be expected to try them all in one judicial proceeding, there is power in federal courts to hear the whole”. 383 U.S. at 724-25. Indeed, since pendent jurisdiction concerns constitutional limitations on the jurisdiction of federal courts, while the instant suit involves only statutory limitations, the case for recognizing jurisdiction over all class members and their claims here is even stronger. See Leather’s Best, Inc. v. S. S. Mormaclynx, 451 F.2d 800, 809-11 (2 Cir. 1971); cf. Ryan v. J. Walter Thompson Co., 453 F.2d 444, 446 (2 Cir. 1971), cert. denied, 406 U.S. 907 (1972).
III.
The majority’s reliance on Snyder v. Harris, 394 U.S. 332 (1969), and Clark v. Paul Gray, Inc., 306 U.S. 583 (1939), strikes me as being unsupportable. In Snyder no member of the class had a claim that could satisfy the amount in controversy requirement; so the Court never reached the ancillary jurisdiction issue. The Court held that the separate and distinct claims presented by or on behalf of the various claimants could not be aggregated to supply the $10,000 jurisdictional amount. The Court reached that result because (1) there was a settled line of precedent establishing that separate and distinct claims could not be aggregated for jurisdictional amount purposes, and (2) the workload of the federal courts would be substantially increased if those precedents were overruled. The Court’s position was summarized in the following statement:
“There is no compelling reason for this Court to overturn a settled interpretation of an important congressional statute in order to add to the burdens of an already overloaded federal court system.” 394 U.S. at 341.
The rationale of the Snyder decision is inapplicable to the issue before us. There is no “settled line of precedent” that every member of a Rule 23(b)(3) class must satisfy the amount in controversy requirement. The Snyder court *1039referred to Clark v. Paul Gray, Inc. as the first ease to apply the nonaggregation rule to a class action situation. 394 U.S. at 336-37. In that ease, as the majority here points out, at least one plaintiff had a claim in excess of $10,-000, but the Supreme Court held that each plaintiff who had a similar claim must meet the amount in controversy requirement. That suit, however, seems not to have been a class action, although the Snyder court characterized it as such; it was merely a case of permissive joinder. It was decided prior to. the 1966 amendment of Rule 23, which had the effect of making a judgment in a Rule 23(b)(3) class action binding on unnamed plaintiffs, thus greatly distinguishing it from a permissive joinder situation and old Rule 23.
Most importantly, whatever the nature of the action in Clark, the precedential value of that decision has been substantially reduced by recent decisions. Although the Court in Snyder cited Clark with approval, its approval was directed not to the holding in Clark but to some of Clark’s dicta on aggregation of claims. Since Clark was decided, moreover, the ancillary jurisdiction doctrine has expanded and grown. As discussed above, within the last few years many federal courts have held that a court has discretion to adjudicate a jurisdictionally insufficient claim joined with a claim for more than $10,000 if the claims derive primarily from the same operative facts. See Hatridge v. Aetna Cas. & Sur. Co., 415 F.2d 809 (8 Cir. 1969); Stone v. Stone, 405 F.2d 94 (4 Cir. 1968); Jacobson v. Atlantic City Hospital, 392 F.2d 149 (3 Cir. 1968); Wilson v. American Chain and Cable Co., 364 F.2d 558 (3 Cir. 1966); Wright, Federal Courts 124, 316 (1970). Cf. United Mine Workers v. Gibbs, supra. But see Alvarez v. Pan American Life Ins. Co., 375 F.2d 992, 996-97 (5 Cir.), cert. denied, 389 U.S. 827 (1967), referred to by the majority.3 In the light of this distinct trend, and the Supreme Court’s enthusiastic endorsement in Gibbs of the an-ciliary jurisdiction concept, old cases such as Clark should be wielded with discrimination.
The other reason for the result in Snyder — to avoid a large increase in the workload- of the federal courts — is also inapplicable to the present controversy. The four named plaintiffs here meet the jurisdictional requirements; a federal court must adjudicate their claims. The burden on the federal courts would not be substantially increased if the claims of the other class members were to be heard by the same court; the predominate questions of law or fact with regard to these claims must be common to all the claims or a class action could not be brought. If the trial court decides before or during trial that the resolution of individual issues will be difficult and time-consuming, it can refuse to try the ancillary claims. The Gibbs decision provides authority for wide discretion in a trial judge to determine whether all the claims arising out of a transaction or occurrence should be tried together in federal court:
“That power [pendent jurisdiction] need not be exercised in every case in which it is found to exist. It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right. Its justification lies in considerations of judicial economy, convenience and fairness to litigants; if these are not present a federal court should hesitate to exercise jurisdiction . . . .” 383 U.S. at 726.
The position of the majority in this action promotes duplicative litigation — a trial of the representative claims in'the federal court and identical actions by the other class members in the state court. Not only does this discourage the named plaintiffs from asserting their right to a federal forum, but it restricts the use of the Rule 23(b)(3) class action to the extraordinary situation in which every member of the class has a claim in excess of $10,000 (unless a statute dispens*1040ing with the jurisdictional amount requirement can be invoked). Furthermore, there is no guarantee that a class action could be initiated in the state court. Many states discourage class actions and if the individual claims are so small that suit would have to be instituted in a state court of limited jurisdiction, most likely the class action device would be unavailable.
The majority’s decision is not compelled by Snyder and Clark, as the opinion states. The result reached disregards the development of a sound doctrine for more efficient and economical judicial administration and severely impairs the efforts of those who would modernize the federal law of class actions. It undercuts this Circuit’s strong policy favoring class actions. I therefore respectfully dissent.

. In addition to a split of authority on the use of ancillary jurisdiction with regard to joinder under Rule 20, the courts have also held that the doctrine may not be used to provide jurisdiction over a party determined to be indispensable under Rule 19, e. g., Lang v. Colonial Pipeline Co., 383 F.2d 986 (3 Cir. 1967), or a party seeking permissive intervention under Rule 24(b), e. g., Hunt Tool Co. v. Moore, Inc., 212 F.2d 685 (5 Cir. 1954).

. Such a result would be consistent with the firmly established rule that claims against third party defendants properly impleaded under Rule 14 need not satisfy the amount in controversy requirement, King v. State Farm Mut. Ins. Co., 274 F.Supp. 824 (W.D.Ark.1967); Schinella v. Iron Workers Union Local 361, 149 F.Supp. 5 (E.D.N.Y.1957), and the rule that, once federal jurisdiction has been fixed by the original parties of record in a class action, subsequent intervenors need not meet the jurisdictional requirements as to diversity and amount, Dickinson v. Burnham, 197 F.2d 973 (2 Cir. 1952).

. Alvarez held that, in a class action where the claims of the members are several and distinct, each member must establish jurisdictional amount.