| Chapter 2: Jurisdiction VI. Supplemental Jurisdiction In 1990, Congress enacted the supplemental jurisdiction statute, 28 U.S.C. § 1367, which largely codified, with certain critical distinctions, the former case-law doctrines of pendent, ancillary, and pendent-party jurisdiction. VI.A. Historical Basis of Pendent and Ancillary Jurisdiction 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. VI.A.1. Pendent Jurisdiction The doctrine of pendent jurisdiction governs the exercise by federal courts of subject-matter jurisdiction over claims that lack an independent basis of jurisdiction. The Supreme Court’s decision in United Mine Workers v. Gibbs created the modern test for determining when federal courts may exercise pendent jurisdiction over state-law claims./96/ By “establishing a new yardstick for deciding whether a federal court has jurisdiction over a state-law claim brought in a case that also involves a federal question,” the Gibbs Court intended “not only to clarify, but also to broaden, the scope of federal pendent jurisdiction.”/97/ The Court in Gibbs drew a distinction between power and discretion. Under the two-prong test adopted in Gibbs, federal courts must first determine whether they have the constitutional power to exercise pendent jurisdiction. This power exists when there is a substantial federal claim over which federal courts have subject-matter jurisdiction,/98/ and when both the “state and federal claims derive from a common nucleus of operative facts” so that a plaintiff would “ordinarily be expected to try them all in one judicial proceeding.”/99/ When the entire action before the federal court, therefore, comprises a single constitutional “case,” the court may, under Article III, exercise jurisdiction over the action, including state-law claims. If the federal court has the power to exercise jurisdiction over the pendent claim, the federal court may nevertheless refuse to exercise pendent jurisdiction based on “considerations of judicial economy, convenience and fairness to litigants.”/100/ Questions of economy arise when the federal claim is dismissed or resolved before the pendent claim. The Gibbs Court observed that “if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well.”/101/ The Court subsequently qualified this statement to permit trial courts to entertain pendent claims after the jurisdiction-conferring claims are dismissed as moot./102/ Ultimately the issue turns on whether sending the pendent claim to state court would result in the wasteful and duplicative expenditure of resources. The Gibbs Court also cautioned against making “[n]eedless decisions of state law.”/103/ Indeed, “if it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may by dismissed without prejudice and left for resolution to state tribunals.”/104/ VI.A.2. Pendent Party Jurisdiction 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. The Supreme Court first considered the question of pendent party jurisdiction in Aldinger v. Howard./105/ The plaintiff there sued county officials under Section 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343(3), 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./106/ 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./107/ 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. The Court, reasoning that the exercise of jurisdiction would be inconsistent with the statutory requirement of complete diversity, rejected jurisdiction over the claims. Finley v. United States marked the death knell of pendent party jurisdiction./108/ In Finley, the Supreme Court held that a plaintiff suing the United States under the Federal Tort Claims Act was not allowed to assert a pendent party claim against jointly liable, non-diverse defendants, even though the claim against the United States was within the exclusive jurisdiction of the federal courts. Modifying the test established in Aldinger, the Court held that federal courts had no authority to assert subject-matter jurisdiction over pendent parties absent an affirmative grant of jurisdiction by Congress. In the absence of a legislative basis for the assertion of pendent party jurisdiction, the plaintiff had to establish an independent basis of subject-matter jurisdiction for each defendant sued. Since most jurisdictional statutes say nothing about pendent jurisdiction, the Finley Court called into question the statutory bases of both ancillary and pendent jurisdiction./109/ VI.A.3. Ancillary Jurisdiction The related doctrine of ancillary jurisdiction developed to empower a federal court to hear some counterclaims and third-party claims over which it lacked an independent jurisdictional base./110/ Generally, when a claim bore a logical relationship to the main claim or arose out of the same transaction or occurrence, courts permitted ancillary jurisdiction. Ancillary jurisdiction consequently extended to compulsory counterclaims, cross-claims, and additional parties to such claims./111/ It did not generally extend to permissive counterclaims, which, by definition, lacked the required factual nexus with the main claim./112/ 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. VI.B. Statutory Codification of Supplemental Jurisdiction Congress responded to Finley in 1990 by enacting 28 U.S.C. § 1367. The supplemental jurisdiction statute retains the basic division described by the Supreme Court in Gibbs between the power of a court to entertain a pendent claim and the discretionary authority of a court to decline to exercise that power. However, Congress, in codifying supplemental jurisdiction, also chose to incorporate several of the discretionary factors that warranted declining jurisdiction./113/ The statute first delineates the power of the federal court to hear supplemental claims and claims against supplemental parties. Section 1367(a), which provides that “the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution,” confers power to entertain supplemental jurisdiction in mandatory terms./114/ Rather than using “common nucleus of operative fact,” Section 1367(a) explicitly makes direct reference to the constitutional “case or controversy” requirement, signaling Congress’ intent to vest the federal courts with the full measure of supplemental jurisdiction permitted by the Constitution./115/ The statute also expressly retains the doctrine of pendent party jurisdiction by mandating the inclusion of claims involving “the joinder or intervention of additional parties.”/116/ The Supreme Court recently interpreted Section 1367(a) broadly in a category of multi-plaintiff cases. In Exxon Mobil v. Allapattah Services,/117/ the Court decided that federal courts may exercise supplemental jurisdiction over additional plaintiffs who fail to satisfy the amount in controversy requirement so long as their claims are part of the same case or controversy presented by an “anchor” plaintiff who alleges a sufficient amount in controversy. So long as the federal court has original jurisdiction over a claim made by an “anchor” plaintiff, there is a “civil action of which the district courts have original jurisdiction,”/118/ to which supplemental claims may adhere./119/ The decision in Exxon Mobil is potentially important to legal services attorneys because it holds that Section 1367(a) overrules Zahn v. International Paper Co.,/120/ which held that each class member in a class action seeking to invoke diversity jurisdiction must meet the amount in controversy requirement./121/ Section 1367(c) sets forth the occasions in which a federal court may exercise its discretion not to hear a supplemental claim or add a supplemental party, despite the power of the court to do so. A federal court may decline to assert supplemental jurisdiction over a pendent claim if any of the following four circumstances specifically enumerated in Section 1367(c)(1)-(4) apply: “the claim raises a novel or complex issue of State law,” “the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,” “the district court has dismissed all claims over which it has original jurisdiction,” or “in exceptional circumstances, there are other compelling reasons for declining jurisdiction.” The first three factors in Section 1367(c)(1)–(3) “are rephrased Gibbs factors.”/122/ The statute offers no guidance on the fourth ground for declining supplemental jurisdiction. The courts have accordingly used a wide-ranging set of factors to define this exception to supplemental jurisdiction./123/ Nowhere in the statute is there a reference to the Gibbs discretionary prong language of fairness, economy, comity, or convenience./124/ Neither does the legislative history suggest a duty to consider these factors to determine if assertion of supplemental jurisdiction would be proper./125/ 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 in the context of the enumerated circumstances. The circuits are split over the question of whether the word “may” in Section 1367(c) broadly incorporates the Gibbs factors or whether Section 1367(c) sets forth the only bases for declining supplemental jurisdiction. The Seventh Circuit has taken the former approach,/126/ followed by the First, Third, and D.C. Circuits./127/ In Executive Software North America Inc. v. U.S. District Court, in contrast, the Ninth Circuit held that the statutory structure adopted by Congress demonstrated its intent for Section 1367(c) “to provide the exclusive means by which supplemental jurisdiction can be declined by a court .... [a]ccordingly, unless a court properly invokes a [S]ection 1367(c) category in exercising its discretion to decline to entertain pendent claims, supplemental jurisdiction must be asserted.”/128/ The Ninth Circuit reasoned that, although subsections (c)(1)–(3) “appear to codify concrete applications of the underlying Gibbs values,” the statute “channels” their application and alters “the nature of the Gibbs discretionary inquiry.”/129/ Once a court identifies one of the “factual predicates” corresponding to one of the subsection 1367(c) categories, the exercise of discretion “is informed by whether remanding the pendent state claims comports with the underlying objective of most sensibly accommodat[ing] the values of ‘economy, convenience, fairness, and comity.’”/130/ In addition, the Executive Software court found that the “other compelling reasons” referred to in the Section 1367(c)(4) “catchall” subsection referred back to the circumstances identified in subsections (c)(1)–(3), thus requiring the court to balance the Gibbs discretionary values of economy, convenience, fairness, and comity. Nonetheless, the Ninth Circuit also found that the “exceptional circumstances” referred to in subsection (c)(4) meant that the court’s discretion should be employed only when the circumstances were “quite unusual.” This would require a district court to “articulate why the circumstances of the case are exceptional in addition to inquiring whether the balance of the Gibbs values provide compelling reasons for declining jurisdiction in such circumstances.”/131/ The Ninth Circuit’s approach has been either expressly adopted or effectively utilized by the Second, Eighth, and Eleventh Circuits./132/ The Supreme Court has not directly acknowledged this controversy./133/ The Court in City of Chicago v. International College of Surgeons observed that federal courts “can decline to exercise jurisdiction over pendent claims for a number of valid reasons.”/134/ “Accordingly,” the Court added, “we have indicated that ‘district courts [should] deal with cases involving pendent claims in the manner that best serves the principles of economy, convenience, fairness, and comity which underlie the pendent jurisdiction doctrine.’”/135/ The Court flatly stated that “[t]he supplemental jurisdiction statute codifies these principles.”/136/ The Court has also addressed the applicability, in light of the Eleventh Amendment, of Section 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./137/ The Court held that Section 1367(a) did not alter this principle, “even though nothing in the statute expressly excludes such claims.”/138/ The Raygor 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./139/ VI.C. Tactical Considerations—Whether or Not to Raise Supplemental Claims Although federal courts generally have discretion to adjudicate pendent state-law claims, plaintiffs who can raise pendent state-law claims are required as a practical matter to attempt to do so. In most states, the alternative to raising pendent state-law claims in federal court litigation is forfeiting them. This is because the doctrine of res judicata or claim preclusion bars plaintiffs from litigating state-law claims that they could have raised as pendent claims in earlier federal court litigation. Therefore, even with only a slim chance that a federal court will exercise pendent jurisdiction, pendent state-law claims should be pleaded. Most state courts confronted with state-law claims that were not joined (or attempted to be joined) in earlier federal court litigation have been unwilling to assume that federal courts would have refused to exercise pendent jurisdiction and have applied claim preclusion to bar litigation of the state-law claims in state courts./140/ Some state courts have refused to preclude litigation of state claims only when federal courts clearly would have declined to hear them as pendent claims for jurisdictional/141/ or discretionary reasons./142/ However, those courts still applied claim preclusion to claims when they could not conclude that the federal court clearly would have declined jurisdiction./143/ 96. United Mine Workers v. Gibbs, 383 U.S. 715 (1966). 97. Carnegie-Mellon University v. Cohill, 484 U.S. 343, 349 (1988) (citing Gibbs, 383 U.S. at 725). 98. 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). 99. Gibbs, 383 U.S. at 725. Such an expectation would turn on considerations 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. 102. See Rosado v. Wyman, 397 U.S. 397, 404 (1970). 105. Aldinger v. Howard, 427 U.S. 1 (1976). 106. Monell v. New York City Department of Social Services, 436 U.S. 658 (1978). 107. Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365 (1978). 108. Finley v. United States, 490 U.S. 545 (1989). 110. See Moore v. New York Cotton Exchange, 270 U.S. 593 (1926). 111. 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. 112. See generally 6 Charles A. Wright et al., Federal Practice And Procedure § 1422, at 170 (2d ed. 1990); 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). 113. For an example of how to plead supplemental jurisdiction, see the Documentary Supplement, Document 1, Complaint, ¶3. 114. 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.”). 115. How to define this Constitutional limit is unclear. In an excellent discussion of this issue, the Second Circuit in Jones, 358 F.3d at 213, n.5, expressed uncertainty as to whether this constitutional limit was congruent with Gibb’s “common nucleus” test. In Channell v. Citicorp Nat’l Servs., 89 F.3d 379 (7th Cir. 1996), the Seventh Circuit required only "[a] loose factual connection between the claims," id. at 385, to satisfy Section 1367(a). In any event, the court in Jones concluded that permissive state law contract counterclaims to Equal Credit Opportunity Act claims fall within Section 1367(a), because they bear a “sufficient factual relationship.” Jones, 358 F.3d at 214; see also Sparrow v. Mazda Am. Credit, 385 F. Supp. 2d 1063 (E.D. Cal. 2005). 116. 28 U.S.C. § 1367(a); see Brazinski v. Amoco Petroleum Additives Co., 6 F.3d 1176, 1181 (7th Cir. 1993). In subsection (b), the statute further places limitations on the use of supplemental jurisdiction in actions founded “solely” on 28 U.S.C. § 1332, thus retaining the requirement of complete diversity between the parties. See Herrick Co. v. SCS Communications Inc., 251 F.3d 315, 325 n.7 (2d Cir. 2001). The statute therefore legislatively overturns Finley and Aldinger and adopts Owen. 117. Exxon Mobil v. Allapattah Services, 125 S. Ct. 2611 (2005). 118. 28 U.S.C. § 1367(a). 119. Exxon Mobil, 125 S. Ct. at 2620. 120. Zahn v. International Paper Co., 414 U.S. 291 (1973). 121. See 28 U.S.C. § 1332(d)(1), (6) (establishing $5 million amount in controversy requirement, aggregated among class members in class actions subject to Class Action Fairness Act). 122. 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). 123. See, e.g., 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”); Southwestern Bell Telephone Co. v. City of El Paso, 168 F. Supp. 2d 640, 648 (W.D. Tex. 2001) (court refused to apply Section 1367(c)(4) to decline supplemental jurisdiction over counterclaim for trespass; a party’s inability to clarify a claim does not present an exceptional circumstance or a compelling reason to decline jurisdiction); Blue Dane Simmental Corp. v. American Simmental Association, 952 F. Supp. 1399, 1413 (D. Neb. 1997) (applying Section 1367(c)(4) to decline supplemental jurisdiction over counterclaim where pending action in state court raised similar issues); Polaris Pool Systems v. Letro Products Inc., 161 F.R.D. 422, 425 (C.D. Cal. 1995) (rejection of supplemental jurisdiction over state-law counterclaims under Section 1367(c)(4) in light of pending state court action may further “the values of economy, convenience, fairness, and comity”). 124. 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 . . . .”). 125. Carnegie-Mellon, 484 U.S. at 350. 126. See Brazinski, 6 F.3d at 1182. 127. See O’Connor v. Commonwealth Gas, 251 F.3d 262 (1st Cir. 2001); Rodriguez v. Doral Mortgage Corp., 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 Dept. 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.”). 128. Executive Sortware North America Inc. v. U.S. District Court, 24 F.3d 1545, 1556 (9th Cir. 1994) (citations omitted). 130. Id. at 1557 (citations and interior quotation marks omitted). 132. 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). 133. 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 122, at 120-35. 134. City of Chicago v. InternationalCollege of Surgeons, 522 U.S. 156 (1997). 135. Id. at 172–73 (quoting Carnegie-Mellon, 484 U.S. at 357) (further citations omitted). 137. Raygor v. Regents of the University of Minnesota, 534 U.S. 533, 546 (2002); Pennhurst State School and Hospital v. Halderman, 465 U.S. 89 (1984). 138. Raygor, 534 U.S. at 541–42. 139. 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 (2003). 140. See, e.g., Milone v. Nissan Motor Corp., 594 A.2d 642, 644 (N.J. Super. Ct. App. Div. 1991). 141. 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). 142. E.g., Toomey v. Blum, 54 N.Y.2d 669, 426 N.E.2d 181, 442 N.Y.S.2d 774 (1981). 143. E.g., Penn v. Iowa State Board of Regents, 577 N.W.2d 393, 401–2 (Iowa 1998);Anderson v. Phoenix Investment Counsel Inc., 440 N.E.2d 1164, 1168–69 (Mass. 1982); Rennie v. Freeway Transportation, 656 P.2d 919, 924 (Or. 1982).
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