Jurisdiction over the Subject Matter of the Action (Subject Matter Jurisdiction) – Supplemental Jurisdiction

Terms:

Supplemental Jurisdiction:
Supplemental jurisdiction is the means through which one can bring into federal court claims over which a federal court would normally not have subject matter jurisdiction. Essentially, a claim over which the court does not have original subject matter jurisdiction is attached to a claim over which the court has original subject matter jurisdiction.

Impleader:
A petition or complaint brought in a lawsuit by a plaintiff or defendant against a third party who may be liable to that plaintiff or defendant.

Supplemental jurisdiction is the means through which one can bring into federal court claims over which a federal court would normally not have subject matter jurisdiction. It is a way, for example, that one can bring state claims into federal court even though there is no diversity jurisdiction. What must exist, however, as the base upon which to build supplemental jurisdiction: a valid, independent claim over which the court has federal subject matter jurisdiction. Supplemental jurisdiction is governed by 28 U.S.C. § 1367, which was enacted in 1990. Because statutes usually trump earlier judicial decisions, decisions addressing supplemental jurisdiction released before 1990 should only be used cautiously, if used at all.

28 U.S.C. § 1367 provides in relevant part:

(a) Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, 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. Such supplemental jurisdiction shall include claims that involve joinder or intervention of additional parties.

(b) In any civil action of which the district courts have original jurisdiction founded solely on section 1332 of this title, the district courts shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure; or over claims by personal proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332.

(c) The district courts may decline to exercise supplemental jurisdiction over a claim under subsection (a) if –
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances there are other compelling reasons for declining jurisdiction.
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Under subsection (a), the additional claims to be attached through supplemental jurisdiction must “form part of the same case or controversy” as the count which properly invokes the court’s subject matter jurisdiction. In other words, there must be some sort of relationship between the count(s) over which the court has original subject matter jurisdiction and the count(s) over which the court will need supplemental jurisdiction. For example:

Adam, a citizen of Michigan, files a complaint against Mary, a citizen of Michigan, in federal court. The complaint consists of two counts: violation of Adam's patent and negligence. Adam's patent claim involves his allegation that Mary marketed and sold a product that Adam claims he holds a patent for. This claim is based on federal law and the court will have federal question jurisdiction to entertain that claim. Adam's negligence claim involves the injuries Adam sustained when he slipped on an icy path on Mary’s property. This count is based on state law. Even though the court has subject matter jurisdiction over the patent count (in fact, the court actually has exclusive jurisdiction over that count), the court will not have supplemental jurisdiction over the negligence claim because the two claims are completely unrelated.

Supplemental jurisdiction does not only apply to claims against original parties. Pursuant to 28 U.S.C. § 1367(a), “claims that involve the joinder or intervention of additional parties” are also included.

It should be noted that courts are not settled regarding whether a plaintiff who does not have different citizenship from a defendant (i.e., they are a non-diverse plaintiff) may have his claim attached to a claim over which the federal court has jurisdiction. Some courts have, however, held that 28 U.S.C. § 1367 allows the court to exercise supplemental jurisdiction over such a claim.

In actions where the claim on which supplemental jurisdiction will be based (the claim over which the federal court has independent subject matter jurisdiction) is a federal question, supplemental jurisdiction is easier to exercise. However, if the court has original jurisdiction over the original claim based on diversity jurisdiction (diversity of parties plus amount in controversy), not every other claim may qualify under supplemental jurisdiction. Where the original claim is a diversity claim, there are limitations to the ways in which supplemental jurisdiction may be exercised.

Where the original claim is based in diversity jurisdiction, supplemental jurisdiction applies only to the following claims:

1. Compulsory counterclaims (counterclaims that must be filed in that particular action) made pursuant to FRCP 13(a)

2. Crossclaims made pursuant to FRCP 13(g)

3. Joinder of additional parties to compulsory counterclaims pursuant to FRCP 13(h)

Example: Jack, a citizen of California, brings an action in federal court for $80,000 against Mike, a citizen of Oregon, for injuries Jack sustained during a fist-fight with Mike. Mike counterclaims against Jack, claiming that he was injured during the same fight by both Jack and a third party, Paul, who is also a citizen of Oregon. In a normal case where Mike was the plaintiff and Paul was the defendant, the court would not have subject matter jurisdiction over the case because there is no diversity of citizenship between the parties. Here, however, because Rule 13(h) applies (it forces Mike to bring his action against Paul in this proceeding, supplemental jurisdiction is extended and Paul may be joined as a third party plaintiff.

4. Impleader, pursuant to FRCP 14, of third-party defendants, but only in certain circumstances. Supplemental jurisdiction does not apply to claims by the original plaintiff against a third-party defendant. It does, however, extend to claims by third-party defendants, and claims by and against third-party plaintiffs.

Example: ABC Corp., a citizen of New York, files a cause of action in federal court against DEF Corp., a citizen of Colorado, for pollution that has impaired New York’s air. Assume for the purposes of this example that the claim is based on DEF Corp.’s installation of a device in a smokestack that did not adequately control emissions. DEF Corp. seeks indemnification from GHI Corp., the manufacturer of the device, and brings an impleader claim (pursuant to Rule 14) against GHI Corp., also a citizen of Colorado. Supplemental jurisdiction extends to DEF’s claim against GHI, as well as any claim by GHI against ABC. As explained above, however, supplemental jurisdiction would not extend to any claim by ABC over GHI. Jurisdiction would only extend under original subject matter jurisdiction.

As provided in 28 U.S.C. § 1367(b), supplemental jurisdiction does not extend (where the original claim is based on diversity jurisdiction) to “claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure; or over claims by persons proposed to be joined as plaintiffs under Rule 19, or seeking to intervene as plaintiffs under Rule 24” when original diversity jurisdiction does not exist.

Pursuant to 28 U.S.C. § 1367(c), the district court has discretion to “decline to exercise supplemental jurisdiction over a claim under subsection (a) if –
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances there are other compelling reasons for declining jurisdiction.

It is important to note that under 28 U.S.C. § 1367(d), if a claim is dismissed for lack of supplemental jurisdiction, the statute of limitations is tolled for 30 days, leaving the claimant the option to re-file in state court. The claimant also has the option to voluntarily dismiss other claims and re-file them in state court.

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