This episode is a tutorial lecture about supplemental jurisdiction. This is one of several episodes on the broader topic of federal subject matter jurisdiction. This episodes focuses on the practical application of Section 1367 of Title 28. I do not try to cover history or any other context here.
This episode is a tutorial lecture about supplemental jurisdiction. This is one of several episodes on the broader topic of federal subject matter jurisdiction. This episodes focuses on the practical application of Section 1367 of Title 28. I do not try to cover history or any other context here.
[inaudible] welcome to the civil procedure podcast. I am your host
Speaker 2:Thomas Maine. And this episode is about supplemental jurisdiction in practice note that this is just one of several episodes that are devoted to the broader topic of federal subject matter jurisdiction. This episode is about supplemental jurisdiction, and it's only about the practical application. So not the history, not any other context, just about doing a supplemental jurisdiction analysis on an exam or in practice. The topic of supplemental jurisdiction is important because remember in the grand scheme of things, federal courts have limited subject matter jurisdiction. They have limited jurisdiction that's limited as opposed to general. And what that limited jurisdiction means is that they cannot hear a claim unless that claim is both within the scope of the judicial capital P power as defined in article three of the constitution. And that Congress has in fact, vested the court with jurisdictional authority to hear that claim. Now, what does that mean as a practical matter? Well, it means that we're going to focus on the congressional legislation that does vest courts with so-called supplemental jurisdiction. And that statute is 28 USC section 1367. Of course, whenever we're in federal court, we need a jurisdictional basis for each and every cause of action against each and every defendant. If a plaintiff initiates an action in federal court, asserting three causes of action, you need to make sure that there is subject matter jurisdiction over each of the three causes of action. The answer might be that only one or some, or maybe none, or maybe all are allowed and you will do that kind of analysis on each cause of action on every counterclaim cross-claim third-party claim, ditto, every cause of action that any claimant ever seeks to add by amendment. As we know from original subject matter jurisdiction, there are two principle subject matter jurisdictional bases. When a plaintiff initiate an action in federal court, federal question under 1331 and diversity under 1332, let's refer hereafter to this original suit and by original suit. I mean the action that opens the docket that starts the file. Let's refer to that as the anchor, it anchors the case in federal court. And again, that anchor could be founded in 1331 federal question jurisdiction and or 1332 diversity jurisdiction, if a plaintiff files an action in federal court. And that action is a one count complaint that arises under federal law. Then there is original subject matter jurisdiction under 1331. And we could say that the anchor is a federal question claim. Next example, if a Wyoming plaintiff files an action against a New York defendant in federal court, and the amount in controversy is$80,000, there is original jurisdiction under 1332. And we would say that that anchor is a diversity suit. A firm grasp of original subject matter jurisdiction is a prerequisite to mastering supplemental jurisdiction and knowing whether the anchor is founded in 1331 and or 1332 is also key before we start tackling supplemental jurisdiction. I want to make sure that you don't tackle supplemental jurisdiction in a fact pattern, unless you have to supplemental jurisdiction is just more complicated than either 1331 or 1332 with 1331. There is just one thing to worry about. What are the cause of action arises under federal law with 1332, there are just two things to worry about complete diversity across the V and the amount in controversy, but with 1367, there are approximately 67 things to worry about. So let's make sure to avoid supplemental jurisdiction whenever we can. So let's talk about that sometimes often, even you can avoid worrying about supplemental jurisdiction because of the court would have original subject matter jurisdiction over that claim. Imagine for example, that a Wyoming plaintiff who sues a New York defendant in federal court, and the amount in controversy is$80,000 in that situation, we'd say original jurisdiction under 1332 that's diversity. Imagine that in that case, the New York defendant has a counter claim back against the Wyoming plaintiff. Now, of course, you know, you need subject matter jurisdiction for each and every cause of action, including for this counter claim. But if that counterclaim arises under federal law, well, then you don't have to worry about supplemental jurisdiction for that counter claim because the court would have original subject matter jurisdiction over that claim under 1331. Now this gets tricky because of course that's not actually original jurisdiction. Original jurisdiction always refers to that main primary action where the plaintiff's case opened the file started the docket, but in circumstances where there would be original subject matter jurisdiction, we treat this as a circumstance where the court has given district judges authority to hear that sort of cause of action in other circumstances, too. And that would include our New York defendant's counterclaim back against that Wyoming plaintiff, the jurisdictional basis for that cause of action would be 1331. Now, of course, if the counterclaim arises under state law, well 1331, isn't going to provide a jurisdictional basis. But we already said that the counterclaim is an action between a new Yorker and someone from Wyoming. Well, that's complete diversity. So if the amount in controversy on the counterclaim exceeds$75,000, well then again, you don't have to worry about supplemental jurisdiction over that counterclaim because the court would have had original subject matter jurisdiction under section 1332. So with respect to that, cause of action or those causes of action, you would say the basis for subject matter jurisdiction on the counterclaim is 1332. And you're done with respect to subject matter jurisdiction on any cause of action on any claim, cross claim counterclaim, third party claim begin your analysis with section 1331 and 1332, because if the court would have had original subject matter jurisdiction over that claim, then Congress has authorized them to hear it in any of the other contexts too. But of course there are a whole bunch of causes of action that won't satisfy 1331 or 1332, if a plaintiff files an action in federal court. And that action is a one count complaint that arises under federal law then, okay, fine. There's original subject matter jurisdiction under 1331. And we would say that the anchor there is a federal question claim, but what if they have a second cause of action that arises under state law? Well, 1331 doesn't give the court subject matter jurisdiction over that second. Cause of action. Of course, if the plaintiff and the defendant are diverse and the amount in controversy exceeds$75,000, you'd be all set, but let's imagine that the plaintiff and the defendants are both Kansans. You need help. Supplemental jurisdiction is just offstage, almost ready for their cameo appearance. But before we hear from them, imagine also that counterclaim asserted by the new Yorker against the person from Wyoming. We said that if the amount in controversy on that state law counterclaim exceeded$75,000, you'd be all set under section 1332. But what if the amount in controversy is only$40,000, can supplemental jurisdiction help or imagine a cross-claim or a third party? Impleader if the claims arise under state law and the parties are not diverse, then neither section 1331 nor 1332 authorizes the courts to hear it. Somebody needs to send some help. Okay, here comes the help, but it's not an easy regime, supplemental jurisdiction. It's tough. Remember there's just one thing under 1331. And there are just two things under 1332, but 67 things under 13. Okay. It's not 67, but if you add those numbers together, those digits six and seven, if you add those digits together, you get the number 13, which is a good mnemonic and prompt to remember that there is one question followed by three steps when it comes to supplemental jurisdiction. First, the one threshold question, what is the original jurisdiction anchor? The point here is that supplemental jurisdiction, supplements, jurisdiction that is proper accordingly. If you're using 1367, you must have a case that is properly anchored with subject matter jurisdiction in federal court. And remember that that anchor is the original suit that the plaintiff filed to launch this action. So you're taking an exam you're analyzing whether there is federal subject matter jurisdiction, over a one count cross claim between defendant one and defendant two, your hopes of resolving subject matter jurisdiction with either 13 30, 1 or 1332 were dashed because the claim arises under state law extinguishing any hope of 1331 providing the basis. And I tell you in the fact pattern that defendant one and defendant two are not diverse. They're both Kansans that of course extinguishes any hope. If you're satisfying 1332, you need supplemental jurisdiction and you are therefore asking the threshold question for supplemental jurisdiction, which is what is the original jurisdiction anchor. So that means before you even tackle subject matter jurisdiction over the cross-claim return first and make sure that the anchor to that original claim is solid. It is solid. If the plaintiff who initiated the action had a federal question claim and a war, the anchor is solid. If the court had diversity jurisdiction over that original claim, the point is we cannot supplement jurisdiction. That's flawed. So the first step of analyzing supplemental jurisdiction then is to ensure that the court had original jurisdiction. The first step is satisfied. When you can say something like original was proper because of federal question 1331 is the anchor, because the one thing we care about there is satisfied that cause of action arose under the federal antitrust statute, a federal Anton discrimination statute. That's what your threshold question analysis is looking like. And if it's not a federal question anchor, then it might say something like original jurisdiction was proper because of diversity, 1332 was the anchor because of the two things that we care about under diversity jurisdiction, we're both satisfied on that original claim. There was complete diversity across the V yada yada. And the amount in controversy was satisfied because yada yada, so anchors are 1331 and or 1332. When the threshold is satisfied, you have three steps before the federal court will assert subject matter jurisdiction over the cause of action for which you are invoking 1367 first, the cause of action for which he worked, trying to use 1367 must arise out of the same transaction or occurrence as the anchor claim. Now the statute doesn't use the standard same transaction or occurrence, but that's the analysis that you need to do. And I like referring to same transaction or occurrence because that's a much more familiar target for you to aim at. Now, if you want to drape that analysis in the language of the statute, you would say, quote, same case or controversy, close quote, instead of same transaction or occurrence, or yet another version of the operative language is from a 1960s Supreme court case where the court referred to quote common nucleus of operative fact close quote. But however you characterize the inquiry when you're analyzing it, you're exploring the overlap, the nexus, the connection, the linkage between two causes of action, the cause of action in the anchor on one hand and the cause of action for which you are trying to use 1367 on the other. That's what needs to be same or common. Now, if the two are not sufficiently related, then the court's going to stop right here. It is not going to allow you to use 1367 to assert that claim in federal court. It will be dismissed at this step under 12 B one for lack of subject matter jurisdiction, no exceptions. There's no waiver. There's no estoppel. There's no consent. It will be dismissed when you survive the first step. The second step of our 1367 analysis disqualifies some claims from the scope of supplemental jurisdiction. If, but only if the anchor is founded solely on diversity jurisdiction. This second step prevents the original plaintiff from using 1367. So let's unpack that if then only if the anchor is founded solely on diversity, that means that if your anchor is grounded in 1331, you don't have to worry about this step at this step. You would just say, my anchor is 1331, so I can skip right past this step. But when the anchor is founded solely in 1332, and it says solely because sometimes your anchor could be both 1331 and 1332, but in circumstances where the anchor is founded solely in 1332, the original plaintiff cannot use this statute in section 1367 to assert claims against parties named under rule 14, 19 20 or 24. I'm just reading from the rule here and yikes. Okay, well, let's just clean this up a little bit. Well, just like we don't have to worry about this step two, unless the anchor is founded solely in diversity. We also don't have to worry about this step two, unless the party who is asserting the claim is the original, the anchor plaintiff let's consider a couple of examples. First, imagine that your using 1367 to try to establish federal subject matter jurisdiction over a third party, impleader, it's a state claim. So 1331, isn't going to provide a basis. And the third party plaintiff and the third party defendant let's assume are not diverse. So 1332 is a non-starter. This is why we're looking at 1367. And if we can't satisfy 1367, this claim will be dismissed 1231. So does 1367 apply? Well, of course our threshold question is the anchor. So let's assume that we have the anchor let's proceed then with the first of our three steps, the first step of our 1367 analysis is satisfied because of a third party claim surely arises out of the same transaction or occurrence as the anchor. And I say surely because if the implementer is proper under rule 14, we could imagine that it's going to need to be part of that same transaction or occurrence as the anchor claim. So all is well so far with this exercise of supplemental jurisdiction under 1367. Notice by the way that we're using it here, not just to add claim, but a brand new party. So let's go on to the second of our three steps in this hypothetical. The anchor is founded solely in diversity. So we do need to worry about this second step, but good news, because this third party impleader claim is not a claim by the original plaintiff. Again, this is a claim by a third party plaintiff. So step two is not your problem here. It would go on to step three. Let's imagine a fact pattern where step two is a problem. Imagine a new case where let's put original jurisdiction. Let's put our anchor is founded in diversity and imagine it's an Iowan who was injured and they've sued a Nebraskan on a state law claim. And the amount of controversy threshold is met. So that's our anchor under 1332, that's easy. And then imagine that that Nebraska defendant brings a third party claim under state law against a third party defendant. And the third party defendant is an Iowan. Well, if we were analyzing subject matter jurisdiction on that third party impleader claim, you would of course start your analysis with 1331, because you will always start at the top of a list that includes 1331, then 1332 and then 1367. And on this third party plaintiff's claim, I said that the claim arises under state law. So 1331 is out, but 1332 would be all you need here provided the amount in controversy on the third party claim exceeds$75,000 because we have complete diversity between the third party plaintiff Nebraskan and the third party defendant Iowan. But imagine that on your exam, this fact pattern evolves a little bit and now that original plaintiff, the original plaintiff wants to amend their complaint. And to add that Iowan as a second defendant alongside the Nebraskan that they sued in their original action. Well, that would be a new cause of action. And of course, every single cause of action against every single defendant needs a subject matter jurisdictional basis. And we have three possible answers, 13 31 13 32 and 1367. Well, if that original Iowa plaintiff's amended claim arises under federal law, well then that's copacetic 1331 would give us jurisdiction over that new amended cause of action. But if you see in the fact pattern that the claim arises under state law, well, then you have to continue. And certainly 1332, isn't going to justify this courts exercise of a claim by an IO one against another Iowan. So that's a nonstarter one more shot after 1331 in 1332, we know to turn to 1367 supplemental jurisdiction begin with the threshold question, which asks us to confirm the anchor. Well here, the anchor began with that original jurisdiction claim, Iowa vs Nebraska, a mountain controversy satisfied state law claim. Yep. That was 1332. That was proper. The threshold was satisfied. Our anchor was 1332, which means we could go on to the three steps. Step one. Does this claim that the plaintiff wants to add by amendment arise out of the same transaction or occurrence as the anchor claim there, we would analyze the proximity of time and proximity of space and the logical relationship. Well, let's just assume that it does so that we can proceed to the second step because in this second step, that's where we disqualify certain claims from the scope of 1367, including this one, because this is a claim where the anchor was founded solely in diversity. And this is a claim where the original plaintiff is the one who was trying to use 1367. And this second step says, oh no, you don't. Let's make obvious here what this second step is trying to prevent. Imagine that in the original case, the Iowa plaintiff tried to Sue the Nebraskan and this Iowan that they're trying to add by amendment. Imagine that that had been their original filing. Would we have allowed that will, can an Iowan use 1332 to Sue a Nebraskan and an Iowan? Absolutely not. That would violate the complete diversity requirement if there were an Iowan on both sides of that V this second step is on the lookout for plaintiffs who use 1332 to get in to federal court, but then want to circumvent the complete diversity requirement by trying to finagle 1367 to do indirectly or to do in stages with they couldn't have done all at once. And we simply don't allow it. That's what the second step is here to prevent the second step. Isn't worried about federal question plaintiffs exploiting the complete diversity requirement because federal question plaintiffs don't need to satisfy the complete diversity requirement. And similarly, we're not worried about cross-claim plaintiffs nor counter plaintiffs, nor third party plaintiffs using 1367, because they aren't somebody who invoked federal court jurisdiction to an action. There's somebody who was brought into this suit in voluntarily. And now that they're here, here, they're trying to assert some claims, but they aren't trying to circumvent the complete diversity requirement of 1332. And so we're not suspicious of them in this second step. Our focus in this second step is plaintiffs who use 1332 to get into federal court. And then they themselves are the ones who try to use 1367. Once the case is anchored in federal court. And step two, doesn't allow it for claims that survive the first two steps of our 1367 analysis. The third and final step gives the court discretion to decline to hear that count. Let's tune your intuition a little bit here. Judges are not thrilled about hearing state law claims between non-diverse parties in federal court. These claims aren't tapping the expertise of federal courts on issues of federal law, because these are state law claims and there is hardly an obvious need for a neutral forum. If the parties aren't diverse and paragraph C of section 1367, allows judges to decline to hear that cause of action. Even though obviously they could, at this point, since the statutory terms are otherwise met, they could hear the count, but 1367 C allows them to decline to hear it. And the enumerated discretionary bases for declining jurisdiction are that the state law claims are novel or complex, or the state law claims predominate or the state law claims are all that's left. So imagine, for example, a fact pattern where a cross-claim between two Kansans raises some unresolved issue about Kansas state law. Well, judges might otherwise have supplemental jurisdiction over the cross-claim. Indeed. If we ran through the steps of section 1367, the threshold would be satisfied if the anchor was legitimate, the cross claim probably arises out of the same transaction or occurrence as the anchor claim. Indeed, that is the standard for asserting a cross claim under 13 G the second step of 1367, doesn't pose a problem because across claim by one defendant against a co-defendant is not a claim by the original plaintiff. Yet 1367 C allows a judge under certain circumstances to decline to exercise jurisdiction over that. Cross-claim, if it's an especially complex or novel issue, the judge would be deferring to the state court. And that deference is manifest by a judge declining to exercise subject matter jurisdiction over that state law claim. Another example, imagine a fact pattern where a Nevada plaintiff brings a two count complaint against a Nevada defendant. Count one arises under federal law, count two arises under state law. And of course we know you need subject matter jurisdiction over each and every cause of action against each and every defendant. Yup. Well, as to count one, that's an easy one. Federal law, 1331, and the federal count would have subject matter jurisdiction over count two, not under 1331, because it's a state law claim, nor would it be under 1332 because these parties are not diverse, but maybe under 1367 supplemental jurisdiction, assuming that count two arises out of the same transaction or occurrence as count. Number one, of course, our second step of 1367 would be irrelevant here because the anchor would not be 1332 on to the third step. And now imagine that six months later count one is dismissed on a 12 B six, the court could still hear count two, but it could also dismiss it this point and 1367 contemplates exactly that or in another variation on that hypo. Imagine that in that two count complaint, count one, isn't dismissed, but it's just dwarfed in comparison to the magnitude and the importance of count. Number two, this case is really mostly about this interesting state law issue it's in federal court because sure there is a federal cause of action, but really about the state law claim. Paragraph C two allows the judge to dismiss that state law claim because the state law claim predominates over the federal question again, this is a federalism inspired federal court deference to state law. Hey, this case is mostly about state law. Let's let them state courts handle it. The way that it's manifest is by dismissing the case in federal court. Plaintiff can refile that action in state court. One common mistake that students make on an exam is doing supplemental jurisdiction analysis when they don't need to do it, they'll see an in pleader or a cross-claim and they'll do supplemental jurisdiction when 1331 or 1332 would suffice. It's not just that 1367 is a lot more work than 1331 or 1332. I'm not just trying to save you some time and effort. You're also often going to get the wrong answer about whether a court must or may exercise subject matter jurisdiction. If you analyze it under 1367, when jurisdiction could have been exercised under 1331 or 1332 instead. So always start every federal subject matter jurisdiction analysis at the top for this cause of action with 1331 provide a basis then turned to 1332 and only in circumstances where neither of those is availing. Would you turn to 1367? The second most common mistake that students make in this arena is exporting the notion of discretion that appears here in the context of supplemental jurisdiction, into other subject matter jurisdiction inquiries, where it doesn't belong. So what's going on here? Well, there is a discretionary escape hatch that allows a judge to decline to hear a claim under 1367. Yep. That's paragraph C when you're relying on 1367 as the basis, there is always the possibility for a judge to simply decline to hear it, to invoke their discretion, to decline, to hear that cause of action, but there is no such escape hatch under 1331 or 13 two. The one thing we care about on 1331 is whether it arises under the two things we care about under 1332, our complete diversity and the amount in controversy, but in neither of those analyses under 1331 or 1332, is there a discretionary escape hatch let's cover one more common mistake. And this one is a little more nuanced than the other two. The mistake is squandering the opportunity to leverage the interconnectedness of some of these standards. Specifically notice that the first of our three steps of our supplemental jurisdiction analysis, that same case or controversy, same transaction or occurrence, common nucleus of operative fact, however you wish to characterize it in a given fact pattern you may be given or an earlier analysis in an exam, you may have already analyzed whether the claim for which you're now seeking supplemental jurisdiction does, or doesn't satisfy that test. Imagine for example, that you were told that it was a permissive counterclaim. Well, if it was a permissive counterclaim, not necessarily means that the counterclaim doesn't arise out of the same transaction or occurrence as the plaintiff's claim against that defendant. Similarly, if you're told that something is a proper cross claim, presumably that would mean that the cross-claim satisfied rule 13 G, which meant that it necessarily arises out of the same transaction or occurrence. That is the subject of the main claim or a proper impleader one order for an employer to be proper. It has to be an indemnification style claim where the third party plaintiff is claiming that the third-party defendant is or may be liable to the third party plaintiff for all, or part of the third party plaintiff's liability to the original plaintiff. So by appreciating the similarity of those inquiries, you can take advantage of the fact that sometimes the analysis is already done. All you need to do is refer to it. So in summary, we bring our section 1367 supplemental jurisdiction test to each and every cause of action against each and every defendant on each and every type of claim counterclaim cross-claim, et cetera. But we use it only if we can't instead use 1331 and or 1332, when we do invoke section 1367, we first ask the threshold question, what is the jurisdictional basis that anchored the original case in federal court? The possible answers to establish the propriety of that original subject matter jurisdiction are 1331 and or 1332. When the anchor is proper, you then have three steps under 13 67, 1 same transaction or occurrence two. If the anchor is founded solely in diversity, remember that we're going to disqualify certain claims by the original plaintiff. Who's trying to circumvent the complete diversity requirement. And then three, remember the court has discretion to decline to,
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Speaker 1:Episodes about topics, federal, subject matter jurisdiction, have a good, a.