Supplemental Jurisdiction

Supplemental jurisdiction is the ability of the court to exercise subject matter jurisdiction over a claim that does not meet the requirements of federal question or diversity jurisdiction.

[I]n 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.

– 28 USC § 1367(a)

This rule illustrates the distinction between a “case” and a “claim.” A case or controversy under Article III of the US Constitution has the ability to be comprised of multiple claims. When a case is comprised of multiple claims, it is possible that some of the claims will satisfy federal question or diversity jurisdiction requirements and other claims will not. Before United Mine Workers v. Gibbs, 383 U.S. 715 (1966), those additional claims would be dismissed for lack of subject matter jurisdiction. However, after Gibbs and the enactment of 28 USC § 1367, the court has the authority to consider those additional claims.

Principles of Supplemental Jurisdiction

State Law Claims

By definition, a claim that fails to satisfy the requirements of federal question jurisdiction will always be a state law claim. That is, because the claim at issue fails to present a federal question, the court cannot exercise original jurisdiction over the claim, being a state law claim.

Common Nucleus of Operative Facts

For a claim that does not satisfy federal question or diversity jurisdiction, the only way to exercise supplemental jurisdiction is if the claim arises from a “common nucleus of operative facts” with claims that do satisfy federal question or diversity jurisdiction. In other words, the insufficient claim must be properly related or anchored to a sufficient claim.

For example: Plaintiff A has a federal claim, for $50,000, and a state law claim, for $50,000 against Defendant A that arose out of a patent infringement (federal law) resulting in a breach of contract (state law). The state law claim by itself does not meet the amount in controversy, but because it arose out of the same events that caused the federal claim, the court may exercise supplemental jurisdiction over the state law claim.

This principle also remains true for defendants. A defendant with a counterclaim that doesn’t meet the requirements for diversity jurisdiction may still be permitted to bring the claim under supplemental jurisdiction.

Complete Diversity

If the insufficient claim seeks to enter federal court tied to another state law claim, the insufficient claim is not permitted to destroy complete diversity. 28 USC § 1367(b).

For instance: Plaintiff A, from State A, has a state law claim of $80,000 against Defendant A, from State B. Plaintiff B, from State B has a state law claim of $40,000 against Defendant A. Even if both the claims from Plaintiff A and Plaintiff B are related, the court cannot exercise subject matter jurisdiction over the claim from Plaintiff B because doing so would destroy complete diversity (State A and State B v. State B). In this situation, the court can exercise diversity jurisdiction over Plaintiff A’s claim, but Plaintiff B’s claim would be dismissed for lack of subject matter jurisdiction.

Discretionary Dismissal

Even if a court can exercise jurisdiction over an insufficient claim through supplemental jurisdiction, they are not required to. A court may still dismiss the insufficient claim 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.

– 28 USC § 1367(c)(1)-(4)

As an important note, the district court judge cannot dismiss any claims upon which there is original jurisdiction; that is, jurisdiction obtained through federal question or diversity jurisdiction.

A great example of this principle is in Szendrey-Ramos v. First Bancorp, 512 F. Supp. 2d 81 (Puerto Rico 2007). In Szendrey-Ramos, the plaintiff was the former general counsel for the defendant. After being alerted of several potential ethic issues with the company, she conducted an investigation into the issues. These investigated resulted in the plaintiff losing her job, with no severance options. She filed three state law claims and one federal claim. The federal claim was a Title VII claim for gender discrimination and retaliation. The state claims were for defamation, wrongful discharge, and violations of the Puerto Rico Constitution. Because the state law claims outnumbered the federal claims in both quantity and complexity, the state law claims were dismissed under 28 USC § 1367(c)(1)-(2).

Case Briefs

United Mine Workers v. Gibbs

383 U.S. 715 (1966).

Question

Can a state law claim be heard in federal courts when the parties are not diverse if it is attached to a federal claim? If so, under what circumstances?

Rule

When a plaintiff makes a federal claim, they can attach state claims if it one where the claim would ordinarily be expected to be resolved together. However, just because a claim can be heard, doesn’t mean it can. There are several factors that federal courts can use to their discretion to see if they want to dismiss the state claim.

Holding

The trial court was not wrong to hear the state claim. Reversed for other reasons.

Facts

Plaintiff is a superintendent of a mine in Tennessee. He is suing the United Mine Workers union in Tennessee. When workers from the union were fired from the closing of a mine, this superintendent was assigned to open a new mine with workers from a different union. The members of this union were furious, believing that they should have gotten their jobs back for the new opening. They prevented the opening of the mine and prevented the superintendent from fulfilling his contract. Thus, the superintendent was fired, and he lost several other jobs.

He sued the Union for violating federal law (should have taken your issues with the owner of the mine, not with me), and a state claim for interference with his contract.

The case was tried and a verdict awarded for the plaintiff in federal district court. The trial judge then dismissed the federal claim and the state claim.

Analysis

The judge was not wrong to hear the state claim in the federal court. The reason why a federal judge can hear state claims attached to a federal claim (as a single case) is to take into account “considerations of judicial economy, convenience, and fairness to litigants.” In other words, it would seem a little extreme to dismiss state claims that are tied to a federal claim because then plaintiffs would always try and resolve federal issues in state courts.

However, judges still have discretion to determine whether they will hear a case. For example:

• If a federal claim drops out early, it might make sense to dismiss the state claim so it can be heard in a state court.
• If the state issues predominate the federal claim, it would make sense to hear it in a state court.
• The federal courts are to interpret state law, so if a state law is unclear, it would make sense for a state court to determine what the law is.
• Hearing state cases in state courts and federal claims in federal courts could lead to less jury confusion.

There may be other reasons, but these are the ones listed in the opinion.

Szendrey-Ramos v. First Bancorp

512 F. Supp. 2d 81 (Puerto Rico 2007).

Szendrey-Ramos is the plaintiff along with her husband. They filed suits against several corporate officials as well as the corporation.

Question

Can the state law claims be pended onto the federal claim? Which claims should be heard by a federal court?

Rule

§ 1367 allows state law claims to be added to a federal claim as long as they come from the same nucleus of a case. However, the federal courts have the discretion to disallow the claims if they fall under one of the categories outlined in 1367(c)

1. Complex state law
2. State law claims predominate over federal claims
3. District court dismisses all federal claims
4. Other compelling reasons to deny jurisdiction

Holding

State law claims dismissed. Federal claim dismissed against individuals. Motion to dismiss another federal claim against corporation fails.

Facts

The plaintiff was the former general counsel for the defendant. After being alerted of several potential ethic issues with the company, she conducted an investigation into the issues. She presented those findings to the company and outside counsel. Other investigations continued which resulted in the plaintiff losing her job. She was offered no severance package while others were. Also, when the SEC started conducting an investigation, the company blamed the issues on the plaintiff. The plaintiff was not provided an opportunity to defend herself.

She filed several state law claims (3) and one federal claim (against both the individuals and the corporation). The federal claim was a Title VII claim for gender discrimination and retaliation. The state claims were for defamation, wrongful discharge, and violations of the Puerto Rico Constitution.

Analysis

The state law claims are to be dismissed because of rule 1367(c)(1)-(2). The predominant claims are the state claims. They are separate and distinct from the federal claims and thus should be litigated in a state court. Additionally, the state law claims deal with complex state issues that would be best resolved in a state court. Therefore, these cases should be dismissed without prejudice so they can be refiled there.

As for the federal claims, Title VII does not allow for a plaintiff to sue individuals. Therefore, that claim is dismissed but the Title VII claim against the corporation can still be heard in the federal court.

This case relates solely to § 1367(c) which allows the court to dismiss a case. This case is simply an example of that application. It is important to note that a court can only dismiss supplemental claims, not diversity claims.