1367(b) Short Hypo

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SwampRat88
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1367(b) Short Hypo

Postby SwampRat88 » Wed Oct 12, 2011 12:19 pm

From casebook: "P1, from State Alpha, sues D1 and D2, both of whom are from State Beta, in federal court. P's claim against D1 is for 100k, while her claim against D2 is only for 50k." Is Supplemental JX permissible? (Assume that the common nucleus of operative fact is met.)

I have in my notes that it is not, but not sure why. Any help appreciated.

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Kilpatrick
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Re: 1367(b) Short Hypo

Postby Kilpatrick » Wed Oct 12, 2011 12:27 pm

It's been awhile since I've thought about CivPro so others feel free to correct me but I think

1367b applies because the claim against D2 is based solely on diversity (assuming there's no fed question, it doesn't say). 1367b states that fed court doesn't have jurisdiction over persons made a party by Rule 20 (which is what D2 would have to be) when it would be inconsistent with 1332, and since D2 doesn't meet the amount in controversy requirement, it would be inconsistent.

SwampRat88
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Re: 1367(b) Short Hypo

Postby SwampRat88 » Wed Oct 12, 2011 12:47 pm

Kilpatrick wrote:It's been awhile since I've thought about CivPro so others feel free to correct me but I think

1367b applies because the claim against D2 is based solely on diversity (assuming there's no fed question, it doesn't say). 1367b states that fed court doesn't have jurisdiction over persons made a party by Rule 20 (which is what D2 would have to be) when it would be inconsistent with 1332, and since D2 doesn't meet the amount in controversy requirement, it would be inconsistent.


Thanks, that makes sense to me.

One more question, assume once again that there is a common nucleus of operative fact:

"P1 and P2, both from State Alpha, sue D, from State Beta, in federal court. P1 then files a 100k cross-claim against P2. Would the majority allow supplemental JX?

My notes are mostly gibberish, but I have the following: The case goes to federal court, and 1367b applies because the claim by P1 and P2 against D2 is based solely on diversity. However, this is a cross-claim. According to my notes this claim is fine under supplemental JX, because P2 is not joinED under Rule 20, but instead joinS. The rule is that multiple P's may NOT be joinED under Rule 20.

Can anyone explain the answer to this hypothetical more clearly?

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Kilpatrick
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Re: 1367(b) Short Hypo

Postby Kilpatrick » Wed Oct 12, 2011 1:15 pm

Now we're definitely venturing out of territory I remember from last semester. Hopefully somebody else can come in and help you out :)

SwampRat88
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Re: 1367(b) Short Hypo

Postby SwampRat88 » Wed Oct 12, 2011 2:10 pm

Kilpatrick wrote:Now we're definitely venturing out of territory I remember from last semester. Hopefully somebody else can come in and help you out :)


Thanks for your help on the first question. Anyone out there have any ideas about the second?

thetortfeasor
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Re: 1367(b) Short Hypo

Postby thetortfeasor » Thu Oct 13, 2011 12:06 pm

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Last edited by thetortfeasor on Thu Oct 13, 2011 3:39 pm, edited 1 time in total.

StyrofoamWar
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Re: 1367(b) Short Hypo

Postby StyrofoamWar » Thu Oct 13, 2011 2:24 pm

thetortfeasor wrote:For your first hypo there is no supplemental jurisdiction not because the amount in controversy is not met but because adding the df would destroy complete diversity between the parties. Since the case is in federal court solely on diversity destroying diversity would take the entire case out. That is also why you cannot join the party later in the suit. People would abuse supplemental if they could make diversity and then add a non diverse party with no consequences to the original jurisdiction. If the entire case before was based on federal question then wouldn't be a problem as long as the secondclaim came from the same operative facts. The amount requirement has been held to be irrelevant for the second claim if all other factors are met. The purpose of the legislature was to prevent destroying complete diversity. So that is a little nuance. Sorry for typos. Wrote from my phone. Too lazy to correct


The quoted material is very very wrong.

Courts require complete diversity AS BETWEEN PLAINTIFFS AND DEFENDANTS. With respect to diversity, in OP's post, P was from State 1 (say Nevada), and both of the D's were from state 2 (say Utah). P could join a million defendants from state 2 (Utah), provided that he doesn't attempt to join any from his own State 1 (Nevada). The fact that both defendants are from the same state does NOT destroy diversity with respect to P's initial suit.

However, P has a problem with amount in controversy. He can meet it with respect to Defendant #1, but not with respect to defendant #2. Accordingly the court will not have original jurisdiction over P's claim against D2 (given that it is not a federal question, nor does the P v. D2 claim satisfy BOTH diversity [okay here] AND amount in controversy [nope]). Therefore, if the court is to hear the case, P will need to establish a claim under 28 U.S.C. § 1367(b) [supplemental jdx].

1367(a) says that a court will have jurisdiction over cases arising out of the same case/controversy. Here, OP states that it this is satisfied. However, the court must also analyze 1367(b) to see if there are any restrictions. 1367(b) says that, when a case is founded solely on § 1332 (diversity jdx), a federal court does NOT have jurisdiction to hear a claim by a plaintiff against any party proposed to be joined under Rule 19 or Rule 20 (permissive and compulsory joinder) if hearing that claim would be incompatible with the jurisdictional requirements under 1332.

Here, we don't have enough facts to determine whether this is a compulsory or a permissive joinder situation. However, the distinction is irrelevant, given that 1367(b) explicitly forbids hearing of a claim against a party brought under EITHER FRCP 19 or 20, if the requirements of 1332 are not met.

1332 requires diversity of citizenship between plaintiff and defendant, as well as amount in controversy. Here, P (utah) vs D2 (nevada) satisfies the diversity of citizenship requirement. However, P vs D2 is only for $50,000, which is less than the AIC requirement of >$75,000. Accordingly, the court cannot establish supplemental jdx over P's claim against D2 because the action is founded solely on 1332 and 1367(b) explicitly forbids the hearing of a claim by a plaintiff against a party joined under Rule 19 or 20 when the action is founded on 1332 and the requirements of 1332 are not satisfies as between P and D2.

StyrofoamWar
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Re: 1367(b) Short Hypo

Postby StyrofoamWar » Thu Oct 13, 2011 2:41 pm

SwampRat88 wrote:"P1 and P2, both from State Alpha, sue D, from State Beta, in federal court. P1 then files a 100k cross-claim against P2. Would the majority allow supplemental JX?

My notes are mostly gibberish, but I have the following: The case goes to federal court, and 1367b applies because the claim by P1 and P2 against D2 is based solely on diversity. However, this is a cross-claim. According to my notes this claim is fine under supplemental JX, because P2 is not joinED under Rule 20, but instead joinS. The rule is that multiple P's may NOT be joinED under Rule 20.

Can anyone explain the answer to this hypothetical more clearly?


I don't think you have enough facts here. If P2 is joinING of his own accord as you stated rather than being joinED, this would need to be a situation involving intervention under FRCP 24 (in which an outside plaintiffs joins of his own accord and effectively butts his way into a lawsuit he wasn't initially involved in) rather than a situation involving permissive joinder under FRCP 20 or compulsory joinder under FRCP 19. 1367(b) does NOT permit a court to hear claims by persons proposed to be joined as plaintiffs under FRCP 24 if the requirements of 1332 diversity are not met.

Here, there is not diversity between the plaintiffs and if hte plaintiff is joinING of his own accord as you mentioned, it is an FRCP 24 intervention motion, and the court should deny to hear the claim because doing so would destroy diversity and be inconsistent with the requirements of 1367/1332.

If it was a Rule 19 compulsory joinder issue, same thing goes.

Interesting aside: 1367(b) is conspicuously silent as to FRCP 20 permissive joinder. Check out the Supreme Court case of Allapattah to get a discussion of it.

thetortfeasor
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Re: 1367(b) Short Hypo

Postby thetortfeasor » Thu Oct 13, 2011 3:17 pm

Reading comp fail disregard my response. Sorry all

SwampRat88
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Re: 1367(b) Short Hypo

Postby SwampRat88 » Thu Oct 13, 2011 5:47 pm

Thank you for that excellent analysis!

StyrofoamWar wrote:
thetortfeasor wrote:For your first hypo there is no supplemental jurisdiction not because the amount in controversy is not met but because adding the df would destroy complete diversity between the parties. Since the case is in federal court solely on diversity destroying diversity would take the entire case out. That is also why you cannot join the party later in the suit. People would abuse supplemental if they could make diversity and then add a non diverse party with no consequences to the original jurisdiction. If the entire case before was based on federal question then wouldn't be a problem as long as the secondclaim came from the same operative facts. The amount requirement has been held to be irrelevant for the second claim if all other factors are met. The purpose of the legislature was to prevent destroying complete diversity. So that is a little nuance. Sorry for typos. Wrote from my phone. Too lazy to correct


The quoted material is very very wrong.

Courts require complete diversity AS BETWEEN PLAINTIFFS AND DEFENDANTS. With respect to diversity, in OP's post, P was from State 1 (say Nevada), and both of the D's were from state 2 (say Utah). P could join a million defendants from state 2 (Utah), provided that he doesn't attempt to join any from his own State 1 (Nevada). The fact that both defendants are from the same state does NOT destroy diversity with respect to P's initial suit.

However, P has a problem with amount in controversy. He can meet it with respect to Defendant #1, but not with respect to defendant #2. Accordingly the court will not have original jurisdiction over P's claim against D2 (given that it is not a federal question, nor does the P v. D2 claim satisfy BOTH diversity [okay here] AND amount in controversy [nope]). Therefore, if the court is to hear the case, P will need to establish a claim under 28 U.S.C. § 1367(b) [supplemental jdx].

1367(a) says that a court will have jurisdiction over cases arising out of the same case/controversy. Here, OP states that it this is satisfied. However, the court must also analyze 1367(b) to see if there are any restrictions. 1367(b) says that, when a case is founded solely on § 1332 (diversity jdx), a federal court does NOT have jurisdiction to hear a claim by a plaintiff against any party proposed to be joined under Rule 19 or Rule 20 (permissive and compulsory joinder) if hearing that claim would be incompatible with the jurisdictional requirements under 1332.

Here, we don't have enough facts to determine whether this is a compulsory or a permissive joinder situation. However, the distinction is irrelevant, given that 1367(b) explicitly forbids hearing of a claim against a party brought under EITHER FRCP 19 or 20, if the requirements of 1332 are not met.

1332 requires diversity of citizenship between plaintiff and defendant, as well as amount in controversy. Here, P (utah) vs D2 (nevada) satisfies the diversity of citizenship requirement. However, P vs D2 is only for $50,000, which is less than the AIC requirement of >$75,000. Accordingly, the court cannot establish supplemental jdx over P's claim against D2 because the action is founded solely on 1332 and 1367(b) explicitly forbids the hearing of a claim by a plaintiff against a party joined under Rule 19 or 20 when the action is founded on 1332 and the requirements of 1332 are not satisfies as between P and D2.

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Mce252
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Re: 1367(b) Short Hypo

Postby Mce252 » Thu Oct 13, 2011 6:36 pm

I'm pretty sure that the >75000 requirement is waived in compulsory counterclaims or joinders, as long as complete diversity remains and the original jurisdiction claim exceeds 75000.

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Tanicius
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Re: 1367(b) Short Hypo

Postby Tanicius » Thu Oct 13, 2011 6:45 pm

Mce252 wrote:I'm pretty sure that the >75000 requirement is waived in compulsory counterclaims or joinders, as long as complete diversity remains and the original jurisdiction claim exceeds 75000.


Yeah, joinder isn't even necessary to consider. All that matters is that the original claim was over 75,000 and complete diversity is maintained. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005) (LinkRemoved).

StyrofoamWar
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Re: 1367(b) Short Hypo

Postby StyrofoamWar » Thu Oct 13, 2011 7:25 pm

Tanicius wrote:
Mce252 wrote:I'm pretty sure that the >75000 requirement is waived in compulsory counterclaims or joinders, as long as complete diversity remains and the original jurisdiction claim exceeds 75000.


Yeah, joinder isn't even necessary to consider. All that matters is that the original claim was over 75,000 and complete diversity is maintained. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005) (LinkRemoved).


I really don't want to be a dick, but if you are referring to OP's first hypo of Plaintiff against D1(diversity of citizenship and AIC) & D2(w/ diversity but no AIC), then this is wrong too.

Allapattah allows the joining of additional PLAINTIFFS who do not individually meet the AIC requirement once you have at least one plaintiff who DOES meet the AIC. That is not the situation described by the OP, in which one plaintiff with AIC and diversity towards D1 is attempting to bootstrap in D2 where P's claim as to D2 does NOT meet the AIC.

See, e.g.: In Exxon Mobil Corp. v. Allapattah Services, Inc.,4 the Supreme Court confirmed that, “where the other elements of jurisdiction are present and at least one named plaintiff in the action satisfies the amount-in-controversy requirement,” § 1367 authorizes federal courts to exercise supplemental jurisdiction over the claims of additional plaintiffs in the same case or controversy, “even if those claims are for less than the jurisdictional amount specified in the statute setting forth the requirements for diversity jurisdiction.” Supplemental Jurisdiction-Amount in Controversy Requirement, 119 Harv. L. Rev. 317, 318 (2005)

The case you should be looking at (among others) is here:

In cases involving more than one defendant, a plaintiff may aggregate the amount claimed against multiple defendants “only if the defendants are jointly liable.” Middle Tennessee News Co., Inc. v. Charnel of Cincinnati, Inc., 250 F.3d 1077, 1081 (7th Cir. 2001). However, “if the defendants are severally liable, plaintiff must satisfy the amount in controversy requirement against each individual defendant.” Id.

By the plain, strict language of 1367(b), if an action is founded solely on 1332, the court has no authority to exercise supplemental jurisdiction over claims by parties that do not satisfy the requirements of 1332. Accordingly, here, the claim by P against D2, while completely diverse, does not meet the AIC requirement. The court does NOT have supplemental jurisdiction, absent additional facts as to the basis of liability between the defendants.

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Tanicius
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Re: 1367(b) Short Hypo

Postby Tanicius » Thu Oct 13, 2011 10:46 pm

StyrofoamWar wrote:
Tanicius wrote:
Mce252 wrote:I'm pretty sure that the >75000 requirement is waived in compulsory counterclaims or joinders, as long as complete diversity remains and the original jurisdiction claim exceeds 75000.


Yeah, joinder isn't even necessary to consider. All that matters is that the original claim was over 75,000 and complete diversity is maintained. See Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005) (LinkRemoved).


I really don't want to be a dick, but if you are referring to OP's first hypo of Plaintiff against D1(diversity of citizenship and AIC) & D2(w/ diversity but no AIC), then this is wrong too.

Allapattah allows the joining of additional PLAINTIFFS who do not individually meet the AIC requirement once you have at least one plaintiff who DOES meet the AIC.


You're not a dick for pointing out that important distinction. It's something I've never considered in detail in our civpro class so far - we had a multiple choice question on a midterm that involved pretty much the OP's exact hypothetical, and while the answer was "There is SMJ here," that may have been the professor's attempt to simplify an issue before getting more specific on joinder rules later in the semester.




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