Exxon Mobil Corp v Allapattah Forum

[jeeptiger09]

Can someone help me out and explain the opinion written in Exxon v. Allapattah, I'm a little confused about supplemental jurisdiction--Thanks!

[kalvano]

http://www.oyez.org/cases/2000-2009/2004/2004_04_70

Facts of the Case:

In 1991 about 10,000 Exxon dealers sued Exxon Corporation in federal court, alleging that the corporation had engaged in an extensive scheme to overcharge them for fuel. A jury found in favor of the plaintiffs, but the District Court judge certified the case for review on the question of supplemental jurisdiction. Some of the multiple plaintiffs in the case had claims that did not meet the minimum amount necessary to qualify for federal diversity jurisdiction (currently $75,000). In 1990 Congress had enacted 28 U.S.C. Section 1367, overturning Finley v. United States, which had narrowly interpreted federal courts' power to confer supplementary jurisdiction on related claims. The question for the District Court was whether Section 1367 also overturned Zahn v. International Paper Co., which ruled that each plaintiff had to separately meet the minimum amount-in-controversy requirement. The District Court accepted the plaintiffs' argument that Section 1367 gave federal courts power to exercise supplemental jurisdiction over plaintiffs with related claims, even if some plaintiffs' claims did not meet the required amount. On appeal, the Eleventh Circuit Court of Appeals upheld the District Court's ruling on supplemental jurisdiction. However, this ruling conflicted with the ruling of another Circuit, which had taken the opposite view of Section 1367's scope (see Ortega v. Star-Kist Foods, No. 04-79). The Supreme Court granted certiorari and consolidated the cases for argument.
Question:

In a civil action where one plaintiff's claim satisfies the minimum amount-in-controversy requirement for federal diversity jurisdiction, and another plaintiff's related claim does not, does 28 U.S.C. Section 1367 allow federal courts to exercise supplemental jurisdiction over the claim that is less than the required amount?
Conclusion:

Yes. In a 5-4 decision, the Court ruled that as long one plaintiff meets the amount-in-controversy requirement for federal jurisdiction, Section 1367 authorizes federal courts to exercise supplemental jurisdiction over related claims even if they do not meet the requirement. The majority opinion by Justice Anthony Kennedy held that courts only need to determine whether they have original jurisdiction over one of the claims in a case. If they do, courts can then decide to extend supplemental jurisdiction to the other related claims. The Justices ruled that to require each claim in a civil action to meet the requirement would be "inconsistent with the whole notion of supplemental jurisdiction." The Court based its ruling on the "unambiguous[]" text of the statute, saying "the authoritative statement is the statutory text, not the legislative history or any other extrinsic material." Justice Stevens, joined by Justice Breyer, wrote a dissenting opinion arguing that the Court should have consulted the legislative history of Section 1367. Justice Ginsburg, joined by Justices Stevens, O'Connor, and Breyer, wrote a dissent arguing for a narrower interpretation of Section 1367 that would not overturn Zahn.

Decisions

Decision: 5 votes for Allapattah Services, 4 vote(s) against

http://www.4lawnotes.com/showthread.php?t=952

US Supreme Court (2005)
Prepared by Dirk

Exxon Facts:
-In these two suits, the issue is raised of whether one party who meets the amount in controversy requirement can suffice to allow all others in the case who don’t meet the amount to be joined.
- In Exxon, the suit was brought by 10,000 dealers who believed they were being systematically overcharged for fuel purchases from Exxon.
Exxon procedure:
-The dealers brought their case to Federal district court for the Northern District of Florida.
-The plaintiffs evoked § 1332(a) for diversity jurisdiction.
-The jury found for the plaintiffs,
-The District Court then certified the case for interlocutory review, asking whether it had correctly applied § 1367 supplemental jurisdiction over the claims of class members who did not meet the amount in controversy requirement.
-The court of appeals for the 11th circuit upheld the district court’s usage of § 1367, explaining that the section clearly provides federal authority when some members of a class have not met the amount in controversy requirement (Rule 23 (class action) is not excluded in § 1367), as long as one member meets the requirement.
Star-Kist Facts:
-Ortega brought suit after she sustained an unusually severe cut on her finger from a tuna can lid. Her family joined the suit, seeking damages for emotional distress and medical payments.
-The girl, but not her family had met the requisite monetary requirements of the limit.
Star-Kist Procedure:
-Ortega brought suit in the federal district court for the district of Puerto Rico who granted summary judgment to Star-Kist, finding that the plaintiffs did not meet the amount-in-controversy requirement.
-Ortega appealed to the 1st Circuit Court of Appeals, who ruled that the girl did meet the amount requirements, but since her family did not, the court did not have supplemental jurisdiction over the families claims.
-The 1st circuit ruled that § 1367 stated that in a diversity case, original jurisdiction is lacking if one party fails to meet the amount in controversy requirement.



Issue:
-Under § 1367, does a federal court have supplemental jurisdiction over all parties under Rules 20 and 23 of the FRCP, when all parties contained in the suit do not meet the amount in controversy requirements of §1332?

Holding:
-Yes. The federal courts have supplemental jurisdiction over all claims as long as no other jurisdictional requirements are violated when the issue is amount in controversy.
Reasoning:
-The court establishes its decision in sections:
a. The exception rules of subsection (b)
1. Rules 19 and 24 are disallowed because it would give plaintiffs a loophole in which to enjoin non-diverse defendants.
2. Nothing in the subsection voids those joined in 20 (plaintiffs) or 23.
b. Indivisibility theory:
1. This theory states that a court lacks original jurisdiction over a case unless every claim in the complaint falls under federal jurisdiction.
A. This is inconsistent with the theory of supplemental jurisdiction.
i. This would overrule Gibbs, and runs counter to the idea that a court can split a claim and hear those parts relevant to federal jurisdiction and remand those that are not.
c. Indivisibility for diversity but not federal question cases:
1. The language in § 1331 and § 1332 have to mean the same thing.
A. They have identical phrases
d. Contamination theory
1. This can work in the diversity requirement sometimes, however it makes little sense in the amount requirement.
A. The fear of bias is important for diversity, therefore you need uniformity of parties. With amount in controversy however, there is nothing lost by one party being under the amount.
e. The court has established a precedent similar to this in removal jurisdiction:
1. In Chicago v. Surgeons, the court ruled that a case can be removed if it contains a federal and a state claim, having federal jurisdiction over the fed. Claim, and supplemental jurisdiction over the state claim. (This contradicts the indivisibility claim again).
f. Claims brought can fall under supp. jurisdiction but not joined parties.
1. § 1367, in overruling Finley, established that parties can be joined and the court can have supplemental jurisdiction.
g. There is conflict between allowing cases in under Rule 20 but not 19.
1. Allowing 19 would allow plaintiffs to join non-diverse plaintiffs who would not be allowed at the time of filing.
2. 20 may have been overlooked, if that is the case, then it is up to the legislature to fix it, not the courts.
A. Nothing in the text prohibits addition through 20; permissive joinder.
h. The argument that § 1367 is ambiguous.
1. It is not ambiguous, and reading it any other way is incorrect.

[uwb09]

From what I gather, in a suit, once the minimum balance has been met to clear federal jurisdiction ($75K), people/entities' claims can be added to the suit, without destroying federal jurisdiction, even if those extra individual claims don't meet the minimum requirement on their own standing.

This is because of the rule congress made, can't remember the exact #, 1367 I think?

[Renzo]

Allapattah says that as long as you have a plaintiff with a claim that meets the federal jurisdictional amount, you can hang additional claims that would otherwise not get into federal court (because of the amount in controversy) off of it without destroying the federal jurisdiction.

[capitalacq]

majority: LOL @ ZAHN!
stevens: but what does it mean??? do i exist?

[SwampRat88]

How did 10,000 plaintiff's not violate complete diversity against the defendant(complete diversity means no P may be the same citizen of the same state as any D). Is Exxon not incorporated and/or not have a principal place of business in the United States?

Confused...

[random5483]

This is all the information I have for the case. I had a one sentence rule statement from this for my outline.

6) Exxon:
i) Allapattah (Plaintiff) brought a diversity action of about 10k car dealers that claimed they had been systematically overcharged by the defendant (Exxon). The amount in controversy requirement was met by some plaintiffs and not all.

ii) 1367(b) prohibition does not apply to minimum amount in controversy. Essentially, every claim does not need to meet the minimum amount in controversy. However judges do have some discretion. Basically, if one claim meets the amount in controversy and 29 supplemental claims do not, the judge can likely use his discretion to remand the other 29 claims to the state courts using the 1367(c) exception.

iv) Indivisibility theory - court must have subject matter jurisdiction over every claim. Court rejected this with the argument based on the fact that given the indivisibility theory there would have been no room to assert supplemental jurisdiction over the supplemental claims in Gibbs.

v) Contamination Theory - Court concedes the theory can sometimes make sense. Having a non diverse party on either side could contaminate the requirement of complete diversity on both sides. But the issue here involves the minimum amount of controversy, and the purpose of the amount in controversy is to set a threshold amount for federal claims. Therefore, court rejects the contamination theory.

iii) Dissent in Exxon wants to retain traditional non-aggregation rules for multiple plaintiffs.

[SwampRat88]

Appreciate the help, but I still don't understand how diversity could be possible in this case with 10k plaintiffs.

I must be missing something really obvious.

[Renzo]

Appreciate the help, but I still don't understand how diversity could be possible in this case with 10k plaintiffs.

I must be missing something really obvious.

It's in the opinion, dood: the parties in Allapattah were completely diverse. And now, since the Class Action Fairness Act, they only need minimum diversity, not complete diversity.

[random5483]

Diversity Jurisdiction generally requires complete diversity (one of the plaintiffs or defendants should be a citizen of the same state) and >75k amount in controversy. In some instances, Diversity jurisdiction only requires minimal diversity (Congress recently expanded the reach of diversity jurisdiction to provide a federal forum to certain large scale, state law, multiparty actions in which one plaintiff is a citizen of a state different from that of one defendant).

Allapatah deals with supplemental jurisdiction, not diversity jurisdiction. Supplemental jurisdiction is further explained in Section 1367. When you have subject matter jurisdiction based on diversity jurisdiction over the primary party, you have a lesser diversity requirement for any supplemental parties. The amount in controversy requirement is also changed. Rather than requiring every party to have >75k amount in controversy, Allapatah stands for the proposition that only one claim needs to meet the amount in controversy requirement (again, note this is supplemental jurisdiction NOT a pure diversity case).

Thus, under Allapatah if you have 50 plaintiffs each with a 2k suit against Exxon and 1 plaintiff with a 100k suit against Exxon, the trial judge has the DISCRETION to exert supplemental jurisdiction over all the claims. The judge could also choose to remand 50 of the 2k plaintiffs back to state court and only exert diversity jurisdiction over the 100k plaintiff.


Note: Hopefully I was not too confusing.

[Renzo]

Diversity Jurisdiction generally requires complete diversity (one of the plaintiffs or defendants should be a citizen of the same state) and >75k amount in controversy. In some instances, Diversity jurisdiction only requires minimal diversity (Congress recently expanded the reach of diversity jurisdiction to provide a federal forum to certain large scale, state law, multiparty actions in which one plaintiff is a citizen of a state different from that of one defendant).

Allapatah deals with supplemental jurisdiction, not diversity jurisdiction. Supplemental jurisdiction is further explained in Section 1367. When you have subject matter jurisdiction based on diversity jurisdiction over the primary party, you have a lesser diversity requirement for any supplemental parties. The amount in controversy requirement is also changed. Rather than requiring every party to have >75k amount in controversy, Allapatah stands for the proposition that only one claim needs to meet the amount in controversy requirement (again, note this is supplemental jurisdiction NOT a pure diversity case).

Thus, under Allapatah if you have 50 plaintiffs each with a 2k suit against Exxon and 1 plaintiff with a 100k suit against Exxon, the trial judge has the DISCRETION to exert supplemental jurisdiction over all the claims. The judge could also choose to remand 50 of the 2k plaintiffs back to state court and only exert diversity jurisdiction over the 100k plaintiff.

Or, as I said above, "the plaintiffs in Allapatah were completely diverse."