Civ Pro Question - Rule 20 Forum

[dedede]

Hey, I have a civ pro question that's been bothering me for a couple of hours, and I was hoping that the collective wisdom of TLS could help me out.

So, say A sues B in federal court, and jurisdiction is based on diversity. Now A wants to assert a claim arising from the same transaction/occurrence against C. A and C are diverse, but the amount in controversy in this particular claim is less than 75K. Would this be allowed?

Thanks in advance.

[dakatz]

Hey, I have a civ pro question that's been bothering me for a couple of hours, and I was hoping that the collective wisdom of TLS could help me out.

So, say A sues B in federal court, and jurisdiction is based on diversity. Now A wants to assert a claim arising from the same transaction/occurrence against C. A and C are diverse, but the amount in controversy in this particular claim is less than 75K. Would this be allowed?

Thanks in advance.

I def don't think so. The whole transaction/occurrence thing doesn't really matter when you are talking about various parties. For example, if I get into a car accident with 3 other cars, I can sue all 3 individually if I like, even though everything is related to the same T/O. The "same T/O" test is only going to bar future claims from being brought against the same parties.

[jas5076]

dakatz is correct nope you can't do that in fed. court, in this case you would need supplemental jurisdiction (1367) and one of the rules that the things that federal court won't have supplemental jurisdiction over is rule 20..

[worldwithoutend]

akatz is correct nope you can't do that in fed. court, in this case you would need supplemental jurisdiction (1367) and one of the rules that the things that federal court won't have supplemental jurisdiction over is rule 20..

Editing this post so it doesn't cause confusion...

1367(b) does allow jurisdiction over parties joined by rule 20. But, as pointed out below, because it's a party joined as a defendant, rather than a plaintiff tagging along, Kroger controls and amount in controversy requirement must be met.

[dakatz]

akatz is correct nope you can't do that in fed. court, in this case you would need supplemental jurisdiction (1367) and one of the rules that the things that federal court won't have supplemental jurisdiction over is rule 20..

I'm not sure that's right.

Section 1367(b) provides that in any civil action founded solely on diversity of citizenship, the district courts shall not have jurisdiction over claims against persons made parties under Rule 20 "when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332," ie, complete diversity.

In your hypo, adding C as a defendant would not destroy diversity. The claim does form part of the same case or controversy, as required by 1367(a), so the courts would have jurisdiction.

As long as both claims arise out of the same transaction or occurrence and give rise to a common question of law or fact (Rule 20) - which they do - and meet the jurisdiction requirement (1367) - which they do, joinder is proper.

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met. They essentially codified Owen v. Kroger in making 1367b, and it was specifically meant to prevent situations like these from occurring, in which a P can bring a suit in "through the backdoor" that otherwise wouldn't be allowed in federal court.

[worldwithoutend]

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met.

Forgot to address that. Take a look at Exxon Mobil Corp. v. Allapattah Services. It's enough that the diversity requirements are met.

[5ky]

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met.

Forgot to address that. Take a look at Exxon Mobil Corp. v. Allapattah Services. It's enough that the diversity requirements are met.

No, that case is in regards to two separate Plaintiffs. In the OP's hypo, A is the plaintiff, and is bringing claims against two separate defendants. Kroger is controlling here.

[worldwithoutend]

Oh yeah, you're right. My mistake.

Will amend post to avoid confusion.

[dakatz]

Oh yeah, you're right. My mistake.

Will amend post to avoid confusion.

No worries. Lol, I don't even know why I'm thinking about this crap now, given that my civ pro exam was this morning, and my books should all be burned and out of my mind at this point. Worst part was, my favorite issues (Erie and SMJ) weren't even on the test at all

[vanwinkle]

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met.
[/quote
Forgot to address that. Take a look at Exxon Mobil Corp. v. Allapattah Services. It's enough that the diversity requirements are met.

No, that case is in regards to two separate Plaintiffs. In the OP's hypo, A is the plaintiff, and is bringing claims against two separate defendants. Kroger is controlling here.

Wait. Kroger was about the complete diversity requirement, not the $75K requirement, right?

[dakatz]

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met.
[/quote
Forgot to address that. Take a look at Exxon Mobil Corp. v. Allapattah Services. It's enough that the diversity requirements are met.

No, that case is in regards to two separate Plaintiffs. In the OP's hypo, A is the plaintiff, and is bringing claims against two separate defendants. Kroger is controlling here.

Wait. Kroger was about the complete diversity requirement, not the $75K requirement, right?

Yes, Kroger was about complete diversity, but the situations all fall under the same principle. In Kroger, D brought in a 3rd party under Rule 14. P brought a claim against this new party, even though they were citizens of the same state. The court didn't want to allow this type of claim through the backdoor. The same would have happened if the amount in controversy hadn't been met between the parties, even if they were from different states. The point is that the court didn't want the requirements of 1332 going out the window, whether we are talking citizenship, or amount in controversy. At least, this was my understanding of the situation.

[GeePee]

This isn't correct, and the bolded part is why you reached the opposite conclusion. The jurisdictional requirements of 1332 are not just complete diversity. 1332 also requires amount in controversy to be met. A is suing both parties separately, so he must claim 75K from each. Doesn't matter what state of citizenship A or C is from if the amount in controversy isn't met.
[/quote
Forgot to address that. Take a look at Exxon Mobil Corp. v. Allapattah Services. It's enough that the diversity requirements are met.

No, that case is in regards to two separate Plaintiffs. In the OP's hypo, A is the plaintiff, and is bringing claims against two separate defendants. Kroger is controlling here.

Wait. Kroger was about the complete diversity requirement, not the $75K requirement, right?

Yes. The OP's hypo is an extension of Exxon that has never been decided in federal court. The stance that you take, in large part, depends on how you view Exxon: whether it was a matter of statutory interpretation and drafting that left out Rule 20, or whether policy controlled.

If statutory interpretation and drafting controls, then there may be a problem under 1367(b). Currently, the applicable rule for FRCP 19 is "Claims by plaintiffs against persons made parties under Rule 19" do not violate jurisdictional requirements under 1332. These requirements are two-fold: Complete diversity of parties, and AIC. If we assume, probably rationally, that this rule should also apply to rule 20, then Exxon passes the test anyway: the defendant is not made a party by this additional claim. The reason that we still require complete diversity is most likely because of Strawbridge, which has become a cornerstone of federal subject matter jurisdiction. This case, on the other hand, is by a plaintiff against a person made party under Rule 20, and although this is not specifically outlined in 1367(b), it may still not be allowable for the same reasons we deny claims under Rule 19.

On the other hand, if we look at the policy rationales for complete diversity and amount in controversy, we may be able to justify this manuever. The requirement of complete diversity is grounded in fairness: we want to allow a group of diverse defendants the option of litigating in Federal court because there has been a historically larger chance of discrimination against defendants from different states than the plaintiffs. On the other hand, the AIC requirement acts as a filter to make sure there is enough at stake in the lawsuit. If one claim has surpassed the $75,000 requirement, then we may consider that there is enough at stake overall to justify the claim living in Federal court, and that it would be more efficient to simply litigate all of the related claims at the same time. From this rationale, it makes sense to allow hanging of claims that do not meet the amount in controversy requirement even though they would violate 1332 on their own.

[vanwinkle]

Yes, Kroger was about complete diversity, but the situations all fall under the same principle. In Kroger, D brought in a 3rd party under Rule 14. P brought a claim against this new party, even though they were citizens of the same state. The court didn't want to allow this type of claim through the backdoor. The same would have happened if the amount in controversy hadn't been met between the parties, even if they were from different states. The point is that the court didn't want the requirements of 1332 going out the window, whether we are talking citizenship, or amount in controversy. At least, this was my understanding of the situation.

I don't think this is true, or at least, I don't think it's true today. Here's the analysis of Allapattah (2005) which interpreted the 1990 version of § 1367 (which codified but also supplanted Kroger):

Although district courts may not exercise jurisdiction absent a statutory basis, once a court has original jurisdiction over some claims in an action, it may exercise supplemental jurisdiction over additional claims arising from the same case or controversy. See Mine Workers v. Gibbs, 383 U.S. 715. This expansive interpretation does not apply to §1332’s complete diversity requirement, for incomplete diversity destroys original jurisdiction with respect to all claims, leaving nothing to which supplemental claims can adhere. But other statutory prerequisites, including the federal-question and amount-in-controversy requirements, can be analyzed claim by claim.

When a well-pleaded complaint has at least one claim satisfying the amount-in-controversy requirement, and there are no other relevant jurisdictional defects, the district court, beyond all question, has original jurisdiction over that claim. A court with original jurisdiction over a single claim in the complaint has original jurisdiction over a “civil action” under §1367(a), even if that action comprises fewer claims than were included in the complaint. Once a court has original jurisdiction over the action, it can then decide whether it has a constitutional and statutory basis for exercising supplemental jurisdiction over other claims in the action. Section 1367(b), which contains exceptions to §1367(a)’s broad rule, does not withdraw supplemental jurisdiction over the claims of the additional parties here. In fact, its exceptions support this Court’s conclusion.

http://www.law.cornell.edu/supct/html/04-70.ZS.html

The language seems to indicate that in any situation where the amount-in-controversy is sufficient to support one claim, then the court has original jurisdiction, and can have supplemental jurisdiction on all "same case or controversy" claims regardless of the amount-in-controversy requirement. The actual holding of the case only pertains to multiple P's, but the language and reasoning (especially the part that treats amount-in-controversy separately than the complete-diversity requirement) indicates that this would be just as true for a single P suing two D's.

Apparently the lower courts haven't all agreed on which approach to take, since Allapattah, when one P does try to do this. However, generally, if you 1) have original jurisdiction with all elements (including amount-in-controversy) and then 2) try to add an additional claim that isn't barred by § 1367(b) (and the language above indicates the amount-in-controversy isn't intended to be a bar for supplemental claims), then you can add the supplemental claim.

[dakatz]

I think I may be out of the loop since I never read the Exxon case. I don't doubt that you guys are right given my knowledge of these supplemental jurisdictional issues is pretty limited just to the Gibbs and Kroger cases and what we learned about 1367 itself.

[de5igual]

Yes, Kroger was about complete diversity, but the situations all fall under the same principle. In Kroger, D brought in a 3rd party under Rule 14. P brought a claim against this new party, even though they were citizens of the same state. The court didn't want to allow this type of claim through the backdoor. The same would have happened if the amount in controversy hadn't been met between the parties, even if they were from different states. The point is that the court didn't want the requirements of 1332 going out the window, whether we are talking citizenship, or amount in controversy. At least, this was my understanding of the situation.

I don't think this is true, or at least, I don't think it's true today. Here's the analysis of Allapattah (2005) which interpreted the 1990 version of § 1367 (which codified but also supplanted Kroger):

Although district courts may not exercise jurisdiction absent a statutory basis, once a court has original jurisdiction over some claims in an action, it may exercise supplemental jurisdiction over additional claims arising from the same case or controversy. See Mine Workers v. Gibbs, 383 U.S. 715. This expansive interpretation does not apply to §1332’s complete diversity requirement, for incomplete diversity destroys original jurisdiction with respect to all claims, leaving nothing to which supplemental claims can adhere. But other statutory prerequisites, including the federal-question and amount-in-controversy requirements, can be analyzed claim by claim.

When a well-pleaded complaint has at least one claim satisfying the amount-in-controversy requirement, and there are no other relevant jurisdictional defects, the district court, beyond all question, has original jurisdiction over that claim. A court with original jurisdiction over a single claim in the complaint has original jurisdiction over a “civil action” under §1367(a), even if that action comprises fewer claims than were included in the complaint. Once a court has original jurisdiction over the action, it can then decide whether it has a constitutional and statutory basis for exercising supplemental jurisdiction over other claims in the action. Section 1367(b), which contains exceptions to §1367(a)’s broad rule, does not withdraw supplemental jurisdiction over the claims of the additional parties here. In fact, its exceptions support this Court’s conclusion.

http://www.law.cornell.edu/supct/html/04-70.ZS.html

The language seems to indicate that in any situation where the amount-in-controversy is sufficient to support one claim, then the court has original jurisdiction, and can have supplemental jurisdiction on all "same case or controversy" claims regardless of the amount-in-controversy requirement. The actual holding of the case only pertains to multiple P's, but the language and reasoning (especially the part that treats amount-in-controversy separately than the complete-diversity requirement) indicates that this would be just as true for a single P suing two D's.

Apparently the lower courts haven't all agreed on which approach to take, since Allapattah, when one P does try to do this. However, generally, if you 1) have original jurisdiction with all elements (including amount-in-controversy) and then 2) try to add an additional claim that isn't barred by § 1367(b) (and the language above indicates the amount-in-controversy isn't intended to be a bar for supplemental claims), then you can add the supplemental claim.

example 8 on p 326 in the e&e seems to state otherwise. ugh.

[worldwithoutend]

Also in the opinion:

Nothing in the text of § 1367(b), however, withholds supplemental jurisdiction over the claims of plaintiffs permissively joined under Rule 20 (like the additional plaintiffs in No. 04-79) or certified as class-action members pursuant to Rule 23 (like the additional plaintiffs in No. 04-70). The natural, indeed the necessary, inference is that § 1367 confers supplemental jurisdiction over claims by Rule 20 and Rule 23 plaintiffs. This inference, at least with respect to Rule 20 plaintiffs, is strengthened by the fact that § 1367(b) explicitly excludes supplemental jurisdiction over claims against defendants joined under Rule 20.

Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 560, 125 S. Ct. 2611, 2621, 162 L. Ed. 2d 502 (2005)

So, I guess it doesn't expressly overrule Kroger on this account, hence the confusion.

Thanks for looking into that, vanwinkle.

[vanwinkle]

If this did come up on an exam, it'd be a great place to make a policy argument. Make sure you make clear the USSC has never ruled on the issue and that's why it's uncertain. You could point out the literal language of the statute, that in Allapattah the Court majority said 1367(b) wasn't referring to amount-in-controversy, discuss whether the fact pattern you're facing would potentially destroy "complete diversity", and end by noting that a court that strictly interprets the language could go one way and one that extends the logic of Allapattah to a single-P situation might go the other.

Also, keep in mind that the courts do prefer to minimize overlap and redundancy. If hearing a supplemental case seems more efficient than making the P bring two separate cases in separate courts, and you care about the P's right to a federal forum for the claim that is over $75K, then you'd want him to have the freedom to bring related claims with it. On the other hand, they also live reducing their caseload when they can, which could push them the other way.

This sounds actually like the kind of policy question a prof might throw you on exam day, to see just how much you can apply those underlying principles of the course.