Removal and Supplemental Jurisidction

§ 4.04 Removal Jurisdiction

A defendant may, pursuant to 28 U.S.C. § 1441, remove a civil action pending in a state court to a federal court if the federal would have had original jurisdiction over the plaintiff’s claim. The assertion of a defense or counter-claim based on federal law does not convert a non-federal case into a federal one.

Diversity cases are removable only if none of the defendants is a citizen of the state in which the action is pending. [28 U.S.C. § 1441(b)]

When a federal court already has jurisdiction over a claim based on a federal question, it has discretion to remove separate and independent state-law claims in order adjudicate the entire case if the state law claim is part of the same constitutional case or controversy as the federal question claim. [28 U.S.C. § 1441(c)] If such test is met, the state law claim falls within the supplemental jurisdiction of the federal court and can thus be removed.

§ 4.05 Supplemental Jurisdiction

1 General Rule and its Antecedents

When a federal court possesses subject matter jurisdiction over a matter, it may exercise supplemental jurisdiction over one or more related claims that would not independently satisfy subject matter jurisdictional requirements. Supplemental jurisdiction, a legislative creation since 1990 [28 U.S.C. § 1367], supplants two related judicial doctrines – pendent and ancillary jurisdiction.

2 Pendent Jurisdiction

Pendent jurisdiction refers to the courts’ extension of jurisdiction from a freestanding (usually federal question) claim to an otherwise jurisdictionally insufficient pendent (usually state law) claim by a plaintiff or plaintiffs.

a Pendent Claim Jurisdiction

In United Mine Workers v. Gibbs [383 U.S. 715 (1966)] Supreme Court was presented the question whether the federal courts had jurisdiction over the state claim in the absence of diversity. The Court held that constitutional power exists to decide the nonfederal claim whenever it is so related to the federal claim that they comprise “but one constitutional ‘case.’ ” It suggested a three-part test for constitutional case:

(1) plaintiff must assert a federal claim that has “substance sufficient to confer subject matter jurisdiction on the court.”

(2) freestanding and pendent claims “must derive from a common nucleus of operative fact.”

(3) the federal and nonfederal claims must be such that the plaintiff “would ordinarily be expected to try them all in one judicial proceeding.”

b Pendent Party Jurisdiction

Pendent party jurisdiction was also relied upon to assert claims against new parties over whom independent federal subject matter jurisdiction was unavailable. In Zahn v. International Paper Co., 414 U.S. 291 (1973), pendent party jurisdiction was invoked in a diversity action to add a defendant against whom the value of the claim was less than the jurisdictional amount. The Court found the exercise of pendent party jurisdiction to be improper, suggesting that pendent party jurisdiction could not be used to avoid the rule against aggregation.

Pendent party jurisdiction was also invoked in federal question cases to add non-diverse parties to state law claims. In Finley v. United State, 490 U.S. 45 (1989), the plaintiff asserted a freestanding claim within the exclusive jurisdiction of the federal courts and sought to join transactionally-related state law claims against non-diverse defendants. Absent pendent party jurisdiction, plaintiff would have had to forego her state law claims against the non-diverse parties or to bring separate actions in federal and state court. The Court acknowledged the inefficiency and inconvenience of this result, yet denied pendent party jurisdiction, because the underlying jurisdictional statute contained no “affirmative grant of pendent-party jurisdiction.”

3 Ancillary Jurisdiction

Ancillary jurisdiction extended jurisdiction from the freestanding (often diversity) claim to an otherwise jurisdictionally insufficient claim by the defendant(s) or similarly situated parties such as intervenors as of right. E.g., in a diversity action, ancillary jurisdiction supported a compulsory counterclaim or cross-claim for less than the jurisdictional amount or impleader of a non-diverse party.

Ancillary jurisdiction originally developed independently of pendent jurisdiction. The Supreme Court recognized ancillary jurisdiction of claims:

Nevertheless, following Finley (regarding pendent party jurisdiction), some lower federal courts extended to ancillary jurisdiction Finley’s insistence on affirmative evidence of Congressional approval for such exercise of jurisdiction by federal courts.

4 Supplemental Jurisdiction

In 1990, Congress responded to Finley by enacting the supplemental jurisdiction statute, essentially over-ruling the case. [28 U.S.C. § 1367]

a Qualifying Under Section 1367(a)

Subsection 1367a expressly extends federal jurisdiction from freestanding claims within the original jurisdiction of the federal court to supplemental claims that are “so related [to the freestanding claims . . . that they form part of the same case or controversy under Article III of the United States Constitution.”

Subsection 1367(a) overrules Finley by expressly providing that “supplemental jurisdiction shall include claims that involve joinder or intervention of parties,” thereby authorizing jurisdiction over what were formerly called pendent party claims. Most courts have found that claims which satisfy the same transaction or occurrence standard for joinder under FRCP 13(a) (compulsory counterclaim), 13(g) (crossclaim), or 20 (joinder of parties) also qualify for supplemental jurisdiction.

b Disqualifying Under § 1367(b)

Subsection 1367(b) provides that in diversity-only cases the courts do not have supplemental jurisdiction over claims by plaintiffs against persons made parties by FRCP 14 (impleader), 19 (compulsory joinder of parties), 20 (permissive joinder of parties) or 24 (intervention), when exercising such jurisdiction would be inconsistent with the jurisdictional requirements of the diversity statute. Thus, a plaintiff may not assert claims against parties in a diversity action if supplemental jurisdiction would negate complete diversity.

c Discretion Under § 1367(c)

Subsection 1367(c) gives courts discretion to refuse jurisdiction when it believes, in the interests of judicial economy, convenience, fairness, and comity, that the supplemental claims would more appropriately be decided by state courts.

When supplemental jurisdiction is asserted over third-party defendants and indispensable parties, service may be effectuated by the 100-mile bulge rule, if such parties cannot be served within the state in which the federal court sits. The rule allows service on such added parties anywhere within 100 miles of the federal courthouse in which the action is pending. FRCP 4(K)(1)(B)

taken from: http://www.lexisnexis.com/lawschool/study/outlines/html/civpro/index.asp