Exxon Mobil Corp. v. Allapattah Servs., Inc.

Supreme Court of United States
545 U.S. 546 (2005)

ELI5:

Rule of Law:

Under 28 U.S.C. § 1367, a federal court in a diversity action may exercise supplemental jurisdiction over the claims of additional plaintiffs who do not independently satisfy the minimum amount-in-controversy requirement, provided that at least one named plaintiff's claim does satisfy the requirement and all claims are part of the same Article III case or controversy.

Facts:

In one case, about 10,000 Exxon dealers filed a class-action lawsuit against Exxon Corporation.
The dealers alleged that Exxon engaged in an intentional and systematic scheme to overcharge them for fuel.
The claims of some of the plaintiff dealers exceeded the jurisdictional minimum amount in controversy, while the claims of others did not.
In a second, separate case, a nine-year-old girl received severe injuries when she sliced her finger on a Star-Kist tuna can.
The girl and her family joined together in a suit against Star-Kist.
The girl's claim for damages met the jurisdictional amount-in-controversy requirement.
Her family members' related claims for emotional distress and medical expenses did not independently meet the jurisdictional amount.

Procedural Posture:

In the Exxon case, plaintiffs filed a class action in the U.S. District Court for the Northern District of Florida (trial court), and a jury returned a verdict for the plaintiffs.
The District Court certified the jurisdictional question for interlocutory appeal to the U.S. Court of Appeals for the Eleventh Circuit (intermediate appellate court).
The Eleventh Circuit held that the District Court properly exercised supplemental jurisdiction.
In the Star-Kist case, plaintiffs sued in the U.S. District Court for the District of Puerto Rico (trial court), which granted summary judgment to the defendant.
The plaintiffs appealed to the U.S. Court of Appeals for the First Circuit (intermediate appellate court).
The First Circuit reversed in part, finding one plaintiff met the amount-in-controversy, but held the court lacked supplemental jurisdiction over the other plaintiffs' claims.
The U.S. Supreme Court granted certiorari in both cases to resolve the conflict between the circuit courts.

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Issue:

Does 28 U.S.C. § 1367 authorize federal district courts in diversity jurisdiction cases to exercise supplemental jurisdiction over the claims of additional plaintiffs who do not independently meet the minimum amount-in-controversy requirement, so long as at least one named plaintiff's claim satisfies the requirement?

Opinions:

Majority - Justice Kennedy

Yes. 28 U.S.C. § 1367 authorizes supplemental jurisdiction over claims of plaintiffs in a diversity action that do not meet the minimum amount-in-controversy, provided other plaintiffs' claims do. The statute's text grants supplemental jurisdiction over claims that are part of the same case or controversy whenever the district court has 'original jurisdiction' over the 'civil action.' The court has original jurisdiction over a civil action as long as at least one claim in the complaint independently meets the requirements for diversity jurisdiction, such as the amount-in-controversy. The presence of other jurisdictionally insufficient claims does not destroy original jurisdiction over the action. Further, § 1367(b), which lists specific exceptions to supplemental jurisdiction in diversity cases, does not prohibit jurisdiction over claims by plaintiffs joined under Federal Rule of Civil Procedure 20 or certified as class-action members under Rule 23. The Court infers from this omission that Congress intended to permit supplemental jurisdiction over such claims, thereby overruling its prior decisions in Clark v. Paul Gray, Inc. and Zahn v. International Paper Co.. The Court dismisses the legislative history suggesting a contrary intent as unreliable and contradictory to the statute's plain text.

Dissenting - Justice Stevens

No. The majority's interpretation is a pedantic exercise divorced from congressional intent. The legislative history of § 1367 provides a 'virtual billboard' of evidence that Congress intended only to overrule Finley v. United States and preserve the pre-existing understanding of supplemental jurisdiction, which included the rule from Zahn that each plaintiff must meet the amount-in-controversy requirement. The House Report explicitly states the statute was 'not intended to affect the jurisdictional requirements of 28 U.S.C. § 1332 in diversity-only class actions' and cites Zahn. This clear statement of intent should not be ignored simply because the majority finds the statutory text unambiguous, particularly when numerous federal judges have found it to be otherwise.

Dissenting - Justice Ginsburg

No. A better, less disruptive reading of the statute preserves prior precedent. The phrase in § 1367(a), 'civil action of which the district courts have original jurisdiction,' should be read to incorporate the established rules for what constituted 'original jurisdiction' under § 1332 at the time of enactment. Those rules included the non-aggregation principle from Clark and Zahn, meaning an action lacked original jurisdiction if any plaintiff failed to meet the amount-in-controversy requirement. Under this reading, § 1367(a) is never triggered for such plaintiffs, and there is no need to look for an exception in § 1367(b). This interpretation aligns the statute with historical practice, avoids creating anomalies between different Federal Rules of Civil Procedure, and respects the principle that statutes should be construed in favor of continuity unless Congress explicitly signals a change.

Analysis:

This decision significantly broadened the scope of federal diversity jurisdiction by allowing the joinder of plaintiffs with jurisdictionally insufficient claims. It resolved a deep circuit split over the interpretation of § 1367 and firmly established that the statute overruled the long-standing non-aggregation rule from Zahn. The ruling makes it easier to bring multi-plaintiff and class-action lawsuits in federal court, as only one representative plaintiff must meet the amount-in-controversy threshold. The Court's reliance on a textualist interpretation, dismissing legislative history that contradicted the statute's plain meaning, also reinforced a key methodological approach to statutory construction.

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