Business Litigation I MARCH 31, 2015

Pendant Party Claims in Federal Court

Unlike state courts, federal courts are courts of limited jurisdiction.  Federal courts have “original jurisdiction” over claims alleging a federal question or diversity jurisdiction.  To bring a claim in federal court, the complaint must either allege (1) a federal question, i.e. a question “arising under the Constitution, laws, or treaties of the United States,” see 28 U.S.C. § 1331; or (2) diversity of citizenship, meaning that the parties are citizens of different states, and the amount in controversy exceeds the sum or value of $75,000, see 28 U.S.C. § 1332.

Federal courts also have discretion to exercise supplemental jurisdiction.  28 U.S.C. § 1367(a) directs that, “in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” This supplemental jurisdiction “shall include claims that involve the joinder or intervention of additional parties.”  Id.

In other words, federal courts can also exercise jurisdiction over pendant party claims.  If the federal court has original jurisdiction over a claim between one plaintiff and one defendant, the court may also have pendant jurisdiction over that same plaintiff’s claims against a different defendant, even if the district court does not independently have original jurisdiction over this latter claim.  Section 1367(a) “is a broad grant of supplemental jurisdiction over other claims within the same case or controversy, as long as the action is one in which the district court would have original jurisdiction.”  Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 558 (2005).  This “broad grant of supplemental jurisdiction” extends to “claims involving joinder or intervention of additional parties.”  Id.
Therefore, one action can be filed against multiple defendants in federal court, where the plaintiff can show the claims against all of the defendants are part of the “same case or controversy,” and that the court has original jurisdiction over the claims against at least one of the defendant’s.  Where the court’s original jurisdiction is based on diversity of citizenship, however, pendant claims against an additional defendant are improper if the claims defeat the diversity of citizenship.  28 U.S.C. § 1367(b).
Notwithstanding the forgoing, federal courts are free to decline to exercise supplemental jurisdiction in any case if:  
  1. the claim raises a novel or complex issue of state law,
  2. the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
  3. the district court has dismissed all claims over which it has original jurisdiction, or
  4. in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

28 U.S.C. § 1367(c).

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