Aggregation versus 1367
Aggregation sometimes permits the amounts in controversy (“AIC”) in a case to be added together to satisfy the jurisdictional requirement of section 1332. If aggregation is allowed, then there is original SMJ over any such claims.
Example: P sues D for five separate claims, each worth $20K: here, the AIC is $100K.
However, some claims can’t be aggregated.
Example: P sues D for an injury, using five different legal theories (ex.: negligence, battery, breach of contract, breach of warranty, and strict liability). Each legal theory asks for $20K: here, the AIC is $20K., one $20K injury demanded in five different ways. No aggregation.
Example: P sues D1 and D2 for $50K each. No aggregation. Different Ds.
Example: P1 and P2 sue D for $50K each. No aggregation. Different Ps.
For a re-review of aggregation, see this YouTube video.
Ok, so sometimes aggregation can’t be done. But what about 1367? That section can sometimes be used to provide supplemental jurisdiction (“SJ”) over claims or parties where aggregation is impossible. In fact, the possibilities of SJ expanded after the Exxon case.
This page discusses examples of outcomes under the basic rules of aggregation, and how post-Exxon 1367 might change those outcomes. Review the following examples, all of which involve diversity claims only. Assume that there is complete diversity of citizenship. Consider 1367(a), (b), and the holding in Exxon. Is there SMJ?
1. One P, one D, two sub-AIC claims. P has two unrelated claims against one D – one for a tort for $50K and another for breach of contract for $50K. Neither claim alone satisfies the AIC requirement of 1332(a).
Aggregation? May P aggregate the claims to exceed the AIC? Yes. Here, P asserts multiple claims against one D, and P may aggregate the amounts in controversy to satisfy the AIC requirement, even if the claims are unrelated. The case may proceed in federal court with original jurisdiction.
Exxon/1367? The result does not change under 1367 or Exxon Mobil. Why? Because there is original SMJ and supplemental jurisdiction is not needed.
2. One P, two Ds, one sub-AIC claim against each. P sues D1 for breach of a garbage hauling contract for $50K and sues D2 for a different hauling contract for $50K.
Aggregation? May P aggregate the two claims to exceed the AIC? No. P may not aggregate claims against different Ds. Section 1332 is not satisfied, there is no original SMJ, and the case must be dismissed.
Exxon/1367? This result does not change under 1367 or Exxon Mobil. 1367(a) requires at least one claim that has original jurisdiction. Here, there is no original SMJ because none of the claims satisfy the amount in controversy required by 1332(a). So supplemental jurisdiction isn’t possible at all under 1367(a).
3. One P, two Ds, one claim AIC-ok and the other sub-AIC. P sues D1 for breach of contract for firing him for $100K and sues D2 in tort for defamation for $50K for libeling him in a letter to D1.
Aggregation? May P aggregate the two claims to exceed the AIC? No. Note that section 1332 is satisfied against D1 but not against D2. But P may not aggregate claims against different Ds. The case may proceed against D1 in federal court but not D2. D2 may be dismissed to preserve subject matter jurisdiction unless D2 is necessary & indispensable under Rule 19.
Exxon/1367? No change in result though the analysis is a bit different. There is an original claim that satisfies 1367(a) because P’s claim against D1 satisfies the AIC required by 1332(a). 1367(a) would therefore grant supplemental jurisdiction over D2. First, the claims are likely part of the same constitutional case – “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.” Second, 1367(a) permits supplemental jurisdiction to lead to the joinder of additional parties. But 1367(b) prohibits supplemental jurisdiction in diversity-only cases where P sues persons joined under Rules 19 or 20. That’s the case here. Same result, different reasoning.
4. Two Ps with sub-AIC claims against one D. P1 and P2 are injured in the same auto accident. They both sue D. P1 and P2 each seek $50K for their own damages.
Aggregation? May they aggregate? No. Two Ps cannot aggregate claims asserted against the same D. See Clark (1939); see also Zahn (1973) (Rule 23). The case must be dismissed because neither plaintiff satisfies the AIC.
Exxon/1367? No change. 1367(a) requires there be at least one claim with original jurisdiction. Exxon Mobil changes nothing because it requires that at least one P satisfy the AIC. Here, neither P satisfies the AIC. But note the operation of 1367(b) in the next hypo!
5. P1 with AIC-ok claim and P2 with sub-AIC claim against one D. P1 and P2 are injured in the same auto accident. They both sue D. P1 seeks $100K in damages and P2 seeks $10K in damages.
Aggregation? May P2 aggregate with P1 to satisfy the AIC? No. Two Ps cannot aggregate claims asserted against the same D. See Clark (1939); see also Zahn (1973) (Rule 23). The case may proceed in federal court with P1 versus D but not with P2. P2 may be dismissed to preserve subject matter jurisdiction unless P2 is necessary & indispensable under Rule 19.
Exxon/1367? This result was abrogated by Exxon. Because one P satisfies the AIC, 1367(a) permits supplemental jurisdiction over P2. (It’s the same CNOF/constitutional case, right?) Because 1367(b) doesn’t divest supplemental claims by Ps joined under Rule 20, it does not bar supplemental jurisdiction. Note that the claims aren’t actually aggregated; instead, aggregation is unnecessary to get P2 into federal court.
6. Class action versus D, all sub-AIC claims. There is a class action against D for products liability. The amount in controversy for the class representative and for each plaintiff class member is only $10 each, but there are 10,000 members in the class.
Aggregation? May the class aggregate to satisfy the 1332(a) AIC? No. See Zahn case, where the Supreme Court held that each class member must individually satisfy the amount in controversy.
Exxon/1367? The result is unaffected by 1367 and Exxon because no single person satisfies the AIC and original jurisdiction is therefore lacking.
Caveat. But the law has changed to some extent from other sources. The Class Action Fairness Act (“CAFA”) created Section 1332(d) to permit diversity jurisdiction over certain class actions with minimal diversity so long as the aggregate AIC exceeds $5 million. But here, even if we aggregated under 1332(d), the AIC would not exceed $5 million.
7. Class action, class rep is AIC-ok, the class members are sub-AIC. Class representative asserts a $100K claim against D; the other 10,000 class members have damages of $10 each.
Aggregation? Can the class members aggregate their claims with that of the class representative to satisfy the AIC? No. Under Zahn, each class member must satisfy the AIC independently.
Exxon/1367? This result was abrogated by Exxon. Because the class representative satisfies the AIC and there is original SMJ, 1367(a) grants supplemental jurisdiction over the class members’ claims. Note that 1367(b) doesn’t bar supplemental claims by plaintiffs suing under Rule 23, so supplemental jurisdiction exists. Also note that the claims aren’t aggregated; instead, aggregation is unnecessary over the class members because of supplemental jurisdiction. (In such scenarios, also consider CAFA.)
8. A final comment. Keep in mind that 1367(b) only kicks in when the original jurisdiction arises solely under 1332. Might you analyze things differently in cases where the original jurisdiction was based on a federal question under section 1331? Say, for example, P sues D1 for a federal civil rights violation under section 1983 and D2 for $10K for an associated breach of state civil rights laws?
Aggregation? Still no aggregation. Different Ds.
Exxon/1367? There would be original federal question jurisdiction over P v. D1. Because the claims are related, 1367(a) would grant supplemental jurisdiction over P v. D2. 1367(b) would not be triggered because original SMJ did not arise under 1332. So this is ok in federal court. Compare the result under Question 3, where 1367(b) was triggered, and divested SJ.
Revised Feb. 13, 2015. Hypos are based in part on examples from Glannon’s Examples & Explanations, chap. 5, and R. Freer, Introduction to Civil Procedure, chap. 4.5.