Exxon Corp v. Allapattah Services

PETITIONER: Exxon Mobil Corporation
RESPONDENT: Allapattah Services, Inc., et al.
LOCATION: City of New London Town Hall

DOCKET NO.: 04-70
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Eleventh Circuit

CITATION: 545 US 546 (2005)
GRANTED: Oct 12, 2004
ARGUED: Mar 01, 2005
DECIDED: Jun 23, 2005

ADVOCATES:
Carter G. Phillips - argued the cause for Petitioner in 04-70
Donald B. Ayer - argued the cause for Petitioner in 04-79
Eugene E. Stearns - argued the cause for Respondents in 04-70
Robert A. Long, Jr. - argued the cause for Respondent in 04-79

Facts of the case

In 1991 about 10,000 Exxon dealers sued Exxon Corporation in federal court, alleging that the corporation had engaged in an extensive scheme to overcharge them for fuel. A jury found in favor of the plaintiffs, but the District Court judge certified the case for review on the question of supplemental jurisdiction. Some of the multiple plaintiffs in the case had claims that did not meet the $75,000 minimum amount in controversy necessary to qualify for federal diversity jurisdiction. In 1990 Congress had enacted 28 U.S.C. Section 1367, overturning Finley v. United States, which had narrowly interpreted federal courts' power to confer supplementary jurisdiction on related claims. The question for the District Court was whether Section 1367 also overturned Zahn v. International Paper Co., which ruled that each plaintiff had to separately meet the minimum amount-in-controversy requirement. The District Court accepted the plaintiffs' argument that Section 1367 gave federal courts power to exercise supplemental jurisdiction over plaintiffs with related claims, even if some plaintiffs' claims did not meet the required amount. On appeal, the Eleventh Circuit Court of Appeals upheld the District Court's ruling on supplemental jurisdiction. However, this ruling conflicted with the ruling of another Circuit, which had taken the opposite view of Section 1367's scope (see Ortega v. Star-Kist Foods, No. 04-79). The Supreme Court granted certiorari and consolidated the cases for argument.

Question

In a civil action where one plaintiff's claim satisfies the minimum amount-in-controversy requirement for federal diversity jurisdiction, and another plaintiff's related claim does not, does 28 U.S.C. Section 1367 allow federal courts to exercise supplemental jurisdiction over the claim that is less than the required amount?

Media for Exxon Corp v. Allapattah Services

Audio Transcription for Oral Argument - March 01, 2005 in Exxon Corp v. Allapattah Services

Audio Transcription for Opinion Announcement - June 23, 2005 in Exxon Corp v. Allapattah Services

William H. Rehnquist:

The opinion of the Court in Exxon Mobile Corporation versus Allapattah will be announced by Justice Kennedy.

Anthony M. Kennedy:

This is the opinion for two consolidated cases Exxon Mobile Corp versus Allapattah 04-70 and Ortega versus Star-Kist Foods 04-79.

One of the most important statutory grants of federal jurisdiction to the Federal Courts is 28 U.S.C. §1332(a).

It grants Federal District Courts original jurisdiction over diversity cases in which the plaintiffs and the defendants are citizens of different states and the Section further provides that District Courts have original jurisdiction over diversity claims only if the amount in controversy exceeds a specified amount.

Congress from time to time historically has changed the jurisdictional amount, under current law and under the laws that have applied to these cases, it is $75,000.00.

In an earlier case from this Court called Zahn versus International Paper Company, we held that all plaintiffs must independently satisfy this amount in controversy requirement.

Zahn was a class action in which the named plaintiffs satisfied the amount in controversy but this was not true for all the other class members.

In Zahn the Court did not allow the class action to proceed.

It held that plaintiffs who do not adequately allege a sufficient amount in controversy must be dismissed from the action even if other plaintiffs do meet the requirement.

In 1990, Congress enacted 28 U.S.C. Section 1367 the so-called supplemental jurisdiction statute.

Section 1367(a) provides that in any civil action in which the District Courts have original jurisdictions, the District Court shall have supplemental jurisdiction over all other claims that are part of the same Article III case of controversy.

The question presented in these consolidated cases today is whether Sectoin 1367 in effect overrules Zahn and allows Federal District Courts to exercise supplemental jurisdiction over the claims of plaintiff that do not meet the amount in controversy requirement, as long as at least one plaintiff in the action advances a claim that does satisfy this and all other requirements of original jurisdiction.

The question is divided the Courts of Appeals.

We granted certiorari in two cases, one from the Court of Appeals for the First Circuit and one from the Court of Appeals for the Eleventh Circuit in order to resolve the conflict.

The resolution of the issue turns on whether a diversity case in which the claims of some but not all plaintiffs satisfy the amount in controversy presents a civil action at which the District Courts have original jurisdiction within the meaning of the recently enacted Section 1367(a).

We hold the answer is yes.

Section 1367(a) does confer supplemental jurisdiction over other claims that do not independently satisfy the amount in controversy requirement.

When a complaint includes several claims, some of which satisfy the original jurisdiction requirements, the District Court has original jurisdiction over that subset of claims, when we cannot accept the view that the presence of one claim in the action that fails to satisfy the amount in controversy requirement destroys original jurisdiction over all those other claims.

While it may be true that the absence of complete diversity destroys original jurisdiction with respect to all claims, this contamination effect arises because of the special nature in justification for the complete diversity rule.

Unlike the complete diversity requirement the amount in controversy requirement can be analyzed claim by claim.

Because we conclude that Section 1367(a) unambiguously confers supplemental jurisdiction over claims that do not independently satisfy the amount in controversy requirement, we need not turn to other interpretative tools such as legislative history.

Even if we did resort to legislative history in this case moreover, we find that Section 1367's legislative history is an unreliable guide in this case.

The judgment of the Court of Appeals for the Eleventh Circuit is affirmed.

The judgment for the Court of Appeals for the First Circuit is reversed and the case is remanded for further proceedings consistent with this opinion.

Justice Stevens has filed a dissenting opinion in which Justice Breyer has joined; Justice Ginsburg has filed a dissenting opinion in which Justice Stevens, Justice O'Connor and Justice Breyer have joined.