Diversity jurisdiction: supplemental jurisdiction

Question 1

Impleader

Answer 1

In a federal court action based solely on diversity jurisdiction, supplemental jurisdiction is precluded with respect to a claim by an existing plaintiff against a person who is made a party to the action through impleader.

Question 2

Cross claims

Answer 2

A federal court has supplemental jurisdiction over a cross-claim:

• by a defendant against another defendant or
• by a plaintiff against another plaintiff

if the cross-claim arises out of the same transaction or occurrence as the initial claim, without regard to:

• the amount in controversy or
• the citizenship of the parties to the cross-claim

as long as the court has subject matter jurisdiction.

Question 3

Intervention

Answer 3

Supplemental jurisdiction does not lie when the federal court’s original jurisdiction is based solely on diversity jurisdiction.

Question 4

Permissive joinder

Answer 4

In a case based exclusively on diversity jurisdiction, supplemental jurisdiction does not apply to defendants to be joined under the permissive joinder rule if exercise of supplemental jurisdiction would destroy diversity.

Thus, the joined defendants must satisfy complete diversity, and claims against each defendant must satisfy the amount-in-controversy requirement.

Question 5

Counterclaims

Answer 5

Compulsory counterclaims need not satisfy the jurisdictional amount.

But permissive counterclaims must satisfy both the jurisdictional amount and complete diversity.

Question 6

Precluded claims in diversity cases

Answer 6

Under § 1367(b), in actions in which the original jurisdiction of the federal court is based solely on diversity jurisdiction, supplemental jurisdiction is precluded for:

(1) Claims by existing plaintiffs (but not defendants) against persons made parties under one of the following Civil Rules:

• Rule 14 (impleader),
• Rule 19 (compulsory joinder),
• Rule 20 (permissive joinder), or
• Rule 24 (intervention);

(2) Claims by persons to be joined as plaintiffs pursuant to Rule 19; and
(3) Claims by persons seeking to intervene as plaintiffs pursuant to Rule 24, when the exercise of supplemental jurisdiction over such claims would be inconsistent with the requirements for diversity jurisdiction under 28 U.S.C. § 1332.

Question 7

Discretionary rejection of supplemental jurisdiction

Answer 7

Under § 1367(c), a district court has discretion to decline to exercise supplemental jurisdiction over a claim that would otherwise qualify for supplemental jurisdiction in each of the following circumstances:

(a) The supplemental claim raises a novel or complex issue of state law;
(b) The supplemental claim substantially predominates over the claims within original federal jurisdiction;
(c) All of the claims within the court’s original jurisdiction have been dismissed; or
(d) In exceptional circumstances, if there are other compelling reasons for declining jurisdiction.