Citation: 545 U.S. 546 (2005)
Procedural and Statutory Background of Exxon Mobil Corp. v. Allapattah Services, Inc.
Exxon Mobil Corp. v. Allapattah Services, Inc. arose from a circuit split over the scope of supplemental jurisdiction in diversity cases. Under Article III, Section 2 of the U.S. Constitution, federal courts possess only the jurisdiction expressly granted by Congress. Two principal statutory grants exist in civil litigation: federal-question jurisdiction under 28 U.S.C. § 1331 and diversity jurisdiction under 28 U.S.C. § 1332.
Diversity jurisdiction requires “complete diversity” of citizenship between plaintiffs and defendants and mandates that each plaintiff’s individual claim exceed the statutory amount-in-controversy threshold—$75,000 at the time of Exxon.
Historically, to promote efficiency and avoid the needless bifurcation of related claims between federal and state forums, courts recognized ancillary and pendent jurisdiction by judicial decision. However, the Supreme Court’s decision in Finley v. United States curtailed pendent-party jurisdiction, prompting Congress to enact 28 U.S.C. § 1367. Section 1367(a) codified supplemental jurisdiction, effectively unifying ancillary and pendent doctrines and authorizing federal courts to hear any claim “that is so related to claims in the action within such original jurisdiction.”
Section 1367(b) preserved certain limits, excluding claims joined under Federal Rules of Civil Procedure 19 and 24 in diversity suits, but did not explicitly prohibit permissive joinder under Rule 20 or class actions under Rule 23. Against this statutory backdrop, Exxon Mobil Corp. v. Allapattah Services, Inc. presented the question whether § 1367 authorizes supplemental jurisdiction over plaintiffs whose individual claims fall below the amount-in-controversy requirement in a diversity action.
Facts of Exxon Mobil Corp. v. Allapattah Services, Inc.
In 1991, approximately 10,000 Exxon dealers filed a class-action suit in federal district court against Exxon Mobil Corp., alleging a company-wide scheme to overcharge for gasoline—transactions that, when aggregated, far exceeded the jurisdictional threshold. All dealer-plaintiffs met the statutory amount-in-controversy requirement individually. Meanwhile, in a separate tort action, a nine-year-old child—along with her parents—sued Star-Kist Foods, Inc., claiming severe finger injuries caused by a defective tuna can. The child’s claim exceeded $75,000, but her parents’ derivative claims for emotional distress and medical expenses fell short of the threshold. Both sets of claims arose from the same incident.
Lower courts were divided. In the Exxon dealer class action, one circuit held that supplemental jurisdiction extended to all class members once diversity requirements were satisfied by any individual member; another circuit reached the opposite conclusion in cases like the Ortega family’s, holding that every plaintiff must independently satisfy the amount-in-controversy requirement. Certiorari was granted to resolve this conflict.
Issue
Whether, under 28 U.S.C. § 1367(a), a federal district court exercising diversity jurisdiction may properly exercise supplemental jurisdiction over additional plaintiffs whose individual claims do not satisfy the amount-in-controversy requirement of 28 U.S.C. § 1332, so long as at least one plaintiff’s claim satisfies that requirement and all claims arise from the same Article III case or controversy.
Exxon Mobil Corp. v. Allapattah Services, Inc. Judgment
In Exxon Mobil Corp. v. Allapattah Services, Inc., the Supreme Court held, 5–4, that § 1367(a) permits federal courts in diversity actions to exercise supplemental jurisdiction over joined claims that do not individually meet the amount-in-controversy requirement, provided that at least one claim in the action independently meets the jurisdictional threshold and there are no other jurisdictional defects.
Majority Reasoning (Justice Kennedy)
- Textual Interpretation of § 1367(a): The Court emphasized that the language of § 1367(a) refers to supplemental jurisdiction over all claims that are part of the same “civil action” over which the district court has original jurisdiction. The statute makes no reference to each claim’s independent eligibility; instead, it speaks broadly of the action as an integrated unit.
- Statutory Structure and § 1367(b): Section 1367(b) expressly restricts supplemental jurisdiction in diversity cases only for certain categories of joined parties—those under Rule 19 (required joinder) and Rule 24 (intervention)—but remains silent with respect to permissive joinder (Rule 20) and class actions (Rule 23). The majority read this omission as a deliberate choice by Congress to permit supplemental jurisdiction in those contexts.
- Preservation of Historical Practice: Prior to § 1367’s enactment, many lower courts had exercised a broader supplemental-jurisdiction practice, allowing below-threshold claims to proceed where at least one claim satisfied the jurisdictional floor. Congress, in codifying supplemental jurisdiction, sought to “bring together” ancillary and pendent jurisdiction without overhauling the existing body of case law in these domains.
- Avoidance of Piecemeal Litigation: Recognizing federal courts’ limited jurisdiction, the Court nonetheless underscored the policy interest in resolving all claims arising from the same nucleus of operative fact in one forum. Denying supplemental jurisdiction for below-threshold plaintiffs would force fragmented litigation and impose heightened burdens on parties and judicial resources.
Because the dealers in the Exxon action and the child-plaintiff in the Ortega action each provided an anchor claim meeting § 1332’s amount-in-controversy requirement, the district courts correctly retained jurisdiction over all related claims under § 1367(a).
Conclusion
In sum, Exxon Mobil Corp. v. Allapattah Services, Inc. stands as a landmark ruling on supplemental jurisdiction, affirming that once a federal court has diversity jurisdiction over one claim in an action, it may extend that jurisdiction to all other claims arising from the same case or controversy, regardless of their individual monetary value.
By interpreting § 1367(a) in light of its text, structure, and legislative purpose, the majority facilitated more efficient adjudication of multi-plaintiff disputes while preserving the narrow exceptions set forth in § 1367(b). The robust dissent underscores the enduring tension between judicial efficiency and strict adherence to Congress’s jurisdictional grants, a balance that remains central to federal-court jurisprudence.