Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546 (2005), 125 S. Ct. 2611, 162 L. Ed. 2d 502.
The case of Exxon Mobil Corp. v. Allapattah Services, Inc. is one of the most significant United States Supreme Court rulings on supplemental jurisdiction in diversity cases. It clarified the reach of 28 U.S.C. § 1367, especially in situations where multiple plaintiffs were joined in a lawsuit but not all of them independently satisfied the amount-in-controversy requirement of 28 U.S.C. § 1332.
The decision consolidated two cases: one involving Exxon dealers suing Exxon for overcharging on fuel purchases, and another involving a young girl, Rosario Ortega, suing Star-Kist Foods after suffering injuries from a can of tuna. The ruling resolved a split among the federal Courts of Appeals and confirmed the scope of federal courts’ power under supplemental jurisdiction.
Facts of Exxon Mobil Corp. v. Allapattah Services, Inc.
The Exxon Case
In 1991, around 10,000 Exxon dealers filed a class-action lawsuit against Exxon Corporation. They alleged that Exxon had intentionally and systematically overcharged them for fuel. The case was large in scale, involving numerous plaintiffs. After prevailing on their claims, the question arose whether the federal court had supplemental jurisdiction over all plaintiffs, particularly those who did not individually meet the minimum amount-in-controversy requirement for diversity jurisdiction. The district court found that supplemental jurisdiction was proper.
The Ortega Case
In the second case, a nine-year-old girl, Rosario Ortega, sued Star-Kist Foods, Inc. after she severely injured her finger on a can of tuna. Her parents also joined the lawsuit, seeking damages for emotional distress and medical expenses. The trial court found that Rosario’s claim satisfied the amount-in-controversy requirement, but her parents’ claims did not. Because of this, the court ruled that supplemental jurisdiction over the parents’ claims was improper, even though the claims all arose from the same set of facts.
Procedural History
The cases reached the Supreme Court as part of a consolidated review. The issue had divided federal appellate courts: some circuits allowed supplemental jurisdiction in diversity cases where only one plaintiff met the amount-in-controversy requirement, while others required each plaintiff to meet it independently. To resolve this conflict, the Supreme Court granted certiorari and consolidated the Exxon and Ortega cases.
Issue
The central question in Exxon Mobil Corp. v. Allapattah Services, Inc. was:
Can a federal court in a diversity action exercise supplemental jurisdiction over additional plaintiffs whose claims do not independently satisfy the amount-in-controversy requirement, as long as at least one plaintiff’s claim does satisfy the requirement and all claims arise from the same case or controversy?
Rule of Law
The Supreme Court held that:
As long as one plaintiff’s claim satisfies the minimum amount-in-controversy requirement, the federal court may exercise supplemental jurisdiction over additional plaintiffs’ claims that do not satisfy the requirement, provided all claims are part of the same case or controversy under Article III of the Constitution.
This rule was derived from the statutory language of 28 U.S.C. § 1367(a), which broadly grants supplemental jurisdiction over other claims within the same case or controversy, unless expressly excluded by § 1367(b).
Opinion of the Court in Exxon Mobil Corp. v. Allapattah Services, Inc.
Justice Kennedy delivered the opinion of the Court.
The Court reasoned that § 1367(a) provides a broad grant of supplemental jurisdiction over claims forming part of the same case or controversy under Article III. The statute’s final sentence confirms that supplemental jurisdiction extends to claims involving the joinder or intervention of additional parties.
The Court explained that when at least one claim in the complaint satisfies the amount-in-controversy requirement and all other jurisdictional requirements of diversity are met, the district court has original jurisdiction over that claim. Once that original jurisdiction is established, the entire “civil action” falls within the scope of § 1367(a). Therefore, supplemental jurisdiction may extend to claims of additional plaintiffs that are part of the same civil action, even if those claims fall short of the amount-in-controversy threshold.
The Court emphasized the distinction between cases where diversity itself is destroyed and cases where only the amount-in-controversy is at issue. If diversity of citizenship is lacking, supplemental jurisdiction cannot apply. However, when diversity is intact and only the monetary threshold is in question, supplemental jurisdiction may be exercised.
The Court also highlighted that § 1367(b) specifically excludes supplemental jurisdiction in certain contexts, such as claims involving indispensable parties under Rule 19 or intervenors under Rule 24. Since claims joined under Rule 20 (permissive joinder) and Rule 23 (class actions) were not excluded, the Court concluded that Congress intended to allow supplemental jurisdiction in those instances.
Dissenting Opinions
The Court was split in its decision, with several justices dissenting.
- Justice Stevens argued that the expansion of supplemental jurisdiction represented a broad interpretation not supported by legislative history. He maintained that Congress had enacted § 1367 mainly in response to the Court’s decision in Finley v. United States and that the statute should not be read as an expansive grant beyond that context.
- Justice Ginsburg also dissented, focusing on statutory ambiguity. She contended that the statute should be interpreted in a way that preserved continuity with prior precedents like Clark v. Paul Gray, Inc. and Zahn v. International Paper Co., which had required every plaintiff to meet all diversity jurisdiction requirements. She concluded that the majority’s interpretation allowed plaintiffs to bypass those established standards.
Together, the dissenters expressed concern that the majority’s reading would unduly expand federal jurisdiction and invite cases into federal court that Congress had not clearly intended to include.
Conclusion
In Exxon Mobil Corp. v. Allapattah Services, Inc., the Supreme Court held that supplemental jurisdiction under § 1367 allows federal courts to hear claims from additional plaintiffs who do not meet the amount-in-controversy requirement, so long as at least one plaintiff’s claim does and all claims arise from the same case or controversy.
The Court’s ruling expanded the scope of diversity jurisdiction, while still maintaining limits where diversity itself is lacking. Though dissenting justices expressed concerns about overreach and statutory ambiguity, the majority opinion provided clarity and uniformity in federal jurisdiction law.