Integrating Supplemental Jurisdiction and Diversity Jurisdiction: A Progress Report on the Work of the American Law Institute

Indiana Law Journal

Volumn 74, Issue 1, 1998, Pages 25-52

  Oakley, John B ^a,b,c  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

^c YALE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 0032279060     PISSN: 00196665     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (93)

1. The Institute's first look took ten years and produced a significant contribution to the literature on the law of federal courts. See AMERICAN LAW INSTITUTE, STUDY OF THE DIVISION OF JURISDICTION BETWEEN STATE AND FEDERAL COURTS (1969).
2. This Article is the third in a series of recent publications in which I have discussed my work for the ALI. The background of the Institute's Judicial Code Project and the content of a "Prospectus" upon which it is founded are set forth in John B. Oakley, Prospectus for the American Law Institute's Federal Judicial Code Revision Project, 31 U.C. DAVIS L. REV. 855 (1998) [hereinafter Oakley, Prospectus]. The relationship between supplemental jurisdiction and federal-question jurisdiction is discussed in John B. Oakley, Federal Jurisdiction and the Problem of the Litigative Unit: When Does What "Arise Under" Federal Law, 76 TEX. L. REV. 1829 (1998) [hereinafter Oakley, Litigative Unit].
3. This Article is the third in a series of recent publications in which I have discussed my work for the ALI. The background of the Institute's Judicial Code Project and the content of a "Prospectus" upon which it is founded are set forth in John B. Oakley, Prospectus for the American Law Institute's Federal Judicial Code Revision Project, 31 U.C. DAVIS L. REV. 855 (1998) [hereinafter Oakley, Prospectus]. The relationship between supplemental jurisdiction and federal-question jurisdiction is discussed in John B. Oakley, Federal Jurisdiction and the Problem of the Litigative Unit: When Does What "Arise Under" Federal Law, 76 TEX. L. REV. 1829 (1998) [hereinafter Oakley, Litigative Unit].
4. 28 U.S.C. § 1331 (1994).
5. Id. (emphasis added).
6. Id. § 1332 (1994).
7. Id. § 1332(a)(1) (emphasis added).
8. In Part III, I return to and elaborate the distinction between an action-specific and a claim-specific model of federal jurisdiction. See infra Part III.A.
9. 28 U.S.C. § 1367 (1994).
10. See infra Part I, which discusses this turn of events.
11. See AMERICAN LAW INSTITUTE, FEDERAL JUDICIAL CODE REVISION PROJECT, TENTATIVE DRAFT NO. 2 (1998) [hereinafter T.D. NO. 2].
12. See ALI Advocates Proposed Amendment to Supplemental Jurisdiction Statute, 66 U.S.L.W. (BNA) 2719 (May 26, 1998).
13. 7 U.S. (3 Cranch) 267 (1806).
14. Some of the material at the beginning of this part - describing the ALI, its operating procedures, and the inception of the Judicial Code Project - is adapted with revisions from the Epilogue that I added to the published version of my Prospectus. See Oakley, Prospectus, supra note 2, at 1020-22. Portions of the material describing the evolution of a revised supplemental-jurisdiction statute from AMERICAN LAW INSTITUTE, FEDERAL JUDICIAL CODE REVISION PROJECT, PRELIMINARY DRAFT NO. 1 (1996) [hereinafter P.D. NO. 1] through AMERICAN LAW INSTITUTE, FEDERAL CODE JUDICIAL PROJECT, TENTATIVE DRAFT NO. 1 (1997) [hereinafter T.D. NO. 1] are adapted from the memorandum to members of the Institute that I wrote as a preface to T.D. NO. 1. See T.D. NO. 1 at xv-xxiii. The views stated are my own, and not necessarily those of the Institute. See infra note 63 (discussing the Institute's practice of nonendorsement of annotative material included in drafts approved by the Institute).
15. See Oakley, Prospectus, supra note 2, at 1020 & n.716. See generally John P. Frank, The American Law Institute, 1923-1998, 26 HOFSTRA L. REV. 615, 625-28, 636-38 (1998) (describing the membership and leadership of the Institute).
16. See Oakley, Prospectus, supra note 2, at 1020 & n.716. See generally John P. Frank, The American Law Institute, 1923-1998, 26 HOFSTRA L. REV. 615, 625-28, 636-38 (1998) (describing the membership and leadership of the Institute).
17. Oakley, Prospectus, supra note 2, at 861 & n.1 (quoting letter from Geoffrey C. Hazard, Jr., Director, American Law Institute, to the author (Jan. 27, 1994)).
18. See JOHN B. OAKLEY, REVISION OF THE FEDERAL JUDICIAL CODE: A PROSPECTUS FOR THE AMERICAN LAW INSTITUTE (1995), reprinted in revised form as Oakley, Prospectus, supra note 2.
19. See JOHN B. OAKLEY, REVISION OF THE FEDERAL JUDICIAL CODE: A PROSPECTUS FOR THE AMERICAN LAW INSTITUTE (1995), reprinted in revised form as Oakley, Prospectus, supra note 2.
20. See Oakley, Prospectus, supra note 2, at 864-65.
21. See id. at 873-1014. Chapters 85 through 89 consist only of Chapter 85 ("District Courts; Jurisdiction"), Chapter 87 ("District Courts; Venue"), and Chapter 89 ("District Courts; Removal of Cases from State Courts"). There is no Chapter 86 or Chapter 88.
22. 28 U.S.C. §§ 1391-1392 (1994).
23. Id. § 1404 (1994).
24. Id. §§ 1406-1407 (1994).
25. Id. § 1631 (1994).
26. Id. §§ 1441-1442a (1994).
27. Id. §§ 1445-1447 (1994).
28. See Oakley, Prospectus, supra note 2, at 1018-19.
29. See id. at 861, 1020-21. All members of the ad hoc panel were (or, in one instance, were about to become) members of the ALI. In the following roster, an asterisk precedes the names of those members of the ad hoc panel who were also members of the Council: * Richard S. Arnold, Judge (then Chief Judge), United States Court of Appeals for the Eighth Circuit, Little Rock, Arkansas; * Bennett Boskey, Washington, District of Columbia (Treasurer of the ALI); * Edward H. Cooper, The University of Michigan Law School, Ann Arbor, Michigan; William A. Fletcher, Judge, United States Court of Appeals for the Ninth Circuit, San Francisco, California (at the time of his appointment to the ad hoc panel, Judge Fletcher was a Professor of Law at the University of California at Berkeley School of Law, Berkeley, California); Charles Fried, Associate Justice of the Supreme Judicial Court of Massachusetts, Boston, Massachusetts; Patrick E. Higginbotham, Judge, United States Court of Appeals for the Fifth Circuit, Dallas, Texas; Patricia M. Hynes, New York, New York; Larry Kramer, New York University School of Law, New York, New York; * Vincent L. McKusick, Portland, Maine; Retired Chief Justice, Supreme Judicial Court of Maine; Daniel J. Meltzer, Harvard University Law School, Cambridge, Massachusetts; * Mary M. Schroeder, Judge, United States Court of Appeals for the Ninth Circuit, Phoenix, Arizona; David L. Shapiro, Harvard University Law School, Cambridge, Massachusetts; Joan E. Steinman, Chicago-Kent College of Law, Illinois Institute of Technology, Chicago, Illinois; * Michael Traynor, San Francisco, California (then 2nd Vice President of the ALI); and * Patricia M. Wald, Judge, United States Court of Appeals for the District of Columbia Circuit, Washington, District of Columbia (then 1st Vice President of the ALI). Also attending the meeting of the ad hoc panel, ex officio, were the ALI's Director, Geoffrey C. Hazard, Jr., and both Deputy Directors, Elena A. Cappella and Michael Greenwald. Several other invitees were unable to attend, as was the Institute's President, Charles Alan Wright of the University of Texas School of Law.
30. There are occasional variations from this routine. Meetings with the Advisers and the MCG are sometimes held elsewhere than Philadelphia, and the length of the meeting may vary with the bulk and controversiality of the material to be reviewed. Some members may receive work-related reimbursement for the expense of attending MCG meetings, and in exceptional circumstances the Institute may provide financial assistance to defray part of the cost of travel to an MCG meeting.
31. P.D. NO. 1, supra note 13.
32. 28 U.S.C. § 1333 (1994).
33. With the exception of Mr. Grinder, who represents the United States Department of Justice, all of the Advisers are members of the ALI. In the following roster, an asterisk designates those Advisers who also serve on the Council, and a dagger designates those who served previously on the ad hoc advisory panel: *† Bennett Boskey, Washington, District of Columbia; *† Edward H. Cooper, The University of Michigan Law School, Ann Arbor, Michigan; † William A. Fletcher, Judge, United States Court of Appeals for the Ninth Circuit, San Francisco, California (at the time of his appointment as an Adviser, Judge Fletcher was a Professor of Law at the University of California at Berkeley School of Law, Berkeley, California); Richard D. Freer, Emory University School of Law, Atlanta, Georgia; Susan P. Graber, Judge, United States Court of Appeals for the Ninth Circuit, Portland, Oregon (at the time of her appointment as an Adviser, Judge Graber was serving as an Associate Justice of the Oregon Supreme Court); Gary Grinder, Washington, District of Columbia; Geoffrey C. Hazard, Jr., Philadelphia, Pennsylvania (ex officio as Director of the Institute); † Patricia M. Hynes, New York, New York; Renée M. Landers, Boston, Massachusetts; David F. Levi, Judge, United Sates District Court for the Eastern District of California, Sacramento, California; *† Vincent L. McKusick, Portland, Maine; Retired Chief Justice, Supreme Judicial Court of Maine; † Daniel J. Meltzer, Harvard University Law School, Cambridge, Massachusetts; Ronald L. Olson, Los Angeles, California; * Roswell B. Perkins, New York, New York (ex officio as Chair of the Council); Thomas R. Phillips, Chief Justice, Texas Supreme Court, Austin, Texas; Mary Kristina Pickering, Las Vegas, Nevada; * Louis H. Pollak, Judge, United States District Court for the Eastern District of Pennsylvania, Philadelphia, Pennsylvania; Joseph F. Spaniol, Jr., Bethesda, Maryland; † Joan E. Steinman, Chicago-Kent College of Law, Illinois Institute of Technology, Chicago, Illinois; *† Patricia M. Wald, Judge, United States Court of Appeals for the District of Columbia Circuit, Washington, District of Columbia; and * Charles Alan Wright, Austin, Texas (ex officio as President of the Institute). See T.D. NO. 2, supra note 10, at v.
34. See AMERICAN LAW INSTITUTE, FEDERAL JUDICIAL CODE REVISION PROJECT, COUNCIL DRAFT NO. 1 (1996) [hereinafter C.D. NO. 1].
35. T.D. NO. 1, supra note 13.
36. P.D. NO. 1 referred to such a claim as an "independent" claim, and C.D. NO. 1 substituted the term "jurisdictionally self-sufficient" claim. With respect to both drafts, there was wide support for the concept addressed by the definition but disagreement about the means of expression. T.D. NO. 1 settled on "freestanding" claim as the operative term, and that is the term used by T.D. NO. 2.
37. 490 U.S. 545 (1989).
38. Finley was decided on May 22, 1989. Id. Subsection (e) of P.D. NO. 1's first draft of new section 1367 provided: (e) In deciding whether to exercise or to decline to exercise the jurisdiction over a supplemental claim conferred by subsection (b), the district court shall be governed by the principles of federalism and sound judicial administration applied by the courts of the United States in cases of ancillary and pendent jurisdiction prior to May 22, 1989, subject to the further elaboration of these principles in the exercise of appellate jurisdiction over the judgments and decrees of the district courts. When the court lacks jurisdiction over a supplemental claim or when the exercise of jurisdiction over a supplemental claim would be inappropriate, the district court shall dismiss the supplemental claim unless that claim was joined prior to removal of the civil action to the district court, in which case the district court shall remand that claim to the State court from which it was removed. P.D. NO. 1, supra note 13, at 80.
39. An edited transcript of the entire discussion of T.D. NO. 1 is printed in Discussion of Federal Judicial Code Revision Project, 74 A.L.I. ANN. MEETING PROC. 1997, at 420-62 (1998). For the discussion of the proposed reintroduction of the pendent/ancillary distinction, see id. at 433-37.
40. My reference here to a "single-vote margin" conforms to my description of the vote during the discussion of T.D. NO. 1 at the 1997 Annual Meeting. See id. at 423, 449. This is technically incorrect. My notes show that the vote in Council during discussion of C.D. NO. 1 was 9-7 in favor of unrestricted supplemental jurisdiction in alienage cases, with President Wright (who was presiding) not voting except as a tie breaker. But President Wright thereafter indicated that he strongly opposed this exceptional treatment of alienage cases, and would have voted in the negative. Effectively, if not technically, the Council thus divided on the matter by the single-vote margin of nine members in favor and eight members opposed. President Wright chose not to preside during the discussion of T.D. NO. 1 at the 1997 Annual Meeting in order to participate actively in the discussion, see id. at 420, and spoke against "allow[ing] minimal diversity because of alienage." Id. at 451-52.
41. See id. at 420-62.
42. See T.D. NO. 1, supra note 13.
43. AMERICAN LAW INSTITUTE, FEDERAL JUDICIAL CODE REVISION PROJECT, PRELIMINARY DRAFT NO. 2 (1997) [hereinafter P.D. NO. 2].
44. AMERICAN LAW INSTITUTE, FEDERAL JUDICIAL CODE REVISION PROJECT, COUNCIL DRAFT NO. 2 (1997) [hereinafter C.D. NO. 2].
45. T.D. NO. 2, supra note 10.
46. Part II consists of copyrighted material reprinted verbatim from T.D. NO. 2, supra note 10, at 1-9, except as indicated in the footnotes discussing amendments adopted pursuant to discussion at the Annual Meeting of the Institute on May 14, 1998. This version of new section 1367 and the accompanying Explanatory Note, as amended and annotated to reflect the proceedings of May 14th, was previously printed in Oakley, Prospectus, supra note 2, at 1023-32. The owner of the copyright is The American Law Institute, which has granted permission for this material to be republished here without waiver of its copyright as to any other publication or republication. Because the Explanatory Note is reprinted from another source, its text does not conform to the convention otherwise followed in this Article: "new section 1367" is sometimes referred to as "revised § 1367."
47. Pursuant to discussion with the membership of the Institute on May 14, 1998, T.D. NO. 2 was amended by the Reporter to substitute the word "asserted" for the word "joined" that appears at this point in the text of new section 1367 as printed in T.D. NO. 2. The intent of the amendment is to refer consistently to the connection between a freestanding and a supplemental claim that invokes the jurisdictional restriction of subsection (c) as the status of having been "asserted" in what is defined to be the "same pleading" rather than the more ambiguous status of the two claims having been "joined."
48. Pursuant to discussion with the membership of the Institute on May 14, 1998, T.D. NO. 2 was amended by the Reporter to insert the words "other than a counterclaim or a claim for indemnity or contribution" at this point in the text of new section 1367 as printed in T.D. NO. 2. The intent of the amendment is to make clear that subsection (c)'s restriction of supplemental jurisdiction in diversity litigation does not apply to a counterclaim or claim for indemnity or contribution that a plaintiff might assert against a previously impleaded third-party defendant as a result of the plaintiff having first been placed in a defensive posture by the assertion against the plaintiff of a claim by a defendant or third-party defendant.
49. Pursuant to discussion with the membership of the Institute on May 14, 1998, T.D. NO. 2 was amended by the Reporter to substitute the word "asserted" for the word "joined" that appears at this point in the text of new section 1367 as printed in T.D. NO. 2. The intent of the amendment is to refer consistently to the connection between a freestanding and a supplemental claim that invokes the jurisdictional restriction of subsection (c) as the status of having been "asserted" in what is defined to be the "same pleading" rather than the more ambiguous status of the two claims having been "joined."
50. Pursuant to discussion with the membership of the Institute on May 14, 1998, T.D. NO. 2 was amended by the Reporter to insert the words "under subsection (b)" at this point in the text of new section 1367 as printed in T.D. NO. 2. By stating expressly that the jurisdictional restriction of subsection (c) qualifies only the scope of the supplemental jurisdiction conferred by subsection (b), the amendment is intended to avoid a construction of subsection (c) that would conflict with the supplemental jurisdiction independently granted by 28 U.S.C. § 1332(a)(3). See generally T.D. NO. 2, supra note 10, at 20-21 (discussing § 1332(a)(3)'s grant of supplemental jurisdiction).
51. The Reporter has added this parenthetical qualification to the text of the Explanatory Note as printed in T.D. NO. 2 in order to conform the Explanatory Note to the amended statutory text of proposed subsection (a)(3). See supra note 45 (specifying and explaining the Reporter's amendment of subsection (a)(3)).
52. As printed in T.D. NO. 2, this sentence concludes: "with one important clarification that would effectively overrule a recent, controversial decision of the Supreme Court." Pursuant to discussion with the membership of the Institute on May 14, 1998, the Reporter has replaced the words "effectively overrule" with the word "undermine" in referring to the impact that subsection (b) of new section 1367 would have on the recent decision of the Supreme Court in City of Chicago v. International College of Surgeons, 118 S. Ct. 523 (1997).
53. As printed in T.D. NO. 2, this sentence reads: "In most fundamental respects its restriction of supplemental jurisdiction preserves the present operation of the rule of complete diversity as applied to actions between citizens of different states." Id. at 7. The concluding words, "as applied to actions between citizens of different states," have been deleted by the Reporter. They had significance in an earlier draft, which would have preserved the rule of complete diversity with respect to a suit between citizens of different states but not with respect to suits between state citizens and aliens. See T.D. NO. 1, supra note 13, at 6, 10, 98-102. They were carried forward inadvertently to T.D. NO. 2, which draws no such distinction between diversity suits in which aliens are and are not parties.
54. Part III is adapted from the memorandum to members of the Institute that I wrote as a preface to T.D. NO. 2. See T.D. NO. 2, supra note 10, at xv-xxv. The views stated are my own, and not necessarily those of the Institute. See infra note 63 (discussing the Institute's practice of nonendorsement of annotative material included in drafts approved by the Institute.).
55. 383 U.S. 715 (1966).
56. 28 U.S.C. § 1335 (1994).
57. Id. § 1367(b) (1994).
58. See T.D. NO. 2, supra note 10, § 1367 (a)(1), at 1.
59. See id. § 1367(a)(2), at 1.
60. U.S. CONST. art. III.
61. T.D. NO. 2, supra note 10, § 1367(a)(3), at 1.
62. 414 U.S. 291 (1973).
63. 306 U.S. 583 (1939).
64. 437 U.S. 365 (1978).
65. Such supplemental claims by a plaintiff who has been placed in a defensive posture fall within the supplemental jurisdiction that subsection (b) of new section 1367 grants in global terms. Subsection (c) of new section 1367 restricts this global grant of supplemental jurisdiction in diversity litigation only when the supplemental claim in question has been "asserted in the same pleading" as the relevant freestanding claim. Subsection (a)(3) of new section 1367 as amended by the Reporter, see supra note 45, excludes from the definition of "asserted in the same pleading" counterclaims and claims for indemnity or contribution asserted by a plaintiff against a previously impleaded third-party defendant. Subsection (e) of new section 1367 also qualifies the rule of complete diversity as applied in Kroger by giving a district court the discretion to exercise supplemental jurisdiction over a claim against a nondiverse defendant that is added to litigation by postremoval amendment of the complaint.
66. Part IV is adapted from Section D of my "Reporter's Memorandum on the Claim-Specific Nature of the Original Jurisdiction of the District Courts," which appears in T.D. NO. 2 after the proposed statutory text and associated commentary. See T.D. NO. 2, supra note 10, at 114-25. The convention of the Institute is that material thus presented in memorandum form as the opinion of the Reporter is not subject to approval by the membership of the Institute, and thus is not endorsed by the Institute even when it approves the associated statements of "black-letter" law or proposed statutory text and supporting commentary that constitute the balance of a tentative or final draft. In contrast to the material presented in Part II, which does bear the imprimatur of ALI approval, the material presented in Part I and Parts III and IV thus represents my views but not necessarily those of the Institute.
67. I do not mean to imply that my analysis of the claim-specific nature of federal-question jurisdiction consists only of a citation to Gibbs. But having written elsewhere of the general features of the claim-specific model of federal jurisdiction, see T.D. NO. 2, supra note 10, at 18-20, 29-35, 101-14, and having elaborated this model with special reference to federal-question jurisdiction, see Oakley, Litigative Unit, supra note 2, at 1832-61, I wish to focus here on the applicability of that model to diversity jurisdiction.
68. Kroger, 437 U.S. at 373-74 (footnotes omitted).
69. 7 U.S. (3 Cranch) 267.
70. FED. R. CIV. P. 20(a) (permitting permissive joinder of parties provided that at least one claim by or against each party is based on "the same transaction, occurrence, or series of transactions or occurrences" and that at least one "question of law or fact common to all" the joined parties "will arise in the action").
71. FED. R. CIV. P. 18(a) (permitting unlimited joinder of claims by a particular claiming party as against a particular opposing party, with no requirement that the claims be related in any way other than that they are between the same parties).
72. U.S. CONST. art. III.
73. Kroger, 437 U.S. at 375.
74. See Zahn v. International Paper Co., 414 U.S. 291, 295 (1973); Clark v. Paul Gray, Inc., 306 U.S. 583, 589-90 (1939).
75. See, e.g., Kroger, 437 U.S. at 373-74; ERWIN CHEMERINSKY, FEDERAL JURISDICTION § 5.3, at 280 (2d ed. 1994).
76. See Romero v. International Terminal Operating Co., 358 U.S. 354, 380-81 (1958).
77. 490 U.S. 826, 833 & n.7 (1989).
78. Id. at 832; see FED. R. CIV. P. 21 (permitting parties to "be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just").
79. Newman-Green, 490 U.S. at 830.
80. 23 U.S. (10 Wheat.) 181 (1825).
81. 84 U.S. (17 Wall.) 570 (1873).
82. Newman-Green, 490 U.S. at 835 (quoting Horn, 84 U.S. at 579) (omission and alteration in original).
83. 490 U.S. 545 (1989).
84. Newman-Green, 490 U.S. at 840 (Kennedy, J., dissenting, joined by Scalia, J.).
85. Id. at 839 (citations omitted).
86. Id. at 840.
87. Id. at 841.
88. Id. (quoting Newman-Green, Inc. v. Alfonzo-Larrain R., 854 F.2d 916, 921 (7th Cir. 1988) (en banc)).
89. 7 U.S. (3 Cranch) 267 (1806).
90. Strawbridge, 7 U.S. at 267.
91. Id. at 267-68.
92. FED. R. CIV. P. 19 (governing "joinder of persons needed for just adjudication").
93. See Mallow v. Hinde, 25 U.S. (12 Wheat.) 193, 198-99 (1827); Cameron v. McRoberts, 16 U.S. (3 Wheat.) 591, 592 (1818); Morgan's Heirs v. Morgan, 15 U.S. (2 Wheat.) 290, 298 & n.b (1817) (Marshall, C.J.).