June 2005
Bulletin 05-13
U.S. Supreme Court Allows
Supplemental Jurisdiction Over Claims
Even When Amount in Controversy Not Satisfied
If you have questions or would
like additional information on the
material covered in this Bulletin,
please contact one of the authors:
Michael K. Brown
(Los Angeles)
213.457.8018
mkbrown@reedsmith.com
Lisa M. Baird
(Los Angeles)
213.457.8036
lbaird@reedsmith.com
Thomas L. Allen
(Pittsburgh)
412.288.3066
tallen@reedsmith.com
Robert “Bo” D. Phillips, Jr.
(Oakland)
510.466.6722
rphillips@reedsmith.com
…or the Reed Smith attorney
with whom you regularly work.
On June 23, 2005, the United States Supreme Court issued a ruling confirming
federal court jurisdiction in a lawsuit brought by numerous plaintiffs. In Exxon
Mobil Corp. v. Allapattah Services, Inc., Nos. 04-70 (available at
supct.law.cornell.edu/supct/html/04-70.ZS.html), the court ruled that supplemental
jurisdiction can be exercised over all plaintiffs’ claims regardless of whether all
plaintiffs meet the diversity jurisdiction “amount in controversy” requirement, so
long as original jurisdiction exists over at least one plaintiff’s claims.
In Exxon Mobil, 10,000 gasoline dealers filed a federal court class action over alleged
gasoline price overcharges. After a plaintiffs’ verdict with the potential for a large
damage award, the trial court certified the question of whether it properly had
jurisdiction over the entire class for interlocutory review.
The Eleventh Circuit held that the supplemental jurisdiction statute, 28 U.S.C.
§1367, “clearly and unambiguously provides district courts with the authority in
diversity class actions to exercise supplemental jurisdiction over the claims of class
members who do not meet the minimum amount in controversy as long as the
district court has original jurisdiction over the claims of at least one of the class
representatives.” Slip Op. at 2 (citing Allapattah Services, Inc. v. Exxon Corp., 333 F.3d
1248, 1256 (2003)). In reaching its conclusion, the Eleventh Circuit aligned itself
with the majority of other Circuits.
The Supreme Court granted review in Exxon Mobil after the First Circuit reached the
opposite conclusion in a case that became Exxon Mobil’s companion, Ortega v. StarKist Foods, Inc., 370 F.3d 124 (2004). According to the First Circuit interpretation of
section 1367, unless all plaintiffs in a diversity action individually satisfied the
amount in controversy requirement, then federal courts lacked jurisdiction to hear
the claims even of a plaintiff in that action who did, and the entire case would have
to be dismissed.
For the defense community, the jurisdictional rule set out in Exxon Mobil is a bit of a
mixed blessing. A defendant who faces a mass litigation that otherwise would
proceed in state court sometimes may prefer to remove the case to federal court
because of the perceived advantages of that forum, whether because of a pro-plaintiff
bias in certain state courts, more advantageous procedural rules, or
other strategic considerations.
LONDON
On the other hand, in a case like Exxon Mobil, the availability of
federal jurisdiction provided plaintiffs’ lawyers an easy way to
aggregate the claims of 10,000 plaintiffs before one judge and—for
now at least—obtain a verdict against the defendant with the
potential for a large total damage award. While the final chapter
has not yet been written in Exxon Mobil about the propriety of that
This bulletin is presented for informational purposes and is not intended to constitute legal advice.
© Reed Smith LLP 2005. All Rights Reserved.
“Reed Smith” refers to Reed Smith LLP, a limited liability partnership formed in the state of Delaware.
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Client Bulletin 05-13
class action or the verdict reached, there can be little doubt that litigating in a single federal forum has not
to-date worked to the defendant’s advantage.
Nevertheless, the ruling in Exxon Mobil is well grounded in the jurisdictional statutes, and in conjunction with
the Class Action Fairness Act of 2005, which extended federal jurisdiction over multi-state class actions meeting
certain criteria, might be said to represent a trend toward the consolidation of mass litigation in the federal
courts.
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For additional information on the federal Class Action Fairness Act, see our Client Bulletin 2005-07, entitled
“Class Action Fairness Act of 2005 Gives Federal Courts Jurisdiction Over Most Nationwide Class Actions,”
online at www.reedsmith.com/library/publicationView.cfm?itemid=91881. This Bulletin was written by Thomas
Evans and Perry Napolitano, of our Oakland and Pittsburgh offices, respectively.
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Reed Smith LLP, a top-25 international law firm with 1,000 lawyers located throughout the United States and
Europe, represents Fortune 100 as well as mid-market and emerging companies. Clients include financial
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www.reedsmith.com.
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