Rosmer v. Pfizer Incorp., 00-2224

Citation263 F.3d 110
Decision Date02 March 2001
Docket NumberNo. 00-2224,00-2224
Parties(4th Cir. 2001) LOUISE ROSMER, on behalf of herself and as class representative, Plaintiff-Appellant, v. PFIZER INCORPORATED, Defendant-Appellee. . Argued:
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

Appeal from the United States District Court for the District of South Carolina, at Charleston.

Solomon Blatt, Jr., Senior District Judge. (CA-00-2168-9-8) COUNSEL ARGUED: Robert Norris Hill, SPEIGHTS & RUNYAN, Hampton, South Carolina, for Appellant. David Klingsberg, KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, L.L.P., New York, New York, for Appellee. ON BRIEF: Daniel A. Speights, Amanda G. Steinmeyer, SPEIGHTS & RUNYAN, Hampton, South Carolina; Howard Hammer, HAMMER, HAMMER, CARRIGG & POTTERFIELD, Columbia, South Carolina, for Appellant. Robert Grass, KAYE, SCHOLER, FIERMAN, HAYS & HANDLER, L.L.P., New York, New York; Michael T. Cole, Jane Thompson Davis, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P., Charleston, South Carolina, for Appellee.

Before WILKINSON, Chief Judge, MOTZ, Circuit Judge, and Cynthia Holcomb HALL, Senior Circuit Judge of the United States Court of Appeals for the Ninth Circuit, sitting by designation.

Affirmed by published opinion. Chief Judge Wilkinson wrote the majority opinion, in which Senior Judge Hall joined. Judge Motz wrote a dissenting opinion.

OPINION

WILKINSON, Chief Judge:

This case turns on one discrete question of statutory interpretation -whether 28 U.S.C. § 1367 (1994) permits federal courts to exercise supplemental jurisdiction in a diversity class action when one named plaintiff has a claim above the jurisdictional minimum. The district court held that § 1367 confers federal subject matter jurisdiction over class members whose claims do not satisfy the amount in controversy requirement of 28 U.S.C. § 1332, as long as diversity jurisdiction exists over the claims of a named plaintiff. Because the plain text of § 1367 authorizes supplemental jurisdiction in diversity class actions, we affirm the judgment of the district court.

I.

Louise Rosmer filed an action in state court against Pfizer Inc. on behalf of herself and as class representative for"all persons whose spouses have been injured by the drug Trovan." She alleged a loss of consortium arising from injuries to her husband caused by Trovan, an antibiotic manufactured by Pfizer. She sought to recover general and special damages resulting from the loss of consortium as well as punitive damages.

Only state-law claims were pled. Rosmer is a resident of South Carolina. Pfizer is a Delaware corporation with its principal place of business in New York. The parties agree that Rosmer's individual claim exceeded $75,000. The complaint alleged, however, that some class members suffered less than $75,000 in actual and punitive damages.

Pfizer removed this action from state court to the United States District Court for the District of South Carolina, basing federal subject matter jurisdiction on 28 U.S.C. S§ 1332 and 1367. Pfizer maintained that the district court had original jurisdiction under § 1332 over Rosmer's claims because she and Pfizer were of diverse citizenship, and Rosmer's claims exceeded $75,000. See 28 U.S.C.A. § 1332 (West Supp. 1999).1 Pfizer then contended that where the district court had original jurisdiction over the named plaintiff, it had supplemental jurisdiction under 28 U.S.C. § 1367 over the claims of all class members regardless of whether each of their claims independently satisfied § 1332's amount in controversy requirement.

Rosmer moved to remand the action to state court alleging a lack of federal subject matter jurisdiction. The district court held that subject matter jurisdiction was appropriate in this case and denied Rosmer's motion to remand. At the same time, the court certified its order for interlocutory review under 28 U.S.C. § 1292(b). This court granted Rosmer's petition for interlocutory review, and Rosmer now appeals.

II.

In 1973, the Supreme Court held that in a class action, multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional amount for diversity suits in federal courts. See Zahn v. Int'l Paper Co., 414 U.S. 291, 300-01 (1973). The Court concluded that "any plaintiff without the jurisdictional amount must be dismissed from the case, even though others allege jurisdictionally sufficient claims." Id. at 300.

The rule that all plaintiffs in a class action must independently satisfy the amount in controversy requirement went unchallenged until 1990, when Congress created supplemental jurisdiction with the passage of 28 U.S.C. § 1367.2

The supplemental jurisdiction statute was passed in response to the Supreme Court's decision in Finley v. United States, 490 U.S. 545 (1989). In Finley, the plaintiff brought a Federal Tort Claims Act action against the United States, alleging negligence on the part of the Federal Aviation Administration. The plaintiff then moved to amend her federal complaint to include state law claims against non-diverse parties. No independent basis for federal jurisdiction existed over the state law claim against the new defendants. See Finley, 490 U.S. at 546. The Court held that the state law claim did not belong in federal court. Id. at 554-55. The Court also invited Congress to act, noting that "[w]hatever we say regarding the scope of jurisdiction conferred by a particular statute can of course be changed by Congress." Finley, 490 U.S. at 556.

The new § 1367 states that federal courts have supplemental jurisdiction over cases "that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy." 28 U.S.C. § 1367(a). Thus, Congress overruled the holding in Finley that pendent parties do not belong in federal court.

Congress did not authorize supplemental jurisdiction in all cases, however. Section 1367(b) states that when "original jurisdiction [is] founded solely on section 1332," federal courts shall not have supplemental jurisdiction over "claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or over claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules, when exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section 1332." 28 U.S.C. § 1367(b). The interpretation of § 1367(a) & (b) lies at the heart of this case.

III.

We must decide whether § 1367 authorizes supplemental jurisdiction in the diversity class action context, or whether Zahn survives the enactment of § 1367. Other circuit courts have split on this question. Compare Stromberg Metal Works, Inc. v. Press Mech., Inc., 77 F.3d 928, 930-31 (7th Cir. 1996) (stating that supplemental jurisdiction applies to class actions), and In re Abbott Labs., 51 F.3d 524, 528-29 (5th Cir. 1995), aff'd by an equally divided court sub nom. Free v. Abbott Labs., 529 U.S. 333 (2000) (per curiam) (same), with Trimble v. Asarco, Inc., 232 F.3d 946, 962 (8th Cir. 2000) (holding that each member of a class who does not meet the jurisdictional amount must be dismissed from the case), Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214, 218 (3d Cir. 1999) (same), and Leonhardt v. Western Sugar Co., 160 F.3d 631, 640 (10th Cir. 1998) (same). The Supreme Court has recently divided 4-4 on this issue. See Free v. Abbott Labs., 529 U.S. 333 (2000) (per curiam). Our view, respectfully, is that § 1367 confers supplemental jurisdiction in diversity class actions, so long as one named plaintiff has a claim giving a federal court original jurisdiction.

A.

Section 1367(a) is a general grant of supplemental jurisdiction, stating that "in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a). Section 1367(a) "is broadly phrased to provide for supplemental jurisdiction over claims appended to`any civil action' over which the court has `original jurisdiction.'" Shanaghan v. Cahill, 58 F.3d 106, 109 (4th Cir. 1995) (quoting 28 U.S.C.§ 1367(a)).

Section 1367(a) states in straightforward language that a federal court may exercise supplemental jurisdiction if those claims "form part of the same case or controversy" as the claim over which "the district courts have original jurisdiction." 28 U.S.C. § 1367(a). This case unequivocally fits within the above language. The federal district court has "original jurisdiction" under § 1332 because Rosmer and Pfizer are diverse and her claim is above $75,000. 28 U.S.C.A. § 1332(a); accord 28 U.S.C. § 1367. And since the pendent claims of the absent class members raise similar questions of law and fact to Rosmer's claim, they are necessarily a "part of the same case or controversy." 28 U.S.C. § 1367(a); see also Fed. R. Civ. P. 23. Therefore, the district court has supplemental jurisdiction over the other claims.

The only exceptions to the federal court's supplemental jurisdiction authority are those "provided in subsections (b) and (c)" or those "expressly provided otherwise by Federal statute." 28 U.S.C. § 1367(a). Section 1367(c), relating to discretionary jurisdiction, is inapplicable to this case. And no federal statute speaks "expressly" as to whether class actions are subject to supplemental jurisdiction. Accordingly, the district court may exercise supplemental jurisdiction unless prevented by one of § 1367(b)'s exceptions.

Section 1367(b) "imposes specific limits on the use of supplemental jurisdiction in diversity cases." Shanaghan, 58 F.3d at 109. Section 1367(b)...

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