Wetzel v. American Motors Corp., Civ. A. No. 87-2742.

Decision Date05 May 1988
Docket NumberCiv. A. No. 87-2742.
Citation693 F. Supp. 246
PartiesVeronica M. WETZEL v. AMERICAN MOTORS CORPORATION.
CourtU.S. District Court — Eastern District of Pennsylvania

Paul I. Guest, Jr., King of Prussia, Pa., for Veronica M. Wetzel.

Sharon R. Donofrio, Philadelphia, Pa., for American Motors Corp.

MEMORANDUM AND ORDER

SHAPIRO, District Judge.

Plaintiff, Veronica M. Wetzel, has instituted this action against defendant, American Motors Corporation, to recover for the purchase of an allegedly defective 1986 Renault Alliance Sedan; the parties are of diverse citizenship and jurisdiction is asserted under 28 U.S.C. § 1332. The first three counts of the amended complaint are based on Pennsylvania statutory law. Count I asserts a claim under the Pennsylvania Automobile Lemon Law, 73 Pa.Cons. Stat. § 1952 et seq. Count II is based on the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa.Cons. Stat. § 201-1 et seq. Count III alleges violations of the implied and express warranty provisions of the Uniform Commercial Code as adopted in Pennsylvania, 13 Pa.Cons.Stat. §§ 2313, 2314, and 2315. Count IV asserts a claim under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. Defendant moves to dismiss Count IV for lack of subject matter jurisdiction.

The Magnuson-Moss Warranty Act ("MMWA") provides a cause of action for damages, reasonable costs and fees, and other legal and equitable relief in state court or, with certain limitations, in federal court. Title 15 U.S.C. § 2310(d)(1) provides:

Subject to subsections (a)(3) and (e) of this section, a consumer who is damaged by the failure of a supplier, warrantor, or service contractor to comply with any obligation under this chapter, or under a written warranty, implied warranty, or service contract, may bring suit for damages and other legal and equitable relief—
(A) in any court of competent jurisdiction in any State or the District of Columbia; or
(B) in an appropriate district court of the United States, subject to paragraph (3) of this subsection.

There is no limit on the amount in controversy in a state court action but 15 U.S.C. § 2310(d)(3) imposes a limit on federal court jurisdiction:

No claim shall be cognizable in a suit brought under paragraph (1)(B) of this subsection—
(A) if the amount in controversy of any individual claim is less than the sum or value of $25;
(B) if the amount in controversy is less than the sum or value of $50,000 (exclusive of interests and costs) computed on the basis of all claims to be determined in this suit; or
(C) if the action is brought as a class action, and the number of named plaintiffs is less than one hundred.1

Plaintiff avers that the purchase price of the automobile was $11,165.40; the maximum recoverable damages are treble that amount, or $33,496.20. Both these sums are less than $50,000.2 Defendant argues that the amount in controversy is insufficient to invoke federal jurisdiction under the MMWA, so this court does not have subject matter jurisdiction over plaintiff's MMWA claim. However, plaintiff asserts federal jurisdiction by reason of diversity of citizenship and pendent jurisdiction over the MMWA claim.

The issue is whether the jurisdictional amount required by MMWA as a basis for federal jurisdiction precludes any MMWA claim in federal court with less than the amount in controversy even if there is independent jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332. We hold that the MMWA limitation on the amount in controversy precludes a federal cause of action where jurisdiction is predicated only on federal question jurisdiction (28 U.S.C. §§ 1331, 1337), but does not preclude federal jurisdiction where there are state claims to which the MMWA claim is pendent and the parties are of diverse citizenship. Defendant's motion will be denied.

It is undisputed that this court has jurisdiction over Counts I, II, and III based on diversity of citizenship of the parties. Plaintiff argues there is pendent jurisdiction over Count IV.

When a federal court has federal question jurisdiction, that court has pendent jurisdiction over state claims as to which there would otherwise be no federal jurisdiction if they derive from "a common nucleus of operative fact" to the federal question properly before it. There is pendent federal jurisdiction over the state claims if "a plaintiff's claims are such that he would ordinarily be expected to try them in one judicial proceeding." United Mine Workers v. Gibbs, 383 U.S. 715, 725-26, 86 S.Ct. 1130, 1138-39, 16 L.Ed.2d 218 (1966). Even if there is a constitutional and statutory basis for pendent jurisdiction, the federal court may use its discretion in deciding if it is in the interests of "judicial economy, convenience and fairness to litigants" to exercise pendent jurisdiction. Id.

The issue here is whether when a federal court has diversity jurisdiction over a state claim, it has pendent jurisdiction over a federal claim that derives from "a common nucleus of operative fact" to a state claim properly before it even if there would otherwise be no federal jurisdiction for lack of the requisite amount in controversy. Here the plaintiff's MMWA and state claims are such that she would ordinarily be expected to try them in one judicial proceeding and it is in the interests of judicial economy, convenience and fairness to the litigants to retain jurisdiction.

Pendent jurisdiction, in the sense of judicial power, exists whenever there is a claim "arising under the Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority....," U.S. Const., Art. III, sec. 2, and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional "case."

Gibbs, supra, 383 U.S. at 725, 86 S.Ct. at 1138.

The Constitution, Article III, Section 2, likewise extends the power of federal courts to cases and controversies "between citizens of different states." It is reasonable to assume that the Constitutional grant of diversity jurisdiction as well as federal question jurisdiction includes claims so related that the entire action before the court comprises but one constitutional "case." If so, there is jurisdiction in the sense of judicial power over claims pendent to a case or controversy between citizens of different states.

Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978), held that plaintiff could not assert a claim against a non-diverse party impleaded by the defendant even though the claims arose out of a common nucleus of operative fact (so-called "pendent party" jurisdiction), in order not to subvert the policy of complete diversity dictated by the holding in Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806), and Congressional acquiescence therein by inaction. See also Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed. 2d 276 (1976) (federal claims against county employees could not provide a basis for pendent jurisdiction over state claims against the county); Zahn v. International Paper Co., 414 U.S. 291, 94 S.Ct. 505, 38 L.Ed.2d 511 (1973) (each class member's claim in diversity must exceed requisite jurisdictional amount).

The Supreme Court in Owen Equipment specifically left open whether the constitutional holding in Gibbs applied to diversity of citizenship jurisdiction; it assumed without deciding that the Gibbs "test also determines the outer boundaries of constitutionally permissible federal jurisdiction when that jurisdiction is based upon diversity of citizenship." 437 U.S. at 371 n. 10, 98 S.Ct. at 2401 n. 10. See also Schenkier, "Ensuring Access to Federal Courts: A Revised Rationale for Pendent Jurisdiction," 75 Nw.U.L.Rev. 245, 279 (1980).

The statute conferring jurisdiction over federal questions, in Gibbs, read: "The district courts shall have original jurisdiction of all civil actions wherein the matter ... arises under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. Thus, if one claim of several arises under a law of the United States, the entire civil action can be heard in federal court.3 The diversity of citizenship statute similarly confers jurisdiction over "all civil actions ... between (1) citizens of different states...." 28 U.S.C. § 1332. Consistently interpreting the term "civil action,"4 this court has statutory jurisdictional power over the MMWA claim as well as the state claims.

The problems presented if a pendent party is provided a federal forum to which he or she is not otherwise entitled are not the same as if a federal claim is heard between parties with related state claims properly in federal court under the doctrine of pendent jurisdiction. The Aldinger court specifically emphasized the distinction:

Courts should consider whether by virtue of the statutory grant of subject-matter jurisdiction, upon which plaintiff's principal claim against the defendant rests, Congress has addressed itself to the party as to whom jurisdiction pendent to the principal claim is sought.

Aldinger, supra, 427 U.S. at 16, 96 S.Ct. at 2421 (emphasis in original).

When this court has diversity jurisdiction, it has the constitutional and statutory power to exercise pendent jurisdiction over a federal claim with a common nucleus of operative fact. Where a basis for federal jurisdiction exists by reason of diversity of citizenship, failure to meet the jurisdictional amount prerequisite for independent jurisdiction over the federal question does not bar a federal court's power to exercise pendent jurisdiction over the federal claim. See, e.g., Hagans v. Lavine, 415 U.S. 528, 94 S.Ct. 1372, 39 L.Ed.2d 577 (1974) (where there is a substantial constitutional claim, the federal court may exercise pendent jurisdiction over a related federal statutory claim without the then applicable requisite amount in controversy under 28 U.S.C. §...

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