Da Silva v. Kinsho Int'l Corp.

• Decision Date: 30 August 2000
• Docket Number: Docket No. 00-7055
• Citation: 229 F.3d 358
• Parties: (2nd Cir. 2000) CELIA DA SILVA, Plaintiff-Appellant, v. KINSHO INTERNATIONAL CORPORATION and HARUO MARUYAMA, Defendants-Appellees. August Term 2000 Argued:
• Court: U.S. Court of Appeals — Second Circuit

Page 358

229 F.3d 358 (2nd Cir. 2000)

CELIA DA SILVA, Plaintiff-Appellant, v. KINSHO INTERNATIONAL CORPORATION and HARUO MARUYAMA, Defendants-Appellees.

Docket No. 00-7055

August Term 2000

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

Argued: August 30, 2000

Decided: October 05, 2000

Appeal from the January 10, 2000, judgment, of the United States District Court for the Southern District of New York (Richard M. Berman, Judge), dismissing Title VII claim because employer has fewer than fifteen employees and dismissing state claims after adverse jury verdict. Appellant challenges the District Court's subject matter jurisdiction.

Affirmed.

[Copyrighted Material Omitted] David N. Mair, New York, N.Y. (Susan D. Bainnson, Kaiser Saurborn & Mair, P.C., New York, N.Y., on the brief), for plaintiff-appellant.

Jeffrey D. Buss, New York, N.Y. (Smith, Buss & Jacobs, L.L.P., New York, N.Y., on the brief), for defendants-appellees.

Before: NEWMAN, STRAUB, and SACK, Circuit Judges.

JON O. NEWMAN, Circuit Judge.

The issue on this appeal is whether the requirement for Title VII coverage that an employer have at least fifteen employees is an ingredient of subject matter jurisdiction or the merits of the plaintiff's claim. The issue has significance in this case because its resolution determines whether the District Court was entitled to exercise supplemental jurisdiction over the Plaintiff's pendent state law claims, on which the Defendant prevailed after a jury trial. Plaintiff-Appellant Celia Da Silva appeals from the January 10, 2000, judgment of the United States District Court for the Southern District of New York (Richard M. Berman, Judge), in favor of Defendant-Appellee Kinsho International Corp. ("Kinsho"). We conclude that the fifteen-employee requirement is not jurisdictional, and we therefore affirm.

Background

The essential facts are not in dispute. Da Silva brought suit in the District Court alleging discrimination based on national origin, in violation of Title VII, 42 U.S.C. §§ 2000e to 2000e-17 (1994), and New York state and New York City anti-discrimination laws. The defendants moved to dismiss the Title VII claim for lack of subject matter jurisdiction on the ground that Kinsho had fewer than fifteen employees, and was thus not an "employer" for purposes of Title VII. See 42 U.S.C. § 2000e(b) ("The term 'employer' means a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year ...."). Da Silva responded that Kinsho and its Japanese parent company were a single employer for purposes of Title VII, see Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1241 (2d Cir. 1995), and that the employees of the parent company should therefore be counted as Kinsho's.

Judge Martin, to whom the case was originally assigned, denied the motion to dismiss on the ground that the issue of single employer status required a factual inquiry. When the case came to trial, Judge Berman, to whom the case had been transferred, held a bench trial, by agreement of the parties, on the single-employer issue. Four witnesses testified, and several exhibits were introduced. Judge Berman reserved decision on the issue, and commenced a jury trial on the merits of Da Silva's Title VII claim the same day. However, that afternoon Judge Berman dismissed the Title VII claim, ruling that Kinsho was a separate entity from its parent for Title VII purposes, and, lacking fifteen employees of its own, was not a covered "employer." Exercising supplemental jurisdiction, see 28 U.S.C. § 1367 (1994), the Court continued with the trial of the state and city law claims.

While the jury was deliberating, the Court asked for additional briefing on the question that is the main issue in this appeal: is the requirement that an employer have fifteen employees a prerequisite to the exercise of subject matter jurisdiction, or is it instead merely a component of the cause of action? Before the Court ruled on the issue, the jury returned a verdict for the defendants on the state and city claims.

Three weeks later, the Court decided that Kinsho's failure to qualify as an "employer" under Title VII was not jurisdictional, dismissed the Title VII complaint under Fed. R. Civ. P. 12(b)(6) (failure to state a claim) rather than 12(b)(1) (lack of jurisdiction), and ruled that it had been entitled to exercise, and had appropriately exercised, supplemental jurisdiction over the non-federal claims. Judgment was entered for the defendants on both the federal and pendent claims. Seeking an opportunity to pursue the state and city claims in state court, Da Silva appeals, challenging only the ruling that the fifteen-employee requirement is not jurisdictional.

Discussion

The issue on this appeal is whether the District Court had subject matter jurisdiction over Da Silva's Title VII claim, which was dismissed because Kinsho had fewer than the fifteen employees necessary to meet the statutory definition of an "employer" under section 2000e(b) of Title VII. If the District Court did not have subject jurisdiction over the Title VII claim, it could not exercise supplemental jurisdiction over Da Silva's state law claims, see Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d 1182, 1187 (2d Cir. 1996); Cushing v. Moore, 970 F.2d 1103, 1106 (2d Cir. 1992), and the judgment entered for the Defendants on those claims would be void. Although Da Silva invoked the jurisdiction of the District Court and contended that Kinsho qualified as an "employer" under Title VII, she now accepts the ruling that Kinsho is not a statutory "employer" and, having lost on the merits of her state law claims, challenges the District Court's subject matter jurisdiction so that she may relitigate these claims in state court. For its part, Kinsho, having disputed the District Court's jurisdiction, now asserts that the ruling on its "employer" status concerned the merits of Da Silva's claim and contends that the District Court had subject matter jurisdiction over the Title VII claim and could therefore exercise supplemental jurisdiction to adjudicate the state law claims. Thus, the parties, in Justice Jackson's memorable phrase, have "changed positions as nimbly as if dancing a quadrille." Orloff v. Willoughby, 345 U.S. 83, 87 (1953). However, their prior litigating positions do not preclude either side from asserting its current position since the issue of subject matter jurisdiction is one we are required to consider, even if the parties have ignored it or, as here, have switched sides on the issue.

Whether a disputed matter concerns jurisdiction or the merits (or occasionally both) is sometimes a close question. Court decisions often obscure the issue by stating that the court is dismissing "for lack of jurisdiction" when some threshold fact has not been established, without explicitly considering whether the dismissal should be for lack of subject matter jurisdiction or for failure to state a claim.¹ As a leading commentator has pointed out, "Subject matter jurisdiction in federal-question cases is sometimes erroneously conflated with a plaintiff's need and ability to prove the defendant bound by the federal law asserted as a predicate for relief--a merits-related determination." 2 Moore's Federal Practice § 12.30[1], at 12-36 (3d ed. 2000).

The jurisdiction/merits issue can assume importance for at least three purposes. First is the obligation of a court, on its own motion, to inquire as to subject matter jurisdiction and satisfy itself that such jurisdiction exists. See Mt. Healthy City School District Board of Education v Doyle, 429 U.S. 274, 278 (1977). Second is a federal court's authority to exercise supplemental jurisdiction under 28 U.S.C. § 1367 over claims not within federal jurisdiction, a power available only as to claims that properly invoke the court's subject matter jurisdiction. See Cushing, 970 F.2d at 1106. Finally, a judgment rendered by a court lacking subject matter jurisdiction is subject to collateral attack as void, see Restatement (Second) of Judgments § 69 (1980) (hereinafter "Restatement"), although a party that has unsuccessfully litigated a court's subject matter jurisdiction is normally collaterally estopped from such a subsequent challenge, see Stoll v. Gottlieb, 305 U.S. 165, 172 (1938); Restatement § 12.

The Restatement has candidly recognized that in many situations "the matter in question can plausibly be characterized either as going to subject matter jurisdiction or as being one of merits or procedure." Restatement § 11 cmt. e.² Indeed, the Restatement's own attempt to identify the category of disputes that concern subject matter jurisdiction can sometimes suffer from this very defect. The Restatement defines subject matter jurisdiction as a court's "authority to adjudicate the type of controversy involved in the action," Restatement § 11, a formulation that has been cited approvingly, see Carlisle v. United States, 517 U.S. 416, 434-35 (1996) (Ginsburg, J., with whom Souter and Breyer, JJ., join, concurring).³ However, this formulation can merely shift the inquiry to the meaning and scope of the phrase "the type of controversy involved in the action." In the pending case, for example, we could consider the "type of controversy" involved in Da Silva's action to be all cases involving colorable claims of employment discrimination in violation of federal law, in which event the numerical employee requirement would concern the merits, or the "type of controversy" could just as plausibly be all cases of employment discrimination against employers covered by federal law, in which event the numerical employee requirement would concern jurisdiction.

In considering whether a disputed issue should be regarded as an ingredient of subject matter jurisdiction or the merits, it might be helpful to identify different categories of...