In re New Motor Vehicles Canadian Export Antitrust

• Citation: 335 F.Supp.2d 126
• Decision Date: 07 September 2004
• Docket Number: MDL No. 1532.
• Parties: In re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION
• Court: U.S. District Court — District of Maine

335 F.Supp.2d 126

In re NEW MOTOR VEHICLES CANADIAN EXPORT ANTITRUST LITIGATION

MDL No. 1532.

United States District Court, D. Maine.

September 7, 2004.

Robert S. Frank, Harvey & Frank, Portland, ME, for Plaintiffs.

William J. Kayatta, Jr., Pierce Atwood, Portland, ME, for Defendants.

ORDER ON CERTAIN DEFENDANTS' MOTION TO DECLINE SUPPLEMENTAL SUBJECT-MATTER JURISDICTION AND TO DISMISS FOR LACK OF PERSONAL JURISDICTION OVER STATE CLAIMS

HORNBY, District Judge.

I ruled previously in this lawsuit that retail purchasers and lessees can pursue a federal antitrust claim against motor vehicle manufacturers for injunctive relief, but not damages. In re New Motor Vehicles Canadian Exp. Antitrust Litig., 307 F.Supp.2d 136, 137 (D.Me.2004).¹ The plaintiffs then amended their complaint to add various state law claims that would allow a monetary recovery. Some, but not all, of the defendant manufacturers² moved to dismiss the state law claims for lack of personal jurisdiction, or on the basis that I should decline supplemental subject matter jurisdiction over the state law claims. After hearing oral argument on August 25, 2004, I conclude, first, that existing personal jurisdiction arising from the federal claim gives me jurisdiction to hear the state law claims (so-called pendent personal jurisdiction). I conclude, second, that I should not decline supplemental subject matter jurisdiction over the state law claims although I have the statutory discretion to do so. The motion to dismiss is therefore DENIED.

I. ANALYSIS

(A) Pendent Personal Jurisdiction

When a federal court has jurisdiction over a defendant for a federal claim, pendent personal jurisdiction allows the court to exercise personal jurisdiction as to state law claims based on the same operative facts as the federal claim, even if the state law claims do not themselves provide a basis for personal jurisdiction. Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir.2004) (citations omitted). The Second, Third, Fourth, Seventh, Ninth, Tenth, and D.C. Circuits have all recognized pendent personal jurisdiction explicitly. See IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056-57 (2d Cir.1993); Robinson v. Penn Cent. Co., 484 F.2d 553, 555-56 (3d Cir.1973); ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 628-29 (4th Cir.1997); Robinson Eng'g Co. Pension Plan and Trust v. George, 223 F.3d 445, 449-50 (7th Cir.2000); Action Embroidery, 368 F.3d at 1181; United States v. Botefuhr, 309 F.3d 1263, 1272-75 (10th Cir.2002); Oetiker v. Jurid Werke, G.m.b.H., 556 F.2d 1, 5 (D.C.Cir.1977). Quoting the Tenth Circuit, the Ninth Circuit observed in 2004 that "every circuit court of appeals to address the question [has] upheld the application of pendent personal jurisdiction." Action Embroidery, 368 F.3d at 1181 (quoting Botefuhr, 309 F.3d at 1273). I recognized pendent personal jurisdiction in this District in 2000. Andrews v. Emerald Green Pension Fund, 2000 WL 1473376, at ^*7-8, 2000 U.S. Dist. LEXIS 14545, at ^*23-24 (D.Me. Sept. 27, 2000). Once again, I conclude that the First Circuit will recognize pendent personal jurisdiction, agreeing with the other seven Circuits that have addressed the issue.

In an earlier ruling, I found personal jurisdiction over certain Canadian defendants on the federal antitrust claim that motor vehicle manufacturers had conspired to avoid price competition by keeping Canadian motor vehicles out of the American market, In re New Motor Vehicles Canadian Exp. Antitrust Litig., 307 F.Supp.2d 145, 147 (D.Me.2004). In a Second Amended Complaint, the plaintiffs have added state law claims under state antitrust statutes, consumer protection statutes and the common law of unjust enrichment. The new claims arise out of the same underlying facts (the asserted conspiracy to avoid price competition) as those supporting the federal claim. (In adding the state claims the plaintiffs did not significantly alter the factual allegations of their complaint.) Therefore, pendent personal jurisdiction provides jurisdiction over these same defendants for the state law claims, because they arise out of the same nucleus of operative facts. Action Embroidery, 368 F.3d at 1180.

To be sure, Circuits that recognize pendent personal jurisdiction also say that the district court has discretion not to assert the jurisdiction. See, e.g., Action Embroidery, 368 F.3d at 1181 (quoting Oetiker, 556 F.2d at 5 ("[T]he district court may have discretion to dismiss the pendent claims where `considerations of judicial economy, convenience and fairness to the litigants' so dictate.")). For the reasons I articulate below in discussing the discretionary decision over supplemental subject matter jurisdiction, I conclude that asserting jurisdiction here is a proper exercise of discretion. "[I]t is often reasonable to compel [a] defendant to answer other claims in the same suit arising out of a common nucleus of operative facts." Action Embroidery, 368 F.3d at 1181. Here, it is in the interest of "judicial economy, avoidance of piecemeal litigation, and overall convenience of the parties." Id.

Contrary to the defendants' argument, I conclude that the existence of personal jurisdiction as to the federal antitrust claim satisfies constitutional due process requirements for personal jurisdiction as to the state law claims as well. See id.; ESAB, 126 F.3d at 628-29. Where the federal and state law claims arise out of the same nucleus of operative facts, "according to the weight of authority, due process would not prevent obliging the defendant to defend against the state claim along with the federal claim under the doctrine of pendent personal jurisdiction." 4A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure, § 1069.7 at 228-29 (3d ed.2002).³ The defendants argue that their case is unique: that for the state law claims, the plaintiffs can obtain personal jurisdiction over these defendants in no state forum in the United States⁴ and therefore should not be permitted to pursue their state claims in this federal court. I do not understand why that argument should succeed.⁵ As the Fourth Circuit said in ESAB,

Once a court has a constitutional case, in the Article III sense, properly before it, service by a court sufficient to assert personal jurisdiction over a defendant by any authorized mechanism consistent with due process may be held to apply to the entire constitutional case.... Since the court has personal jurisdiction over the defendants..., we can find no constitutional bar to requiring the defendants to defend the entire constitutional case, which includes both federal and state claims arising from the same nucleus of facts, so long as the federal claim is not wholly immaterial or insubstantial.

126 F.3d at 628-29.

Nevertheless, certain defendants argue that the First Circuit will not accept pendent personal jurisdiction because of its holding in Moreno v. United States, 120 F.2d 128 (1st Cir.1941). In Moreno, a widow sued the government in federal court in Massachusetts, seeking benefits under a war risk insurance policy insuring her deceased husband. Id. at 129. Section 19 of the World War Veterans' Act, 1924, permitted the United States to implead into such a lawsuit anyone else claiming an interest in the insurance policy, regardless of where he or she lived. Accordingly, the government impleaded the policy's named beneficiary, a woman who lived in New Jersey. Subsequently, the plaintiff widow tried to add a direct claim for damages against the New Jersey resident for alienation of affections. Both the district court and the First Circuit held that she could not. Id. at 130.

The pendent state claim the plaintiff sought to raise in Moreno (alienation of affections) was not related to the underlying federal claim (entitlement to benefits under a government insurance policy). Pendent personal jurisdiction exists when the state claims for which there is no independent basis for jurisdiction and the federal claim for which there is personal jurisdiction do "arise[ ] out of a common nucleus of operative facts." See Action Embroidery, 368 F.3d at 1180 (citations omitted). Thus, the 1941 Moreno decision is not inconsistent with the later recognized doctrine of pendent personal jurisdiction. Accord Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F.Supp. 1168, 1174 n. 4 (D.Mass.1986) (distinguishing Moreno and applying doctrine of pendent personal jurisdiction); Bertozzi v. King Louie Int'l, Inc., 420 F.Supp. 1166, 1172 n. 3 (D.R.I.1976) (adopting narrow interpretation of Moreno). But see Wilensky v. Standard Beryllium Corp., 228 F.Supp. 703, 706 (D.Mass.1964).

Therefore, pendent personal jurisdiction permits jurisdiction over the Canadian defendants on the state law claims.

(B) Supplemental Subject Matter Jurisdiction

Because there is subject matter jurisdiction over the federal antitrust claim, 28 U.S.C. § 1367 also grants supplemental jurisdiction over "all other claims that are so related to [the federal claim] that they form part of the same case or controversy under Article III of the United States Constitution." 28 U.S.C. § 1367(a) (1993). The state law claims meet that standard. Certain defendants argue, however, that I should decline supplemental subject matter jurisdiction over the state law claims. The statute provides: "[D]istrict courts may decline to exercise supplemental jurisdiction over a claim ... if ... the claim substantially predominates over the claim or claims over which the district court has original jurisdiction...." 28 U.S.C. § 1367(c)(2). According to the First Circuit, this language accords a district court "`broad discretion.'" Che v. Mass. Bay Transp. Auth., 342 F.3d 31, 37 (1st Cir.2003) (quoting Vera-Lozano v. Int'l Broad., 50 F.3d 67, 70 (1st Cir.1995)). The focus is on "the totality of the circumstances" and consideration of issues such as "comity, judicial economy, convenience, fairness and...