Zahn v. International Paper Company 8212 888

Decision Date17 December 1973
Docket NumberNo. 72,72
Citation94 S.Ct. 505,38 L.Ed.2d 511,414 U.S. 291
PartiesH. Keith ZAHN et al., Petitioners, v. INTERNATIONAL PAPER COMPANY. —888
CourtU.S. Supreme Court

Multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional amount for suits in federal courts, and in this diversity class action under Fed.Rule Civ.Proc. 23(b)(3) by owners of lakeshore property charging respondent with polluting the lake, where only the named plaintiffs but not the unnamed plaintiffs could show damages in the jurisdictional amount, a class action is not maintainable. Each plaintiff in a Rule 23(b)(3) class action must satisfy the jurisdictional amount and any plaintiff was does not must be dismissed from the case. Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319, followed. Pp. 292—302.

469 F.2d 1033, affirmed.

Peter F. Langrock, Middlebury, Vt., for petitioners.

Taggart Whipple, New York City, for respondent.

Mr. Justice WHITE delivered the opinion of the Court.

Petitioners, asserting that they were owners of property fronting on Lake Champlain in Orwell, Vermont brought this action in the District Court on behalf of a class consisting of themselves and 200 lake-front property owners and lessees. They sought damages from International Paper Co., a New York corporation, for allegedly having permitted discharges from its pulp and paper-making plant, located in New York, to flow into Ticonderoga Creek and to be carried by that stream into Lake Champlain, thereby polluting the waters of the lake and damaging the value and utility of the surrounding properties. The suit was brought as a diversity action, jurisdiction assertedly resting on 28 U.S.C. § 1332(a)(1). The claim of each of the named plaintiffs was found to satisfy the $10,000 jurisdictional amount, but the District Court was convinced 'to a legal certainty' that not every individual owner in the class had suffered pollution damages in excess of $10,000. Reading Snyder v. Harris, 394 U.S. 332, 89 S.Ct. 1053, 22 L.Ed.2d 319 (1969), as precluding maintenance of the action by any member of the class whose separate and distinct claim did not individually satisfy the jurisdictional amount and concluding that it would not be feasible to define a class of property owners each of whom had more than a $10,000 claim, the District Court then refused to permit the suit to proceed as a class action. 53 F.R.D. 430 (Vt.1971). A divided Court of Appeals affirmed, 469 F.2d 1033 (CA2 1972), principally on the authority of Snyder v. Harris, supra. We granted the petition for writ of certiorari, 410 U.S. 925, 93 S.Ct. 1370, 35 L.Ed.2d 585 (1973).

The Court of Appeals correctly held that this case is governed by the rationale of this Court's prior cases construing the statutes defining the jurisdiction of the District Court. We therefore affirm its judgment.

From the outset, Congress has provided that suits between citizens of different States are maintainable in the district courts only if the 'matter in controversy' exceeds the statutory minimum, now set at $10,000. 28 U.S.C. § 1332(a).1 The same jurisdictional-amount requirement has applied when the general federal-question jurisdiction of the district courts, 28 U.S.C. § 1331(a), is sought to be invoked.2 A classic statement of the dichotomy that developed in construing and applying these sections is found in Troy Bank of Troy, Indiana v. G. A. Whitehead & Co., 222 U.S. 39, 40—41, 32 S.Ct. 9, 56 L.Ed. 81 (1911):

'When two or more plaintiffs, having separate and distinct demands, unite for convenience and economy in a single suit, it is essential that the demand of each be of the requisite jurisdictional amount; but when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest, it is enough if their interests collectively equal the jurisdictional amount.'

This distinction and rule that multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional-amount requirement for suit in the federal courts were firmly rooted in prior cases dating from 1832,3 and have continued to be the accepted construction of the controlling statutes, now §§ 1331 and 1332.4 The rule has been applied to forbid aggregation of claims where none of the claimants satisfies the jurisdictional amount, as was the case in Scott v. Frazier, 253 U.S. 243, 244, 40 S.Ct. 503, 64 L.Ed. 883 (1920), for example, where the Court stated the rule to be that 'the amount in controversy must equal the jurisdictional sum as to each complainant.' It also requires dismissal of those litigants whose claims do not satisfy the jurisdictional amount, even though other litigants assert claims sufficient to invoke the jurisdiction of the federal court. Clark v. Paul Gray, Inc., 306 U.S. 583, 59 S.Ct. 744, 83 L.Ed. 1001 (1939); Stewart v. Dunham, 115 U.S. 61, 64—65, 5 S.Ct. 1163, 1164—1165, 29 L.Ed. 329 (1885); Township of Bernards v. Stebbins, 109 U.S. 341, 355, 3 S.Ct. 252, 262, 27 L.Ed. 956 (1883).

In Clark v. Paul Gray, Inc., decided after the effective date of the Federal Rules of Civil Procedure in 1938, the Court applied the familiar rule that 'when several plaintiffs assert separate and distinct demands in a single suit, the amount involved in each separate controversy must be of the requisite amount . . ., and . . . those amounts cannot be added together to satisfy jurisdictional requirements.' 306 U.S., at 589, 59 S.Ct., at 748. Upon ascertaining on its own motion that only one of the plaintiffs in the District Court had presented a claim satisfying the jurisdictional amount, the Court reached the merits of that claim but directed the District Court to dismiss the claims of all other plaintiffs for want of jurisdiction.

The same rules were applied to class actions contemplated by Fed.Rule Civ.Proc. 23. The spurious class action authorized by Rule 23(a)(3), as it stood prior to amendment in 1966,5 was viewed by Judge Frank, writing for himself and Judges Learned and Augustus Hand, as, 'in effect, but a congeries of separate suits so that each claimant must, as to his own claim, meet the jurisdictional requirements.' Steele v. Guaranty Trust Co. of N.Y., 164 F.2d 387, 388 (CA2 1947).6 The direct precedent for Steele was a 1941 decision in the same Circuit expressed in an opinion written by Judge Charles Clark, who, as a member of and Reporter for the Advisory Committee, was a principal architect of the Federal Rules of Civil Procedure. That case, Hackner v. Guaranty Trust Co. of N.Y., 117 F.2d 95 (CA2 1941), involved a class action brought on behalf of plaintiffs with separate and distinct claims. Judge Clark invoked a long line of authority in this Court, and in other courts, to hold that among parties related only by a common question of law and fact, 'aggregation is improper' and that jurisdiction cannot be supplied for those without claims in the requisite amount 'by adding a plaintiff who can show jurisdiction.' Id., at 98. (Citations omitted). This was the accepted view in the federal courts with respect to class actions.7 In consequence, district courts were to entertain the claims of only those class action plaintiffs whose individual cases satisfied the jurisdictional-amount requirement.

The meaning of the 'matter in controversy' language of § 1332 as it applied to class actions under Rule 23 reached this Court in Snyder v. Harris, supra, the occasion being a division of opinion in the courts of appeals as to whether the 1966 amendments to Rule 23 had changed the jurisdictional-amount requirement of § 1332 as applied to class actions involving separate and distinct claims. 8 None of the named plaintiffs and none of the unnamed members of the class before the Court alleged claims in excess of the requisite amount. It was nevertheless urged that in class action situations, particularly in light of the 1966 amendments to the rule, aggregation of separate and distinct claims should be permitted. The Court was of a contrary view, holding that class actions involving plaintiffs with separate and distinct claims were subject to the usual rule that a federal district court can assume jurisdiction over only those plaintiffs presenting claims exceeding the $10,000 minimum specified in § 1332. Aggregation of claims was impermissible, and the federal court was without jurisdiction where none of the plaintiffs presented a claim of the requisite size. The Court unmistakably rejected the notion that the 1966 amendments to Rule 23 were intended to effect, or effected, any change in the meaning and application of the jurisdictional-amount requirement insofar as class actions are concerned.

'The doctrine that separate and distinct claims could not be aggregated was never, and is not now, based upon the categories of old Rule 23 or of any rule of procedure. That doctrine is based rather upon this Court's interpretation of the statutory phrase 'matter in controversy.' The interpretation of this phrase as precluding aggregation substantially predates the 1938 Federal Rules of Civil Procedure. '. . . Nothing in the amended Rule 23 changes this doctrine. . . . The fact that judgments under class actions formerly classified as spurious may now have the same effect as claims brought under the joinder provisions is certainly no reason to treat them differently from joined actions for purposes of aggregation.' 394 U.S., at 336—337, 89 S.Ct., at 1057.

The Court also refused to reconsider its prior constructions of the 'matter in controversy' phrase, concluding that it should not do so where Congress, with complete understanding of how the courts had construed the statute, had not changed the governing language and down through the years had continued to specify and had progressively increased the jurisdictional amount necessary for instituting suit in the federal courts.

None of the plaintiffs in Snyder v. Harris alleged a claim exceeding $10,000,...

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