Analyzing a Supplemental Claim

Every supplemental-jurisdiction problem starts with § 1367(a). In any civil action within the district courts' original jurisdiction, the courts have supplemental jurisdiction over all other claims so related to the original-jurisdiction claims that they form part of the same case or controversy under Article III, and the grant includes claims that involve the joinder or intervention of additional parties.¹ That grant is only the first move. Subsection (b) withdraws part of it in actions founded solely on diversity, and subsection (c) lets a court decline claims that the grant covers.²

A supplemental claim therefore has to clear three layers of authority. Article III must permit the court to hear it, § 1367 must grant jurisdiction over it, and the court must be willing to use the jurisdiction it has. The first layer owes nothing to the statute, because Congress cannot decide by statute which claims the Constitution authorizes a court to hear. It comes from Gibbs, under which constitutional power exists when a proper claim is within the federal court's jurisdiction and the related claim arises from the same nucleus of operative facts.³ The second layer is § 1367(a), which broadly grants authority over related state-law claims that meet the Gibbs test, subject to the diversity-only exceptions of subsection (b).⁴ The third layer is the discretion that subsection (c) confers. Success at one layer cannot make up for failure at another.

The questions must be asked in order, because each answer depends on the one before it. Relatedness has a reference point only after you have found a claim within original jurisdiction to which the added claim might attach. Whether the diversity-only bars apply depends on what that anchor claim rests on. Discretion to decline operates only on claims already inside the grant. Students who reverse the order make one of two mistakes: they treat a close factual connection as a substitute for an anchor claim, or they apply the diversity-only bars to an action that rests on a federal question, where subsection (b) has no force.

Exam Analysis Steps

The statute and the cases impose four questions, and the analysis follows their order:

Find a claim within the court's original jurisdiction to serve as the anchor, because supplemental jurisdiction operates only in a civil action that already has one.⁵
Ask whether the added claim forms part of the same case or controversy as the anchor claim, which requires both constitutional power under Gibbs and the grant of § 1367(a), including its reach to additional parties.⁶
If original jurisdiction rests solely on diversity, ask whether subsection (b) bars the claim, meaning a plaintiff-side claim whose exercise would be inconsistent with the requirements of § 1332.⁷
Ask whether the court should decline a claim that survived the first three steps because it raises a novel or complex issue of state law, substantially predominates over the claims within original jurisdiction, follows the dismissal of every such claim, or presents exceptional circumstances.⁸

If the court declines a claim at the fourth step, the tolling rule covered in the previous section protects the plaintiff when the claim is refiled in state court.

Two questions that students tend to merge must stay apart. The Federal Rules of Civil Procedure decide whether a claim or a party may be joined in the action, and the statute decides whether the court has power to hear the claim once it is joined.⁹ The federal courts have only limited jurisdictional power, so permission to join a claim under the Rules cannot substitute for a basis in Article III.¹⁰ A counterclaim or added-party problem must therefore pass both tests, and the applications below show where each test does its work.

The two basic configurations part ways at the third question. When a federal claim anchors the action, the diversity-only bars never apply, and the analysis reduces to relatedness and discretion. When diversity alone anchors the action, the third question decides many of the hard cases. The federal-question configuration comes first.

Federal Question Cases

When a federal claim anchors the action, whether it arises under 42 U.S.C. § 1983, the Truth in Lending Act, or the patent laws, § 1367(a) operates without the cutbacks that complicate a diversity case. Subsection (b) withholds supplemental jurisdiction only in a civil action whose original jurisdiction is founded solely on § 1332, so it never applies to an action anchored by a federal question.¹² The third question therefore drops out, and the problem reduces to the anchor, the relatedness of the added claim, and the court's discretion.

The reason follows from what subsection (b) protects. It excepts claims in diversity cases that would contradict the limits on jurisdiction in § 1332.¹³ An action anchored by a federal claim does not depend on § 1332 for its original jurisdiction, so no such limit is at risk, and relatedness is the only check on what may be added.

The simplest application adds a state claim against the same defendant. An arrestee who sues an officer under § 1983 for excessive force and adds a state-law battery claim over the same scuffle presents a case exactly analogous to Gibbs: the § 1983 claim is a proper federal claim, and the battery claim arises from the same nucleus of operative fact.¹⁴

The grant also reaches additional parties. A state claim that is transactionally related to the federal claim comes in against a new party who must defend it, and neither the new party's citizenship nor the amount of the claim matters.¹⁵

Lakeview's citizenship and the amounts are the same in both claims, so only relatedness explains the different results. An answer that rejects the misstatement claim because Dana and Lakeview are co-citizens has applied a diversity rule to an action that does not rest on diversity.¹⁶

A patent suit supplies the same kind of federal anchor, because the federal district courts have exclusive subject-matter jurisdiction over cases involving a U.S. patent under 28 U.S.C. § 1338.¹⁷ The pendent-party exercises held improper in Finley and Aldinger would be upheld under § 1367, and the last sentence of § 1367(a) does that work.¹⁸ A related state claim by an added plaintiff comes in on the same reasoning, because subsection (b) does not reach an action anchored by a federal question.¹⁹

Counterclaims show most clearly why power and permission are separate questions. A Texas arrestee sues a Texas officer under § 1983, and the officer counterclaims for $90,000 on a loan made months before the arrest. Rule 13(b) permits the counterclaim as a permissive one, but that answers only whether the officer may plead it.²⁰ The jurisdictional question remains. The counterclaim is a state claim between nondiverse parties, and the loan has no connection to the arrest, so the counterclaim does not arise from the same transaction or occurrence as the anchor claim and almost certainly is not part of the same case or controversy.²¹ Supplemental jurisdiction is therefore unavailable.²²

The same distinction governs claims that the plaintiff piles on. Rule 18(a) lets a party who has asserted one proper claim against an opposing party join any other claims it has against that party,²³ but only a claim that shares the nucleus of the § 1983 claim, such as the battery claim, has a jurisdictional basis. An unrelated claim is not necessarily lost, since it survives if it satisfies § 1331 or § 1332 on its own.

Relatedness establishes power, and discretion decides whether the court uses it. Section 1367(c) lets a court decline a related claim that raises a novel or complex issue of state law, that substantially predominates over the claims within original jurisdiction, or that remains after the court has dismissed every claim within its original jurisdiction, and it adds a residual ground for exceptional circumstances.²⁴ The third ground deserves attention whenever a federal claim is dismissed. The statute treats the dismissal of every anchor claim as a reason the court may decline the state claim, which presupposes that the court still holds power over it.

Exam Analysis Steps

Because the diversity limits drop out and the Rules answer a separate question, a federal-question problem takes five steps:

Identify the federal claim and confirm that it is substantial enough to support jurisdiction under § 1331, because added claims need an anchor to accompany.
Confirm that the action's original jurisdiction does not rest solely on § 1332, which takes subsection (b) out of the problem whatever the added parties' citizenship or the added claims' amounts.²⁵
For each added claim, whether asserted by the plaintiff, by a defendant, or against a new party, compare the events it requires proof of with the events behind the anchor claim, and admit it only if the two share a common nucleus of operative fact.²⁶
Ask separately whether the Federal Rules permit the joinder, since Rules 13, 18, and 20 decide whether a claim may be pleaded and say nothing about the court's power to hear it.²⁷
For each claim within the court's power, ask whether a ground in § 1367(c) justifies declining it, watching especially whether the federal claims have been dismissed and how early.²⁸

Steps three and four draw on different bodies of law. A claim can be permitted by the Rules and still lie outside the court's power, as the loan counterclaim did, so an answer that stops at the Rules has addressed half of the problem.

Diversity-Only Cases

When § 1332 alone supplies the anchor, subsection (b) becomes the hard part of the analysis. In a civil action whose original jurisdiction is founded solely on diversity, the district courts have no supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24. They also lack it over claims by persons proposed to be joined as plaintiffs under Rule 19 or seeking to intervene as plaintiffs under Rule 24, whenever exercising it would be inconsistent with the jurisdictional requirements of § 1332.³⁰ Subsection (a) still supplies the baseline grant, so each added claim must pass both subsections.³¹

Every claim that subsection (b) removes comes from the plaintiff's side of the caption, and that pattern yields a shorthand. In a diversity-only case, supplemental jurisdiction helps the party in a defensive posture. It reaches additional claims by defendants, including third-party plaintiffs and third-party defendants, and generally does not reach additional claims or parties that a plaintiff adds.³²

The shorthand tracks a real difference between the sides. A plaintiff chooses the forum and the defendants. Without subsection (b), a plaintiff could sue one diverse defendant, join nondiverse defendants under Rule 20, and use § 1367(a) to take jurisdiction over the claims against them, which would avoid the complete diversity requirement.³³ A defendant's claim, by contrast, answers a case that the plaintiff has already filed.

Claims from the defending side fall outside the bars. Each of the following enters a diversity-only action if it also forms part of the same case or controversy as the anchor claim under subsection (a):

a defendant's compulsory counterclaim against the plaintiff;
a cross-claim by one defendant against a co-defendant;
an impleader claim by a third-party plaintiff against a third-party defendant; and
a further claim by a third-party plaintiff or a third-party defendant against anyone else.³⁴

Escaping subsection (b) does not satisfy subsection (a). A compulsory counterclaim arises from the plaintiff's transaction and qualifies. A permissive counterclaim does not arise from that transaction, shares no common nucleus of fact with the main claim, and needs a basis of its own.³⁵ The same sorting governs a third-party defendant's claim against the third-party plaintiff, which comes in when it arises from the transaction behind the third-party claim and otherwise must stand on its own.³⁶

Hypothetical Illustration

A California plaintiff sues an Arizona defendant in federal court for $200,000 over a warehouse fire, and jurisdiction rests solely on diversity. The defendant impleads an Arizona manufacturer whose wiring allegedly caused the fire and seeks indemnity. That claim comes in under § 1367(a) even though the defendant and the manufacturer are co-citizens, because a defendant's claim lies outside subsection (b) and this one arises from the same fire.

The plaintiff then asserts a $40,000 claim directly against the manufacturer for losses from the same fire. The two are diverse, but the claim falls below $75,000 and has no basis of its own. It is a plaintiff's claim against a person made a party under Rule 14, so subsection (b) applies, and supplemental jurisdiction is unavailable because it would be inconsistent with the amount requirement of § 1332.

The fire and the manufacturer are the same in both claims, so relatedness cannot explain the different results. The defendant's claim answers the case the plaintiff filed, while the plaintiff's claim enlarges it, and subsection (b) is aimed at the enlargement. A plaintiff who wants to reach the manufacturer in federal court needs the manufacturer to be diverse and the claim to exceed $75,000, and the claim then stands on § 1332 and needs no supplemental help.³⁷

On the other side of the line are the claims that subsection (b) removes, each asserted by a plaintiff or a would-be plaintiff:

a plaintiff's claim against a third-party defendant joined under Rule 14;
a plaintiff's claim against a person joined under Rule 19;
a plaintiff's claim against an additional defendant joined under Rule 20;
a plaintiff's claim against an intervenor under Rule 24;
a claim by a person proposed to be joined as a plaintiff under Rule 19; and
a claim by a person seeking to intervene as a plaintiff under Rule 24.³⁸

A removed claim is not lost if it satisfies § 1332 by itself. A plaintiff may join a diverse defendant on a claim exceeding $75,000 and rely on traditional diversity jurisdiction to support the joinder.³⁹ The Rule 20 defendant entry is the one that surprises students, because the claims seem so closely connected. A plaintiff who has met the amount against one defendant usually cannot join a smaller claim against another defendant, however closely the claims are connected.⁴⁰

The defensive-posture shorthand has one exception, and the statute's text explains it. Subsection (b) names plaintiffs joined under Rule 19 and intervenors under Rule 24, but it says nothing about plaintiffs who join voluntarily under Rule 20 or about members of a Rule 23 class.⁴¹ That text lines up with the rule of Allapattah. When complete diversity exists and at least one plaintiff's claim meets the amount in controversy, the other plaintiffs may join their related claims against the same defendant even if those claims fall below $75,000.⁴² Two New York plaintiffs suing a New Jersey defendant over one accident show the rule at work: the plaintiff with a $100,000 claim anchors the action, and the plaintiff with a $50,000 claim rides along on the amount.⁴³

A Rule 23 diversity class action follows the same logic. Only the class representatives must satisfy the requirements of subject-matter jurisdiction, so the unnamed members need not meet the amount themselves, and their citizenship does not count against complete diversity.⁴⁴

The exception relaxes the amount requirement and nothing else. A citizenship overlap between any plaintiff and any defendant destroys original jurisdiction over every claim, so supplemental jurisdiction has nothing to attach to.⁴⁵ A New Jersey citizen who tries to join the New York plaintiffs' suit against the New Jersey defendant therefore cannot, however large or closely related the claim. The exception also reaches only plaintiffs who sue a defendant already before the court, and a smaller claim against an added Rule 20 defendant stays barred.⁴⁶ Two errors recur on exams: some answers carry the defensive-posture shorthand past its limit and exclude every added plaintiff, and others read Allapattah as admitting any added party when it relaxes only the amount requirement for plaintiffs suing a defendant already in the case.

Exam Analysis Steps

Because the defensive-posture shorthand is a heuristic and the statute's text decides the edge cases, sort each added claim by who asserts it and against whom:

Confirm that original jurisdiction rests solely on § 1332, since a federal-question anchor takes the problem out of subsection (b).⁴⁷
Confirm complete diversity between the original parties and at least one claim that independently exceeds $75,000, because supplemental jurisdiction needs an anchor and cannot create one.⁴⁸
For each claim by a defendant, third-party plaintiff, or third-party defendant, skip subsection (b) and ask only whether the claim is part of the same case or controversy under subsection (a).⁴⁹
For each claim by a plaintiff or would-be plaintiff, ask whether it stands on § 1332 by itself, and if it does not, admit it only when a Rule 20 plaintiff or class member who sues a defendant already in the case falls short solely on the amount.⁵⁰
For each surviving claim, ask whether subsection (c) justifies declining it.⁵¹