Lessons From Appellate Practice: The Mixed Blessings of Supplemental Jurisdiction

Quick Hits

• Federal courts must have subject matter jurisdiction over every claim in a lawsuit, and practitioners may not simply add state law claims to a federal lawsuit without a basis for jurisdiction over the state law claims.
• In a non-diversity case, a non-federal claim is properly in federal court only if it is so related to the federal claim that it forms part of the same case or controversy.
• Failing to recognize a lack of supplemental jurisdiction can lead to late-stage dismissal of state law claims, forcing parties to relitigate issues years later when evidence may be stale.

When the case satisfies the rules for diversity jurisdiction, 28 U.S.C. § 1332, the parties may generally rest assured they are comfortably within the federal court’s subject matter jurisdiction.

However, when the federal court’s jurisdiction is based on a federal question, 28 U.S.C. § 1331, things become more complicated. If one or more of those multiple claims is not federal, then it belongs in federal court only if it satisfies the requirements for supplemental jurisdiction set forth in 28 U.S.C. § 1367. That is, in a non-diversity case, a non-federal claim is properly in federal court only if it is so related to the federal claim “that they form part of the same case or controversy under Article III of the United States Constitution.” When the same facts are at issue in the federal and non-federal claims—e.g., when the plaintiff sues based on the same factual scenario under both federal and state versions of laws prohibiting that scenario—supplemental jurisdiction may be found over the non-federal claim.

Not all cases involving state and federal claims, however, boil down to federal and state versions of the same lawsuit. And when the factual bases of the two claims are different, there may be no supplemental jurisdiction over the state law claim.

What is there to lose? Consider this: If litigation goes forward in federal court with state claims that do not really belong, at some point the district court may realize that it does not have jurisdiction over the state claims. The court would have to dismiss the state law claims at that point. Or perhaps the district court never tumbles to the problem, but the district court’s judgment is appealed. At that point, a party or the court of appeals may identify the issue and, even if it rules in the defendant’s favor on the federal claim, the court of appeals will be forced to remand the state law claim with instructions that the district court dismiss it (as it should have done earlier) for lack of subject matter jurisdiction.

The problem? The defendant may then have to defend the state law claim again, even if it had already defended it and possibly even prevailed on it, after lengthy and expensive litigation. Moreover, 28 U.S.C. § 1367(d) provides that the limitation period for that state law claim is tolled during the entire time the claim was (improperly) pending in federal court (plus an extra thirty days). Multiple years may have passed since the events giving rise to the lawsuit, meaning that important witnesses may no longer be available or, if so, only with faded memories. A lawsuit that could have been litigated years earlier—if the supplemental jurisdiction problem had been identified—may thus have to be defended again (at additional expense), but this time perhaps with less strength than it could have been.

Ogletree Deakins’ Appellate Practice Group will continue to monitor developments and provide updates on the Employment Law blog as additional information becomes available.

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