1.2 Supplemental Jurisdiction & Removal

1.2 Supplemental Jurisdiction & Removal

When a civil action involves multiple claims or parties, federal courts frequently encounter state-law claims that lack an independent basis of federal subject-matter jurisdiction (i.e., no independent federal question and no complete diversity or insufficient amount in controversy). Supplemental jurisdiction provides the statutory mechanism for a federal court to adjudicate these related state claims alongside an "anchor" claim. Conversely, removal jurisdiction provides defendants with the procedural mechanism to transfer eligible state-court actions into federal court.

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Supplemental Jurisdiction (28 U.S.C. § 1367)

Supplemental jurisdiction operates through a strict three-step statutory framework enacted in 28 U.S.C. § 1367:

1. The Statutory Grant: § 1367(a)

Under § 1367(a), in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.

• The Gibbs Standard: The statutory phrase "same case or controversy" codified the constitutional standard from United Mine Workers of America v. Gibbs (1966). Claims form part of the same case or controversy if they share a "common nucleus of operative fact" (CNOF) such that the plaintiff would ordinarily be expected to try them all in a single judicial proceeding.
• Scope of Parties: Section 1367(a) explicitly includes claims that involve the joinder or intervention of additional parties (overruling the prior common law restrictions of Finley v. United States).

2. The Diversity-Only Restrictions: § 1367(b)

If original federal jurisdiction is founded solely on diversity of citizenship (28 U.S.C. § 1332), § 1367(b) withdraws supplemental jurisdiction over certain specified claims to prevent plaintiffs from evading the complete diversity requirement.

Under § 1367(b), the court lacks supplemental jurisdiction over:

1. Claims asserted by plaintiffs against persons made parties under:
   • Rule 14 (Third-party practice / Impleader);
   • Rule 19 (Required joinder of parties);
   • Rule 20 (Permissive joinder of defendants); or
   • Rule 24 (Intervention).
2. Claims by persons proposed to be joined as plaintiffs under Rule 19;
3. Claims by persons seeking to intervene as plaintiffs under Rule 24;

...WHEN exercising supplemental jurisdiction over such claims would be inconsistent with the jurisdictional requirements of § 1332 (i.e., when it would destroy complete diversity).

                          SUPPLEMENTAL JURISDICTION DECISION TREE
                                    (28 U.S.C. § 1367)

                             ┌─────────────────────────────┐
                             │ Does the supplemental claim │
                             │ share a CNOF (Gibbs) with   │
                             │ the original anchor claim?  │
                             └──────────────┬──────────────┘
                                            │
                                  YES       │       NO
                                  ┌─────────┴─────────┐
                                  ▼                   ▼
                       § 1367(a) GRANTS SMJ       NO SMJ
                                  │             (Claim must
                                  ▼             be dismissed)
                     ┌───────────────────────────┐
                     │ Is anchor claim founded   │
                     │  SOLELY on § 1332 (Div)?  │
                     └────────────┬──────────────┘
                                  │
                        YES       │       NO (e.g. § 1331 Federal Question)
                        ┌─────────┴─────────┐
                        ▼                   ▼
             ┌─────────────────────┐   ┌───────────────────┐
             │ Does § 1367(b)      │   │ § 1367(b) does not│
             │ bar the claim?      │   │ apply; CNOF grants│
             └──────────┬──────────┘   │ supplemental jur. │
                        │              └───────────────────┘
                        ▼
          ┌─────────────────────────────────────────────┐
          │ Is the claim asserted BY A PLAINTIFF against│
          │ a party joined under Rule 14, 19, 20, or 24?│
          └─────────────────────┬───────────────────────┘
                                │
                     YES        │       NO
                     ┌──────────┴──────────┐
                     ▼                     ▼
           ┌───────────────────┐ ┌───────────────────┐
           │   JURISDICTION    │ │   JURISDICTION    │
           │      BARRED       │ │     GRANTED       │
           │  if non-diverse   │ │ (e.g. Def. claims)│
           └───────────────────┘ └───────────────────┘

What § 1367(b) Does NOT Bar

Notice the strict statutory text: § 1367(b) strips jurisdiction only over claims asserted by plaintiffs (or proposed plaintiffs). It does not bar claims asserted by defendants:

• Compulsory Counterclaims (FRCP 13(a)): Always arise from the same transaction or occurrence (CNOF) and receive supplemental jurisdiction without meeting the $75,000 threshold or requiring diversity from the plaintiff.
• Crossclaims by Defendants (FRCP 13(g)): Claims by one defendant against a co-defendant arising from the CNOF receive supplemental jurisdiction.
• Third-Party Claims by Defendants (FRCP 14(a)): Impleader claims by a defendant against a third-party defendant for contribution or indemnity receive supplemental jurisdiction.

The Amount in Controversy Exception (Allapattah)

In Exxon Mobil Corp. v. Allapattah Services, Inc. (2005), the Supreme Court resolved a major ambiguity in § 1367(b): In a diversity case where at least one named plaintiff asserts a claim exceeding $75,000, § 1367(a) authorizes supplemental jurisdiction over claims by additional co-plaintiffs joined under Rule 20, or class members under Rule 23, whose claims fall below the $75,000 threshold, provided complete diversity of citizenship is not violated.

3. Discretionary Decline of Supplemental Jurisdiction: § 1367(c)

Even when § 1367(a) grants supplemental jurisdiction and § 1367(b) does not bar it, a federal district court retains statutory discretion to decline supplemental jurisdiction under § 1367(c) if:

1. The claim raises a novel or complex issue of state law;
2. The state-law claim substantially predominates over the claim or claims over which the district court has original jurisdiction;
3. The district court has dismissed all claims over which it had original jurisdiction (most common in practice when federal claims are dismissed at the Rule 12(b)(6) or summary judgment stage before trial); or
4. In exceptional circumstances, there are other compelling reasons for declining jurisdiction.

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Removal Jurisdiction (28 U.S.C. §§ 1441, 1446, 1447)

Removal is the statutory procedure allowing a defendant to transfer a civil action filed in state court into the federal district court embracing the place where the state action is pending.

1. Basic Principles and Eligible Parties

• Defendants Only (28 U.S.C. § 1441(a)): Only the defendant(s) may remove an action. A plaintiff cannot remove, even if the defendant asserts a federal counterclaim against the plaintiff (Shamrock Oil & Gas Corp. v. Sheets).
• Original Jurisdiction Required: The action must be one over which the federal district court would have had original jurisdiction (federal question under § 1331 or diversity under § 1332) had it been filed originally in federal court.
• Proper District: The action is removed solely to the federal district court for the district and division embracing the geographic location where the state-court action is pending.

2. The Unanimity Rule (28 U.S.C. § 1446(b)(2)(A))

When a civil action is removed solely under § 1441(a), all defendants who have been properly joined and served must join in or consent to the removal.

• If any properly served defendant refuses to consent, the case cannot be removed.
• Nominal or unserved defendants are exempt from the unanimity requirement.

3. Timing for Removal (28 U.S.C. § 1446(b))

• Standard 30-Day Window: The notice of removal must be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading or summons.
• Later-Served Defendants (§ 1446(b)(2)(C)): Each defendant has 30 days from the date they are individually served to file a notice of removal. An earlier-served defendant who failed to remove within their own 30 days may still consent to a timely removal initiated by a later-served defendant.
• Subsequent Removability (§ 1446(b)(3)): If the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant of an amended pleading, motion, order, or other paper from which it first becomes ascertainable that the case has become removable (e.g., plaintiff voluntarily dismisses a non-diverse defendant).

4. The Forum-Defendant Rule (28 U.S.C. § 1441(b)(2))

When an action is removable solely on the basis of diversity of citizenship, the action CANNOT be removed if any defendant properly joined and served is a citizen of the state in which the action was brought.

• Rationale: Diversity jurisdiction protects out-of-state defendants from local bias in state courts. An in-state defendant faces no such local prejudice in their home state court.
• Federal Question Distinction: The forum-defendant rule does not apply to federal question cases. A forum defendant sued in their home state court on a federal claim may freely remove under § 1441(a).

5. The One-Year Outer Limit for Diversity Cases (28 U.S.C. § 1446(c)(1))

An action based on diversity jurisdiction cannot be removed more than one year after commencement of the action in state court, UNLESS the district court finds that the plaintiff acted in bad faith in order to prevent a defendant from removing (e.g., deliberately concealing the amount in controversy or fraudulently naming a non-diverse defendant with no intention of pursuing them).

6. Procedure After Removal and Remand (28 U.S.C. § 1447)

Once a notice of removal is filed in federal court and written notice is served on adverse parties and the state court clerk, the state court loses all jurisdiction over the case. If the plaintiff challenges removal, they file a motion to remand under § 1447(c):

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Additional Removal Rules Worth Knowing

Worked Example: Separate Federal and State Claims

An employee sues her former employer in state court, alleging a federal Fair Labor Standards Act wage claim and an unrelated state-law defamation claim against a coworker who is not diverse from her. The employer may remove the whole action under § 1441(c) because the wage claim arises under federal law. The federal court then severs the unrelated defamation claim against the coworker—which shares no common nucleus of operative fact with the wage claim and has no independent jurisdictional basis—and remands it to state court. The coworker's consent was not required, because no federal claim was asserted against the coworker.