Law School Case Brief
Jones v. Ford Motor Credit Co. - 358 F.3d 205 (2d Cir. 2004)
Where at least one of the 28 U.S.C.S. § 1367(c) factors is applicable, a trial court should not decline to exercise supplemental jurisdiction unless it also determines that doing so would not promote the Gibbs values: economy, convenience, fairness, and comity.
Plaintiffs Joyce Jones and several others ("Buyers") purchased vehicles under the financing plan implemented by defendant Ford Motor Credit Company ("Ford"). The Buyers later filed a putative class action against Ford in federal district court, alleging that Ford permitted vehicle dealers to mark up the financing rate based on subjective criteria, including race. According to the Buyers, African-American buyers were penalized by having to pay higher rates than those imposed on similarly-situated Caucasian buyers. Thus, the Buyers claimed, Ford engaged in racial discrimination under the Equal Credit Opportunity Act, 15 U.S.C.S. § 1691 et seq. Ford denied the discrimination charge and asserted state-law counterclaims against three of the Buyers for the amounts of their unpaid car loans. The district court determined the counterclaims were permissive and granted the Buyers' motion to dismiss the counterclaims for lack of subject matter jurisdiction. Ford appealed.
Did the trial court err in exercising discretion about whether to exercise supplemental jurisdiction over Ford's permissive counterclaims before it made a ruling on the Buyers' motion for class certification?
The court of appeals vacated the district court's judgment and remanded the case for further proceedings. The court agreed with the district court's ruling that Ford's counterclaims were permissive. The court also found that supplemental jurisdiction authorized by 28 U.S.C.S. § 1367 could be available for those permissive counterclaims. However, the court ruled, but district court should not have exercised its discretion under § 1367(c), and thereby dismissed Ford's counterclaims, until after the district court made a ruling on the Buyers' motion for class certification. On remand, in order to decline jurisdiction on the basis of § 1367(c), the district court was instructed to identify truly compelling circumstances that militated against exercising jurisdiction. Moreover, the court instructed, if the district court certified the class action, its substantial predomination analysis under § 1367(c)(2) should take into account the methods by which the class action might be managed in order to prevent the state law counterclaims from predominating.
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