The United States Supreme Court has consistently interpreted 28 U.S.C.S. § 1332 as requiring complete diversity: In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same state as a single defendant deprives the district court of original diversity jurisdiction over the entire action. The complete diversity requirement is not mandated by the Constitution or by the plain text of § 1332(a). The Court, nonetheless, has adhered to the complete diversity rule in light of the purpose of the diversity requirement, which is to provide a federal forum for important disputes where state courts might favor, or be perceived as favoring, home-state litigants. The presence of parties from the same state on both sides of a case dispels this concern, eliminating a principal reason for conferring § 1332 jurisdiction over any of the claims in the action.
Two circuits courts were split as to whether a federal court in a diversity action could exercise supplemental jurisdiction over additional plaintiffs whose claims did not satisfy the minimum amount in controversy in a class action suit. The United States Court of Appeals for the Eleventh Circuit affirmed a district court's exercise of supplemental jurisdiction. And in a separate suit, the United States Court of Appeals for the First Circuit found that supplemental jurisdiction was lacking.
Can a federal court in a diversity action exercise supplemental jurisdiction over additional plaintiffs whose claims did not satisfy the minimum amount in controversy in a class action suit?
The Supreme Court found that, where the other elements of jurisdiction were satisfied and at least one named plaintiff met the amount-in-controversy requirement, § 1367 authorized supplemental jurisdiction over claims of other plaintiffs in the same U.S. Const. art. III case or controversy, even if those claims were for less than the jurisdictional amount. By enacting 28 U.S.C.S. § 1367, Congress overruled prior Supreme Court precedent that had required every plaintiff to separately satisfy the amount-in-controversy requirement. Although § 1367(b) precluded supplemental jurisdiction over claims of plaintiffs joined under Fed. R. Civ. P. 19 or intervenors under Fed. R. Civ. P. 24, nothing in the statute withheld jurisdiction over claims of plaintiffs permissively joined under Fed. R. Civ. P. 20 or certified as class members under Fed. R. Civ. P. 23. The Class Action Fairness Act, Pub. L. No. 109-2, 119 Stat. 4, did not affect the Court's interpretation of 28 U.S.C.S. § 1367.