Sylvester Griffin v. J P Morgan Chase & Co.

Filing

PUBLISHED OPINION FILED. [09-30734 Vacated & Remanded ] Judge: EHJ , Judge: ECP , Judge: HSO Mandate pull date is 10/14/2010 [09-30734]

Sylvester Griffin v. J P Morgan Chase & Co.

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IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
September 23, 2010 N o . 09-30734 Lyle W. Cayce Clerk

S Y L V E S T E R GRIFFIN, P la in t if f v. R O B E R T A. LEE, I n t e r v e n o r Plaintiff­Appellee v. J P MORGAN CHASE & COMPANY, individually & as successor by merger, D e fe n d a n t v. S Y L V E S T E R GRIFFIN, I n t e r v e n o r Defendant­Appellant

A p p e a l from the United States District Court for the Western District of Louisiana

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No. 09-30734 B e fo r e JONES, Chief Judge, PRADO, Circuit Judge, and OZERDEN * , District Judge. P E R CURIAM: A p p e ll e e Robert A. Lee, an attorney, represented Appellant Sylvester G r iffin in the underlying lawsuit in this case, in which Griffin sought r e fo r m a t io n of a trust of which he was a beneficiary [the "Trust"]. Griffin also a d v a n c e d various state law claims, including fraud, against Defendants below, w h o included successor Trustee JPMorgan Chase Bank, N.A. ["Trustee"], and its o ffic e r s . After Lee was allowed to withdraw from his representation of Griffin, h e sought recovery of attorney's fees. Lee filed a Motion for Leave to Intervene u n d e r Federal Rule of Civil Procedure 24(a)(2) and Motion for Additional C o n s e r v a t o r y Relief. He sought imposition of a statutory lien upon Griffin's r e c o v e r y , pursuant to a contingency fee agreement [the "Agreement"] and L o u is ia n a Revised Statute § 37:218. The district court granted the Motion and p e r m it t e d Lee's intervention. After a bench trial, the district court entered J u d g m e n t in favor of Lee and against Griffin on the Petition of Intervention, and a w a r d e d Lee $16,068.00 in attorney's fees based on the Agreement. Because we fin d that the district court lacked supplemental jurisdiction over Lee's claim in in t e r v e n t io n against Griffin, we VACATE and REMAND with instructions that t h e district court DISMISS the Petition of Intervention for lack of subject matter ju r is d ic t io n . I. FACTUAL AND PROCEDURAL BACKGROUND G r iffin originally brought this action in Louisiana state court, by filing his P e t it io n for Fraud and Unjust Enrichment and for Return of Monies on or about A u g u s t 25, 2006. Defendants removed the case to the United States District C o u r t for the Western District of Louisiana, Monroe Division, on September 15,

*

District Judge of the Southern District of Mississippi, sitting by designation.

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No. 09-30734 2 0 0 6 , based solely on the court's diversity jurisdiction pursuant to 28 U.S.C. § 1 3 3 2 . On April 6, 2009, the district court granted Defendants' Motions for S u m m a r y Judgment and dismissed all of Griffin's claims against them with p r e ju d ic e . The district court entered Judgment in Defendants' favor on April 7, 2 0 0 9 . The same day, Lee filed his Motion to Intervene. O n April 8, 2009, the district court granted Lee's Motion to Intervene. The d is t r ic t court concluded that Lee was entitled to intervene as of right pursuant t o Rule 24(a)(2). Lee filed his Petition of Intervention for Attorney Fee[s] and C o s ts the same day. Lee sought "5% of all accrued but unpaid interest,

d iv id e n d s , growth, etc. accumulated but undisbursed upon the principal amount d e p o s it e d in the trust fund," "7.5% of the initial principal endowment of $116,000 p la c e d in the" Trust, one-fourth of any damages recovered by Griffin against T r u s t e e or other parties for breach of trust or other fault, and $3,087.51 in costs in c u r r e d . In his Motion to Intervene, Lee calculated his attorney's fees to be $ 5 1 ,0 0 0 .0 0 , in addition to the $3,087.51 in costs incurred. The district court initially enjoined the Trustee from disbursing to Griffin t h e sum of $54,087.51, the amount which Lee claimed as attorney's fees and c o s t s in his Motion to Intervene. On April 14, 2009, at the conclusion of a p r e lim in a r y injunction hearing, the district court granted Lee's Motion for P r e lim in a r y Injunction and ordered the Trustee not to disburse $25,000.00 of the a m o u n t in trust pending final adjudication of Lee's Petition of Intervention. The C o u r t scheduled a bench trial on the merits of Lee's Petition for June 29, 2009. For reasons not germane to the district court's jurisdiction, neither Griffin n o r his new attorney appeared at the June 29, 2009 bench trial. The district c o u r t entered Judgment on July 7, 2009, in favor of Lee and against Griffin, in t h e amount of $16,068.00, with legal interest from the date of Judgment, in the fo r m of a privilege on the funds in the Trust. The Judgment directed that the T r u s t e e "shall hold and conserve said monies as a debit item upon the [Trust] 3

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No. 09-30734 a n d pay said monies from the [Trust] to Mr. Lee out of the funds ultimately d e t e r m in e d to be available for distribution to Mr. Griffin upon finality of Mr. G r iffin 's appeal" of his claims against Defendants. The Judgment also ordered t h a t , "per the contract for legal fees entered into by Mr. Lee and Mr. Griffin, Mr. L e e holds a privilege on future funds, if any, paid by Defendants to Mr. Griffin fo r damages suffered by Mr. Griffin." Griffin appealed. Though he does not d is p u t e that Lee is owed some fees for his work in successfully having the Trust r e fo r m e d , Griffin disputes the amount awarded, and that any award should exist a s a lien or encumbrance on the Trust. Our review of this appeal raised the question of whether supplemental ju r is d ic t io n existed over Lee's claim in intervention pursuant to 28 U.S.C. § 1 3 6 7 . We requested additional briefing from the parties on this point. Lee and G r iffin have each filed supplemental briefs. I I . JURISDICTION AND STANDARD OF REVIEW A lt h o u g h not raised by the parties, we must first determine whether we h a v e jurisdiction to consider this appeal. See Energy Mgmt. Corp. v. City of S h r e v e p o r t, 397 F.3d 297, 301 n.2 (5th Cir. 2005) ("This court has an obligation t o consider possible objections to our jurisdiction sua sponte."); Howery v. Allstate I n s . Co., 243 F.3d 912, 919 (5th Cir. 2001) (same). We have a special obligation t o satisfy ourselves not only of our own jurisdiction, but of that of the district c o u r t as well. Bender v. Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986). When the district court lacks jurisdiction, we have jurisdiction on appeal, not on t h e merits but for the purpose of addressing the lower court's jurisdiction to e n te r ta in the suit. Id. (quoting United States v. Corrick, 298 U.S. 435, 440 (1 9 3 6 )). Our review of the district court's exercise of subject matter jurisdiction is plenary. Rutherford v. Harris County, Tex., 197 F.3d 173, 189­90 (5th Cir. 1 9 9 9 ).

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No. 09-30734 I I I . ANALYSIS A t the time this case was removed from state court, original jurisdiction in the underlying lawsuit was founded solely upon diversity, pursuant to 28 U .S .C . § 1332. This statute provides, in relevant part, that (a ) The district courts shall have original jurisdiction of all civil a c t io n s where the matter in controversy exceeds the sum or value o f $75,000, exclusive of interest and costs, and is between-- (1) citizens of different States . . . . 2 8 U.S.C. § 1332(a). Thus, § 1332 requires that the matter in controversy exceed $ 7 5 ,0 0 0 .0 0 , and that the action be between citizens of different states. See id.; Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005) (noting t h a t the Supreme Court has "consistently interpreted § 1332 as requiring c o m p le t e diversity"). At the time of removal, Plaintiff Griffin was a Mississippi citizen. Defendant JPMorgan Chase & Co. was a citizen of both Delaware and New York. Defendant JP Morgan Chase Bank, N.A., was a citizen of Ohio, as was D e fe n d a n t Bank One Trust Co., N.A. The individual Defendants, Walter E. B u s b y , Drew C. Detraz, and Charlotte Ray, were Louisiana citizens. There was c o m p le t e diversity of citizenship, and the record is clear that the amount in c o n t r o v e r s y exceeded $75,000.00, fulfilling the requirements of § 1332(a). T h e district court subsequently granted Lee's Motion to Intervene as of r ig h t , pursuant to Rule 24(a)(2). Lee was aligned as an Intervenor Plaintiff, as h e asserted claims for attorney's fees against his former client Griffin, and fu r t h e r sought to impose a lien upon the Trust. The record reflects that Lee was a citizen of Louisiana, and that the amount in controversy on his claim was c le a r ly less than $75,000.00, as his initial pleadings sought only $54,087.51. B e c a u s e Lee was aligned as a Plaintiff, the Petition, on its face, was not c o n s is t e n t with the jurisdictional requirements of § 1332. Complete diversity

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No. 09-30734 o f citizenship was lacking between Lee and Defendants, and the amount in c o n t r o v e r s y was less than $75,000.00. The question presented is whether there w a s supplemental jurisdiction over Lee's claim. We conclude that there was not. A. A p p lic a b ility of § 1367 to Lee's Claim I f a district court has original jurisdiction over at least one claim in a case, it must look to what was traditionally known as "pendent" or "ancillary" ju r is d ic t io n to assess whether it has jurisdiction over any remaining claims over w h ic h it would otherwise lack original jurisdiction. See, e.g., City of Chi. v. Int'l C o ll. of Surgeons, 522 U.S. 156, 164­65 (1997) (federal question context). Congress has codified the concepts of pendent and ancillary jurisdiction in the s u p p le m e n t a l jurisdiction statute, 28 U.S.C. § 1367. Id. at 165 ("Congress has c o d ifie d those principles in the supplemental jurisdiction statute, which c o m b in e s the doctrines of pendent and ancillary jurisdiction under a common h e a d in g . 28 U.S.C. § 1367."); Walter Fuller Aircraft Sales, Inc. v. Republic of P h il., 965 F.2d 1375, 1389 n.13 (5th Cir. 1992) ("[T]he intent of § 1367(a) was to c o d ify the doctrines of pendent and ancillary jurisdiction.") (citations omitted). Lee argues in his supplemental brief that § 1367(b) is not applicable to his c la im , because the suit was removed to the district court pursuant to 28 U.S.C. § 1441(a), and not directly pursuant to § 1332(a). We are not persuaded by this a r g u m e n t . 28 U.S.C. § 1441(a) provides for removal of certain actions, but it d o e s not confer subject matter jurisdiction upon the district court. It is, at b o t t o m , a procedural statute. Even though this action was removed pursuant t o § 1441(a), the district court's original jurisdiction was founded solely on § 1 3 3 2 . Moreover, the Supreme Court has explicitly stated that § 1367(a) "applies w it h equal force to cases removed to federal court as to cases initially filed there; a removed case is necessarily one `of which the district courts . . . have original ju r is d ic t io n .'" City of Chi., 522 U.S. at 165 (quoting 28 U.S.C. § 1441(a)).

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No. 09-30734 B. S u p p le m e n t a l Jurisdiction under § 1367 1. S t a t u t o r y Framework

S e c t io n 1367(a) reads as follows: (a ) Except as provided in subsections (b) and (c) or as expressly p r o v id e d otherwise by Federal statute, in any civil action of which t h e district courts have original jurisdiction, the district courts shall h a v e supplemental jurisdiction over all other claims that are so r e la te d to claims in the action within such original jurisdiction that t h e y form part of the same case or controversy under Article III of t h e United States Constitution. Such supplemental jurisdiction s h a ll include claims that involve the joinder or intervention of a d d it io n a l parties. 28 U.S.C. § 1367(a) (emphasis added). T h e Supreme Court has held that [s ]e c t io n 1367(a) is a broad grant of supplemental jurisdiction over o t h e r claims within the same case or controversy, as long as the a c t io n is one in which the district courts would have original ju r is d ic t io n . The last sentence of § 1367(a) makes it clear that the g r a n t of supplemental jurisdiction extends to claims involving jo in d e r or intervention of additional parties. E x x o n Mobil, 545 U.S. at 558. It is clear that Lee's Petition satisfied the requirements of § 1367(a). This d o e s not end the inquiry, however. "If § 1367(a) were the sum total of the r e le v a n t statutory language, our holding would rest on that language alone. The s t a t u t e , of course, instructs us to examine § 1367(b) to determine if any of its e x c e p t io n s apply, so we proceed to that section." Exxon Mobil, 545 U.S. at 5 5 9 ­ 6 0 . Subsection (b) reads as follows: (b ) In any civil action of which the district courts have original ju r is d ic t io n founded solely on section 1332 of this title, the district c o u r t s shall not have supplemental jurisdiction under subsection (a) o v e r claims by plaintiffs against persons made parties under Rule 1 4 , 19, 20, or 24 of the Federal Rules of Civil Procedure, or over c la im s by persons proposed to be joined as plaintiffs under Rule 19 7

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No. 09-30734 o f such rules, or seeking to intervene as plaintiffs under Rule 24 of s u c h rules, when exercising supplemental jurisdiction over such c la im s would be inconsistent with the jurisdictional requirements of s e c tio n 1332. 28 U.S.C. § 1367(b) (emphasis added). L e e , who intervened as a Plaintiff, was a Louisiana citizen. While Griffin, w h o was the original Plaintiff, was a Mississippi citizen, there were Defendants in the underlying case who were, like Lee, citizens of Louisiana. The record r e fle c t s that individual Defendants Walter E. Busby, Drew C. Detraz, and C h a r lo t t e Ray, who were Trustee bank officers, were Louisiana citizens. Lee w a s not completely diverse from Defendants in the underlying action. See 28 U .S .C . §§ 1332, 1367(b). I t was also facially apparent from Lee's Petition of Intervention that the a m o u n t in controversy, Lee's claim for attorney's fees, fell below $75,000.00. In t h e proposed Order submitted with his Motion to Intervene, Lee estimated his t o t a l claim to be $54,087.51. At the hearing on Lee's Motion for Preliminary I n ju n c t io n held on April 14, 2009, Lee estimated his total claim to be $25,000.00 o r less. Thus, Lee's intervention was clearly inconsistent with the jurisdictional r e q u ir e m e n t s of § 1332, diversity of citizenship and the requisite amount in c o n t r o v e r s y , excluding it from the court's supplemental jurisdiction under the c le a r language of the supplemental jurisdiction statute. See 28 U.S.C. § 1367(b). 2. A p p lic a tio n of § 1367

C o m m e n ta t o r s have recognized that the difficult q u e s t io n has been whether, if the court has proper jurisdiction of the o r ig in a l action, it may allow an intervenor to come in and present a c la im or defense although there would be no basis for federal ju r is d ic t io n if the intervenor were suing or being sued alone. This p r o b le m arises primarily in diversity cases, in which the would-be in t e r v e n o r is a citizen of the same state as a party against whom the in t e r v e n o r would be aligned if intervention is allowed or in which

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No. 09-30734 t h e controversy with regard to the intervenor is for less than the r e q u is it e jurisdictional amount. 7 C CHARLES ALAN WRIGHT, ARTHUR R. MILLER & MARY KAY KANE, FEDERAL P RACTICE AND PROCEDURE § 1917 (3d ed. 2007). C o n g r e s s 's enactment of the supplemental jurisdiction statute addressed t h e s e issues. See generally id. Congress excepted from the statute's reach c e r t a in claims in cases in which original jurisdiction is founded solely upon d iv e r s it y , such as claims by persons seeking to intervene as plaintiffs under Rule 2 4 , when exercising supplemental jurisdiction over such claims would be in c o n s is t e n t with the jurisdictional requirements of § 1332. See 28 U.S.C. § 1 3 6 7 (b ); Exxon Mobil, 545 U.S. at 560 ("Section 1367(b), which applies only to d iv e r s it y cases, withholds supplemental jurisdiction over the claims of plaintiffs p r o p o s e d to be joined as indispensable parties under Federal Rule of Civil P r o c e d u r e 19, or who seek to intervene pursuant to Rule 24."). T h i s change can be criticized as contrary to the objectives of e n c o u r a g in g efficient joinder and some commentators have noted t h a t it goes beyond the "modest but significant" alterations stated b y the drafters. Nonetheless, it remains the law and it now is clear t h a t in diversity cases, ancillary (now supplemental) jurisdiction c a n n o t be invoked for plaintiff intervenors, whether they are of right o r permissive. 7C WRIGHT, MILLER & KANE, supra, § 1917 (citations omitted). In other words, while Congress codified the concepts of pendent and a n c illa r y jurisdiction in §1367(a), it apparently chose to circumscribe such ju r is d ic t io n in § 1367(b) with respect to plaintiff intervenors. Despite

c o m m e n t a t o r s ' criticism of the manner in which the statute was drafted, the S u p r e m e Court has held that "§ 1367 is not ambiguous." Exxon Mobil, 545 U.S. a t 567; see State Nat. Ins. Co. v. Yates, 391 F.3d 577, 581 (5th Cir. 2004). Accordingly, the Supreme Court has rejected the view that it should look to other

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No. 09-30734 in t e r p r e t iv e tools, including the legislative history of § 1367, to interpret the s t a t u t e . Exxon Mobil, 545 U.S. at 567. As this Court has stated, "the statute is t h e sole repository of congressional intent where the statute is clear and does not d e m a n d an absurd result." In re Abbott Laboratories, 51 F.3d 524, 529 (5th Cir. 1 9 9 5 ). In this case, the lack of complete diversity and the presence of an amount in controversy less than $75,000.00 are both inconsistent with the jurisdictional r e q u ir e m e n t s of 28 U.S.C. § 1332. Under a plain reading of 28 U.S.C. § 1367(b), t h e r e was no supplemental jurisdiction over Lee's claim in intervention, as it w a s a claim by a person seeking to intervene as a plaintiff under Rule 24. See 2 8 U.S.C. §§ 1332, 1367(b); see also 7C WRIGHT, MILLER & KANE, supra, § 1917. Other circuits have reached similar conclusions. I n Development Finance Corp. v. Alpha Housing & Health Care, Inc., 54 F .3 d 156 (3d Cir. 1995), the Third Circuit acknowledged that § 1367(b) e lim in a t e s supplemental jurisdiction over claims of plaintiff intervenors who s h a r e citizenship with a defendant. Id. at 159. Ultimately, the Third Circuit d e c id e d that the intervenor in that case was more properly aligned as a d e fe n d a n t , which cured the jurisdictional defect. Id. In TIG Insurance Co. v. R e lia b le Research Co., 334 F.3d 630 (7th Cir. 2003), the Seventh Circuit d is m is s e d a plaintiff intervenor's claim for want of jurisdiction, because its c it iz e n s h ip was not diverse from the party against whom it was asserting the c la im .1 Id. at 634.

Also instructive is Krueger v. Cartwright, 996 F.2d 928 (7th Cir. 1993), where the Seventh Circuit held that "the `supplemental jurisdiction' statute, authorizes the assertion of federal jurisdiction over additional claims and parties, but specifically prohibits the exercise of supplemental jurisdiction in diversity cases over non-diverse parties joined to the action under Rule 19." Id. at 933 (citing 28 U.S.C. § 1367(b)). Rule 19 and Rule 24 plaintiffs receive similar treatment under a plain reading of § 1367(b).

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No. 09-30734 I n Baker v. Minnesota Mining and Manufacturing Co., 99 F. App'x 718 (6 t h Cir. 2004), abrogated on other grounds by Blackburn v. Oaktree Capital M a n a g e m e n t, LLC, 511 F.3d 633 (6th Cir. 2008), the Sixth Circuit held that the R u le 24 intervention as a plaintiff by a party which was an arm of the C o m m o n w e a lth of Kentucky, and not a "citizen" for diversity purposes, deprived t h e district court of jurisdiction under § 1367(b). Id. at 723. Thus, the Court c o n c lu d e d that the district court should have denied the non-diverse party's m o t io n to intervene as a plaintiff. Id.2 District courts in this Circuit have in t e r p r e t e d the statute in a similar fashion. See Dushane v. Gallagher Kaiser C o r p ., No. 05-CV-171, 2005 WL 1959151, at *6 (W.D. La. Aug. 10, 2005); MCI T e le c o m m . Corp. v. Logan Group, Inc., 848 F. Supp. 86, 88­89 (N.D. Tex. 1994).3 " F e d e r a l courts are courts of limited jurisdiction. They possess only that p o w e r authorized by the Constitution and statute, which is not to be expanded b y judicial decree." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 378 ( 1 9 9 4 ) (internal citations omitted). "Unless a dispute falls within the confines o f the jurisdiction conferred by Congress, such courts do not have authority to is s u e orders regarding its resolution." Giannakos v. M/V Bravo Trader, 762

We recognize that the Seventh Circuit took a somewhat different approach in Aurora Loan Services v. Craddieth, 442 F.3d 1018, 1025­26 (7th Cir. 2006). There, the Seventh Circuit found supplemental jurisdiction existed over a claim by a non-diverse plaintiff in intervention. Aurora held that § 1367(b)'s exclusion "has no application to a party forced to intervene to protect an interest that arose during the course of a federal litigation in which he had no stake at the outset." Id. at 1025. Aurora is factually distinguishable from the instant case. Unlike the plaintiff intervenor in Aurora, Lee was not forced to intervene in the present action, inasmuch as he would not have been bereft of a remedy absent such intervention. See also Int'l Chem. Corp. v. Nautilus Ins. Co., No. 09-CV-359S(F), 2010 WL 3070101, at *3 (W.D.N.Y. Aug. 3, 2010) (holding that "where, as here, intervention is sought by an intervenor as a plaintiff in order to prosecute in district court a claim against a non-diverse party, intervention may not be granted as such status is expressly prohibited by § 1367(b)); Liberty Mut. Grp. v. Hillman's Sheet Metal & Certified Welding, Inc., 168 F.R.D. 90, 92 (D. Me. 1996) (noting that "the weight of authority supports the conclusion that § 1367(b) precludes the exercise of supplemental jurisdiction over claims by nondiverse plaintiff-intervenors, even as of right under Rule 24(a)").
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No. 09-30734 F .2 d 1295, 1297 (5th Cir. 1985). "Such jurisdiction goes to the core of the court's p o w e r to act, not merely to the rights of the particular parties." Id. Based on the fo r e g o in g , neither the Constitution nor Congress has authorized the exercise of s u p p le m e n t a l jurisdiction over Lee's claim here. C. P a r t y Alignment W e note that the issue of party alignment has not been addressed by the p a r tie s . The district court characterized Lee as an "Intervenor Plaintiff" and G r iffin as an "Intervenor Defendant." Because § 1367(b) speaks only to plaintiff in t e r v e n o r s , we consider whether Lee was properly aligned as a plaintiff. In a s c e r t a in in g the proper alignment of parties for jurisdictional purposes, courts h a v e a "duty" to "look beyond the pleadings, and arrange the parties according t o their sides in the dispute." City of Indianapolis v. Chase Nat'l Bank of City o f N.Y., 314 U.S. 63, 69 (1941) (internal quotation omitted). "Whether the n e c e s s a r y `collision of interest' exists must be ascertained from the `principal p u r p o s e of the suit' and the `primary and controlling matter in dispute.'" Id. (in t e r n a l citation omitted). As previously noted, the Third Circuit has held that if an intervenor is realigned as a defendant, § 1367(b) does not deprive the d is t r ic t court of supplemental jurisdiction over a counterclaim raised by the in t e r v e n in g defendant, even where the requirements of § 1332 are not met. See D e v . Fin., 54 F.3d at 161. I n this Circuit, "[t]he generally accepted test of proper alignment is w h e t h e r the parties with the same `ultimate interests' in the outcome of the a c t io n are on the same side." Lowe v. Ingalls Shipbuilding, A Div. of Litton Sys., I n c ., 723 F.2d 1173, 1178 (5th Cir. 1984) (citation omitted). "[W]hen it relates t o jurisdiction, it is [this Court's] duty to notice party alignment and apply p r o p e r realignment sua sponte on appeal, and that such realignment is to be d e t e r m in e d according to `the principal purpose of the suit and the primary and c o n t r o llin g matter in dispute.'" Id. at 1178 (citation omitted). 12

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No. 09-30734 B a s e d on the nature of Lee's claim, we are of the opinion that it is more a p p r o p r ia te to align him as a plaintiff with a claim against co-Plaintiff Griffin a s to the amount of attorney's fees owed, and with a direct claim against Trustee fo r a lien on the Trust. As a plaintiff intervening under Rule 24, § 1367(b)'s e x c l u s i o n would apply, and there is no supplemental jurisdiction over Lee's c la im . D. L e e 's Arguments in Support of Supplemental Jurisdiction I n his supplemental brief, Lee cites a number of cases for the proposition t h a t a claim for, or award of, attorney's fees in a case is collateral to the case's m e r it s , such that federal courts possess ancillary or supplemental jurisdiction o v e r such claims. None of those cases, however, involve a Rule 24 intervention. Lee quotes heavily from In re Private Counsel Agreement, No. 5:98-CV-270, 1 9 9 9 WL 1022131 (W.D. Tex. Nov. 5, 1999), which did involve a Rule 24 in t e r v e n t i o n , for the proposition that attorney's fee disputes meet the r e la t e d n e s s test of supplemental jurisdiction. What Lee apparently does not a p p r e c ia t e , however, is that In re Private Counsel Agreement was a federal q u e s t io n case, as were many of the other cases he cites. See id.; see also, e.g., J o s e p h Brenner Assoc., Inc. v. Starmaker Entm't, Inc., 82 F.3d 55 (2d Cir. 1996); B a e r v. First Options of Chi., Inc., 72 F.3d 1294 (7th Cir. 1995). Because original ju r is d ic t io n in those cases was not founded solely on § 1332, § 1367(b)'s e x c lu s io n s were inapplicable, even to Rule 24 interventions. Lee next contends that under § 1367, the jurisdictional amount in c o n t r o v e r s y is not a requirement which must be satisfied. Even assuming that t h e r e were complete diversity of citizenship here, this argument is not c o m p e llin g . The Supreme Court has concluded that in a diversity case in which s o m e original plaintiffs satisfy the amount in controversy requirement, but o t h e r s do not, § 1367(a) confers supplemental jurisdiction over all claims that are p a r t of the same Article III case or controversy, including those that do not 13

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Date Filed: 09/23/2010

No. 09-30734 in d ep en d e n t ly satisfy the amount in controversy requirement. Exxon Mobil, 545 U .S . at 558­59 (emphasis added). Lee is not an original Plaintiff. A s the Exxon Mobil Court also noted, "§§ 1367(b) and (c), or other relevant s t a t u t e s , may provide specific exceptions" to § 1367(a)'s broad jurisdictional g r a n t . Id. at 559. Such is the case with respect to Lee's claim, which is clearly e x c e p t e d from supplemental jurisdiction by § 1367(b). In other words, what § 1 3 6 7 (a ) giveth, § 1367(b) may taketh away. Moreover, the expansive

in t e r p r e t a t io n for which Lee argues, even if accepted, would not remedy the lack o f complete diversity of citizenship occasioned by his intervention. Id. at 554. Lee next maintains that his intervention was the assertion of a state law r ig h t to intervene, and not one pursuant to the Federal Rules of Civil Procedure. He asserts that his was an "intervention of right," but not under Rule 24(a). Lee's contention that this case does not come within the purview of § 1367(b)'s e x c e p t io n s because his right arises under state law is not persuasive. State law c le a r ly confers upon Lee whatever substantive right he may have at issue in this c a s e , but it was the Federal Rules of Civil Procedure, specifically Rule 24(a)(2), w h ic h the district court applied to permit his intervention. In a diversity case, t h e substantive right giving rise to intervention will likely originate from state la w , but federal procedural rules will dictate whether the party is allowed to in te r v e n e . Finally, Lee points out that the district court was the most convenient fo r u m for handling the subject matter then before it. This is no doubt true, but c o n v e n ie n c e cannot supplant the unambiguous language of a jurisdictional s t a t u t e . We are sympathetic to the added expense and potential waste of judicial r e s o u r c e s Lee will likely face in pursuing his claim for legal fees in a separate a c t io n and forum. However, efficiency and economy cannot confer jurisdiction u p o n the courts where Congress has, according to the Supreme Court, u n a m b ig u o u s ly chosen to limit such jurisdiction. See id. at 567. 14

Case: 09-30734

Document: 00511243201

Page: 15

Date Filed: 09/23/2010

No. 09-30734 I V . CONCLUSION A lt h o u g h we are sympathetic to Lee and the inconvenience he faces, b e c a u s e there was no supplemental jurisdiction over Lee's claim in intervention p u r s u a n t to 28 U.S.C. § 1367(b), we VACATE and REMAND with instructions t h a t the district court DISMISS Lee's Petition of Intervention for lack of subject m a t t e r jurisdiction.

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