Zahn v. International Paper Co.Annotate this Case
414 U.S. 291 (1973)
U.S. Supreme Court
Zahn v. International Paper Co., 414 U.S. 291 (1973)
Zahn v. International Paper Co.
Argued October 16, 1973
Decided December 17, 1973
414 U.S. 291
CERTIORARI TO THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
Multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional amount for suits in federal courts, and, in this diversity class action under Fed.Rule Civ.Proc. 23(b)(3) by owners of lakeshore property charging respondent with polluting the lake, where only the named plaintiffs, but not the unnamed plaintiffs, could show damages in the jurisdictional amount, a class action is not maintainable. Each plaintiff in a Rule 23(b)(3) class action must satisfy the jurisdictional amount and any plaintiff who does not must be dismissed from the case. Snyder v. Harris,394 U. S. 332, followed. Pp. 414 U. S. 292-302.
469 F.2d 1033, affirmed.
WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, BLACKMUN, POWELL, and REHNQUIST, JJ., joined. BRENNAN, J., filed dissenting opinion, in which DOUGLAS and MARSHALL, JJ., joined, post, p. 414 U. S. 302.
MR. JUSTICE WHITE delivered the opinion of the Court.
Petitioners, asserting that they were owners of property fronting on Lake Champlain in Orwell, Vermont,
brought this action in the District Court on behalf of a class consisting of themselves and 200 lakefront property owners and lessees. They sought damages from International Paper Co., a New York corporation, for allegedly having permitted discharges from its pulp and paper-making plant, located in New York, to flow into Ticonderoga Creek and to be carried by that stream into Lake Champlain, thereby polluting the waters of the lake and damaging the value and utility of the surrounding properties. The suit was brought as a diversity action, jurisdiction assertedly resting on 28 U.S.C. § 1332(a)(1). The claim of each of the named plaintiffs was found to satisfy the $10,000 jurisdictional amount, but the District Court was convinced "to a legal certainty" that not every individual owner in the class had suffered pollution damages in excess of $10,000. Reading Snyder v. Harris,394 U. S. 332 (1969), as precluding maintenance of the action by any member of the class whose separate and distinct claim did not individually satisfy the jurisdictional amount, and concluding that it would not be feasible to define a class of property owners each of whom had more than a $10,000 claim, the District Court then refused to permit the suit to proceed as a class action. 53 F.R.D. 430 (Vt.1971). A divided Court of Appeals affirmed, 469 F.2d 1033 (CA2 1972), principally on the authority of Snyder v. Harris, supra. We granted the petition for writ of certiorari, 410 U.S. 925 (1973).
The Court of Appeals correctly held that this case is governed by the rationale of this Court's prior cases construing the statutes defining the jurisdiction of the District Court. We therefore affirm its judgment.
From the outset, Congress has provided that suits between citizens of different States are maintainable in the district courts only if the "matter in controversy"
exceeds the statutory minimum, now set at $10,000. 28 U.S.C. § 1332(a). [Footnote 1] The same jurisdictional amount requirement has applied when the general federal question jurisdiction of the district courts, 28 U.S.C. § 1331(a), is sought to be invoked. [Footnote 2] A classic statement of the dichotomy that developed in construing and applying
"When two or more plaintiffs, having separate and distinct demands, unite for convenience and economy in a single suit, it is essential that the demand of each be of the requisite jurisdictional amount; but when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest, it is enough if their interests collectively equal the jurisdictional amount."
This distinction and rule that multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional amount requirement for suit in the federal courts were firmly rooted in prior cases dating from 1832, [Footnote 3] and have continued to be the accepted construction
of the controlling statutes, now §§ 1331 and 1332. [Footnote 4] The rule has been applied to forbid aggregation of claims where none of the claimants satisfies the jurisdictional amount, as was the case in Scott v. Frazier,253 U. S. 243, 253 U. S. 244 (1920), for example, where the Court stated the rule to be that "the amount in controversy must equal the jurisdictional sum as to each complainant." It also requires dismissal of those litigants whose claims do not satisfy the jurisdictional amount, even though other litigants assert claims sufficient to invoke the jurisdiction of the federal court. Clark v. Paul Gray, Inc.,306 U. S. 583 (1939); Stewart v. Dunham,115 U. S. 61, 115 U. S. 665 (1885); Bernards Township v. Stebbins,109 U. S. 341, 109 U. S. 355 (1883).
In Clark v. Paul Gray, Inc., decided after the effective date of the Federal Rules of Civil Procedure in 1938, the Court applied the familiar rule that,
"when several plaintiffs assert separate and distinct demands in a single suit, the amount involved in each separate controversy must be of the requisite amount . . . , and . . . those amounts cannot be added together to satisfy jurisdictional requirements."
306 U.S. at 306 U. S. 589. Upon ascertaining on its own motion that only one of the plaintiffs in the District Court had presented a claim satisfying the
jurisdictional amount, the Court reached the merits of that claim, but directed the District Court to dismiss the claims of all other plaintiffs for want of jurisdiction.
The same rules were applied to class actions contemplated by Fed.Rule Civ.Proc. 23. The spurious class action authorized by Rule 23(a)(3), as it stood prior to amendment in 1966, [Footnote 5] was viewed by Judge Frank, writing for himself and Judges Learned and Augustus Hand, as, "in effect, but a congeries of separate suits so that each claimant must, as to his own claim, meet the jurisdictional requirements." Steele v. Guaranty Trust Co. of N.Y., 164 F.2d 387, 388 (CA2 1947). [Footnote 6] The direct precedent
for Steele was 1941 decision in the same Circuit expressed in an opinion written by Judge Charles Clark, who, as a member of and Reporter for the Advisory Committee, was a principal architect of the Federal Rules of Civil Procedure. That case, Hackner v. Guaranty Trust Co. of N.Y., 117 F.2d 95 (CA2 1941), involved a class action brought on behalf of plaintiffs with separate and distinct claims. Judge Clark invoked a long line of authority in this Court, and in other courts, to hold that, among parties related only by a common question of law and fact, "aggregation is improper," and that jurisdiction cannot be supplied for those without claims in the requisite amount "by adding a plaintiff who can how jurisdiction." Id. at 98. (Citations omitted.) This was the accepted view in the federal courts with respect to class actions. [Footnote 7] In consequence, district courts were to
entertain the claims of only those class action plaintiffs whose individual cases satisfied the jurisdictional amount requirement.
The meaning of the "matter in controversy" language of § 1332 as it applied to class actions under Rule 23 reached this Court in Snyder v. Harris, supra, the occasion being a division of opinion in the courts of appeals as to whether the 1966 amendments to Rule 23 had changed the jurisdictional amount requirement of § 1332 as applied to class actions involving separate and distinct claims. [Footnote 8] None of the named plaintiffs and
none of the unnamed members of the class before the Court alleged claims in excess of the requisite amount. It was nevertheless urged that, in class action situations, particularly in light of the 1966 amendments to the rule, aggregation of separate and distinct claims should be permitted. The Court was of a contrary view, holding that class actions involving plaintiffs with separate and distinct claims were subject to the usual rule that a federal district court can assume jurisdiction over only those plaintiffs presenting claims exceeding the $10,000 minimum specified in § 1332. Aggregation of claims was impermissible, and the federal court was without jurisdiction where none of the plaintiffs presented a claim of the requisite size. The Court unmistakably rejected the notion that the 1966 amendments to Rule 23 were intended to effect, or effected, any change in the meaning and application of the jurisdictional amount requirement insofar as class actions are concerned.
"The doctrine that separate and distinct claims could not be aggregated was never, and is not now, based upon the categories of old Rule 23 or of any rule of procedure. That doctrine is based rather upon this Court's interpretation of the statutory phrase 'matter in controversy.' The interpretation of this phrase as precluding aggregation substantially predates the 1938 Federal Rules of Civil Procedure. . . . Nothing in the amended Rule 23 changes this doctrine. . . . The fact that judgments under class actions formerly classified as spurious may now have the same effect as claims brought under the joinder provisions is certainly no reason to treat
them differently from joined actions for purposes of aggregation."
394 U.S. at 394 U. S. 336-337.
The Court also refused to reconsider its prior constructions of the "matter in controversy" phrase, concluding that it should not do so where Congress, with complete understanding of how the courts had construed the statute, had not changed the governing language, and, down through the years, had continued to specify, and had progressively increased, the jurisdictional amount necessary for instituting suit in the federal courts.
None of the plaintiffs in Snyder v. Harris alleged a claim exceeding $10,000, but there is no doubt that the rationale of that case controls this one. As previously indicated, Snyder invoked the well established rule that each of several plaintiffs asserting separate and distinct claims must satisfy the jurisdictional amount requirement if his claim is to survive a motion to dismiss. This rule plainly mandates not only that there may be no aggregation, and that the entire case must be dismissed where none of the plaintiffs claims more than $10,000, but also requires that any plaintiff without the jurisdictional amount must be dismissed from the case, even though others allege jurisdictionally sufficient claims.
This follows inescapably from the Court's heavy reliance on Clark v. Paul Gray, Inc., supra, where only one of several plaintiffs had a sufficiently large claim and all other plaintiffs were dismissed from the suit. [Footnote 9] Moreover,
the Court cited with approval the decision in Alvarez v. Pan American Life Insurance Co., 375 F.2d 992 (CA5), cert. denied, 389 U.S. 827 (1967), which was decided after the 1966 amendments to Rule 23 and which involved a class action with only one member of the class having a claim sufficient to satisfy § 1332. Only that claim was held within the jurisdiction of the District Court.
We conclude, as we must, that the Court of Appeals in the case before us accurately read and applied Snyder v. Harris: [Footnote 10] each plaintiff in a Rule 23(b)(3) class action must satisfy the jurisdictional amount, and any plaintiff who does not must be dismissed from the case -- "one plaintiff may not ride in on another's coattails." 469 F.2d at 1035.
Neither are we inclined to overrule Snyder v. Harris, nor to change the Court's longstanding construction of the "matter in controversy" requirement of § 1332. The Court declined a like invitation in Snyder v. Harris after surveying all relevant considerations and concluding that to do so would undermine the purpose and intent of Congress in providing that plaintiffs in diversity cases must present claims in excess of the specified jurisdictional amount. At this time, we have no good reason to disagree with Snyder v. Harris or with the historic construction of the jurisdictional statutes, left undisturbed by Congress over these many years.
It also seems to us that the application of the jurisdictional amount requirement to class actions was so plainly etched in the federal courts prior to 1966 that, had there been any thought of departing from these decisions, and, in so doing, of calling into question the accepted approach to cases involving ordinary joinder of plaintiffs with separate and distinct claims, some express statement of that intention would surely have appeared either in the amendments themselves or in the official commentaries. But we find not a trace to this effect. As the Court thought in Snyder v. Harris, the matter must rest there, absent further congressional action. [Footnote 11]
The section provides in pertinent part that:
"(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between -- "
"(1) citizens of different States. . . ."
Section 11 of the First Judiciary Act of 1789 set the jurisdictional amount in diversity suits at $500. 1 Stat. 78. In 1801, Congress lowered the requirement to $400 in the Midnight Judges Act, 2 Stat. 89, 92, but it was quickly restored to $500 the following year. 2 Stat. 132. The jurisdictional amount requirement remained fixed at this level until the Act of Mar. 3, 1887, 24 Stat. 552, when it was raised to $2,000. The figure was subsequently increased by $1,000 by the Act of Mar. 3, 1911, § 24, 36 Stat. 1091. See S.Rep. No. 388, 61st Cong., 2d Sess., pt. 2, pp. 30-32 (1910); H.R.Rep. No. 818, 61st Cong., 2d Sess. (1910); Conference Report, S.Doc. No. 848, 61st Cong., 3d Sess. (1911); 45 Cong.Rec. 3596-3599 (1910); 46 Cong.Rec. 4002, 4003, 4004 (1911).
The current $10,000 jurisdictional amount, codified in 28 U.S.C. § 1332(a), was enacted by the Act of July 25, 1958, 72 Stat. 415. The legislative history discloses that the change was made
"on the premise that the amount should be fixed at a sum of money that will make jurisdiction available in all substantial controversies where other elements of Federal jurisdiction are present. The jurisdictional amount should not be so high as to convert the Federal courts into courts of big business, nor so low as to fritter away their time in the trial of petty controversies."
S.Rep. No. 1830, 85th Cong., 2d Sess., 3-4 (1958); see also id. at 21; H.R.Rep. No. 1706, 85th Cong., 2d Sess., 3 (1958).
Section 1331(a) provides:
"(a) The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States."
The following are representative of innumerable cases confirming this principle: Woodside v. Beckham,216 U. S. 117 (1910); Waite v. Santa Cruz,184 U. S. 302, 184 U. S. 328-329 (1902); Wheless v. St. Louis,180 U. S. 379, 180 U. S. 382 (1901); Bernards Township v. Stebbins,109 U. S. 341, 109 U. S. 355 (1883). Cf. Clay v. Field,138 U. S. 464 (1891); Russell v. Stansell,105 U. S. 303 (1882); Seaver v. Bigelows, 5 Wall. 208 (1867); Stratton v. Jarvis, 8 Pet. 4 (1834); Oliver v. Alexander, 6 Pet. 143 (1832).
Snyder v. Harris,394 U. S. 332 (1969), noted that the judicial interpretation of "matter in controversy" to bar aggregation of separate and distinct claims dated back to at least Oliver v. Alexander, which is representative of the unbroken line of decisions of this Court interpreting our appellate jurisdiction when that jurisdiction was confined to review of lower court decisions in which the "matter in dispute" exceeded a designated monetary amount. Consistently, plaintiffs with separate and distinct claims could not aggregate their respective "matters in dispute" to bring an appeal to this Court. See, e.g., Stewart v. Dunham,115 U. S. 61, 115 U. S. 64-65 (1885) (and cases cited therein). The original Alexander construction of our appellate jurisdiction was applied to the jurisdictional amount requirement for federal trial courts in Walter v. Northeastern R. Co.,147 U. S. 370, 147 U. S. 373 (1893):
"Is the plaintiff entitled to join [all his actions] in a single suit in a Federal court, and sustain the jurisdiction by reason of the fact that the total amount involved exceeds $2,000? We think not. It is well settled in this court that, when two or more plaintiffs, having several interests, unite for the convenience of litigation in a single suit, it can only be sustained in the court of original jurisdiction, or on appeal in this court, as to those whose claims exceed the jurisdictional amount; and that, when two or more defendants are sued by the same plaintiff in one suit, the test of jurisdiction is the joint or several character of the liability to the plaintiff."
Rogers v. Hennepin County,329 U. S. 621 (1916); Title Guaranty Co. v. Allen,240 U. S. 136 (1916); Pinel v. Pinel,240 U. S. 594, 240 U. S. 596 (1916); Scott v. Frazier,253 U. S. 243, 253 U. S. 244 (1920); Clark v. Paul Gray, Inc.,306 U. S. 583 (1939).
Rule 23(a)(3) provided:
"If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is"
"* * * *"
"(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought."
"The spurious class suit was a permissive joinder device. . . ."
"There was no jural relationship between the members of the class; unlike, for example, the members of an unincorporated association, they had taken no steps to create a legal relationship among themselves. They were not fellow travelers by agreement. The right or liability of each was distinct. The class was formed solely by the presence of a common question of law or fact. When a suit was brought by or against such a class, it was merely an invitation to joinder -- an invitation to become a fellow traveler in the litigation, which might or might not be accepted. It was an invitation, and not a command performance."
3B J. Moore, Federal Practice