Separate and distinct claims presented by and for various
claimants in federal diversity actions may not be added together to
provide the requisite $10,000 jurisdictional amount in controversy.
Fed.Rule Civ.Proc. 23, as amended in 1966, did not change the scope
of the statutory grant of district court jurisdiction, as the
longstanding judicial interpretation of that statute cannot be
changed by an amendment to the Rules, and there is no compelling
reason for overturning settled judicial construction of "matter in
controversy" in the light of consistent congressional reenactment
of that language against a background of judicial interpretation
that the phrase does not encompass the aggregation of separate and
distinct claims. Pp.
394 U. S.
332-342.
No. 109, 39,0 F.2d 204, affirmed; No. 117, 389 F.2d 831,
reversed.
MR. JUSTICE BLACK delivered the opinion of the Court.
Title 28 U.S.C. § 1332 grants jurisdiction to United States
district courts of suits between citizens of different States where
"the matter in controversy exceeds the sum
Page 394 U. S. 333
or value of $10,000. . . ." The issue presented by these two
cases is whether separate and distinct claims presented by and for
various claimants in a class action may be added together to
provide the $10,000 jurisdictional amount in controversy.
Each of these cases involves a single plaintiff suing on behalf
of himself and "all others similarly situated." In No. 109, Mrs.
Margaret E. Snyder, a shareholder of Missouri Fidelity Union Trust
Life Insurance Company, brought suit against members of the
company's board of directors alleging that they had sold their
shares of the company's stock for an amount far in excess of its
fair market value, that this excess represented payment to these
particular directors to obtain complete control of the company, and
that, under Missouri law, the excess should properly be distributed
among all the shareholders of the company, and not merely to a few
of them. The suit was brought in the United States District Court
for the Eastern District of Missouri, diversity of citizenship
being alleged as the basis for federal jurisdiction. Since
petitioner's allegations showed that she sought for herself only
$8,740 in damages, respondent moved to dismiss on the grounds that
the matter in controversy did not exceed $10,000. Petitioner
contended, however, that her claim should be aggregated with those
of the other members of her class, approximately 4,000 shareholders
of the company stock. If all 4,000 potential claims were
aggregated, the amount in controversy would be approximately
$1,200,000. The District Court held that the claims could not thus
be aggregated to meet the statutory test of jurisdiction, and the
Court of Appeals for the Eighth Circuit, following a somewhat
similar decision by the Court of Appeals for the Fifth Circuit in
Alvarez v. Pan American Life Insurance Co., 375 F.2d 992,
cert. denied, 389 U.S. 827 (1967),
affirmed, 390
F.2d 204 (1968).
Page 394 U. S. 334
In No. 117, Otto R. Coburn, a resident of Kansas, brought suit
in the United States District Court for the District of Kansas
against the Gas Service Company, a corporation marketing natural
gas in Kansas. Jurisdiction was predicated upon diversity of
citizenship. The complaint alleged that the Gas Service Company had
billed and illegally collected a city franchise tax from Coburn and
others living outside city limits. Coburn alleged damages to
himself of only $7.81. Styling his complaint as a class action,
however, Coburn sought relief on behalf of approximately 18,000
other Gas Service Company customers living outside of cities. The
amount by which other members of the class had been overcharged
was, and is, unknown, but the complaint alleged that the
aggregation of all these claims would, in any event, exceed
$10,000. The District Court overruled the Gas Company's motion to
dismiss for failure to satisfy the jurisdictional amount and, on
interlocutory appeal, the Court of Appeals for the Tenth Circuit
affirmed, holding that, because of a 1966 amendment to Rule 23 of
the Federal Rules of Civil Procedure relating to class actions,
separate and distinct claims brought together in a class action
could now be aggregated for the purpose of establishing the
jurisdictional amount in diversity cases. 389 F.2d 831. We granted
certiorari to resolve the conflict between the position of the
Courts of Appeals for the Fifth and the Eighth Circuits and that of
the Court of Appeals for the Tenth Circuit.
The first congressional grant to district courts to take suits
between citizens of different States fixed the requirement for the
jurisdictional amount in controversy at $500. [
Footnote 1] In 1887, this jurisdictional amount
was increased to $2,000; [
Footnote
2] in 1911 to $3,000; [
Footnote
3] and in 1958 to $10,000. [
Footnote 4]
Page 394 U. S. 335
The traditional judicial interpretation under all of these
statutes has been from the beginning that the separate and distinct
claims of two or more plaintiffs cannot be aggregated in order to
satisfy the jurisdictional amount requirement. Aggregation has been
permitted only (1) in cases in which a single plaintiff seeks to
aggregate two or more of his own claims against a single defendant
and (2) in cases in which two or more plaintiffs unite to enforce a
single title or right in which they have a common and undivided
interest. It is contended, however, that the adoption of a 1966
amendment to Rule 23 effectuated a change in this jurisdictional
doctrine. Under old Rule 23, class actions were divided into three
categories which came to be known as "true," "hybrid," and
"spurious." True class actions were those in which the rights of
the different class members were common and undivided; in such
cases aggregation was permitted. Spurious class actions, on the
other hand, were, in essence, merely a form of permissive joinder
in which parties with separate and distinct claims were allowed to
litigate those claims in a single suit simply because the different
claims involved common questions of law or fact. In such cases,
aggregation was not permitted: each plaintiff had to show that his
individual claim exceeded the jurisdictional amount. The 1966
amendment to Rule 23 replaced the old categories with a functional
approach to class actions. The new Rule establishes guidelines for
the appropriateness of class actions, makes provision for giving
notice to absent members, allows members of the class to remove
themselves from the litigation and provides that the judgment will
include all members of the class who have not requested exclusion.
In No. 117, Gas Service Company, the Court of Appeals for the Tenth
Circuit held that these changes in Rule 23 changed the
jurisdictional amount doctrine as well. The court noted that:
"Because the claims of the individuals constituting the class in
the case at bar are neither 'joint'
Page 394 U. S. 336
nor 'common,' this action under Rule 23 before amendment would
not have been classified as a 'true' class action, and aggregation
of claims would not have been permitted."
389 F.2d 831, 833. The Court of Appeals held, however, that a
different result was compelled now that the amendment to Rule 23
abolished the distinctions between true and spurious class actions.
The court held that, because aggregation was permitted in some
class actions, it must now be permitted in all class actions under
the new Rule. We disagree, and conclude, as did the Courts of
Appeal for the Fifth and Eighth Circuits, that the adoption of
amended Rule 23 did not and could not have brought about this
change in the scope of the congressionally enacted grant of
jurisdiction to the district courts.
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. In 1911, this Court said in
Troy Rank
v. Whitehead & Co.:
"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. . . ."
222 U.S.
39,
222 U. S. 40. By
1916, this Court was able to say, in
Pinel v. Pinel,
240 U. S. 594,
that it was "settled doctrine" that separate and distinct claims
could not be aggregated to meet the required jurisdictional amount.
In
Clark v. Paul Gray, Inc., 306 U.
S. 583 (1939), this doctrine, which had first been
declared in cases involving joinder of
Page 394 U. S. 337
parties, was applied to class actions under the then recently
passed Federal Rules. In that case, numerous individuals,
partnerships, and corporations joined in bringing a suit
challenging the validity of a California statute which exacted fees
of $15 on each automobile driven into the State. Raising the
jurisdictional amount question
sua sponte, this Court held
that the claims of the various fee payers could not be aggregated
"where there are numerous plaintiffs having no joint or common
interest or title in the subject matter of the suit." 306 U.S. at
306 U. S. 588.
Nothing in the amended Rule 23 changes this doctrine. The class
action plaintiffs in the two cases before us argue that, since the
new Rule will include in the judgment all members of the class who
do not ask to be out by a certain date, the "matter in controversy"
now encompasses all the claims of the entire class. But it is
equally true that, where two or more plaintiffs join their claims
under the joinder provisions of Rule 20, each and every joined
plaintiff is bound by the judgment. And it was in joinder cases of
this very kind that the doctrine that distinct claims could not be
aggregated was originally enunciated.
Troy Bank v. Whitehead
Co., 222 U. S. 39
(1911);
Pinel v. Pinel, 240 U. S. 594
(1916). 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.
Any change in the Rules that did purport to effect a change in
the definition of "matter in controversy" would clearly conflict
with the command of Rule 82 that "[t]hese rules shall not be
construed to extend or limit the jurisdiction of the United States
district courts. . . ." In
Sibbach v. Wilson & Co.,
this Court held that the rulemaking authority was limited by "the
inability of a court, by rule, to extend or restrict the
jurisdiction
Page 394 U. S. 338
conferred by a statute."
312 U. S. 1,
312 U. S. 10
(1941). We have consistently interpreted the jurisdictional statute
passed by Congress as not conferring jurisdiction where the
required amount in controversy can be reached only by aggregating
separate and distinct claims. The interpretation of that statute
cannot be changed by a change in the Rules.
For the reasons set out above, we think that it is unmistakably
clear that the 1966 changes in Rule 23 did not and could not have
changed the interpretation of the statutory phrase "matter in
controversy." It is urged, however, that this Court should now
overrule its established statutory interpretation and hold that
"matter in controversy" encompasses the aggregation of all claims
that can be brought together in a single suit, regardless of
whether any single plaintiff has a claim that exceeds the required
jurisdictional amount. It is argued in behalf of this position that
(1) the determination of whether claims are "separate and distinct"
is a troublesome question that breeds uncertainty and needless
litigation, and (2) the inability of parties to aggregate numerous
small claims will prevent some important questions from being
litigated in federal courts. And both of these factors, it is
argued, will tend to undercut the attempt of the Judicial
Conference to promulgate efficient and modernized class action
procedures. We think that whatever the merit of these contentions,
they are not sufficient to justify our abandonment of a judicial
interpretation of congressional language that has stood for more
than a century and a half.
It is linguistically possible, of course, to interpret the old
congressional phrase "matter in controversy" as including all
claims that can be joined or brought in a single suit through the
class action device. But, beginning with the first Judiciary Act in
1789, Congress has
Page 394 U. S. 339
placed a jurisdictional amount requirement on access to the
federal courts in certain classes of cases, including diversity
actions. The initial requirement was $500 and a series of increases
have, as pointed out above, finally placed the amount at $10,000.
Congress has thus consistently amended the amount in controversy
section and reenacted the "matter in controversy" language without
change of its jurisdictional effect against a background of
judicial interpretation that has consistently interpreted that
congressionally enacted phrase as not encompassing the aggregation
of separate and distinct claims. This judicial interpretation has
been uniform since at least the 1832 decision of this Court in
Oliver v.
Alexander, 6 Pet. 143. There are no doubt hazards
and pitfalls involved in assuming that reenactment of certain
language by Congress always freezes the existing judicial
interpretation of the statutes involved. Here, however, the settled
judicial interpretation of "amount in controversy" was implicitly
taken into account by the relevant congressional committees in
determining, in 1958, the extent to which the jurisdictional amount
should be raised. It is quite possible, if not probable, that
Congress chose the increase to $10,000, rather than the proposed
increases to $7,500 or $15,000 on the basis of workload estimates
which clearly relied on the settled doctrine that separate and
distinct claims could not be aggregated. Where Congress has
consistently reenacted its prior statutory language for more than a
century and a half in the face of a settled interpretation of that
language, it is perhaps not entirely realistic to designate the
resulting rule a "judge-made formula."
To overrule the aggregation doctrine at this late date would run
counter to the congressional purpose in steadily increasing through
the years the jurisdictional amount requirement. That purpose was
to check, to
Page 394 U. S. 340
some degree, the rising caseload of the federal courts,
especially with regard to the federal courts' diversity of
citizenship jurisdiction. Any change in the doctrine of aggregation
in class action cases under Rule 23 would inescapably have to be
applied as well to the liberal joinder provisions of Rule 20 and to
the joinder of claims provisions of Rule 18. The result would be to
allow aggregation of practically any claims of any parties that for
any reason happen to be brought together in a single action. This
would seriously undercut the purpose of the jurisdictional amount
requirement. The expansion of the federal caseload could be most
noticeable in class actions brought on the basis of diversity of
citizenship. Under current doctrine, if one member of a class is of
diverse citizenship from the class' opponent, and no nondiverse
members are named parties, the suit may be brought in federal court
even though all other members of the class are citizens of the same
State as the defendant and have nothing to fear from trying the
lawsuit in the courts of their own State.
See Supreme Tribe of
Ber-Hur v. Cauble, 255 U. S. 356
(1921). To allow aggregation of claims where only one member of the
entire class is of diverse citizenship could transfer into the
federal courts numerous local controversies involving exclusively
questions of state law. In
Healy v. Ratta, 292 U.
S. 263 (1934), this Court noted that, by successively
raising the jurisdictional amount, Congress had determined that
cases involving lesser amounts should be left to be dealt with by
the state courts and said:
"The policy of the statute calls for its strict construction. .
. . Due regard for the rightful independence of state governments,
which should actuate federal courts, requires that they
scrupulously confine their own jurisdiction to the precise limits
which the statute has defined."
292 U.S.
263,
292 U. S.
270.
Page 394 U. S. 341
Finally, it has been argued that, unless the established
aggregation principles are overturned, the functional advantages
alleged to inhere in the new class action Rule will be undercut by
resort to the old forms. But the disadvantageous results are
overemphasized, we think, since lower courts have developed largely
workable standards for determining when claims are joint and
common, and therefore entitled to be aggregated, and when they are
separate and distinct, and therefore not aggregable. Moreover,
while the class action device serves a useful function across the
entire range of legal questions, the jurisdictional amount
requirement applies almost exclusively to controversies based upon
diversity of citizenship. A large part of those matters involving
federal questions can be brought, by way of class actions or
otherwise, without regard to the amount in controversy. Suits
involving issues of state law and brought on the basis of diversity
of citizenship can often be most appropriately tried in state
courts. The underlying claims in the two cases before us, for
example, will be determined exclusively on the basis of Missouri
and Kansas law, respectively. In No. 109, a separate suit
litigating the underlying issues has already been filed in a
Missouri state court. In No. 117, the residents of Kansas who
contend that certain gas service charges are not authorized by
Kansas law can bring a class action under Kansas procedures that
are patterned on former Federal Rule 23. There is no compelling
reason for this Court to overturn a settled interpretation of an
important congressional statute in order to add to the burdens of
an already overloaded federal court system. Nor can we overlook the
fact that the Congress that permitted the Federal Rules to go into
effect was assured before doing so that none of the Rules would
either expand or contract the jurisdiction of federal courts. If
there is a present need
Page 394 U. S. 342
to expand the jurisdiction of those courts, we cannot overlook
the fact that the Constitution specifically vests that power in the
Congress, not in the courts.
The judgment in No. 109 is
Affirmed.
The judgment in No. 117 is
Reversed.
* Together with No. 117,
Gas Service Co. v. Coburn, on
certiorari to the United States Court of Appeals for the Tenth
Circuit, argued on January 21-22, 1969.
[
Footnote 1]
Section 11 of the Judiciary Act of 1789, 1 Stat. 78.
[
Footnote 2]
Act of March 3, 1887, 24 Stat. 552.
[
Footnote 3]
Act of March 3, 1911, § 24, 36 Stat. 1091.
[
Footnote 4]
Act of July 25, 1958, 72 Stat. 415.
MR. JUSTICE FORTAS, with whom MR. JUSTICE DOUGLAS joins,
dissenting.
The Court today refuses to conform the judge-made formula for
computing the amount in controversy in class actions with the 1966
amendment to Rule 23 of the Federal Rules of Civil Procedure. The
effect of this refusal is substantially to undermine a generally
welcomed and long-needed reform in federal procedure. [
Footnote 2/1]
Its impact will be noticeable not only in diversity of
citizenship cases, but also in important classes of federal
question cases in which federal jurisdiction must be based on 8
U.S.C. § 1331, the general federal question provision, rather than
on one of the specific grants of federal jurisdiction. [
Footnote 2/2]
Page 394 U. S. 343
The artificial, awkward, and unworkable distinctions between
"joint," "common," and "several" claims and between "true,"
"hybrid," and "spurious" class actions which the amendment of Rule
23 sought to terminate is now reestablished in federal procedural
law. Litigants, lawyers, and federal courts must now continue to be
ensnared in their complexities in all cases where one or more of
the co-plaintiffs have a claim of less than the jurisdictional
amount, usually $10,000.
It was precisely this morass that the 1966 amendment to Rule 23
sought to avoid. The amendment had as its purpose to give the
Federal District Courts wider discretion as to the type of claims
that could be joined in litigation. That amendment replaced the
metaphysics of conceptual analysis of the "character of the right
sought to be enforced" by a pragmatic, workable definition of when
class actions might be maintained,
Page 394 U. S. 344
that is, when claims of various claimants might be aggregated in
a class action, and it carefully provided procedures and safeguards
to avoid unfairness. [
Footnote
2/3]
Page 394 U. S. 345
The amendment was formulated with care by an able committee and
recommended to this Court by the Judicial Conference of the United
States pursuant to 28
Page 394 U. S. 346
U.S.C. § 331. [
Footnote 2/4] It
was accepted and promulgated by this Court, [
Footnote 2/5] and, with congressional acquiescence,
became the law of the land on July 1, 1966. 28 U.S.C. § 2072 (1964
ed., Supp. III). Now the Court, for reasons which in my opinion
will not stand analysis, defeats the purpose of the amendment as
applied to cases like those before us here and insists upon a
perpetuation of distinctions which the profession had hoped would
become only curiosities of the past.
The Court is led to this unfortunate result by its insistence
upon regarding the method of computing the amount in controversy as
embodied in an Act of Congress, as unaffected by the subsequent
amendment of Rule 23, and as immune from judicial reexamination
because any change would be an impermissible expansion of the
jurisdiction of the courts. None of these premises is correct.
I
Since the first Judiciary Act, Congress has included in certain
grants of jurisdiction to the federal courts -- notably the grants
of jurisdiction based on diversity of
Page 394 U. S. 347
citizenship, [
Footnote 2/6] and
the later-established grant of a general jurisdiction to consider
cases raising federal questions [
Footnote 2/7] -- a requirement that the "matter in
controversy" exceed a stated amount of money. Congress has never
expanded or explained the bare words of these successive
jurisdictional amount statutes. Over the years, the courts
themselves have developed a detailed and complex set of rules for
determining when the jurisdictional amount requirements are met.
[
Footnote 2/8]
Among these rules is the proposition that multiple parties
cannot aggregate their "separate and distinct" claims to reach the
jurisdictional amount.
E.g., Troy Bank v. Whitehead &
Co., 222 U. S. 39,
222 U. S. 40
(1911);
Oliver v.
Alexander, 6 Pet. 143,
31 U. S. 147
(1832). Applying that general principle to traditional property law
concepts, the courts developed the more specialized rule that
multiple parties who asserted very similar legal claims could not
aggregate them to make up the jurisdictional amount if their
interests, however similar in fact, were in legal theory "several,"
e.g., Pinel v. Pinel, 240 U. S. 594
(1916), but that such aggregation was permissible where the parties
claimed undivided interests in a single "joint" right.
E.g.,
Texas & Pacific R. Co. v. Gentry, 163 U.
S. 353 (1896);
Shields v.
Thomas, 17 How. 3 (1855).
This general aggregation rule, and its much later application to
class actions, [
Footnote 2/9] rest
entirely on judicial decisions,
Page 394 U. S. 348
not on any Act of Congress. There is certainly no reason the
specific application of this body of federal decisional law to
class actions should be immune from reevaluation after a
fundamental change in the structure of federal class actions has
made its continuing application wholly anomalous. [
Footnote 2/10]
The majority rather half-heartedly suggests that this judicial
interpretation of the jurisdictional amount statute is not subject
to judicial reevaluation because Congress by reenacting the
jurisdictional amount statute from time to time has somehow
expressed an intent to freeze once and for all the judicial
interpretation of the statute. As the majority frankly
acknowledges, there are
"hazards and pitfalls involved in assuming that reenactment of
certain language by Congress always freezes the existing judicial
interpretation of the statutes involved."
While reenactment may sometimes signify adoption, in my view,
the appropriate position on the matter is that stated in
Girouard v. United States, 328 U. S.
61,
328 U. S. 69-70
(1946):
"'It would require very persuasive circumstances enveloping
Congressional silence to debar this Court from reexamining its own
doctrines.' It is, at best, treacherous to find in congressional
silence alone the adoption of a controlling rule of law. . . . The
silence of Congress and its inaction are as consistent with a
desire to leave the problem fluid as they are with an adoption by
silence of the rule of those cases. [
Footnote 2/11] "
Page 394 U. S. 349
This case, far from being one in which there are "very
persuasive circumstances" indicating congressional adoption of
prior judicial doctrines, is one where only by the most obvious
fiction can congressional reenactment of a general statute be said
to manifest an intention to adopt and perpetuate an existing
technical judicial doctrine designed to facilitate administration
of the statute.
The hearings and reports on the 1958 statute raising the
jurisdictional amount from $3,000 to $10,000 -- which the majority
fastens on as the adopting reenactment -- include not one word
about the whole complex body of rules by which courts determine
when the amount is at issue, much less any reference to the
particular problem of aggregation of claims in class action cases.
[
Footnote 2/12] The
Page 394 U. S. 350
majority speculates that it is "possible, if not probable," that
Congress "implicitly" took into account the existing aggregation
doctrines as applied to class action cases when it decided to raise
the jurisdictional amount to $10,000, rather than some higher or
lower amount. If we are to attribute to Congress any thoughts on
this highly technical and specialized matter, it seems to me far
more reasonable to assume that Congress was aware that the courts
had been developing the interpretation of the jurisdictional amount
requirement in class actions and would continue to do so after the
1958 amendments.
I cannot find any meaningful sense in which the aggregation
doctrines in class action cases should be any less subject to
reevaluation in the light of new conditions because Congress in
1958 reenacted the jurisdictional amount statute to raise the
dollar amount required.
II
Whatever the pre-1966 status of the aggregation doctrines in
class action cases, the amendment of the Rules in that year permits
and even requires a reexamination of the application of the
doctrines to such cases. The fundamental change in the law of class
actions effected by the new Rule 23 requires that prior subsidiary
judicial doctrines developed for application to the old Rule be
harmonized with the new procedural law. By Act of Congress, the
Rules of Procedure, when promulgated according to the statutorily
defined process, have the effect of law and supersede all prior
laws in conflict with them. 28 U.S.C. § 2072 (1964 ed., Supp. III).
Thus, even if the old aggregation doctrines were embodied in
statute -- as they are not -- they could not stand if they
conflicted with the new Rule.
Page 394 U. S. 351
Under the pre-1966 version of Rule 23, the very availability of
the class action device depended on the "joint" or "common"
"character of the right sought to be enforced." [
Footnote 2/13] If the right were merely "several,"
only a "spurious" class action could be maintained and only those
members of the class who actually appeared as parties were bound by
the judgment. [
Footnote 2/14] It
was in this context of a law of class actions already heavily
dependent on categorization of interests as "joint" or "several"
that the traditional aggregation doctrines were originally applied
to class actions under the Federal Rules. In such a context, those
aggregation doctrines which the majority now perpetuates in the
quite different context of the new Rule, whatever their other
defects, were at least not anomalous and eccentric.
Scholarly and professional criticism of the "character of
interest" classification scheme was vigorous and distinguished.
[
Footnote 2/15] Courts as well
found the old Rule 23
Page 394 U. S. 352
categories confusing and unhelpful in making practical
decisions. Not only was the categorization difficult, [
Footnote 2/16] but dividing group
interests according to whether they were "joint" or "several" did
not isolate those cases in which a class action was appropriate
from those in which it was not. [
Footnote 2/17] In proposing amendment of Rule 23, the
Advisory Committee summed up experience under the old Rule by
saying:
"In practice the terms 'joint,' 'common,' etc., which were used
as the basis of the Rule 23 classification proved obscure and
uncertain."
39 F.R.D. 98.
In response to the demonstrated inappropriateness of the
"character of interest" categorization, the Rule dealing with class
actions was fundamentally amended, effective in July, 1966. Under
the new Rule, the focus shifts from the abstract character of the
right asserted to explicit analysis of the suitability of the
particular claim to resolution in a class action. The decision that
a class action is appropriate is not to be taken lightly; the
district court must consider the full range of relevant factors
specified in the Rule. However, whether a claim is, in traditional
terms, "joint" or "several" no longer has any necessary relevance
to whether a class action is proper. Thus, the amended Rule 23,
which in the area of its operation has the effect of a statute,
states a new method for determining when the common interests
of
Page 394 U. S. 353
many individuals can be asserted and resolved in a single
litigation.
The jurisdictional amount statutes require placing a value on
the "matter in controversy" in a civil action. Once it is decided
under the new Rule that an action may be maintained as a class
action, it is the claim of the whole class and not the individual
economic stakes of the separate members of the class which is the
"matter in controversy." That this is so is perhaps most clearly
indicated by the fact that the judgment in a class action, properly
maintained as such, includes all members of the class.Rule
23(c)(3). This effect of the new Rule in broadening the scope of
the "controversy" in a class action to include the combined
interests of all the members of the class is illustrated by the
facts of No. 117. That class action, if allowed to proceed, would,
under the Rule, determine not merely whether the gas company
wrongfully collected $7.81 for taxes from Mr. Coburn. It would also
result in a judgment which, subject to the limits of due process,
[
Footnote 2/18] would determine
-- authoritatively and not merely as a matter of precedent -- the
status of the taxes collected from the 18,000 other people
allegedly in the class Coburn seeks to represent. [
Footnote 2/19] That being the case, it is hard to
understand why the fact that the alleged claims are, in terms of
the old Rule categories, "several", rather than "joint," means that
the "matter in controversy" for jurisdictional amount purposes must
be regarded as the $7.81 Mr. Coburn claims instead of the thousands
of dollars of alleged overcharges of the whole class, the status of
all of which would be determined by the judgment.
Page 394 U. S. 354
In past development of rules concerning the jurisdictional
amount requirement, the courts have, properly, responded to changes
in the procedural and substantive law. [
Footnote 2/20] Now, confronted by an issue of the
meaning of the jurisdictional amount requirement arising in the
context of a new procedural law of class actions, we should
continue to take account of such changes. We should not allow the
judicial interpretation of the jurisdictional amount requirement to
become petrified into forms which are products of, and appropriate
to, another time. To do this would vitiate a significant part of
the reform intended to be accomplished by the amendment of Rule 23.
For the majority result will continue to make determinative of the
maintainability of a class action just that obsolete conceptualism
the amended Rule sought to make irrelevant. In this sense,
continued adherence to the old aggregation doctrines conflicts with
the new Rule and is improper under 28 U.S.C. § 2072 (1964 ed.,
Supp. III).
III
Permitting aggregation in class action cases does not involve
any violation of the principle, expressed in Rule 82 and inherent
in the whole procedure for the
Page 394 U. S. 355
promulgation and amendment of the Federal Rules, that the courts
cannot by rule expand their own jurisdictions. While the Rules
cannot change subject matter jurisdiction, changes in the forms and
practices of the federal courts through changes in the Rules
frequently and necessarily will affect the occasions on which
subject matter jurisdiction is exercised, because they will in some
cases make a difference in what cases the federal courts will hear
and who will be authoritatively bound by the judgment. [
Footnote 2/21] For example, the
development of the law of joinder and ancillary jurisdiction under
the Federal Rules has influenced the "jurisdiction" of the federal
courts in this broader sense. [
Footnote 2/22] Indeed, the promulgation of the old Rule
23 provided a new means for resolving in a single federal
litigation, based on diversity jurisdiction, the claims of all
members of a class, even though some in the class were not of
diverse citizenship from parties on the other side. [
Footnote 2/23] Similarly, the creation in
a Rule having statutory effect of a new type of class action -- one
meeting the requirements of the new Rule as to suitability for
class-wide resolution,
Page 394 U. S. 356
although involving "several" interests of the members of the
class -- has changed the procedural context in which the subject
matter jurisdiction statutes, like those referring to
jurisdictional amount, are to be applied. Making judicial rules for
calculating jurisdictional amount responsive to the new structure
of class actions is not an extension of the jurisdiction of the
federal courts, but a recognition that the procedural framework in
which the courts operate has been changed by a provision having the
effect of law.
In a larger sense as well, abandonment of the old aggregation
rules for class actions would fulfill, rather than contradict, the
command that courts adhere to the jurisdictional boundaries
established by Congress. In a large number of instances, Congress
has said that cases raising claims with a certain subject matter
may be heard in federal courts regardless of the amount involved.
However, it has also provided generally that, in the two great
areas of Article III jurisdiction -- federal questions and
diversity of citizenship -- any suit, regardless of specific
subject matter, may be heard if "the matter in controversy exceeds
the sum or value of $10,000." Just as it would be wrong for the
courts to exercise a jurisdiction not properly theirs, so it would
be wrong for the courts to refuse to exercise a part of the
jurisdiction granted them because of a view that Congress erred in
granting it.
The new Rule 23, by redefining the law of class actions, has,
with the effect of statute, provided for a decision by the district
courts that the nominally separate and legally "several" claims of
individuals may be so much alike that they can be tried all at
once, as if there were just one claim, in a single proceeding in
which most members of the class asserting the claim will not be
personally present at all. When that determination has been made,
in accordance with the painstaking demands of Rule 23,
Page 394 U. S. 357
there is authorized to be brought in the federal courts a single
litigation in which, both practically and in legal theory, the
thing at stake, the "matter in controversy," is the total,
combined, aggregated claim of the whole class. When that happens,
the courts do not obey, but violate, the jurisdictional statutes if
they continue to impose ancient and artificial judicial doctrines
to fragment what is in every other respect a single claim, which
the courts are commanded to stand ready to hear.
For these reasons, I would measure the value of the "matter in
controversy" in a class action found otherwise proper under the
amended Rule 23 by the monetary value of the claim of the whole
class.
[
Footnote 2/1]
On the background of the amendment to Rule 23 and its reception,
see, e.g., Kaplan, Continuing Work of the Civil Committee:
1966 Amendments of the Federal Rules of Civil Procedure (I), 81
Harv.L.Rev. 356, 38386 (1967); Cohn, The New Federal Rules of Civil
Procedure, 54 Geo.L.J. 1204, 1213-1214 (1966); Note, Proposed Rule
23: Class Actions Reclassified, 51 Va.L.Rev. 629, 63636 (1965).
See also 2 W. Barron & A. Holtzoff, Federal Practice
and Procedure § 561 and n. 15.1 (C. Wright ed.1968 Pocket Part)
(hereinafter cited as Barron & Holtzoff). Even commentators
critical of the apparent breadth of the new Rule welcomed abolition
of the categories of the old Rule. E. Ford, The History and
Development of Old Rule 23 and the Development of Amended Rule 23,
32 ABA Antitrust L.J. 254, 257-258 (1966).
[
Footnote 2/2]
The majority says broadly, "A large part of those matters
involving federal questions can be brought, by way of class actions
or otherwise, without regard to the amount in controversy."
Ante at
394 U. S. 341.
However, in at least one vitally important type of federal question
case -- an action alleging that governmental action, state or
federal, violates constitutional limits -- the task of
demonstrating the existence of federal jurisdiction would in many
instances be significantly complicated if 28 U.S.C. § 1331 were not
available. There are, to be sure, a large number of specific
statutory provisions conferring on the federal courts jurisdiction
to hear certain types of federal question cases. No doubt many
constitutional cases could ultimately be brought within one of
these special provisions. However, the pitfalls of seeking to
establish federal jurisdiction in a constitutional action against
public officials without resort to 28 U.S.C. § 1331 are suggested
by the diversity of opinions in
Hague v. CIO, 307 U.
S. 496 (1939). Even if 28 U.S.C. § 1343 provides a basis
for jurisdiction of such an action against state officials,
see
Pierson v. Ray, 386 U. S. 547
(1967);
Monroe v. Pape, 365 U. S. 167
(1961), that statute is no help to one challenging purely federal
action.
Wheeldin v. Wheeler, 373 U.
S. 647,
373 U. S. 650
and n. 2 (1963).
See generally Friedenthal, New
Limitations on Federal Jurisdiction, 11 Stan.L.Rev. 213, 216-218
(1959).
[
Footnote 2/3]
The Rule, as amended, reads:
"Rule 23. Class Actions"
"(a) Prerequisites to a Class Action. One or more members of a
class may sue or be sued as representative parties on behalf of all
only if (1) the class is so numerous that joinder of all members is
impracticable, (2) there are questions of law or fact common to the
class, (3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class, and (4) the
representative parties will fairly and adequately protect the
interests of the class."
"(b) Class Actions Maintainable. An action may be maintained as
a class action if the prerequisites of subdivision (a) are
satisfied, and in addition: "
"(1) the prosecution of separate actions by or against
individual members of the class would create a risk of"
"(A) inconsistent or varying adjudications with respect to
individual members of the class which would establish incompatible
standards of conduct for the party opposing the class, or"
"(B) adjudications with respect to individual members of the
class which would, as a practical matter, be dispositive of the
interests of the other members not parties to the adjudications or
substantially impair or impede their ability to protect their
interests; or"
"(2) the party opposing the class has acted or refused to act on
grounds generally applicable to the class, thereby making
appropriate final injunctive relief or corresponding declaratory
relief with respect to the class as a whole; or"
"(3) the court finds that the questions of law or fact common to
the members of the class predominate over any questions affecting
only individual members, and that a class action is superior to
other available methods for the fair and efficient adjudication of
the controversy. The matters pertinent to the findings include: (A)
the interest of members of the class in individually controlling
the prosecution or defense of separate actions; (B) the extent and
nature of any litigation concerning the controversy already
commenced by or against members of the class; (C) the desirability
or undesirability of concentrating the litigation of the claims in
the particular forum; (D) the difficulties likely to be encountered
in the management of a class action."
"(c) Determination by Order Whether Class Action to be
Maintained; Notice; Judgment; Actions Conducted Partially as Class
Actions."
"(1) As soon as practicable after the commencement of an action
brought as a class action, the court shall determine by order
whether it is to be so maintained. An order under this subdivision
may be conditional, and may be altered or amended before the
decision on the merits."
"(2) In any class action maintained under subdivision (b)(3),
the court shall direct to the members of the class the best notice
practicable under the circumstances, including individual notice to
all members who can be identified through reasonable effort. The
notice shall advise each member that (A) the court will exclude him
from the class if he so requests by a specified date; (B) the
judgment, whether favorable or not, will include all members who do
not request exclusion, and (C) any member who does not request
exclusion may, if he desires, enter an appearance through his
counsel."
"(3) The judgment in an action maintained as a class action
under subdivision (b)(1) or (b)(2), whether or not favorable to the
class, shall include and describe those whom the court finds to be
members of the class. The judgment in an action maintained as a
class action under subdivision (b)(3), whether or not favorable to
the class, shall include and specify or describe those to whom the
notice provided in subdivision (c)(2) was directed, and who have
not requested exclusion, and whom the court finds to be members of
the class."
"(4) When appropriate (A) an action may be brought or maintained
as a class action with respect to particular issues, or (B) a class
may be divided into subclasses and each subclass treated as a
class, and the provisions of this rule shall then be construed and
applied accordingly."
"(d) Orders in Conduct of Actions. In the conduct of actions to
which this rule applies, the court may make appropriate orders: (1)
determining the course of proceedings or prescribing measures to
prevent undue repetition or complication in the presentation of
evidence or argument; (2) requiring, for the protection of the
members of the class or otherwise for the fair conduct of the
action, that notice be given in such manner as the court may direct
to some or all of the members of any step in the action, or of the
proposed extent of the judgment, or of the opportunity of members
to signify whether they consider the representation fair and
adequate, to intervene and present claims or defenses, or otherwise
to come into the action; (3) imposing conditions on the
representative parties or on intervenors; (4) requiring that the
pleadings be amended to eliminate therefrom allegations as to
representation of absent persons, and that the action proceed
accordingly; (5) dealing with similar procedural matters. The
orders may be combined with an order under Rule 16, and may be
altered or amended as may be desirable from time to time."
"(e) Dismissal or Compromise. A class action shall not be
dismissed or compromised without the approval of the court, and
notice of the proposed dismissal or compromise shall be given to
all members of the class in such manner as the court directs. (As
amended Feb. 28, 1966, eff. July 1, 1966.)"
[
Footnote 2/4]
1965 U.S. Judicial Conf. Proceedings Rep. 52-53.
See
Kaplan,
supra, 394
U.S. 332fn2/1|>n. 1, at 357-358.
[
Footnote 2/5]
383 U.S. 1031 (1966).
[
Footnote 2/6]
28 U.S.C. § 1332.
[
Footnote 2/7]
28 U.S.C. § 1331. Other jurisdictional statutes providing a
monetary requirement include 28 U.S.C. § 1335 (interpleader); §
1346 (claims against United States); § 1445 (removal of certain
actions against carriers).
[
Footnote 2/8]
See generally 1 J. Moore, Federal Practice � O.90 O.99;
1 Barron & Holtzoff § 24; Ilsen & Sardell, The Monetary
Minimum in Federal Court Jurisdiction: I, 29 St. John's L.Rev. 1
(1954),
id. II, p. 183 (1955); Note, Federal
Jurisdictional Amount: Determination of the Matter in Controversy,
73 Harv.L.Rev. 1369 (1960).
[
Footnote 2/9]
Clark v. Paul Gray, Inc., 306 U.
S. 583 (1939);
Buck v. Gallagher, 307 U. S.
95 (1939).
See Thomson v. Gaskill, 315 U.
S. 442 (1942).
[
Footnote 2/10]
For a criticism of the aggregation doctrine in another context,
see Note, The Federal Jurisdictional Amount Requirement
and Joinder of Parties Under the Federal Rules of Civil Procedure,
27 Ind.L.J.199 (1952).
[
Footnote 2/11]
See also Helvering v. Reynolds, 313 U.
S. 428,
313 U. S. 432
(1941); Note, Legislative Adoption of Prior Judicial Construction:
The
Girouard Case and the Reenactment Rule, 59 Harv.L.Rev.
1277 (1946). In
Francis v. Southern Pacific Co.,
333 U. S. 445,
333 U. S. 450
(1948), the majority noted the difficulty of regarding reenactment
as a congressional adoption of existing judicial doctrines, but
decided that, "in the setting of this case," adoption was implied.
The dissent responded:
"[I]f judges make rules of law, it would seem that they should
keep their minds open in order to exercise a continuing and helpful
supervision over the manner in which their laws serve the
public."
333 U.S. at
333 U. S.
453.
"I venture the suggestion that it would be shocking to members
of Congress, even those who are in closest touch with [the kind of
legislation involved], to be told that their 'silence' is
responsible for application today of a rule which is out of step
with the trend of all congressional legislation for more than the
past quarter of a century. There are some fields in which
congressional committees have such close liaison with agencies in
regard to some matters that it is reasonable to assume an awareness
of Congress with relevant judicial and administrative decisions.
But I can find no ground for an assumption that Congress has known
about the . . . rule [held adopted by reenactment] and deliberately
left it alone because it favored such an archaic doctrine."
Id. 465-466.
[
Footnote 2/12]
See Hearing on H.R. 2516 and H.R. 4497, before
Subcommittee No. 3 of the House Committee on the Judiciary, 85th
Cong., 1st Sess., ser. 5 (1957); H.R.Rep. No. 1706, 85th Cong., 2d
Sess. (1958); S.Rep. No. 1830, 85th Cong., 2d Sess. (1958).
[
Footnote 2/13]
A "true" class action could also be maintained to enforce a
right
"secondary in the sense that the owner of a primary right
refuses to enforce that right and a member of the class thereby
becomes entitled to enforce it."
Stockholders' derivative actions were the most significant type
of suit within this group. They are now separately dealt with under
Rule 23.1 in addition. Under the former Rule 23(a)(2), if the right
was "several" in character, "and the object of the action is the
adjudication of claims which do or may affect specific property
involved in the action," a "hybrid" class action could be
maintained which would determine the interests of each member of
the class in the particular property.
[
Footnote 2/14]
See, e.g., All Amer. Airways, Inc. v. Elderd, 209 F.2d
247 (C.A.2d Cir.1954). Thus, under the prior Rule, the "spurious"
class action was, in effect, little more than a permissive joinder
device. The pre-amendment categorization and its consequences are
explicated in detail in 3A J. Moore, Federal Practice ��
23.08-23.14.
[
Footnote 2/15]
E.g., Z. Chafee, Some Problems of Equity 243-295
(1950); C. Wright, Handbook of the Law of Federal Courts 269
(1963); Kalven & Rosenfield, The Contemporary Function of the
Class Suit, 8 U.Chi.L.Rev. 684 (1941).
See Note, Proposed
Rule 23: Class Actions Reclassified, 51 Va.L.Rev. 629, n. 3
(1965).
[
Footnote 2/16]
A notable example is
Deckert v. Independence Shares
Corp., 27 F. Supp.
763 (D.C.E.D.Pa.),
rev'd, 108 F.2d 51 (C.A.3d
Cir.1939),
rev'd, 311 U. S. 282
(1940),
on remand, 39 F. Supp.
592 (D.C.E.D.Pa.),
rev'd sub nom. Pennsylvania Co. for
Insurances on Lives v. Deckert, 123 F.2d 979 (C.A.3d
Cir.1941). The views of successive courts on the proper
classification of the
Deckert action are discussed in
Chafee,
supra, 394
U.S. 332fn2/15|>n. 15, at 263-269.
[
Footnote 2/17]
See Fed.Rule Civ.Proc. 23, Advisory Comm. Note, 39
F.R.D. 98-99.
[
Footnote 2/18]
See Hansberry v. Lee, 311 U. S. 32,
311 U. S. 42-43
(1940).
[
Footnote 2/19]
If members of the class elected to exercise the right, which
might be extended them under Rule 23(b)(3), to exclude themselves
from the litigation, they would not be included in the judgment in
the class action.
[
Footnote 2/20]
For example, the general rule is that, if suit is brought only
for past installments due under an installment contract, the
jurisdictional amount is in controversy only if the installments
due at the time of suit exceed the jurisdictional amount.
E.g.,
New York Life Ins. Co. v. Viglas, 297 U.
S. 672 (1936). However, if, because of the structure of
equitable remedies or the availability of a declaratory judgment,
the action can put in issue the validity of the contract as a
whole, the "matter in controversy" is not the accrued damages, but
the potential value of full performance.
Landers Frary &
Clark v. Vischer Prods. Co., 201 F.2d 319 (C.A. 7th Cir.1953);
Franklin Life Ins. Co. v. Johnson, 157 F.2d 653 (C.A. 10th
Cir.1946);
Davis v. American Foundry Equip. Co., 94 F.2d
441 (C.A. 7th Cir.1938).
See Note, Developments in the
Law, Declaratory Judgments -- 1941-1949, 62 Harv.L.Rev. 787,
801-802 (1949).
[
Footnote 2/21]
See Mississippi Pub. Corp. v. Murphree, 326 U.
S. 438,
326 U. S.
445-446 (1946); Kaplan,
supra, 394
U.S. 332fn2/1|>n. 1, at 399-400.
Cf. Provident
Tradesmens Bank & Trust Co. v. Patterson, 390 U.
S. 102,
390 U. S.
116-125 (1968).
[
Footnote 2/22]
See Wright,
supra, 394
U.S. 332fn2/15|>n. 15, at 19-20; Fraser, Ancillary
Jurisdiction and the Joinder of Claims in the Federal Courts, 33
F.R.D. 27, 28.
[
Footnote 2/23]
It has long been established that, if the requisite diversity
existed between the original parties federal jurisdiction is not
ousted merely because later intervenors or members of the class
represented by the original parties are citizens of the same State
as an adverse party.
Stewart v. Dunham, 115 U. S.
61 (1885);
Supreme Tribe of Ben-Hur v. Cauble,
255 U. S. 356
(1921). The original Rule 23 provided new occasions for the
assertion of this principle, with respect to both "true" class
actions,
Montgomery Ward & Co. v. Langer, 168 F.2d 182
(C.A. 8th Cir.1948), and those merely "spurious,"
Amen v.
Black, 234 F.2d 12 (C.A. 10th Cir.1956),
dismissed as
moot, 355 U. S. 600
(1958).