Complex Litigation: Class Actions

Abstract

Commentary and analysis of the Supreme Court’s decision in Exxon Mobil Corp. v. Allapattah Services, which addressed the issue whether the supplemental jurisdiction statute, 28 U.S.C. § 1367, applies in federal class actions to permit aggregation of the individual claims of class members in order to satisfy the amount-in-controversy requirement. Under the prevailing legal standard, articulated in Zahn v. Int’l Paper Co., 414 U.S. 291 (1973), the Supreme Court previously held that in class litigation each and every class member independently was required to satisfy the $75,000 amount-in-controversy requirement. The Court’s Zahn decision has long served as an impediment to class certification of many class actions which could not satisfy this requirement. In Allapattah, a 5-4 decision written by Justice Anthony Kennedy, the Supreme Court’s majority held that the supplemental jurisdiction statute applied to permit aggregation of damages to satisfy the amount in controversy requirement, overruling the Zahn decision. The Court’s majority and dissenting opinions contain extensive statutory construction principles as well as arguments and counter-arguments relying on the supplemental jurisdiction statute’s legislative history. The Court’s Allapattah decision resolved a conflict on the Circuit Courts concerning whether the supplemental jurisdiction statute effectively overruled Zahn. Four Justices dissented, including Justices Ginsburg, Stevens, O’Connor, and Breyer.

Keywords: Exxon Mobil Corp. v. Allapattah Services, Zahn v. Internation Paper Co., supplemental jurisdiction, class action, aggregation of damages in class actions, diversity class actions, Zahn rule