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Snyder v. Harris

Supreme Court of the United States · 1969 · Civil Procedure

Civil ProcedureDiversity JurisdictionAmount in ControversyClass Actions28 U.S.C. § 1332amount in controversyaggregationclass action

Facts

In No. 109, Snyder, a shareholder, sued directors on behalf of herself and about 4,000 similarly situated shareholders, alleging that the directors sold their stock for more than fair market value and that the excess should be distributed among all shareholders under Missouri law. Snyder sought only $8,740 for herself, below the $10,000 diversity threshold, but argued that the class claims totaling about $1,200,000 should be aggregated. In No. 117, Coburn sued a gas company on behalf of himself and about 18,000 similarly situated customers, alleging unlawful collection of a city franchise tax from customers outside city limits; his own claim was only $7.81, though he alleged the class claims together exceeded $10,000. Both cases presented whether class members' separate claims could be added together to create diversity jurisdiction.

Issue

Whether separate and distinct claims presented by and for various claimants in a class action may be aggregated to satisfy the $10,000 amount-in-controversy requirement for diversity jurisdiction under 28 U.S.C. § 1332. More specifically, the question was whether the 1966 amendment to Rule 23 changed that jurisdictional rule.

Rule

Under 28 U.S.C. § 1332, separate and distinct claims of two or more plaintiffs cannot be aggregated to satisfy the jurisdictional amount requirement. Aggregation is allowed only when a single plaintiff aggregates his own claims against a single defendant, or when multiple plaintiffs unite to enforce a single title or right in which they have a common and undivided interest. The 1966 amendment to Rule 23 did not and could not alter this statutory interpretation, because procedural rules may not extend federal jurisdiction.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Leah Moreno, a citizen of Arizona, files a diversity suit in federal court in Denver against Front Range Home Shield, a fictional Colorado warranty company. She seeks $9,400 for herself and purports to represent 3,000 other homeowners, each alleging similar warranty overcharges ranging from $200 to $1,500.

Assuming complete diversity otherwise exists, does the federal court have diversity jurisdiction based on the combined value of the proposed class members' claims?

Explanation. The majority rule is that separate and distinct claims of two or more plaintiffs cannot be aggregated to reach the diversity jurisdictional amount. That remains true in a class action, even when the claims arise from the same alleged misconduct and involve common questions. Binding effect under modern class procedure does not change the statutory meaning of 'matter in controversy,' and aggregation is still permitted only in recognized exceptions, not present here. (Derived from Snyder v. Harris (n.d.).)