Federal Court Exercises Supplemental Jurisdiction Over NYC Human Rights Law Claim

In many discrimination cases filed in a federal (U.S. District) court, the plaintiff asserts violations of various laws – including federal law (e.g., Title VII of the Civil Rights Act of 1964), state law (e.g., the New York State Human Rights Law), and city/local law (e.g., the New York City Human Rights law). But federal courts are courts of “limited” jurisdiction – such that in order to assert a claim there, there must be a specific basis for doing so. Since federal, state, and city discrimination claims have different legal requirements, it’s not uncommon for a federal court to dismiss the federal (typically, the narrowest) claim. This leaves the question of what, if anything, should the federal court do with the remaining non-federal claims?

Turns out there is a federal statute, 28 U.S.C. § 1367, that gives us the answer. This statute tells us when a federal court may exercise “supplemental” jurisdiction over such claims. In many, if not most, cases, a federal court will – having dismissed the federal claim(s) – decline to retain “supplemental” jurisdiction over state and/or city law claims.

A relatively recent decision, Europe v. Equinox Holdings, Inc., 2023 WL 172205 (S.D.N.Y. Jan. 11, 2023), is one example of a court retaining jurisdiction over state and federal and city-law claims, despite its having dismissed the federal claim. Here is its explanation:

The parties have agreed to dismiss before trial the federal claims and the New York State Human Rights Law (NYSHRL) claims in this case if the Court continues to exercise its discretion to maintain supplemental jurisdiction over the New York City Human Rights Law (NYCHRL) claim. Almost all pre-trial proceedings are complete and the parties are scheduled to be ready for trial in about two months.

Pursuant to 28 U.S.C. § 1367(c)(3), a district court may, but is not required, to decline to exercise its supplemental jurisdiction over a state law claim if the district court has dismissed all claims over which it has original jurisdiction. “A district court’s decision whether to exercise [supplemental] jurisdiction [over state law claims] after dismissing every claim over which it had original jurisdiction is purely discretionary.” Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009). “In deciding whether to exercise jurisdiction,” a district court should “balance[ ] the traditional values of judicial economy, convenience, fairness, and comity.” Kolari v. New York-Presbyterian Hosp., 455 F.3d 118, 122 (2d Cir. 2006).

In this case, the Court agrees that the values of judicial economy, convenience, fairness, and comity would be served by retaining supplemental jurisdiction over the NYCHRL claim. In light of the extensive effort the Court has expended on this case, including “extensive discovery and motion practice,” declining supplemental jurisdiction would “actively work against the values of judicial economy, convenience, and fairness.” Zap Cellular, Inc. v. Weintraub, No. 15-cv-6723, 2022 WL 4325746, at *12 (E.D.N.Y. Sep. 19, 2022).

In this case, the federal claims have been dismissed on “the eve of trial.” See Catzin v. Thank You & Good Luck Corp., 899 F.3d 77, 81-82, 85-86 (2d Cir. 2018) (reversing the district court’s decision to decline supplemental jurisdiction when federal claims were dismissed on “the eve of trial”); Raucci v. Town of Rotterdam, 902 F.2d 1050, 1055 (2d Cir. 1990) (affirming the district court’s decision to retain jurisdiction in a case where discovery was completed, three dispositive motions had been determined, and the case was ready for trial). Because the “dismissal of the federal claim [has] occur[ed] late in the action, after there has been substantial expenditure in time, effort, and money in preparing the dependent claims,” there is no need to “knock[ ] them down with a belated rejection of supplemental jurisdiction.” Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir. 1994).

Based on this, the court determined that it will retain supplemental jurisdiction over plaintiff’s New York City Human Rights Law claim for trial.

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