# Krell v. Prudential Insurance

> Court of Appeals for the Third Circuit · July 23, 1998 · 148 F.3d 283

URL: https://www.frixlaw.com/law-library/cases/6970733

## Case

- **Full name:** In re: THE PRUDENTIAL INSURANCE COMPANY OF AMERICA SALES PRACTICES LITIGATION. Richard P. KRELL, MDL transfer, N.D. Ohio, DNJ Civil Action No. 95-6062 v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, Richard P. Krell, as well as Objectors Elizabeth Bajek, Amanda Bajek, Helen Bartsch, Mark Ciconte, Raymond Dolce, Margaret Dolice, Louise Duggan, Peter Duggan, Charles Duncan, Mary Howe, Mary Krell, William Morris, Diana Racer, Thomas Racer, Gweneth Reidel, The Estate of Carl J. Scalzo, Marie Scalzo, Terry Sligar, Alice Smith, Jerry Smith, and William Walton, at Nos. 97-5155/5156/5312. In re PRUDENTIAL INSURANCE COMPANY AMERICA SALES PRACTICE LITIGATION AGENT ACTIONS. Richard Johnson, Intervenor-Plaintiff in District Court, Richard E. Johnson, at No. 97-5217
- **Court:** Court of Appeals for the Third Circuit
- **Decided:** July 23, 1998
- **Citations:** 148 F.3d 283
- **Precedential status:** Published
- **Opinion:** Concurrence by Roth
- **Judges:** Rendell, Roth, Scirica
- **Cited by:** 5 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/6970733

## Opinion text

ROTH, Circuit Judge,
concurring.
While I join in the majority’s ultimate conclusion that the district court had jurisdiction over the claims of all classmembers, I respectfully disagree with its determination in subsection III.A.1 that the district court had supplemental jurisdiction by virtue of its federal question jurisdiction over the federal securities claims of named plaintiff, Martin Dorfner. Only 30% of the absent classmem-bers have claims arising under federal law; the remaining classmembers assert claims under state fraud statutes. Under the Supreme Court’s decision in United Mine Workers v. Gibbs, 383 U.S. 715 , 86 S.Ct. 1130 , 16 L.Ed.2d 218 (1966), courts may exercise supplemental jurisdiction only when the federal and state claims arise from a common nucleus of operative fact. Thus, for example, supplemental jurisdiction may be asserted when the federal and state claims “are merely alternative theories of recovery based on the sáme acts.” Lyon v. Whisman, 45 F.3d 758, 761 (3d Cir.1995) (quoting Lentino v. Fringe Employee Plans, Inc., 611 F.2d 474, 479 (3d Cir.1979)).
In this case, the district court found the federal and state claims alleged by class members to be “inextricably intertwined” because they “are premised upon a common course of conduct by Prudential; all related to the same alleged company-wide development and implementation of patently fraudulent sales techniques.” In re the Prudential Ins. Co. of America Sales Practices Litigation, 962 F.Supp. 450, 501 (D.N.J.1997). Although the injuries of all classmembers may arise from a common scheme to defraud, it is far from clear that all of their state claims share a common nucleus of operative fact with Dorfner’s federal securities claims.
■ In contrast, I find the requirement of a common nucleus of operative fact would be satisfied-if " the basis for the application of supplemental jurisdiction was derived from the district court’s diversity jurisdiction over the state law claims of the remaining named plaintiffs. These plaintiffs raise a more diverse array of claims than those alleged by Dorfner. As a group, their claims are representative of the claims of the class as a whole.
The majority opinion undertakes a detailed and well-reasoned analysis of the present uncertainty surrounding the use of diversity jurisdiction as a basis for supplemental jurisdiction in subsection III.A.2, only to avoid answering the ultimate question of whether the Supreme Court’s decision in Zahn v. International Paper Co., 414 U.S. 291 , 94 S.Ct. 505 , 38 L.Ed.2d 511 (1973), remains good law following the enactment of 28 U.S.C. § 1367 . I would reach this question and would hold that under the plain language of § 1367, the amount-in-eontroversy requirement articulated in Zahn is no longer applicable to absent classmembers.
I am concerned that, by avoiding the question of whether § 1367 overrules Zahn and by basing its finding of jurisdiction on the securities claims, the majority establishes a dangerous precedent. I fear the majority’s decision on jurisdiction risks opening the federal courts to a wide array of state claims whenever a complaint incorporates both federal and state claims, no matter how tangentially related the state claims might be to federal claim upon which jurisdiction is based. As this Court wrote in Lyon , “when a court exercises federal jurisdiction pursuant to a rather narrow and specialized federal statute it should be circumspect when determining the. scope of its supplemental jurisdiction.” 45 F.3d at 764 .
Accordingly, I join with the majority in holding that the district court had jurisdiction over the claims of all classmembers, but I do so based on my determination that supplemental jurisdiction can be derived from the diversity claims of the named plaintiffs.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6970733. Public record. Not legal advice.