Filed: Jan. 24, 2006
Latest Update: Mar. 02, 2020
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 1-24-2006 Pgh Comm Human v. Key Bank Natl Assn Precedential or Non-Precedential: Non-Precedential Docket No. 05-1602 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "Pgh Comm Human v. Key Bank Natl Assn" (2006). 2006 Decisions. Paper 1721. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1721 This decision is brought to you for free and
Summary: Opinions of the United 2006 Decisions States Court of Appeals for the Third Circuit 1-24-2006 Pgh Comm Human v. Key Bank Natl Assn Precedential or Non-Precedential: Non-Precedential Docket No. 05-1602 Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006 Recommended Citation "Pgh Comm Human v. Key Bank Natl Assn" (2006). 2006 Decisions. Paper 1721. http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1721 This decision is brought to you for free and o..
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Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
1-24-2006
Pgh Comm Human v. Key Bank Natl Assn
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-1602
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2006
Recommended Citation
"Pgh Comm Human v. Key Bank Natl Assn" (2006). 2006 Decisions. Paper 1721.
http://digitalcommons.law.villanova.edu/thirdcircuit_2006/1721
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2006 Decisions by an authorized administrator of Villanova
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NOT PRECEDENTIAL
IN THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________________
NO. 05-1602
____________________
CITY OF PITTSBURGH COMMISSION ON HUMAN RELATIONS, on behalf of
DAVID and VALARIE POLLARD
v.
KEY BANK USA, NATIONAL ASSOCIATION; P&C REPLACEMENT WINDOWS
KEY BANK USA, NATIONAL ASSOCIATION,
Appellant
_________________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 04-cv-01034)
District Judge: David S. Cercone
______________________
Argued October 20, 2005
Before: SMITH, BECKER and NYGAARD, Circuit Judges
(Filed: January 24, 2006)
________________________
OPINION
________________________
JEFFREY J. RUDER (Argued)
1717 Murray Avenue, Suite 101
Pittsburgh, PA 15217
Attorney for Appellee
JAMES W. BENTZ (Argued)
680 Washington Road, Suite 200
Pittsburgh, PA 15228
Attorney for Appellant
BECKER, Circuit Judge.
The City of Pittsburgh Commission on Human Relations (“the Commission”) filed
this action against Key Bank USA, National Association (“Key Bank”) and P&C
Replacement Windows in the Court of Common Pleas of Allegheny County. Alleging
violations of both the federal Fair Housing Act, 42 U.S.C. § 3601 et. seq., and §
659.03(a)-(e) of the Pittsburgh City Code, the Commission claimed, on behalf of David
and Valerie Pollard, that the Pollards were discriminated against on the basis of race
during their application for a home improvement loan. After the case was removed by
Key Bank to the District Court for the Western District of Pennsylvania, the Court
dismissed all federal claims for lack of standing and remanded the remaining claims to
the Court of Common Pleas of Allegheny County. The question presented here is
whether the claims under the Pittsburgh City Code were properly remanded, or whether,
as Key Bank argues, they should have been decided and dismissed by the District Court.
Although this case potentially raises a number of difficult legal questions, we find
2
that it can be disposed of on the more elemental ground that federal district courts should
refrain from exercising supplemental jurisdiction once all federal claims have been
dismissed. This principle has been long-recognized by this Court, and we do not find an
exception to the rule here. For that reason, we find that the District Court’s remand was
not an abuse of discretion. Therefore, we will affirm the Order of the District Court.
I. Facts and Procedural History
The Commission’s suit was a fair lending action, claiming that Key Bank and
P&C Replacement Windows discriminated against the Pollards by denying their
application for a home improvement loan on the basis of race. Notably, the Commission
claimed that the Pollards were improperly asked their race in applying for a home
improvement loan, and that Key Bank’s request for such information indicated racial
preferences. (Id. at 20-21.) The Commission alleged violations of the Fair Housing Act
and the Pittsburgh City Code. (Id.)
After Key Bank removed the case to federal court, it moved to dismiss, alleging
that the Commission lacked standing, that jurisdiction lay only with the Office of the
Comptroller of the Currency, and that there was no valid claim for relief because of the
way the application had been handled. Adopting the recommendation of Magistrate
Judge Caiazza, the District Court dismissed the Fair Housing Act claims for lack of
standing, and remanded the City Code claims to the Court of Common Pleas of
Allegheny County for further proceedings.
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Magistrate Judge Caiazza’s recommendation that the federal Fair Housing Act
claims be dismissed due to lack of standing was grounded on the view that the Act does
not confer authority on local agencies to file suit. Rather, 42 U.S.C. § 3612(o)(1)
provides that the Attorney General may commence a civil action. He also reasoned that a
remand of the City Code claims was proper under 28 U.S.C. § 1367(c), which gives a
district court the ability to decline to exercise supplemental jurisdiction once the claims
over which it had original jurisdiction have been dismissed. The Magistrate Judge
emphasized that in the absence of “compelling circumstances,” district courts should
decline jurisdiction in circumstances such as these.
This appeal followed, in which Key Bank challenges the portion of the District
Court’s order that remanded the remaining claims to the Court of Common Pleas of
Allegheny County. There is no dispute at this juncture about the inability of the
Commission to bring the federal claims in federal court. Accordingly, the dispute before
us turns on whether the District Court should have retained jurisdiction and adjudicated
the remaining claims, including the federal implied preemption defense, or whether it
properly remanded the claims to state court.1
II. Discussion
1
Originally, the Commission appealed the portion of the District Court’s order dismissing
the Fair Housing Act claim. However, the Commission later withdrew its appeal. We
have appellate jurisdiction to review this case pursuant to 28 U.S.C. § 1291.
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A. The Relevant Statutes
Two statutes are relevant to this case in its present posture. First, and most
important, 28 U.S.C. § 1367(c) gives a district court discretion to decline supplemental
jurisdiction once it has dismissed all federal claims before it. That statute states: “The
district courts may decline to exercise supplemental jurisdiction over a [state law claim] if
. . . the district court has dismissed all claims over which it has original jurisdiction . . . .”
Second, 28 U.S.C. § 1447(c) mandates that when a district court lacks subject matter
jurisdiction altogether, the case must be remanded. That statute provides: “If at any time
before final judgment it appears that the district court lacks subject matter jurisdiction, the
case shall be remanded.”
B. The Exercise of Pendent Jurisdiction in the Absence of Federal Claims
Decisions to remand under 28 U.S.C. § 1367(c) are reviewed for abuse of
discretion. See, e.g., De Asencio v. Tyson Foods, Inc., 342 F.3d 301, 311 (3d Cir. 2003);
Pryzbowski v. U.S. Healthcare, Inc.,
245 F.3d 266, 276 (3d Cir. 2001). Key Bank asserts
that the District Court abused its discretion in remanding the Pittsburgh City Code claims
instead of dismissing them outright. It contends that the Commission lacked standing to
bring this action altogether and that the claims under the Pittsburgh City Code are
preempted by federal law. For example, Key Bank submits that the Office of the
Comptroller of the Currency has essentially exclusive power to ensure that national banks
comply with applicable state and federal laws. Key Bank also argues that it was required
to collect the race-related data at issue under 12 C.F.R. § 203.4. Therefore, it concludes, a
5
remand is futile.
Pendent jurisdiction is a doctrine of discretion. See, e.g., De Asencio, 342 F.3d at
308. In United Mine Workers v. Gibbs,
383 U.S. 715, 726 (1966), the Supreme Court
noted that the discretionary exercise of pendent jurisdiction must depend on questions of
judicial economy, convenience, and fairness to litigants. However, it stated that when
federal claims are dismissed at an early stage, the exercise of pendent jurisdiction should
be declined:
Needless decisions of state law should be avoided both as a matter of
comity and to promote justice between the parties, by procuring for them a
surer-footed reading of applicable law. Certainly, if the federal claims are
dismissed before trial, even though not insubstantial in a jurisdictional
sense, the state claims should be dismissed as well.
Id. (footnote omitted).
This Court has confirmed that “[t]he power of the court to exercise pendent
jurisdiction, though largely unrestricted, requires, at a minimum, a federal claim of
sufficient substance to confer subject matter jurisdiction on the court.” Tully v. Mott
Supermarkets, Inc., 540 F.2d 187, 195 (3d Cir. 1976). In Tully, we stated that if it appears
that all federal claims are subject to dismissal, the court should not exercise jurisdiction
over remaining claims unless “extraordinary circumstances” exist.
Id. We determined that
“substantial time devoted to the case” and “expense incurred by the parties” did not
constitute extraordinary circumstances.
Id. at 196. We have reiterated this principle on
several occasions. See, e.g., Hedges v. Musco,
204 F.3d 109, 123 (3d Cir. 2000)
(“‘[W]here the claim over which the district court has original jurisdiction is dismissed
6
before trial, the district court must decline to decide the pendent state claims unless
considerations of judicial economy, convenience, and fairness to the parties provide an
affirmative justification for doing so.’”) (citation omitted); Shaffer v. Board of Sch.
Directors of Albert Gallatin Area Sch. Dist., 730 F.2d 910, 912 (3d Cir. 1984) (“We have
held that pendent jurisdiction should be declined where the federal claims are no longer
viable, absent ‘extraordinary circumstances.’”) (citation omitted).
Key Bank has argued that the Commission’s remaining claims under the
Pittsburgh City Code are preempted by federal law. However, even that proposition
cannot constitute “extraordinary circumstances” in light of Tully, especially at this
relatively early stage in the litigation. Key Bank has not shown that the circumstances
here warrant finding an exception to our general rule, given that there is no plausible
reason why the Court of Common Pleas of Allegheny County cannot fairly and
competently decide this issue. The caselaw is clear that when a district court has
dismissed the claim or claims that gave it original jurisdiction, it should decline to hear
pendent state claims, absent extraordinary circumstances. None have been sufficiently
alleged.
Here, the Commission maintains that its remaining claims are viable. It argues that
Key Bank’s federal preemption arguments are “meritless.” In support, it states that
discrimination actions are not “visitorial acts” and can therefore be brought by a party
other than the Office of the Comptroller of the Currency. This claim, regardless of its
merit or lack thereof, can and should be resolved by the state court. Given that a remand
7
is preferable unless “extraordinary circumstances” are presented, we find no abuse of
discretion here.2
In sum, we are satisfied that the District Court acted within its sound discretion in
remanding this case to the Court of Common Pleas of Allegheny County. The Order of
the District Court will therefore be affirmed.
2
The Commission claims that the District Court was required to remand the case under 28
U.S.C. § 1447. See Int’l Primate Prot. League v. Adm’rs of Tulane Educ. Fund, 500 U.S.
72 (1991). It argues that the District Court did not have subject matter jurisdiction to hear
the remaining Pittsburgh City Code claims because federal standing was lacking, and that
§ 1447 mandates that a federal court must remand state claims in such a situation.
Because we believe that § 1367 authorizes the outcome we reach here, and that the
District Court did not abuse its discretion in declining to exercise jurisdiction, we need
not examine the Commission’s more complex claim under § 1447(c) that the District
Court was required to remand the case.
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