CAFC negates ND California on supplemental jurisdiction issue in AngioScore case

The summary of "what happened"


AngioScore, Inc. sued the defendant-appellants (Tri-
Reme Medical, LLC, Quattro Vascular PTE Ltd., QT
Vascular Ltd., and Eitan Konstantino) for patent infringement,
breach of fiduciary duty, aiding and abetting,
and unfair competition. After separate trials on the
patent and state-law claims, the district court entered
final judgment for Defendants on the patent claim, for
AngioScore on the state-law claims, and denied Corporate
Defendants’ (TriReme Medical, LLC, Quattro Vascular
PTE Ltd., and QT Vascular Ltd.) request for attorneys’
fees under 35 U.S.C. § 285. Because we find that the
district court improperly exercised supplemental jurisdiction
over the state-law claims but did not err in denying
attorneys’ fees, we reverse-in-part, affirm-in-part, vacatein-
part, and remand with instructions to dismiss the
state-law claims for lack of jurisdiction.




Of supplemental jurisdiction:


The threshold question here is whether the district
court properly exercised jurisdiction over the state-law
claims. We review de novo a district court’s exercise of
supplemental jurisdiction over state-law claims under 28
U.S.C. § 1367(a). Voda v. Cordis Corp., 476 F.3d 887, 892
(Fed. Cir. 2007).
This court follows the “‘fundamental precept that federal
courts are courts of limited jurisdiction,’ empowered
to act only within the bounds of Article III of the United
States Constitution.” Highway Equip. Co. v. FECO, Ltd.,
469 F.3d 1027, 1032 (Fed. Cir. 2006) (quoting Owen
Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374
(1978)). If diversity jurisdiction is lacking and the case
involves state-law claims that are not independently
subject to federal jurisdiction, a district court may exercise
supplemental jurisdiction over those state-law claims
only if they “are so related to claims in the action within
such original jurisdiction that they form part of the same
case or controversy under Article III of the United States
Constitution.” 28 U.S.C. § 1367(a); see also Highway
Equip. Co., 469 F.3d at 1038. “For this relatedness requirement
to be satisfied, ‘[t]he state and federal claims
must derive from a common nucleus of operative fact’
such that they would ordinarily be expected to be tried in
one proceeding.” Highway Equip. Co., 469 F.3d at 1038
(quoting United Mine Workers of Am. v. Gibbs, 383 U.S.
715, 725 (1966)).
An “operative fact” is one “that constitutes the transaction
or event on which a claim or defense is based.”
Wisey’s #1 LLC v. Nimellis Pizzeria LLC, 952 F. Supp. 2d
184, 190 (D.D.C. 2013) (quoting BLACK’S LAW DICTIONARY
670 (9th ed. 2009)). Generally, claims arise out of a
common nucleus of operative fact when they “involve the
same witnesses, presentation of the same evidence, and
determination of the same, or very similar, facts.” Palmer
v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1563–64
(11th Cir. 1994); see also Lyndonville Sav. Bank & Trust
Co. v. Lussier, 211 F.3d 697, 704 (2d Cir. 2000) (a sufficient
relationship will be found if “the facts underlying
the federal and state claims substantially overlap[] . . . or
where presentation of the federal claim necessarily
b[rings] the facts underlying the state claim before the
court”). However, state-law claims that “only ‘relate
generally’ to federal claims through a broader dispute and
do not share any operative facts are insufficient for supplemental
jurisdiction.” Wisey’s #1 LLC, 952 F. Supp. 2d
at 190 (quoting Chelsea Condo. Unit Owners Ass’n v. 1815
A St., Condo. Grp., LLC, 468 F. Supp. 2d 136, 141 (D.D.C.
2007)).

Here, no common nucleus of operative fact exists.




The outcome:


For these reasons, we find that the district court improperly
exercised supplemental jurisdiction over the
state-law claims, but did not err in denying attorneys’
fees. Therefore, we reverse-in-part, affirm-in-part, vacate-
in-part, and remand with instructions to dismiss the
state-law claims for lack of subject matter jurisdiction.