Opinion
No. 03 Civ. 3501 (SHS).
March 8, 2005
OPINION ORDER
Linquist Vennum, P.L.L.P. ("LV"), which was one of the law firms that represented plaintiffs in this action, has petitioned the Court to exercise supplemental jurisdiction over its fee dispute with plaintiffs. The parties to the litigation reached a settlement of the underlying action immediately prior to trial, and all claims in the action have been dismissed with prejudice. LV now seeks enforcement of its charging lien against plaintiffs, based on a contingency fee arrangement it had allegedly entered into with plaintiffs. In its discretion pursuant to 28 U.S.C. § 1367(c)(3), the Court dismisses LV's petition on the grounds that the exercise of supplemental jurisdiction in these circumstances does not further the interests of "judicial economy, convenience, fairness and comity." Motorola Credit Corp. v. Uzan, 388 F.3d 39, 56 (2d Cir. 2004).
In 1990, Congress consolidated the judicial doctrines of ancillary and pendent jurisdiction, codifying them together at 28 U.S.C. § 1367 under the title "Supplemental Jurisdiction." See Erwin Chemerinsky, Federal Jurisdiction, § 5.4 (4th ed. 2003). Prior to the enactment of Section 1367, courts would consider several factors derived from United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S. Ct. 1130, 16 L. Ed. 2d 218 (1966), including "the values of judicial economy, convenience, fairness and comity[,]" when determining whether to exercise ancillary jurisdiction over attorney fee disputes such as this one. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350, 108 S. Ct. 614, 98 L. Ed. 2d 720 (1988); see also Chesley v. Union Carbide Corp., 927 F.2d 60, 64 (2d Cir. 1991); Petition of Rosenman Colin Freund Lewis Cohen, 600 F. Supp. 527, 531 (S.D.N.Y. 1984).
Section 1367(c) permits district courts to decline to exercise supplemental jurisdiction, if any of the following conditions are met:
(1) the claim raises a novel or complex issue of State law,
(2) the claim substantially predominates over the claim or claims over which the district court has original jurisdiction,
(3) the district court has dismissed all claims over which it had original jurisdiction,
(4) or in exceptional circumstances, there are other compelling reasons for declining jurisdiction.
The United States Court of Appeals for the Second Circuit has held that upon determining that at least one of these conditions applies, district courts should, in their discretion, consider the United Mine Workers v. Gibbs factors in deciding whether to exercise supplemental jurisdiction. See Motorola Credit Corp., 388 F.3d at 56; Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 446 (2d Cir. 1998).
As noted, all claims over which the Court had original jurisdiction have been dismissed. (See Stip. Order of Dismissal dated Feb. 28, 2005). A condition of Section 1367(c)(3) has been satisfied, and the Court must therefore determine whether the interests of "economy, convenience, fairness and comity" are served by exercising supplemental jurisdiction over LV's petition. Motorola Credit Corp., 388 F.3d at 56; see also First Captial Asset Mgmt., Inc. v. Satinwood, Inc., 385 F.3d 159, 183 (2d Cir. 2004); Itar-Tass, 140 F.3d at 446;Purgess v. Sharrock, 33 F.3d 134, 138 (2d Cir. 1994).
Exercising supplemental jurisdiction over this fee dispute would involve substantial inconvenience, delay and unnecessary cost. This action was originally commenced in state court in Colorado — where plaintiff Dispute Resolution Management, Inc. and LV have offices — before it was removed to U.S. District Court in Colorado and then subsequently transferred to the Southern District of New York. The defendants in the underlying litigation, none of whom is a party to this fee dispute, moved for the removal and transfer of the action. None of the parties to the contract at issue in this petition resides in this district or any district in reasonable proximity. The relevant witnesses or documents relating to this fee petition will likely be located in Colorado or other jurisdictions, such as Utah, where plaintiff Speciale resides and plaintiff Dispute Resolution Management, Inc. maintains its principal place of business, or Minnesota, where LV has other offices. Thus, the interests of judicial economy, convenience, fairness and comity dictate that this petition should be brought in another jurisdiction with a more substantial connection to the parties and to this fee dispute.
Plaintiff Russell, who has, according to plaintiffs, assigned his interest in this litigation to plaintiff Speciale, resides in Idaho.
Moreover, although LV claims that its charging lien arises under New York State Judiciary Law § 475, it is not at all clear that New York law would apply to this petition. The New York Court of Appeals employs an interest analysis test when determining the choice of law with respect to charging liens.See Istim, Inc. v. Chemical Bank, 78 N.Y. 2d 342, 348, 581 N.E. 2d 1042, 575 N.Y.S. 2d 796 (1991).
There is no reason to believe that LV's state law contract claim cannot be expeditiously and effectively adjudicated in another forum. See Hallmark Capital Corp. v. The Red Rose Collection, Inc., No. 96 Civ. 2839, 1997 WL 725189, at * 1 (S.D.N.Y. Nov. 19, 1997). By overseeing the pretrial stages of the underlying litigation, this Court has not gained any special knowledge that would make it a particularly efficient adjudicator of the fee dispute between LV and plaintiffs. See Elementis Chems., Inc. v. T H Agric. and Nutrition, No. 93 Civ. 5150, 2005 WL 236488 at * 14 (S.D.N.Y. Jan. 31, 2005). Cf. Itar-Tass, 140 F.3d at 445 (requiring a district court to exercise supplemental jurisdiction over a fee dispute when none of the Section 1367(c) conditions had been met and when an attorney and an expert witness brought motions for fees after trial, once the district court had gained "total familiarity with the professional services of the moving parties and of the virtual totality of all the compensation arrangements contended for and disputed, all of which were fully disclosed on the record of the proceedings before the court.").
This Court declines to exercise supplemental jurisdiction over LV's petition, which is dismissed without prejudice.