In a 5 to 4 decision in Exxon Mobil Corp. v. Allapattah Services, Inc. (June 23, 2005), the Supreme Court finally decided that the supplemental jurisdiction statute, 28 U.S.C. § 1367, overruled Zahn v. Int'l Paper Co., 414 U.S. 291 (1973). Zahn was a class action in which the Court held that each plaintiff and class member who did not meet the jurisdictional amount required for diversity jurisdiction statute had to be dismissed from the case. The supplemental jurisdiction statute, adopted in 1990, stated that so long as one plaintiff satisfied federal jurisdictional requirements, the U.S. District Courts would have jurisdiction over "all other claims that 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." The statute excluded from its scope claims by plaintiffs against persons who became parties under Rules 14, 19, 20, or 24 of the Federal Rules of Civil Procedure if the original jurisdiction of the federal court was based on diversity.

In an opinion that discusses the Court's jurisprudence on supplemental jurisdiction dating back to its 1966 decision in Mine Workers v. Gibbs, Justice Kennedy, writing for the majority, agreed with those Courts of Appeals which had ruled that § 1367 overruled Zahn. He explained: "If the court has original jurisdiction over a single claim in the complaint, it has original action over a 'civil action' within the meaning of § 1367(a), even if the civil action over which it has jurisdiction comprises fewer claims than were included in the complaint." And, given the express limitations Congress placed in § 1367(b), the majority ruled that "[t]he natural, indeed the necessary, inference is that § 1367 confers supplemental jurisdiction" over the claims of plaintiffs "permissively joined under Rule 20 . . . or certified as class-action members pursuant to Rule 23." The Court expressly rejected the view that "a district court lacks original jurisdiction over a civil action unless the court has original jurisdiction over every claim in the complaint."

A dissenting opinion, authored by Justice Ginsburg and joined by Justices Stevens, O'Connor and Breyer, would have preferred the Court to hold that § 1367 did not overrule Zahn, thereby ensuring that class actions within the original jurisdiction of federal courts would only include plaintiffs and class members who individually met the amount in controversy requirement. The majority opinion, on the other hand, is more permissive, allowing class actions to be brought in or removed to federal court even if some of the named plaintiffs or class members do not individually meet the amount in controversy requirement. Like the recently enacted Class Action Fairness Act, Exxon Mobil is likely to provide some additional relief from abusive state court class actions.