McKoy v. The Trump Corporation and Donald J. Trump

Background

Plaintiffs brought a proposed class action asserting several bases for federal jurisdiction, including the Class Action Fairness Act, federal-question jurisdiction, diversity jurisdiction, the Racketeer Influenced and Corrupt Organizations Act, and supplemental jurisdiction. On July 24, 2019, the court granted the defendants’ motion to dismiss in part, dismissing the RICO claims, which were the only claims arising under federal law. On October 17, 2023, the court denied the plaintiffs’ motion for class certification.

The remaining claims were common-law and statutory claims brought by three plaintiffs under California, Maryland, and Pennsylvania law. The opinion states that the plaintiffs’ total claimed out-of-pocket losses were roughly $7,000. Discovery had ended, but the defendants’ summary-judgment motion remained pending, the parties still had to file and address pretrial submissions, a final pretrial conference had to occur, and a trial date had to be rescheduled.

Jurisdiction and forum

At the court’s invitation, the defendants asked the court to have the case litigated elsewhere. Their alternatives were dismissal of the state-law claims so they could be pursued in state court, or severance of the claims into three cases followed by transfer to federal courts in the relevant states. The parties submitted additional briefing about uncertainty over how appellate review would work after severance and transfer. Both parties stated a preference for declining supplemental jurisdiction rather than severing and transferring the claims.

Supplemental jurisdiction is a court’s authority to hear state-law claims connected to claims within federal jurisdiction. The court explained that it could decline that authority only after considering economy, convenience, fairness, and respect for state courts. Although discovery was complete and some motions had been decided, the court found that keeping the case would not promote economy or convenience. The case was not yet ready for trial, and the remaining claims involved only state law and three individual plaintiffs. The court concluded that the claims were not better suited for adjudication in federal court than in the state courts of California, Maryland, and Pennsylvania. The court also considered the parties’ preferences and the uncertainty concerning appeals after severance and transfer.

Disposition

The court declined to exercise supplemental jurisdiction over the remaining state-law claims. It ordered that the plaintiffs’ claims be dismissed without prejudice to refiling in state court. The court denied all pending motions, except the motions to seal at Dkt. Nos. 572, 601, 613, 660, and 676, which it stated would be addressed in a separate order. All court appearances, including trial, were cancelled. The Clerk of Court was directed to close the case and the motions at Dkt. Nos. 590, 642, and 659.