Section 1367(a) Governs Supplemental Jurisdiction Over Intervention Claims: Affirming the “Common Nucleus of Operative Fact” Standard

Introduction

This appeal arises from the denial of a motion to intervene in a breach-of-contract action brought by Hamilton Reserve Bank against the Democratic Socialist Republic of Sri Lanka. After Sri Lanka defaulted on more than $243 million of sovereign bonds, Hamilton sued in the Southern District of New York under the Foreign Sovereign Immunities Act. More than a year into the case, three private entities—Jesse Guzman, Ultimate Concrete LLC, and Intercoastal Finance Ltd.—sought to intervene, alleging that Hamilton had misappropriated their $50 million deposit to purchase those same bonds. The district court denied intervention for lack of subject-matter jurisdiction under 28 U.S.C. § 1367(a). On April 10, 2025, a unanimous Second Circuit panel affirmed, clarifying that § 1367(a) – not Federal Rule of Civil Procedure 24(a)(2) – sets the boundaries of supplemental jurisdiction over intervention claims and that those claims must share a “common nucleus of operative fact” with the existing suit.

Summary of the Judgment

The Second Circuit held that:

28 U.S.C. § 1367(a) expressly governs supplemental jurisdiction over claims involving additional parties, including intervenors.
Federal Rule 24(a)(2)’s intervention-as-of-right test does not expand a court’s jurisdiction; Rule 82 forbids such an expansion.
A would-be intervenor’s claims must “derive from a common nucleus of operative fact” with the claims already before the court to support supplemental jurisdiction.
Because Guzman, Ultimate Concrete, and Intercoastal alleged a distinct deposit-and-withdrawal dispute—with virtually no factual overlap with Hamilton’s breach-of-contract claim against Sri Lanka—the district court correctly concluded it lacked supplemental jurisdiction and properly denied intervention.

Analysis

Precedents Cited

28 U.S.C. § 1367(a) – Grants supplemental jurisdiction over all claims forming “the same case or controversy” under Article III, including those involving intervention of additional parties.
Fed. R. Civ. P. 82 – Clarifies that the Federal Rules do not extend jurisdiction of the district courts.
Achtman v. Kirby, McInerney & Squire, LLP, 464 F.3d 328 (2d Cir. 2006) – Confirms that “common nucleus of operative fact” is the test for supplemental jurisdiction under § 1367.
Royal Canin U.S.A., Inc. v. Wullschleger, 604 U.S. 22 (2025) – Supreme Court reiterating that § 1367’s same-case-or-controversy test hinges on a common factual core.
Finley v. United States, 490 U.S. 545 (1989) – Led Congress to codify supplemental jurisdiction in § 1367 after repudiating any presumption that jurisdiction existed absent statutory grant.
Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005) – Instructs courts to interpret § 1367’s text in light of context, structure, and related provisions.

Legal Reasoning

Statutory Text Controls. The Court emphasized that § 1367(a) explicitly extends supplemental jurisdiction to claims involving “the intervention of additional parties” only if those claims “form part of the same case or controversy.”
Rule 24 Does Not Create Jurisdiction. Under Rule 82, procedural rules cannot enlarge subject-matter jurisdiction. Thus, satisfying Rule 24(a)(2)’s interest-and-impairment test does not, by itself, confer jurisdiction.
Common Nucleus Standard. The Court reaffirmed that a claim must share a “common nucleus of operative fact” with the existing action to fall within § 1367(a). It rejected any separate or looser standard for intervention claims.
Application to This Case. Hamilton’s suit against Sri Lanka centered on sovereign bond default and debt restructuring, whereas the intervenors’ claims arose from a domestic banking relationship and deposit-account dispute. The factual bases do not substantially overlap, precluding supplemental jurisdiction.

Impact

Intervention Strategy. Parties seeking to intervene must now be prepared to demonstrate not only that they meet Rule 24(a)(2) but also that their claims share a substantial factual core with the existing litigation.
Procedural Clarity. The decision resolves uncertainty over whether Rule 24(a)(2) alone could supply supplemental jurisdiction, reinforcing the primacy of § 1367(a).
Sovereign and Commercial Litigants. In cases involving foreign sovereigns or complex financial disputes, late-arriving intervenors will face a higher hurdle to join ongoing litigation.

Complex Concepts Simplified

Supplemental Jurisdiction: The power of a federal court to hear additional claims—even state-law or other federal claims—if they are so closely related to the claims already before the court that they form one case under Article III.
Common Nucleus of Operative Fact: A test asking whether two claims share enough factual overlap—same events, transactions, or evidence—that it makes sense to resolve them in one lawsuit.
Rule 24(a)(2) Intervention as of Right: A procedural standard requiring an applicant to show (1) timeliness, (2) an interest relating to the subject of the action, (3) potential impairment of that interest, and (4) inadequate representation by existing parties.
Rule 82 (No Expansion of Jurisdiction): States that the Federal Rules of Civil Procedure cannot be used to enlarge or restrict the jurisdiction of federal courts—only Congress can do that through statute.

Conclusion

The Second Circuit’s decision in Hamilton Reserve Bank v. Sri Lanka establishes a clear rule: supplemental jurisdiction over intervention claims is governed exclusively by 28 U.S.C. § 1367(a) and requires a “common nucleus of operative fact” with the underlying action. Federal Rule 24(a)(2)’s intervention criteria remain important for procedural fairness but do not by themselves create jurisdiction. This ruling will guide lower courts and practitioners in evaluating both the propriety of intervention and the jurisdictional limits of federal courts.