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Owen Equipment & Erection Co. v. Kroger

Supreme Court of the United States · 1978 · Civil Procedure

Civil Proceduresupplemental jurisdictiondiversitycomplete diversitypendent party jurisdictionancillary jurisdictiondiversity jurisdictioncomplete diversity

Facts

Respondent, an Iowa citizen, sued OPPD, a Nebraska corporation, in federal court for wrongful death based on diversity. OPPD then impleaded Owen under Rule 14, alleging Owen's negligence caused the death, and respondent amended her complaint to add a direct claim against Owen. After OPPD obtained summary judgment, the case proceeded between respondent and Owen alone. During trial it was revealed that Owen's principal place of business was in Iowa, making both respondent and Owen citizens of Iowa, and Owen moved to dismiss for lack of jurisdiction.

Issue

In a diversity action, may a plaintiff assert a state-law claim against a third-party defendant when there is no independent basis for federal jurisdiction over that claim because the plaintiff and third-party defendant are citizens of the same State? More specifically, does ancillary jurisdiction permit such a claim notwithstanding the complete-diversity requirement of 28 U.S.C. § 1332?

Rule

Even if a nonfederal claim arises from a common nucleus of operative fact with a jurisdiction-conferring claim, that does not end the inquiry. A federal court must also examine the posture in which the claim is asserted and the statute conferring jurisdiction to determine whether Congress has expressly or by implication negated jurisdiction over that particular claim. In a diversity case, § 1332 requires complete diversity, and ancillary jurisdiction does not extend to a plaintiff's claim against a nondiverse third-party defendant absent an independent basis of federal jurisdiction.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lena Ortiz, a citizen of New Mexico, sued Red Mesa Transit, a corporation incorporated and having its principal place of business in Colorado, in federal court in Denver for injuries from a warehouse collapse. Red Mesa impleaded High Desert Scaffolding, whose only citizenship is New Mexico, alleging contribution. Lena then amended her complaint to assert a negligence claim directly against High Desert arising from the same collapse.

Does the federal court have subject-matter jurisdiction over Lena's direct claim against High Desert?

Explanation. The majority held that a common nucleus of operative fact is not enough. In a diversity case, the court must also examine the posture of the claim and § 1332's complete-diversity requirement. A plaintiff's direct claim against a third-party defendant who shares the plaintiff's citizenship is a new and independent claim, and ancillary jurisdiction does not supply jurisdiction absent an independent basis. Rule 14 does not create jurisdiction. (Derived from Owen Equipment & Erection Co. v. Kroger (1978).)