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United States v. Joe Grasso & Son, Inc.

United States Court of Appeals for the Fifth Circuit · 1967 · Civil Procedure

Civil ProcedureThird-Party PracticeImpleaderFederal Rules of Civil Procedure Rule 14(a)Rule 14(a)impleaderthird-party complaintderivative liability

Facts

Joe Grasso & Son, Inc. owned seven shrimp boats operated by captains and usually two crewmen each. Federal employment taxes were assessed against Grasso on the theory that Grasso was the employer of the fishermen during the relevant tax periods. In Grasso's refund action, the United States impleaded the captains, alleging that if Grasso was not the employer, then the same facts would show that the captains were liable for the taxes as employers of the crewmen. The district court concluded that the captains' potential liability did not depend on the outcome of Grasso's refund claim and dismissed the third-party complaint.

Issue

Under Rule 14(a), may the government implead the captains in Grasso's tax refund suit on the theory that if Grasso is not liable for the employment taxes, the captains may be liable instead? More specifically, does the government's claim against the captains qualify as a proper third-party claim when the captains' liability is not necessarily derivative of Grasso's liability?

Rule

Rule 14(a) permits impleader only against a person who is or may be liable to the defendant for all or part of the plaintiff's claim against the defendant. Impleader is proper only when the third-party defendant's liability is dependent upon the outcome of the main claim, such that the third party is secondarily liable, liable over, or otherwise derivative of the defendant's liability; an entirely separate and independent claim cannot be maintained under Rule 14 even if it arises from the same general set of facts.

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In Houston, Nora Feldman sued Bayou Steel Works for injuries caused by a collapsing scaffold at a warehouse renovation site. Bayou Steel filed a third-party complaint against Gulf Harbor Equipment Leasing, alleging that its lease contract requires Gulf Harbor to indemnify Bayou Steel for any liability arising from defects in the scaffold Gulf Harbor supplied.

Is impleader proper under Rule 14(a)?

Explanation. Rule 14(a) permits impleader only when the third-party defendant may be liable to the defendant for all or part of the plaintiff's claim. That means the third-party liability must be dependent on the outcome of the main claim and derivative of it, such as indemnity or liability over. Here, Bayou Steel seeks to pass on to Gulf Harbor all or part of any liability Bayou Steel owes Nora, so impleader is proper. (Derived from United States v. Joe Grasso & Son, Inc. (1967).)