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Jeub v. B/G Foods, Inc.

District Court, D. Minnesota
2 F.R.D. 238, 1942 U.S. Dist. LEXIS 1677 (1942)
ELI5:

Rule of Law:

Under Federal Rule of Civil Procedure 14, a defendant may implead a third-party defendant who 'is or may be liable' for indemnity or contribution, even if the substantive right to recovery has not yet accrued because the defendant has not yet paid a judgment to the plaintiff.


Facts:

  • Plaintiffs were served ham at a restaurant operated by B/G Foods, Inc.
  • After eating the ham, the plaintiffs became sick.
  • The plaintiffs alleged the ham was contaminated, unwholesome, and deleterious to health.
  • The ham served was a 'Swift Premium Ham,' a product of Swift and Company.
  • B/G Foods, Inc. had purchased the ham from Swift and Company in a sealed can the day before serving it to the plaintiffs.

Procedural Posture:

  • Plaintiffs filed a complaint against B/G Foods, Inc. in federal district court to recover damages.
  • Prior to answering, B/G Foods, Inc. obtained an ex parte order to make Swift and Company a third-party defendant.
  • B/G Foods, Inc. filed a third-party complaint against Swift and Company, seeking indemnity for any judgment entered against it.
  • The plaintiffs declined to amend their complaint to add a claim against Swift and Company.
  • The third-party defendant, Swift and Company, moved to vacate the order making it a party, arguing the indemnity action was premature because no loss had yet been sustained by B/G Foods, Inc.

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Issue:

Does Federal Rule of Civil Procedure 14 permit a defendant to implead a third-party defendant for indemnity before the defendant's liability has been determined and before any actual loss has been sustained?


Opinions:

Majority - Nordbye, District Judge

Yes. Federal Rule of Civil Procedure 14 permits a defendant to implead a third party who 'may be liable' for indemnity, even if the claim is contingent and has not yet matured under substantive law. While the rule is procedural and does not create substantive rights, it allows for the acceleration of the presentation of those rights to promote judicial efficiency and avoid circuity of action. The court reasoned that the rule's specific language, allowing impleader of a party who 'is or may be liable,' explicitly contemplates bringing in parties whose liability is not yet fixed. This prevents the defendant from having to wait to be found liable and pay a judgment before instituting a separate action against the third party. Any prejudice to the third-party defendant can be cured by staying execution of an indemnity judgment until the original defendant has satisfied the plaintiff's judgment.



Analysis:

This case is a foundational interpretation of Federal Rule of Civil Procedure 14, clarifying its role in accelerating contingent claims. The decision establishes that impleader is a procedural device for judicial efficiency, not a mechanism that alters substantive rights. By allowing a defendant to bring a third-party claim for indemnity or contribution before the claim technically accrues, the court promotes the resolution of all related liabilities in a single action. This precedent solidifies the power of Rule 14 to prevent duplicative litigation and potentially inconsistent verdicts, shaping modern third-party practice in federal courts.

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