Osorio v. State Farm Bank, F.S.B.
81 Fed. R. Serv. 3d 529, 2011 WL 6937385, 278 F.R.D. 671 (2011)
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Rule of Law:
Federal Rule of Civil Procedure 14(a) permits a defendant to implead a non-party if that non-party's liability is dependent upon the outcome of the main claim, serving to deflect the defendant's potential liability to the plaintiff; once a proper third-party claim is established, Federal Rule of Civil Procedure 18(a) allows the joinder of additional, independent claims against the third-party defendant, which may be supported by supplemental jurisdiction under 28 U.S.C. § 1367(a).
Facts:
- Clara Betancourt provided a cell phone number to State Farm Bank, F.S.B., representing it belonged to her and could be lawfully called to discuss her account, in an attempt to induce State Farm to enter into a credit card agreement and extend her credit.
- State Farm Bank entered into a credit card agreement with Clara Betancourt and extended her credit.
- State Farm Bank made calls to the provided cell phone number for the purposes of collecting valid debts from Clara Betancourt.
- Fredy D. Osorio alleges that the cell phone number belongs to him.
- Fredy D. Osorio received calls from State Farm Bank, which he claims violated the Telephone Consumer Protection Act (TCPA).
Procedural Posture:
- Fredy D. Osorio instituted an action against State Farm Bank, F.S.B., alleging a violation of the Telephone Consumer Protection Act (TCPA) in the United States District Court for the Southern District of Florida.
- State Farm Bank, F.S.B., filed a Motion for Leave to File a Third-Party Complaint, seeking permission to add Clara Betancourt as a Third-Party Defendant more than fourteen days after serving its original answer.
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Issue:
Does Federal Rule of Civil Procedure 14(a) allow a defendant to file a third-party complaint against a non-party for indemnification when the non-party's liability depends on the outcome of the plaintiff's original claim against the defendant, and can additional, independent claims then be joined under Rule 18(a) and supported by supplemental jurisdiction?
Opinions:
Majority - Donald M. Middlebrooks, District Judge
Yes, Federal Rule of Civil Procedure 14(a) allows a defendant to file a third-party complaint against a non-party for indemnification when that non-party's liability depends on the outcome of the plaintiff's original claim, and Rule 18(a) permits the joinder of additional, independent claims, which can be supported by supplemental jurisdiction under 28 U.S.C. § 1367(a). The court found impleader under Rule 14(a) appropriate because State Farm's claims against Betancourt for common law and contractual indemnification are based on Osorio's claim against State Farm, meaning Betancourt's liability is dependent upon the outcome of the main claim. The court cited United States v. Olavarrieta and United States v. Joe Grasso & Son, Inc., which establish that Rule 14(a) aims to allow a defending party to deflect potential liability and is properly used to reduce litigation by having one lawsuit do the work of two. The court explicitly stated that these claims are not separate and independent from Osorio's claim. Furthermore, once proper third-party claims are asserted, Rule 18(a) permits State Farm to join other claims, such as breach of contract, negligent misrepresentation, account stated, and open account, against Betancourt. The court concluded it could exercise supplemental jurisdiction over these additional claims under 28 U.S.C. § 1367(a) because they form part of the same case or controversy as the original TCPA claim (which is based on diversity jurisdiction under 28 U.S.C. § 1332), and supplemental jurisdiction expressly includes claims involving the joinder of additional parties.
Analysis:
This case clarifies the broad scope of impleader under Federal Rule of Civil Procedure 14(a) when the third-party defendant's liability is contingent upon the main claim's outcome, reinforcing its purpose of judicial economy. It also illustrates how Rule 18(a) can significantly expand the claims against an impleaded party, relying on supplemental jurisdiction under 28 U.S.C. § 1367(a) to bring otherwise distinct state law claims into federal court. This decision provides a crucial procedural mechanism for defendants facing statutory liability (like TCPA) to shift or share that burden with parties responsible for the underlying factual misrepresentations, potentially impacting how businesses manage customer data and contractual agreements and discouraging fraudulent representations by customers.
