Owen Equipment and Erection Co. v. Kroger
(1978)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
In a federal action based solely on diversity of citizenship, a plaintiff may not assert a claim against a third-party defendant unless there is an independent basis for federal jurisdiction over that claim. The doctrine of ancillary jurisdiction does not overcome the statutory requirement of complete diversity for claims brought by the plaintiff.
Facts:
- James Kroger was electrocuted and killed when the boom of a steel crane he was next to came too close to a high-tension power line in Carter Lake, Iowa.
- His widow, Kroger, a citizen of Iowa, initiated a wrongful-death lawsuit.
- The power line was owned and operated by Omaha Public Power District (OPPD), a Nebraska corporation.
- The crane was owned and operated by Owen Equipment and Erection Co. (Owen).
- When Kroger later added Owen as a defendant, Owen was described in the complaint as a Nebraska corporation.
- During the third day of trial, it was disclosed that Owen's principal place of business was in Iowa, making it a citizen of Iowa for diversity purposes, the same as Kroger.
Procedural Posture:
- Kroger, an Iowa citizen, filed a wrongful-death suit against Omaha Public Power District (OPPD), a Nebraska corporation, in the U.S. District Court for the District of Nebraska, based on diversity jurisdiction.
- OPPD filed a third-party complaint under Fed. R. Civ. P. 14(a) against Owen Equipment and Erection Co. (Owen), alleging Owen's negligence caused the death.
- The District Court granted Kroger leave to amend her complaint to assert a direct tort claim against Owen.
- Subsequently, the District Court granted summary judgment in favor of OPPD, dismissing it from the case.
- The case proceeded to trial solely between Kroger and Owen, during which Owen's Iowa citizenship was revealed, destroying diversity.
- Owen moved to dismiss for lack of subject matter jurisdiction, but the District Court denied the motion and entered judgment on a jury verdict for Kroger.
- Owen, as appellant, appealed to the U.S. Court of Appeals for the Eighth Circuit, which affirmed the district court's judgment, with Kroger as appellee.
- The U.S. Supreme Court granted certiorari to review the judgment of the Court of Appeals.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
In a federal diversity suit, does a court have ancillary jurisdiction over a plaintiff's state-law claim against a non-diverse third-party defendant who was impleaded by the original defendant?
Opinions:
Majority - Justice Stewart
No. In a federal diversity action, a plaintiff cannot assert a claim against a non-diverse third-party defendant because doing so would violate the statutory requirement of complete diversity. Federal courts are courts of limited jurisdiction, defined by both the Constitution and Congress. While the claim may satisfy the constitutional test of arising from a 'common nucleus of operative fact' under Mine Workers v. Gibbs, this does not end the inquiry. The specific statute conferring jurisdiction, 28 U.S.C. § 1332, has consistently been interpreted to require complete diversity between all plaintiffs and all defendants. Allowing a plaintiff to assert a claim against a non-diverse third-party defendant would permit an easy circumvention of this congressional mandate. Ancillary jurisdiction is typically used for claims by defending parties, not by a plaintiff who voluntarily chose the federal forum and must accept its limitations.
Dissenting - Justice White
Yes. The District Court had constitutional power to entertain the claim because it derived from a 'common nucleus of operative fact' with the original claim. The statutory complete diversity requirement of 28 U.S.C. § 1332 should not be read so broadly as to bar a plaintiff's claim against a party who has already been properly brought into the case by a defendant. The plaintiff is not adding a new party, but merely asserting a claim against an existing one, which is different from the situation in Aldinger v. Howard. Considerations of judicial economy, convenience, and fairness to the litigants all support exercising ancillary jurisdiction here, as it avoids duplicative litigation in state court over the exact same incident.
Analysis:
This decision significantly clarified and narrowed the scope of ancillary jurisdiction in diversity cases. It established a firm rule that a plaintiff cannot use procedural mechanisms like Fed. R. Civ. P. 14 to bring claims against non-diverse parties that they could not have originally sued in federal court. The case reinforces the strict construction of the complete diversity statute and the principle that federal courts are courts of limited jurisdiction. This holding was a key precursor to the supplemental jurisdiction statute, 28 U.S.C. § 1367, which codified this rule in § 1367(b), explicitly prohibiting supplemental jurisdiction over claims by plaintiffs against persons made parties under Rule 14 if exercising such jurisdiction would be inconsistent with the requirements of diversity jurisdiction.
Unlock the full brief for Owen Equipment and Erection Co. v. Kroger