Owen Equipment & Erection v Kroger
437 U S 365  [1978]
Author:- Sam Biers

Joinder : Complex Litigation

Relevant Facts:  Iowa citizen sued Nebraska electric utility (OPPD) to recover for alleged wrongful death of her husband, who was electrocuted when boom of a steel crane next to which he was walking came too close to utility's high-tension power line, in which utility filed third-party complaint against corporation which owned and operated the crane(Owen). Pl Amended her complaint to name crane owner, Nebraska corporation, as an additional Df.

Legal Issue(s): Whether a plaintiff may not defeat statutory requirement of complete diversity of citizenship simply by suing only those defendants of diverse citizenship and wait for them to implead non-diverse defendants ?

Court’s Holding: NO, neither judicial economy or convenience of litigants can defeat complete diversity requirement.

Procedure: D Ct NE jury verdict against Df (Appellant-Crane Co.), Df Motion for dismissal denied, and Df appealed; Ct of Appeals Affirmed; U. S. Ct Reversed

Law or Rule(s): 28 U S C 1332 (a) (1) requires complete diversity and an amt in controversy exceeding $75,000.

Court Rationale: Diversity jurisdiction is not available when any Pl is a citizen of the same state as the Df. Res could not bring this suit in Fed ct naming Owen and OPPD as co-dfs since citizens of Iowa would have been on both sides of the litigation.  When Respondent amended complaint to assert a claim against Owen complete diversity was destroyed, b/c testimony of secretary disclosed that Owen’s principal place of business was IA.

In determining whether jurisdiction over a nonfederal claim exists, the context in which the nonfederal claim is asserted is crucial.  Here the nonfederal claim is not ancillary to the federal one b/c the impleader by Df of a 3^rd party Df is ancillary. The Res’s claim against the Pet was entierly separate from her original complaint against OPPD, since the Pet’s liability to her depended not at all upon whether or not OPPD was also liable.  That claim was a new and independent one, not ancillary or dependent.

Plaintiff’s Argument: Federal courts have authority to grant jurisdiction a claim by a Pl against a 3^rd Party where the Federal claim is ancillary to the State one.

Defendant’s Argument: Congress’ mandate that complete diversity between the Pl and Dfs should be strictly constructed.

OPPD then filed a third-party complaint against petitioner company which owned and operated the crane. OPPD successfully moved for summary judgment, leaving petitioner as the sole defendant. Though in its answer petitioner admitted that it was a corporation organized and existing under the laws of Nebraska, during trial it was disclosed that petitioner's principal place of business was in Iowa.

Ct of App, citing Mine Workers v Gibbs D Ct had jurisdictional power, in its discretion, to adjudicate the claim, which arose from the "core of 'operative facts' giving rise to both [respondent's] claim against OPPD and OPPD's claim against [petitioner],"

Court of Appeals' ancillary-jurisdiction theory a plaintiff could defeat the statutory requirement of complete diversity simply by suing only those defendants of diverse citizenship and waiting for them to implead nondiverse defendants.