Short Essay Question from the 2005 CivPro Exam

With updated answers:

Essay Question 3. (15 points – 18 minutes) 

P (a citizen of New York) sues D (a citizen of Texas) for battery in the Federal District Court for the District of New Jersey. P’s suit concerns a brawl between P, D and X (a citizen of Illinois) that occurred in Chicago. P is asking for $100,000 damages for the loss of his eye. D counterclaims for $20,000 for his injuries in the brawl. P joins X under Rule 14 in response to D’s counterclaim. X makes a motion to dismiss P’s suit against X for lack of subject matter jurisdiction. Will X’s motion succeed or not succeed? Should it succeed or not succeed?

 

It is important to the issue of subject matter jurisdiction to think through how P might implead X. Notice that P cannot simply bring X in on the grounds that X caused P damage in the brawl. An impleader under FRCP 14 allows P to join X only if X may be liable to P for all or part of an action brought against P. So P must be claiming that X is liable to P for all or part of P’s liability to D under D’s counterclaim. The only plausible argument would be that P and X are joint tortfeasors and P is asking for contribution from X for any liability to D. Notice that since P is asking from X for all or part of any liability that P may have to D, P cannot be asking for more than $20,000 from X.

Let us now address the issue of subject matter jurisdiction. I expected you to both say how the motion to dismiss for lack of subject matter jurisdiction would turn out and how it ought to turn out. Many of you only did the former.

How would the motion turn out? It would probably succeed. As an initial matter, let’s look at P’s suit against D. This is an adequate diversity action. The parties are diverse and the amount in controversy is over $75,000, since P is asking for $100,000 in damages for the loss of his eye. Furthermore, D’s counterclaim against P for D’s damages in the brawl also has subject matter jurisdiction. It is not a diversity case on its own, because it does not meet the amount in controversy (D is asking only for $20,000) but it does have supplemental jurisdiction under 28 USC 1367. It is part of the same constitutional case or controversy (D’s action against P shares a core of operative fact with P’s action against D since they both concern the same brawl) and so satisfies 1367(a). Furthermore, it is does not fall under the exceptions to supplemental jurisdiction in 1367(b). True, 1367(b) is implicated, insofar as this is a civil action “of which the district courts have original jurisdiction founded solely on section 1332.” But the actions that are potentially excluded under 1367(b) are “claims by plaintiffs against persons made parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure, or … claims by persons proposed to be joined as plaintiffs under Rule 19 of such rules, or seeking to intervene as plaintiffs under Rule 24 of such rules.” D’s counterclaim against P is an action by a defendant, not a plaintiff.

But P’s impleader against X does seem to fall under the exceptions. True, it is part of the same constitutional case or controversy as P’s claim against D. But this action appears excluded by 1367(b), since P’s action against X looks like a claim by a plaintiff against a person made a party under Rule 14. Furthermore, exercising supplemental jurisdiction over such a claim would be inconsistent with the jurisdictional requirements of section 1332. Some of you said it would not be inconsistent because P is diverse from X. But, as we have seen, P can’t be claiming more than $20K from X, so the amount in controversy is not satisfied. Thus there is no supplemental jurisdiction, although it is possible that a court might buy the argument that P’s impleader of X is not a claim by a plaintiff, but a claim by a “counterclaim defendant.” One person argued, creatively, that 1367(b) does not apply because it speaks of “claims by plaintiffs against persons MADE parties under Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure” meaning that the person the plaintiff is suing must have already been brought in as a party due to R 14 before P sues him (which is not true here, because P himself brought X in under R 14). This was a nice argument.

Should there be supplemental jurisdiction? The argument that there should be is very strong. First of all, there is the argument that efficiency would be enhanced by allowing supplemental jurisdiction. Without it, P is going to have to bring the impleader as a separate suit in state court, thereby wasting judicial resources. What is more important, this is not a case (like Owen) where if supplemental jurisdiction is allowed there would be worries that P could use supplemental jurisdiction to game the system and subvert the purposes of the diversity statute. Remember that in Owen, the question was whether there was supplemental jurisdiction (although it was not called that at the time, since 28 USC 1367 was not yet in existence) for the plaintiff’s Rule-14(a)(3) action against a non-diverse impleaded party. The worry was that if supplemental jurisdiction were allowed, a plaintiff who was really interested in suing the impleaded party in federal court (but could not do so as an original matter because there was no diversity) might sue the defendant, expecting that the defendant would implead the third party and then use supplemental jurisdiction to bring the action against the third party.

Some of you said that a problem of gaming the system exists in our example as well, since P might sue D knowing that D would bring a counterclaim against him, thereby allowing him to implead X. Indeed, given that D’s counterclaim was compulsory, whereas in Owen the defendant’s impleader was permissive, it seems that there are even greater worries here about plaintiffs using supplemental jurisdiction to game the system.

But there are not the same worries for the following reasons. First of all, in Owen there was genuinely no diversity, whereas here the only problem is the failure to meet the jurisdiction minimum. What is more important, in Owen the worry concerned a plaintiff whose real interest was in obtaining affirmative relief from the impleaded party in federal court. But in our case P is not suing X for affirmative relief. The only reason that P is suing X is to get compensation for some of the money he may have to pay out to D. The action of P against X is in no sense an action that P WANTS to bring (in federal court or elsewhere). He would prefer that it not be brought at all. He only has motivation to bring the action when D sues him.

Although I did not demand that you actually say that supplemental jurisdiction ought to be provided here, you needed to mention these considerations, which in fact strongly argue in favor of supplemental jurisdiction. The scenario in this question has often been cited as an example of how 1367(b) was misdrafted.

Comments

[Cameron]

Hi Professor Green,

While I understand the structural differences between this example and the case in 'Allapattah', I am wondering if the language in Kennedy's 'contamination' opinion would be helpful in arguing for supplemental jurisdiction over P's claim against X.

I realize that there are 'end-run' concerns present in this case that are not obviously present in 'Allapattah', because the action brought against X here is brought by the plaintiff who initially brought the case.

But if we can persuasively argue that the 'end-run' concerns here are not so great (and we do in this example), then shouldn't the fact that the defect in P ---> X is amount in controversy and not complete diversity be informed by Kennedy's language?

I point especially to these words, that:

" .The “contamination theory”–that inclusion of a claim or party falling outside the district court’s original jurisdiction contaminates every other claim in the complaint–makes sense with respect to the complete diversity requirement because a nondiverse party’s presence eliminates the justification for a federal forum. But it makes little sense with regard to the amount-in-controversy requirement, which is meant to ensure that a dispute is sufficiently important to warrant federal-court attention."

Should we view this language as persuasive authority endorsing certain claims by plaintiffs that fall within the case and controversy boundaries of the original action and which have only an amount-in-controversy defect?