Generally, a federal court may exercise supplemental jurisdiction over claims brought by or against additional parties such as third-party defendants, parties who are required or permitted to be joined in the case and intervenors 28 U. In cases where the federal court's jurisdiction is based solely on diversity jurisdiction , however, the court does not have supplemental jurisdiction to hear claims by or against additional parties if their presence in the case would destroy complete diversity 28 U.
A district court in its discretion may decline to exercise supplemental jurisdiction over a state law claim if:. It provides a U. Supplemental Jurisdiction is a common-law device that allows a court to resolve all claims between opposing parties in one forum. However, if the case is brought as a diversity action, generally, no supplemental jurisdiction is entertained if such claims would destroy complete diversity. Supplementary jurisdiction is discretionary and a federal court can choose whether or not to exercise it in a given case.
In addition, if the tenant also complained that the landlord damaged his car by negligently breaking a window, this claim would not normally come under the jurisdiction of a federal court. Home Information. It is not tied to legal theories or defenses. When cars driven by A and B collide, and then driver B gets out of his car and punches driver A, this presents one transaction or occurrence only one event , not one for negligence and another for battery. Clearly, the transaction or occurrence is close kin to the claim for relief [ see Exercise Three, part I.
Unfortunately, many federal courts have felt a need to gloss the rule. Courts that look to a single set of facts follow the language of the rule, not an unnecessary addition. The logical relationship standard may make sense for the more difficult decision of when to tie transactions together into the same claim, as is sometimes necessary to decide for a question of joinder of parties [ see part II.
See Douglas D. A compulsory counterclaim that is not stated is lost, although courts vary on the theory of loss, some using preclusion, others using an estoppel, and others using a sanction for violation of the rules. The Federal Rules define a permissive counterclaim by exclusion.
A permissive counterclaim is any counterclaim that is not compulsory. Since by definition the permissive counterclaim does not involve the same subject matter as the claim, little efficiency is lost. A party choosing not to bring a permissive counterclaim must at the same time be careful that it is not lost through the operation of issue preclusion; to the extent that the counterclaim has an issue or issues in common with the claim, the decision on that issue in the litigation of the claim may well be preclusive in a later, separate action on the counterclaim.
See Exercise Eleven, part II. Prior to the enactment of supplemental jurisdiction, the law in the area was clear. Compulsory counterclaims, arising out of the same transaction or occurrence, qualified for ancillary jurisdiction; permissive counterclaims, not arising out of the same transaction or occurrence, did not qualify for ancillary jurisdiction. Compulsory counterclaims ride into federal court on supplemental jurisdiction. Permissive counterclaims do not. Compulsory counterclaim. By definition, a compulsory counterclaim, because it must arise out of the same transaction or occurrence, is part of the same Article III case or controversy.
A counterclaim is asserted under Rule A compulsory counterclaim is carried into federal court by supplemental jurisdiction. Permissive counterclaim. By definition, a permissive counterclaim, because it does not arise out of the same transaction or occurrence, is not part of the same Article III case or controversy.
The crossclaim traces back into the equity courts, which allowed a party to assert a cross-bill against another party. This procedure found its way into the federal equity rules of Many code states adopted the procedure, usually renaming the device a cross-complaint. See Jack H.
The Federal Rules carried forward the possibility of asserting a claim against another party to the action, either as a counterclaim against an opposing party or as a crossclaim against a coparty. Or a crossclaim is by one plaintiff against another plaintiff. For example, assume plaintiff A and plaintiff B sue defendant C and defendant D.
C could crossclaim against D since they are coparties. A might then plead a crossclaim against B perhaps for indemnity. First, a crossclaim is a claim against a coparty. Second, a crossclaim is always permissive.
The concept of transaction or occurrence means in its essence the same set of operative facts [ see II. Allowing parties to add factually related claims to an existing action makes efficient sense for the court; allowing the addition of unrelated claims to an existing action would serve no efficiency purpose.
That is why a crossclaim must be part of the same transaction or occurrence. This reasoning is undercut somewhat, however, by the fact that once a party is able to plead a crossclaim, the party is then able to add other, completely unrelated claims to the same action.
This is so because of the broad federal joinder of claims rule, which allows the joinder of all claims against a party. See II. Prior to the enactment of supplemental jurisdiction, crossclaims qualified for ancillary jurisdiction because by rule they are required to arise from the same transaction or occurrence as the claim, and the same transaction or occurrence was also the test for ancillary jurisdiction.
Supplemental jurisdiction exists. It provides supplemental jurisdiction does not exist in diversity cases when joinder is accomplished under certain enumerated rules. Rule 13 g is not on the list. Consequently, crossclaims will always be covered by supplemental jurisdiction. Third-party practice is commonly called impleader, and the two terms are synonymous.
A person must remember that impleader is used by a party to bring a person not a party a third party into the action, intervention is used by a person not a party to the action to force his way into the action, and interpleader is used by a person subject to multiple claims to the same property to force all claimants to assert those claims in a single action. A judgment against the original defendant would then also be conclusive on the vouched in party.
The weakness of this procedure was that the original defendant was still required to bring a second, separate action against the vouched in party to obtain a judgment. Third-party practice was adopted by several of the code states, and subsequently by the Federal Rules.
The advantage of third-party practice lies in this example. Plaintiff consumer sues defendant retailer for selling a defective product. The retailer can defend the action, and—should it lose—later sue the manufacturer of the product in a separate action. When the retailer wins that second action, the manufacturer ultimately pays the damages. The retailer is removed from the middle. Drawbacks exist with this plan, however. First, inconsistent results might occur: the jury in the first action may decide the product was defective, and the jury in the second action may decide the product was not defective.
Second, delay results. The retailer might have to pay the first judgment years before the second case proceeds to judgment. Even worse, during the time lag the statute of limitations on the second action might expire. Third, the retailer will incur the expense of litigating two separate actions. Impleader removes these problems. By impleading the manufacturer into the original action, the retailer removes the possibility of inconsistent results since the same jury will decide the entire action.
Judgment will be entered on both the original claim and the third-party claim at the same time, so no delay results. Both claims will be determined in the same litigation, so little added expense will result. Prior to the general, plainer English, re-writing of the Federal Rules in , the third-party practice rule was one large, complicated paragraph. The amendment broke the rule into several smaller, more understandable parts.
Even so, in order to assist understanding third-party practice, we parse out each sentence of the rule. Here are the relevant portions of Federal Rule 14 a , interspersed with our comments in italics. A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it.
A claim against a co-party is a crossclaim. This language also contains the most important thing to remember about the joinder device: impleader liability must be derivative.
Impleader is not a device to offer up an alternative defendant to the plaintiff. For example, plaintiff homeowner sues defendant waterproofing company because the basement continues to leak. Defendant can implead the manufacturer of the waterproof paint it used.
That is derivative liability. Defendant cannot implead the architect of the house on the theory that the fault lies in the house design instead of the waterproofing job. That is an alternate defendant, not derivative liability. Rule 14 cannot be used for that purpose. Defendant should plead a denial. The original defendant may implead as a matter of right within 14 days of serving the original answer although another party may later move to strike the third-party complaint, so impleader in the end is always discretionary with the court ; of course, the common practice is to serve the third-party complaint as part of the same document as the answer.
After the day period has expired, defendant must obtain leave of court to use third-party practice. The court will decide whether the increased efficiency of a single action will outweigh any prejudice to a party. B must assert any counterclaim against the third-party plaintiff under Rule 13 a , and may assert any counterclaim against the third-party plaintiff under Rule 13 b or any crossclaim against another third-party defendant under Rule 13 g ;.
The third-party defendant can defend the third-party claim, counterclaim against the third-party plaintiff original defendant , cross-claim against other third-party defendants if any—this is unlikely , and defend—assist in defense of—the original claim. After all, if the original claim fails, no liability will pass through. The proper title for such a claim is a Rule 14 claim; it is not a counterclaim since the third-party defendant and the plaintiff are not opposing parties until such a claim is asserted, and it is not a cross-claim since they are not co-parties.
The third-party defendant must then assert any defense under Rule 12 and any counterclaim under Rule 13 a , and may also assert any counterclaim under Rule 13 b or any crossclaim under Rule 13 g.. The original plaintiff is allowed to assert a claim directly against a third-party defendant who the original defendant has brought into the action, so long as the claim is transactionally related. The third-party defendant is then allowed to defend the claim as would an original defendant.
Should a claim by the plaintiff against the third-party defendant be asserted first, it would be a Rule 14 claim; should it be asserted after the third-party defendant has asserted a claim directly against plaintiff, it would be a counterclaim since the two parties have become opposing parties. Any party may move to strike the third-party claim, to sever it, or to try it separately..
As mentioned above, the court will decide whether efficiency outweighs any possible prejudice to a party of trial in a single action. A third-party defendant may proceed under this rule against a nonparty who is or may be liable to the third-party defendant for all or part of any claim against it.. This would be properly termed a fourth-party action. And the chain of actions can, at least in theory, continue. Prior to the enactment of supplemental jurisdiction, third-party claims qualified for ancillary jurisdiction a derivative claim must arise from the same transaction or occurrence.
In the standard third-party practice situation, defendant impleads the third-party defendant. A third-party claim, because it must arise derivatively through the original claim, is part of the same case or controversy. It is a claim by a defendant. Consequently, supplemental jurisdiction exists over the third-party claim. The same result was intended to apply, and does apply, in two other third-party practice situations. When the third-party defendant brings in a fourth-party defendant, that also is not a claim by a plaintiff, so supplemental jurisdiction attaches.
Similarly, when the third-party defendant asserts a claim directly against the original plaintiff, that also is not a claim by a plaintiff, so supplemental jurisdiction applies. The opposite result was intended to apply, and does apply, when the original plaintiff asserts a claim directly against the third-party defendant.
Owen Equip. Kroger , U. The common law, in its search for a single issue, made joinder of parties difficult. It tied joinder to the substantive rights of the parties and the forms of action. It distinguished between joint interests in which joinder was possible and several interests in which joinder was not possible.
The codes allowed joinder more generously, although they added their own artificial categories for when joinder of parties would be permitted. See generally Jack H. While joinder of parties under Federal Rule 20 is not freely allowed as is joinder of claims under Federal Rule 18 [ see II.
The transaction or occurrence test arises throughout the federal joinder devices We have already discussed its meaning with regard to compulsory counterclaims, for example [ see II.
The essence of a transaction or occurrence is a single set of facts; it is not in any way tied to legal theories of recovery or defenses. Federal Rule 20 goes even further than a single transaction or occurrence: it allows permissive joinder when the relief arises from a series of transactions or occurrences.
Perhaps, for example, plaintiff is injured in an auto accident, and several months later the physician treating her for the accident injuries commits malpractice. Plaintiff can join the driver and the physician permissively as defendants since this is a series of transactions or occurrences—even though separated in time by several months.
Or perhaps a salesman of worthless securities sells them to plaintiff A over the telephone and some time later sells them to plaintiff B during an in-home presentation.
The court would likely determine this to be a series of transactions or occurrences so that the two buyers could join permissively as plaintiffs in a single action. Here is where the logical relationship test, considering judicial economy and convenience, makes sense [ see II.
The common question requirement is even easier to satisfy. The question may be law or fact. The rule does not require a majority of common questions, or even a multitude of common questions.
It requires only a common question. Once again, consideration of whether a common question is presented will prompt the court to consider economy and convenience of trying the case in a single proceeding. Should the court determine that parties are misjoined, the remedy is to drop the misjoined party, not to dismiss the case.
The common law required joinder of parties in certain limited situations, chiefly when a joint interest was involved. The codes generally carried this requirement forward.
In interpreting this requirement in Shields v. Barrow , 58 U. Over the following years, courts tended to sidestep the facts of the individual case in their haste to apply one of these two conclusory labels. When Federal Rule 19 was originally promulgated in , it adopted this system. This resulted in complete rewriting of Federal Rule 19 in In the event joinder of the person is not feasible joinder would destroy diversity or the person is not subject to personal jurisdiction , then the court must proceed to Rule 19 b.
That rule leads the court through consideration of four practical factors to determine whether the better course is to proceed without the absent person or to dismiss the action. The rule requires the court to place the conclusion where it belongs: at the end of the analysis.
The label is a conclusion, not a substitute for practical considerations and analysis. This point was driven home forcefully by the Supreme Court in a major decision rendered only two years after the rewriting of Rule Patterson , U. Even though the absent person is commonly called an indispensable party, the rules reinforce that until analysis is completed, this conclusory label should not be applied. As discussed in I. Despite several attempts by lower federal courts to establish a doctrine of pendent party jurisdiction, these efforts were uniformly rejected by the Supreme Court.
With the adoption of supplemental jurisdiction in , the possibility of supplemental jurisdiction over additional parties to a lawsuit arose. Consequently, a case in federal court on any basis save diversity alone will allow the joinder of additional, nondiverse parties. Consider the facts of Finley v. United States , U. The Supreme Court refused pendent party jurisdiction. Today, both of these claims could be brought into federal court.
An unintended glitch in the statute may even allow permissive joinder of plaintiffs who fail to meet the diversity requirements. Consider, for example, two subcontractors, both citizens of state A, who wish to sue defendant contractor, a citizen of state B, for breach of their separate contracts in the same construction project.
Clearly, one plaintiff satisfies diversity requirements, but the other does not. Can the two plaintiffs join permissively to sue together in federal court? The question of joinder is easily answered. Both parties sue on contracts arising from the same construction project, so the same transaction or occurrence is involved one building project ; at least one common question may arise on the events of the project or in interpretation of the standard-form contracts.
The more interesting question is whether diversity jurisdiction between plaintiff one and defendant allows supplemental jurisdiction over plaintiff two. How should a court respond to this apparent drafting error? Some federal courts read the statute as it is written and allow supplemental jurisdiction.
Press Mechanical, Inc. A person who is not a party to a lawsuit can force his way in and become a party through the joinder device of intervention.
The outsider can intervene into the lawsuit, either as a plaintiff or as a defendant. Should the intervention be successful, the intervenor becomes a full-fledged party to the suit. Intervention originated in Roman law to give a nonparty a means to protect an interest when that interest might be affected by a decision in a lawsuit that the losing party chose not to appeal; it developed in different forms in the common law and equity courts.
Federal Rule 24 provides two types of intervention: of right and permissive. When the nonparty satisfies the requirements of Rule 24 a , it has a right to intervene. When the nonparty is unable to satisfy that rule, it still may intervene permissively under Rule 24 b in the discretion of the court. Of course, since the court must decide whether the requirements of Rule 24 a are satisfied, in a large sense all intervention is permissive. In a second sense also, all intervention is permissive.
A nonparty is never required to intervene. It can choose to remain outside a lawsuit and attempt to protect its interests in a separate suit. Due process prevents binding nonparties with the result of a lawsuit. The joinder device of intervention balances a number of interests. It prevents persons from impairing the rights of nonparties through a lawsuit. It promotes efficiency by allowing entire controversies to be resolved in a single lawsuit. It balances the control of the litigation by the original parties with control shared with the new party; this seems to be part of the general trend toward dilution of party control in favor of court governance of a lawsuit.
Federal Rule 24 a places three essential requirements on a party seeking to intervene of right. First, the application for intervention must be timely. The rule provides no guidelines of timeliness, so the court will consider the matter on an individual case basis.
The court will consider such things as the stage of the litigation, the reasons for any delay in application, and any possible prejudice to the existing parties should the intervention be allowed. Certainly an application to intervene made during the pleading stage of the litigation will be timely; later applications raise possible delay for the original parties.
A person who claims the proceeds of an insurance policy has an interest in that policy that would support intervention into a suit between another claimant for the proceeds and the insurance company.
A lienholder of a property has an interest in a lawsuit involving that property. The interest need not always be economic. The federal courts have recognized a broad range of interests to support intervention, including economic, environmental, and educational. Early cases held that the nonparty had to be bound by the potential adverse decision. This standard was almost impossible to satisfy since due process prevents binding a nonparty.
For example, in a challenge by environmentalists to pollution caused by an industrial plant, potential relief might include closing the plant. Employees, businesses in the locality, and even the county that might have its tax basis eroded would likely be held to have interests that as a practical matter might be impaired. On the other hand, assume a town zones land for open space.
The landowner sues the town for a declaratory judgment that the ordinance is invalid. Will an environmental group that supports zoning the land for open space be entitled to intervene of right? The answer is no because the town is already defending the zoning and adequately represents that interest.
This requirement that representation not be adequate can interplay with the timeliness requirement. For example, assume parents of schoolchildren sue the school board for racial discrimination. Other parents support the board policies, but they cannot intervene because the board is adequately representing their interests. The lengthy litigation results in a judgment by the trial court that the policies are discriminatory. The school board, for various reasons, decides not to appeal.
Their interests for the first time are not represented, yet post judgment in the trial court is hardly timely. A well-known case, Smuck v. Hobson , F. When the nonparty cannot qualify for intervention of right, it may still seek leave of court to intervene permissively. As with permissive joinder of parties [ see II. Since the sole requirement of a common question is so minimal, much will depend on the discretion of the court.
Prior to , persons intervening of right generally qualified for ancillary jurisdiction while persons intervening only permissively had to establish their own independent basis for federal jurisdiction. The advent of supplemental jurisdiction in tilted the scale strongly toward the requirement of an independent basis of federal jurisdiction for all intervenors. Since a constitutional case is essentially a common nucleus of operative fact, supplemental jurisdiction over an added claim by a nonparty is possible.
When the basis for federal jurisdiction is diversity alone, this subsection applies, and it clearly eliminates any possibility of supplemental jurisdiction over intervenors:. Here the statute is clear. It specifically eliminates supplemental jurisdiction in diversity cases over both intervening defendants and intervening plaintiffs.
Interpleader is unique, and is structurally different from all of the other joinder devices. One of your authors likes to introduce interpleader by reading a newspaper story that appeared on the Associated Press wire several years ago:.
Cloud [Minnesota], she said. Doe, who returned for the money the day after he discovered it was missing, says the money belongs to him. He told the Bloomington police that he found it five days earlier in a paper bag near a parked car in north Minneapolis [on the day after the Super Bowl]. In addition, Excel Inns Limited Partnership, which owns the motel, and Excel Management Associates, which operates it, have filed a claim to the money on the theory that they may have more legal right to the cash than Roe.
The city of Bloomington, which has custody of the money, [will sue] to have the ownership question decided in court. What type of action will the city file?
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