Ayala v. U.S., 76-1899

Citation550 F.2d 1196
Decision Date28 March 1977
Docket NumberNo. 76-1899,76-1899
PartiesPedro AYALA et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. NATIONAL AMERICAN INSURANCE COMPANY OF OMAHA et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. ALLSTATE INSURANCE COMPANY et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. PEOPLE OF the STATE OF CALIFORNIA, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. SENTRY INSURANCE COMPANY, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. TRANSAMERICA INSURANCE GROUP, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. The AMERICAN STAR INSURANCE COMPANY et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. SEQUOIA INSURANCE COMPANY et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, Plaintiff-Appellant, v. UNITED STATES of America et al., Defendants-Appellees. VANGUARD INSURANCE COMPANY et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees. AMERICAN HOME ASSURANCE CO. et al., Plaintiffs-Appellants, v. UNITED STATES of America et al., Defendants-Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (9th Circuit)

Gerald J. Adler, argued, Crow, Lytle & Gilwee, Lloyd Hinkelman, argued, Kronick, Moskovits, Tiedemann & Girard, Sacramento, Cal., for plaintiffs-appellants.

James Brown, argued, Sacramento, Cal., for defendants-appellees.

John L. Rogers, III, argued, Hopkins, Sutter, Mulroy, Davis & Cromartie, Chicago, Ill., for amicus to support appellees.

On Appeal from the United States District Court for the Eastern District of California.

Before WRIGHT, KILKENNY, and CHOY, Circuit Judges.

CHOY, Circuit Judge:

The State of California, 28 individuals, and 45 insurance companies appeal from the district court's dismissal of claims against appellee Pullman, Inc. for lack of subject matter jurisdiction. We affirm in part, vacate in part, and remand for further proceedings.

Background and Proceedings Below

This is a joint appeal in 11 of over 100 actions consolidated for pretrial purposes in the United States District Court for the Eastern District of California by order of the Judicial Panel on Multidistrict Litigation, MDL No. 207. All of these actions for recovery of damages arise out of the April 28, 1973 explosion of bomb-laden boxcars at a Southern Pacific Transportation Company (Southern Pacific) railway yard in Roseville, California. Both the boxcars and tritonal-filled bombs were the property of the United States and were being hauled by Southern Pacific from Hawthorne, Nevada to Port Chicago, California under a contract with the Department of the Navy.

Appellants' jurisdictional basis for suit against the United States is the Federal Tort Claims Act (FTCA), 28 U.S.C. § 2671 et seq., and 28 U.S.C. § 1346(b). Several appellants sought to name the manufacturer of the boxcars, Pullman, Inc. (Pullman), as an additional defendant. Some of these appellants based jurisdiction against Pullman on diversity of citizenship, 28 U.S.C. § 1332. Others, however, unable to meet the requirements of the diversity statute either because they were nondiverse as to Pullman or because their claims were under the $10,000 jurisdictional limit, or both, sought to base jurisdiction against Pullman on theories of "pendent party" jurisdiction.

The district court ruled that this circuit did not recognize pendent party jurisdiction, and it dismissed the claims against Pullman under Federal Rule of Civil Procedure 12(b)(1). Subsequent to Pullman's dismissal, appellants sought leave to amend their complaints to add new jurisdictional grounds against it. Prior to the date set for closing briefs on the matter, however, appellants filed their notice of appeal to this court. The district court reasoned that it was thus divested of jurisdiction over the appealing plaintiffs, "dismissed" their motions to file amendments, and directed appellants to address prayers for leave to amend to this court. Appellate jurisdiction rests on Fed.R.Civ.P. 54(b) and 28 U.S.C. § 1291.

Appellants seek recognition of the pendent party jurisdiction doctrine in this circuit. Arguing for the continued rejection of pendent party theory are Pullman as appellee and Amsted Industries as amicus curiae. 1

Discussion
A. Pendent Jurisdiction Theory

In the simple "pendent claim " context, a plaintiff seeks to have a federal court hear a state claim (the pendent claim) which shares a "common nucleus of operative fact" with a federal question action (the anchoring claim) between the same parties. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). The court has subject matter jurisdiction under either the general federal question grant of 28 U.S.C. § 1331, or a more specific grant, such as that of 28 U.S.C. § 1346(b) involved here. 2

The instant case presents the "pendent party " variant which, in addition to involving a state claim which is appended to the action that provides the anchoring source of federal jurisdiction, requires for its resolution the joinder of an ancillary party. Two distinct theories are offered here by appellants for the extension of the pendent claim theory to provide pendent party jurisdiction over their claims against Pullman. The principal theory involves the joinder of Pullman as a pendent party-defendant allegedly jointly and severally liable with the United States. Under this theory, each plaintiff's state claim is said to be pendent to that plaintiff's own FTCA federal question action against the United States.

Appellants also offer a second theory, however, under which they themselves are regarded as pendent party-plaintiffs. Appellants reason that, if other plaintiffs can satisfy diversity jurisdiction as to Pullman, plaintiffs who fail to meet diversity requirements can append their claims and themselves to those other diversity actions. 3 This would allow nondiverse plaintiffs to sue Pullman, who would already be in federal court as a defendant in at least one diversity action. Under either of appellants' theories, the ultimate result is the resolution of all claims in one federal trial.

B. Decisional Precedent

This circuit has held that

in order for a claim against other parties to be joined properly with a claim against the United States under the Federal Tort Claims Act, an independent ground of jurisdiction must exist, and that the theory of pendent jurisdiction is not sufficient.

Williams v. United States, 405 F.2d 951, 954 (9th Cir. 1969). Perhaps our broadest rejection of pendent party jurisdiction is found in Hymer v. Chai, 407 F.2d 136 (9th Cir. 1969), decided a month after Williams and without citation to it. 4 While recognizing that (p)endent jurisdiction was devised to avoid the waste and inefficiency resulting from fragmenting a single action and dividing the pieces into separate proceedings before the state and federal courts and to encourage a party who had a claim presenting a substantial federal question, mixed with a nonfederal claim, to take his bundle of claims to the federal court(,)

id. at 137 (footnote omitted), we nevertheless held that

(j)oinder of claims, not joinder of parties, is the object of the doctrine. It was not designed to permit a party without a federally cognizable claim to invoke federal jurisdiction by joining a different party plaintiff asserting an independent federal claim growing out of the same operative facts.

Id. at 137.

In two cases subsequent to Williams and Hymer, we again rejected pendent party jurisdictional theory, and each time our decision was affirmed by the Supreme Court on an alternative ground. Aldinger v. Howard, 513 F.2d 1257 (9th Cir. 1975), aff'd, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976); Moor v. Madigan, 458 F.2d 1217 (9th Cir. 1972) (expressly reaffirming the broad rule of Hymer ), aff'd sub nom. Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973).

Appellants argue, however, that the Supreme Court's mode of analysis in affirming Aldinger encourages re-examination of Williams and Hymer. The Court briefly stated its approach:

In short, as against a plaintiff's claim of additional power over a "pendent party," the reach of the statute conferring jurisdiction should be construed in light of the scope of the cause of action as to which federal judicial power has been extended by Congress.

Resolution of a claim of pendent party jurisdiction, therefore, calls for careful attention to the relevant statutory language.

427 U.S. at 17, 96 S.Ct. at 2421 (emphasis in original). It found a "congressional disinclination" to extend pendent party jurisdiction over a political subdivision under 42 U.S.C. § 1983 and its jurisdictional counterpart, 28 U.S.C. § 1343(3). The Court reserved opinion with respect to other parties and other jurisdictional grants:

There are, of course, many variations in the language which Congress has employed to confer jurisdiction upon the federal courts, and we decide here only the issue of so-called "pendent party" jurisdiction with respect to a claim brought under § 1343(3) and § 1983. Other statutory grants and other alignments of parties and claims might call for a different result.

427 U.S. at 18, 96 S.Ct. at 2422.

Appellants contend that the Williams court failed to undertake the Aldinger "methodology" of careful statutory analysis, arguing that our conclusion in Williams that 28 U.S.C. § 1346 "establishes jurisdiction only over suits against the United States (, and that) it does not permit the joinder of parties," 405 F.2d at 953 (emphasis in original), was without reasoned justification. They assert that Aldinger calls for more than congressional silence before a court can properly conclude that pendent party jurisdiction...

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