Boudreaux v. Puckett

• Decision Date: 14 February 1980
• Docket Number: No. 77-2913,77-2913
• Citation: 611 F.2d 1028
• Parties: Richard BOUDREAUX, Plaintiff-Appellant, v. Pat PUCKETT, d/b/a Pat Puckett Auto Sales et al., Defendants, Western Surety Co., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 1028

611 F.2d 1028

72 A.L.R.Fed. 183

Richard BOUDREAUX, Plaintiff-Appellant, v. Pat PUCKETT, d/b/a Pat Puckett Auto Sales et al., Defendants Western Surety Co., Defendant-Appellee.

No. 77-2913.

United States Court of Appeals Fifth Circuit.

Feb. 14, 1980.

Paula A. Perrone, New Orleans, La., for plaintiff-appellant.

Eugene R. Preaus, Eileen Shaver, New Orleans, La., for Western Surety Co.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before THORNBERRY, GEE, and HATCHETT, Circuit Judges.

THORNBERRY, Circuit Judge:

Richard Boudreaux appeals from the district court's dismissal of his civil action against Western Surety Company. Boudreaux alleges that he purchased an automobile on which the odometer was replaced with one that showed much less than the true mileage. Boudreaux brought suit for damages and penalties against the individual who sold him the car as well as against Western Surety. Defendant Western Surety was the surety on a bond in the amount of $5,000 which Boudreaux's vendor posted pursuant to the provisions of Louisiana Revised Statute 32:718(D). Boudreaux appeals from Judge Schwartz's decision to dismiss Western Surety from the suit by granting the surety's motion for summary judgment. We affirm the judgment insofar as it ruled that Boudreaux failed to state a claim under federal law. We hold further that the complaint states a claim under Louisiana law within the pendent jurisdiction of the district court. Therefore, the dismissal of the complaint as to Western Surety is reversed and the cause is remanded.

On July 26, 1976, Boudreaux purchased a 1974 Dodge Coronet from Philip Roman, d/b/a All State Motor Company and Pat Puckett, d/b/a Pat Puckett Auto Sales. Roman was in the business of selling used automobiles and was bonded by Western Surety in the amount of $5,000. The bonding requirement was a prerequisite for Roman to do business in Louisiana as a used car dealer. At the time of the sale, Roman disclosed on all pertinent documents that the odometer reading was 25,671 miles. The alleged actual odometer reading, unknown to Boudreaux, was 73,887 miles. Soon after the sale, the engine quit running and the car was considered virtually useless.

Appellant alleged that the odometer reading was willfully understated as an inducement for him to purchase the automobile. He also alleged that Roman and Puckett conspired to violate the Motor Vehicle Information and Cost Savings Act, 15 U.S.C. § 1981. By an amendment to his complaint, appellant alleged that Western Surety was liable to him to the extent of the $5,000 bond which it had posted in behalf of Roman, as required by La.R.S. 32:718(D). This statute provides that, as a condition precedent to dealing in automobiles, the bond must be posted in favor of the state Motor Vehicle Commissioner for the use and benefit of third parties injured under certain conditions specified in the statute. Section 718(D) provides in pertinent part as follows:

Such bond shall be payable to the commissioner and to his successors in office, for the use, benefit, and indemnity of any persons who shall suffer any loss as a result of any violation of the conditions hereinabove contained.

The conditions referred to in this statute are that the dealer shall:

. . . comply with the conditions of any written contract made by such dealer in connection with the sale or exchange of any motor vehicle and shall not violate any of the provisions of this Chapter (32:701 to 32:734) or any other law of Louisiana in the conduct of the business for which he is licensed.

Western's bond is alleged to have been in effect at all times relevant to this action.

The initial question is whether the claim against Western Surety should be dismissed for lack of jurisdiction. Any finding that this court possesses jurisdiction to hear this claim must be based on the recently emerging doctrine of pendent party jurisdiction. This is the case because while the suit against Roman is based on a violation of the Motor Vehicle Information and Cost Savings Act of 1972, 15 U.S.C. 1981, Boudreaux's claim against Western Surety is based on a Louisiana statutory bond provision. There is no independent basis for exercising jurisdiction over Western Surety. Therefore, we must determine whether Western Surety is a pendent party. ¹

The doctrine of pendent party jurisdiction entails bringing extra parties into a federal suit who could not otherwise be subjected to federal jurisdiction. The major Supreme Court pronouncement on pendent party jurisdiction is found in Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976). In Aldinger, the plaintiffs sought to couple their civil rights claim under 42 U.S.C. § 1983 against county officials with a state law claim against the county itself. Jurisdiction over the federal claim was based on 28 U.S.C. § 1343(3) and pendent jurisdiction was alleged to lie over the state law claims because there was no independent basis of jurisdiction over the county. The Supreme Court first distinguished Aldinger from its previous decision in United Mine Workers of America v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (recognizing pendent claim jurisdiction), stating that pendent claim jurisdiction is both factually and legally different from pendent party jurisdiction. Without making any "sweeping pronouncement" concerning the existence or non-existence of pendent party jurisdiction, the Supreme Court refused to assert jurisdiction over the county because of the fact situation presented in Aldinger. Justice Rehnquist emphasized that, while a civil rights action set out in § 1983 is included within the jurisdictional grant of 28 U.S.C. § 1343(3), Congress Expressly excluded counties from § 1983 liability. Therefore, the county could not be brought back within the power of the federal court as a pendent party.

The Supreme Court in Aldinger did not completely overrule the possibility of recognizing pendent party jurisdiction in certain fact situations. The Court noted that a particularly compelling situation would arise, for example, in the prosecution of tort claims against the United States under 28 U.S.C. § 1346 because only in a federal court could all of the claims be tried together. Other factors to consider were judicial economy and convenience. Justice Rehnquist concluded with the following observations:

If the new party sought to be joined is not otherwise subject to federal jurisdiction, there is a more serious obstacle to the exercise of pendent jurisdiction than if parties already before the court are required to litigate a state-law claim. Before it can be concluded that such jurisdiction exists, a federal court must satisfy itself not only that Art. III permits it, but that Congress in the statutes conferring jurisdiction has not expressly or by implication negated its existence.

427 U.S. at 18, 96 S.Ct. at 2422. We must consider these factors.

We must also examine this court's decision in Connecticut General Life Insurance Company v. Craton, 405 F.2d 41 (5th Cir. 1968). In Craton, this court apparently recognized the doctrine of pendent party jurisdiction. The case involved a suit by a union and its individual members against an employer and an insurance carrier (Connecticut General). The court obviously possessed jurisdiction over the employer based upon § 301 of the Labor Management Relations Act. Without deciding whether a suit against an insurance company that is not an employer is essentially a suit for the violation of a contract between an employer and a labor organization as required by § 301, citing Gibbs, this court stated that the federal district court's assertion of jurisdiction over Connecticut General was "supportable under the doctrine of pendent jurisdiction." 405 F.2d at 48. Judge Goldberg's opinion relied on the "common nucleus of operative fact" and considered other factors such as judicial time and energy as well as the "strong and practical policies undergirding the pendent jurisdiction doctrine."

The facts presented in the present case do not pose the strongest possible case for jurisdiction. While the facts do not present as compelling a situation as is the case when the federal claim can Only be brought in a federal court, it is not a case, as in Aldinger, where Congress has expressly or impliedly negated the existence of jurisdiction of a pendent claim and party. Considerations of judicial economy and convenience strongly support litigating the claim against Western Surety along with the federal claims against Roman and Puckett. Consistent with the factors mentioned in Aldinger, Article III of the United States Constitution permits assertion of jurisdiction over Western Surety. Also, the statutes Congress has enacted conferring jurisdiction have not expressly or by implication negated an assertion of jurisdiction over Western Surety.

An...