Potter v. Rain Brook Feed Co., Inc.

• Decision Date: 13 January 1982
• Docket Number: No. Civil S-81-34 LKK.,Civil S-81-34 LKK.
• Citation: 530 F. Supp. 569
• Parties: Perry D. POTTER, Plaintiff, v. RAIN BROOK FEED COMPANY, INC., a California corporation, et al., Defendants. And Related Cross-Actions.
• Court: U.S. District Court — Eastern District of California

530 F. Supp. 569

Perry D. POTTER, Plaintiff, v. RAIN BROOK FEED COMPANY, INC., a California corporation, et al., Defendants And Related Cross-Actions.

No. Civil S-81-34 LKK.

United States District Court, E. D. California.

January 13, 1982.

Thomas I. McKnew, Jr., Richard L. Rosett, Los Angeles, Cal., for defendant Atchison, Topeka & Santa Fe Railway Co.

Leo M. O'Connor, Inc., A Professional Corp., Sacramento, Cal., for plaintiff.

Memering & DeMers, Sacramento, Cal., for defendants Rain Brook Feed Co., Inc. and Stockton Hay & Grain, Ltd.

ORDER

KARLTON, District Judge.

Plaintiff Potter brings this action to recover damages for personal injuries allegedly sustained while employed by the defendant and third-party plaintiff Atchison, Topeka & Santa Fe Railway Co. (Santa Fe). Potter suffered his injuries when a Santa Fe locomotive collided with a grain truck allegedly owned and operated by the defendants and third-party defendants Rain Brook Feed Co., Inc. and Stockton Hay & Grain, Ltd. (hereafter referred to collectively as Rain Brook). Potter seeks relief against Santa Fe under the Federal Employers' Liability Act, 45 U.S.C. § 51 et seq. (FELA), and against Rain Brook under state tort law. Plaintiff asserts subject matter jurisdiction under 28 U.S.C. § 1331(b). The matter is presently before the court on Rain Brook's motion to dismiss plaintiff's complaint for lack of subject matter jurisdiction. Before addressing the merits of Rain Brook's motion, a brief procedural history of this action is in order.

In his original and first amended complaint, Potter named Santa Fe and Rain Brook as parties defendant, alleging that his state law claims against Rain Brook fell within the court's pendent jurisdiction. Shortly after Potter brought suit, Santa Fe filed a third-party complaint against Rain Brook, seeking indemnification and recovery for property damage allegedly sustained in the collision between the locomotive and the grain truck. Rain Brook then moved to dismiss both the third-party complaint and Potter's complaint for lack of subject matter jurisdiction. Rain Brook premised its motion to dismiss the third-party property damage action on the absence of diversity of citizenship between itself and Santa Fe. In response, Santa Fe sought and obtained leave to amend its complaint to allege facts sufficient to establish jurisdiction under the federal diversity statute, 28 U.S.C. § 1332, and, on that basis, the motion to dismiss was denied. In support of its motion to dismiss Potter's complaint, Rain Brook maintained that Potter's failure to plead an independent basis of federal jurisdiction over his state law claim rendered Rain Brook a "pendent party" and therefore not within the court's subject matter jurisdiction under Ninth Circuit law. In opposition, Potter argued that Rain Brook's status as a third-party defendant subject to independent federal jurisdiction operated to confer "ancillary" jurisdiction over his original complaint under Fed.R. Civ.P. 14(a).¹ Because the plaintiff's complaint per force was filed prior to Santa Fe's third party complaint, the court refused to consider its existence as a retroactive basis for jurisdiction and, on that basis, dismissed plaintiff's action against Rain Brook without prejudice, holding that Ayala v. United States, 550 F.2d 1196 (9th Cir. 1977) precluded the exercise of jurisdiction over a "pendent party" not otherwise subject to federal jurisdiction. At the same time, Potter was granted leave to amend to allege the existence of the third-party complaint. By his second amended complaint, Potter has done so and again asserts that this court possesses power to adjudicate his state law claim against Rain Brook under its "ancillary" jurisdiction. Rain Brook disagrees and now moves to dismiss Potter's second amended complaint for lack of subject matter jurisdiction.

Given the absence of diversity of citizenship between Potter and Rain Brook, jurisdiction over plaintiff's state claim, if it exists at all, must be predicated on a theory of ancillary or pendent jurisdiction. Although the Supreme Court recently stated that it is not "necessary to determine ... whether there are any `principled' differences between pendent and ancillary jurisdiction; ..." Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365, 370 n.8, 98 S.Ct. 2396, 2401 n.8, 57 L.Ed.2d 274 (1978), quoting Aldinger v. Howard, 427 U.S. 1, 13, 96 S.Ct. 2413, 2419, 49 L.Ed.2d 276 (1976), the Ninth Circuit's rejection of "pendent party" jurisdiction requires a brief explanation of the distinctions traditionally drawn between these jurisdictional theories. Both doctrines involve "the same generic problem: under what circumstances may a federal court hear and decide a state-law claim arising between citizens of the same state?" Owen Equipment and Erection Co. v. Kroger, 437 U.S. at 370, 98 S.Ct. at 2401. Ancillary jurisdiction is most commonly exercised over cross-claims, counterclaims, and third-party claims—claims asserted "by a defending party hailed into court against his will, or by another person whose rights might be irretrievably lost unless he could assert them in an ongoing action in a federal court." Owen Equipment and Erection Co. v. Kroger, 437 U.S. at 376, 98 S.Ct. at 2404 (emphasis added). In the typical pendent jurisdiction context, on the other hand, a plaintiff seeks to have a federal court decide a state law claim which shares a "common nucleus of operative fact" with a federal question action. United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966). Courts have identified two distinct species of pendent jurisdiction. "Pendent claim" jurisdiction exists when a plaintiff raises parallel state and federal claims against the same defendant. So-called "pendent party" jurisdiction, in contrast, typically involves not only a state claim which is appended to the action that provides the anchoring source of federal jurisdiction, but requires for its resolution the joinder of an additional party over whom there is no independent basis of federal jurisdiction. See Ayala v. United States, 550 F.2d 1196, 1198 (9th Cir. 1977).

None of these jurisdictional theories comfortably embraces the procedural and jurisdictional alignment presented by this motion. Plaintiff does not assert his state law claim from a defensive posture, nor is the claim logically dependent upon the outcome of the federal question action. Rather, Potter's state law claim is logically separate and independent of his FELA claim and, therefore, must be distinguished from those claims over which ancillary jurisdiction is traditionally exercised. Nor can the jurisdictional question here be resolved by application of traditional pendent claim or pendent party theory. Although Rain Brook is in this lawsuit under an independent jurisdictional provision, Potter's state claim against it is not a "pendent claim," in the usual sense, since Rain Brook is not the same party against whom the federal claim is raised. Nor is Rain Brook, in the ordinary sense, a pendent party. Although clearly a pendent party for the purpose of its first motion to dismiss, Rain Brook's procedural stance in this lawsuit has changed. For purposes of the present motion, Rain Brook is no longer a party who would not be a party to this lawsuit but for plaintiff's nonfederal claim. Rain Brook is now a third party defendant subject to the court's jurisdiction under an independent jurisdictional predicate — the federal diversity statute, 28 U.S.C. § 1332 — based on the diversity of citizenship between Rain Brook and the third party plaintiff Santa Fe. Although not the party against whom plaintiff's anchoring federal claim is raised, Rain Brook is nevertheless implicated in this litigation in connection with a claim for which there is an independent, statutory basis of federal jurisdiction.

Viewed as such, the procedural and jurisdictional alignment of the parties to this action falls into (or perhaps bridges) the factual, and in the Ninth Circuit, the legal crevasse separating the discrete theories of pendent claim and pendent party jurisdiction. Given the Ninth Circuit's rejection of pendent party theory, the threshold question raised by the present motion is whether Rain Brook is to be viewed as a "pendent party" in relation to plaintiff's state law claim notwithstanding the procedural and jurisdictional alignment now properly before the court or, given the existence of an independent basis of jurisdiction over Rain Brook, whether plaintiff's state law claim may properly be viewed as a "pendent claim" and therefore within reach of this court's pendent jurisdiction. Stated differently: Does Ninth Circuit law permit a plaintiff to assert a state law claim against a party who, although not the party against whom plaintiff's anchoring federal claim is raised, is subject to federal jurisdiction under an independent, statutory jurisdictional predicate as a third party defendant? The question is complex and, indeed, appears to be a question for which Ninth Circuit precedent provides no answer.

In Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976), the Supreme Court identified two prerequisites of pendent party jurisdictional power:

Before it can be concluded that pendent party 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. Standing virtually alone among federal courts in its rejection of pendent party theory, the Ninth Circuit condemns pendent party jurisdiction not upon "ferreted congressional disinclination," but rather upon "a more fundamental constitutional grant of Article III.² Ayala v. United States, 550 F.2d 1196, 1199-1200 (9th Cir. 1977), cert. dismissed, 435 U.S. 982, 98 S.Ct. 1635, 56 L.Ed.2d 76 (1978). My discussion of the...