Skinner v. American Oil Co.

• Decision Date: 11 May 1979
• Docket Number: Civ. No. 77-256-1.
• Parties: Terrence SKINNER, d/b/a Skinner Construction Co., Plaintiff, v. AMERICAN OIL CO., a/k/a Amoco Oil Co., et al., Defendants.
• Court: U.S. District Court — Southern District of Iowa

470 F. Supp. 229

Terrence SKINNER, d/b/a Skinner Construction Co., Plaintiff, v. AMERICAN OIL CO., a/k/a Amoco Oil Co., et al., Defendants.

Civ. No. 77-256-1.

United States District Court, S. D. Iowa, C. D.

May 11, 1979.

Ross H. Sidney, Henry A. Harmon and Mark J. Wiedenfeld, Grefe & Sidney, Des Moines, Iowa, Mike Travis, Bedford, Iowa, for plaintiff.

L. R. Voigts of Nyemaster, Goode, McLaughlin, Emery & O'Brien, Des Moines, Iowa, for defendant American Oil Co.

Eugene Davis and Robert C. Rouwenhorst, Des Moines, Iowa, for defendant Hertz Farm Management, Inc.

MEMORANDUM OPINION AND ORDER

STUART, Chief Judge.

The above-captioned case was commenced on August 10, 1977, in Polk County District Court, seeking to recover the value of a bulldozer destroyed when it struck one of defendant American Oil Co.'s Amoco pipelines and a rupture and fire ensued. Defendant Amoco filed a petition for removal on August 30, 1977, pursuant to 28 U.S.C. §§ 1332, 1441, and 1446, alleging diversity of citizenship. Plaintiff is a resident of the State of Iowa, while defendant Amoco is a Maryland corporation with its principal place of business in Illinois. Defendant's answer and counterclaim were subsequently filed on September 12.

On July 17, 1978, plaintiff moved to amend its complaint, joining an additional party defendant, Hertz Farm Management, Inc. Hertz. Leave was granted on July 28, 1978. Plaintiff alleges that defendant Hertz managed the property under which defendant Amoco's pipeline was laid and that Hertz negligently failed to apprise plaintiff of the location, depth or state of maintenance of the pipeline before it undertook the landscaping, bulldozing and cultivating work for which it had been retained, resulting in the aforementioned rupture and explosion. The instant motions before the Court arise out of Hertz's joinder in this action.

Hertz filed its motion to dismiss for lack of jurisdiction on August 18, 1978. It contends that plaintiff's petition shows on its face that the requisite diversity is not present to convey jurisdiction since both plaintiff and Hertz are citizens of the State of Iowa. Plaintiff filed a resistance on August 28, 1978, claiming this is an appropriate case for the exercise of this Court's pendent jurisdiction over Hertz. Alternatively, plaintiff seeks a remand of the entire matter to state court so that it can be resolved in one proceeding. Hertz's resistance to plaintiff's motion to remand followed on October 10, 1978, and plaintiff's motion to strike Hertz's resistance was filed on October 17, 1978. Defendant Amoco has not chosen to take part in any of the pending motions.

This case presents difficult questions concerning pendent party jurisdiction and this Court's power to hear a state claim against a nondiverse defendant within the confines of a simple diversity action, concepts which have aroused considerable judicial controversy. After careful consideration, the Court concludes that recent Supreme Court pronouncements dictate a conservative approach discouraging the exercise of pendent jurisdiction in cases such as this despite the loss in judicial economy, and will, therefore, grant defendant Hertz's motion to dismiss.

The doctrine of pendent jurisdiction, as initially conceived, was applied only in cases in which a federal question formed the basis of the court's jurisdiction. Under the pendent claim approach, a plaintiff may seek to have a federal court hear a state claim which shares a "common nucleus of operative fact" with a federal question action between the same parties. United Mine Workers v. Gibbs, 383 U.S. 715, 727, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).

The exercise of pendent jurisdiction also calls into play certain discretionary considerations. Having determined the power exists to hear a pendent matter, the presiding court must then consider such factors as (1) judicial economy, (2) fairness to the litigants, (3) convenience to the parties and witnesses, and (4) the existence of unified legal theories of relief. Acceptance of pendent jurisdiction is generally deemed inappropriate where the federal court would be called upon to resolve difficult questions of state law for which there is little or no state authority or where the effect of combining the several claims and defenses of the parties would unduly complicate the case for the jury and the Court. United Mine Workers v. Gibbs, supra; Moor v. County of Alameda, 411 U.S. 693, 712, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973).

Although pendent claim jurisdiction is the most widely recognized and frequently used form of pendent jurisdiction, a number of courts have also exercised pendent jurisdiction over parties who fail to satisfy all the applicable jurisdictional requirements in a given case. See Jacobsen v. Atlantic City Hospital, 392 F.2d 149 (3rd Cir. 1968); Stone v. Stone, 405 F.2d 94 (4th Cir. 1968) (Jurisdictional amount had not been met); Hatridge v. Aetna Casualty & Surety Co., 415 F.2d 809 (8th Cir. 1969). This latest variant of the pendent jurisdiction doctrine is known as "pendent party" jurisdiction and may be distinguished from pendent claim jurisdiction in that it requires the joinder of an ancillary party for its resolution, in addition to involving a state claim appended to the action premised on an independent source of federal jurisdiction.¹

While early expansion of the pendent party jurisdiction concept was primarily limited to cases where the pendent party, though diverse, could not meet the jurisdictional amount requirement, several courts proceeded to take what they viewed as the next logical step: extending pendent party jurisdiction to encompass a nondiverse defendant. See Campbell v. Triangle Corp., 336 F.Supp. 1002 (E.D.Pa.1972); Wittersheim v. General Transportation Services, Inc., 378 F.Supp. 762 (E.D.Va.1974); Rieser v. District of Columbia, 183 U.S.App.D.C. 375, 563 F.2d 462 (1977), vacated as to jurisdictional holding and aff'd in part on rehearing, 188 U.S.App.D.C. 384, 580 F.2d 647 (1978).

The Supreme Court, however, has refused to expressly grant this version of pendent party jurisdiction its imprimatur and recent holdings may imply a rejection of the doctrine in favor of strict adherence to the principle of complete diversity. In Moor v. County of Alameda, 411 U.S. 693, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973), the Supreme Court assumed arguendo that pendent party jurisdiction was proper, noting that most circuit courts had approved its exercise while only one had disapproved. It went on to hold, however, that the district court's refusal to exercise pendent party jurisdiction over the plaintiff's claim against the defendant county in that case was not an abuse of discretion. (The Court also held that diversity jurisdiction did not exist since under the applicable state law the county was not deemed a "citizen" of the state and that the county was not a "person" subject to suit under 28 U.S.C. § 1343(3) and 42 U.S.C. § 1983.)

In Aldinger v. Howard, 427 U.S. 1, 2, 96 S.Ct. 2413, 2415, 49 L.Ed.2d 276 (1976), the Court again addressed itself to "the `subtle and complex question with far-reaching implications,' alluded to but not answered in Moor v. County of Alameda and Philbrook v. Glodgett citations omitted: whether the doctrine of pendent jurisdiction extends to confer jurisdiction over a party as to whom no independent basis of federal jurisdiction exists." The case again involved a civil rights suit under §§ 1343(3) and 1983 against a county and its officials, with the plaintiff arguing the court had pendent party jurisdiction over the county. The Supreme Court devised a statutory interpretation-based test to be used in assessing similar jurisdictional arguments and concluded that the exercise of pendent jurisdiction was improper in that case.

Although the Court's holding was expressly limited to § 1983 suits, the Court did generally observe that:

if the new party sought to be impleaded is not otherwise subject to federal jurisdiction, there is a more serious obstacle to the exercise of pendent jurisdiction than if the 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.

Aldinger v. Howard, supra, at 18, 96 S.Ct. at 2422. Thus, it is clear that beyond making the constitutionally minimum finding that the federal and nonfederal claims asserted meet the Gibbs test of "arising out of a common nucleus of operative fact," the Court must also examine the posture in which the nonfederal claim is asserted and the specific underlying jurisdictional statute, to determine whether the exercise of jurisdiction over that nonfederal claim has been congressionally negated, either expressly or by implication. See also Fawvor v. Texaco, Inc., 546 F.2d 636 (5th Cir. 1977); Aldamuy v. Pirro, 436 F.Supp. 1005 (N.D.N. Y.1977); Long Prarie Packing Co. v. Midwest Emery Freight System, 429 F.Supp. 201 (D.Mass.1977); Kack v. United States, 570 F.2d 754, 757, n. 4 (8th Cir. 1978). But see Pearce v. United States, 450 F.Supp. 613 (D.Kansas 1978) (in action against United States under Federal Tort Claims Act, court exercised pendent party jurisdiction over private hospital as to which no independent basis of jurisdiction existed).

The most recent United States Supreme Court discussion of pendent party jurisdiction came in the case of Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978), where the Court held that pendent party jurisdiction did not extend to authorize hearing a plaintiff's state law tort claims against a nondiverse third-party defendant. Following the Aldinger rationale, the Court focused upon 28 U.S.C. § 1332(a)(1), the general diversity jurisdiction statute, and reaffirmed the...