Opinion ID: 2672933
Heading Depth: 1
Heading Rank: 2

Heading: Geisler Unit Claims

Text: As a court of limited jurisdiction, we must first satisfy ourselves, independent of the district court’s determination, that subject-matter jurisdiction exists over the parties’ claims related to the Geisler Unit. See Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); Silver Star Enters., Inc. v. M/V Saramacca, 19 F.3d 1008, 1013 n.6 (5th Cir. 1994). As proponents of jurisdiction, Chesapeake and Harleton carry the burden of establishing jurisdiction. See Kokkonen, 511 U.S. at 377. Here, only two potential sources of jurisdiction exist: § 1332 (diversity) and § 1367 (supplemental). As the parties correctly acknowledge, diversity jurisdiction existed over the suit prior to Harleton’s intervention; 4 however, we must consider whether Harleton’s intervention destroyed diversity such that the district court lacked jurisdiction over this matter. We begin by determining whether Harleton is properly aligned as a defendant-intervenor (as the district court concluded) or a plaintiff-intervenor. Our generally accepted test for alignment places the parties with the same 3 Harleton also asserted an alternative claim that we do not reach due to our jurisdictional ruling. 4 Specifically, Chesapeake was a citizen of Oklahoma and Freeman, Freeman Capital, and Buffco were citizens of Texas and the amount in controversy exceeded $75,000. 5 Case: 13-40458 Document: 00512621558 Page: 6 Date Filed: 05/07/2014 No. 13-40458 “ultimate interests” in the litigation on the same side. Griffin v. Lee, 621 F.3d 380, 388 (5th Cir. 2010). To that end, we must “look beyond the pleadings, and arrange the parties according to their sides in the dispute” to ensure that the parties have a “collision of interest[s]” over the “principal purpose of the suit” and the “primary and controlling matter in dispute.” City of Indianapolis v. Chase Nat’l Bank of City of N.Y., 314 U.S. 63, 69 (1941) (citation and internal quotation marks omitted); see also Griffin, 621 F.3d at 388. Here, the principal purpose of the suit and the primary and controlling matter in dispute suggest that Harleton is a plaintiff. The district court concluded that Harleton was a defendant after noting that “Harleton and Chesapeake could not be classified as sharing the same interest in the suit because both are openly competing to capture the same pot of money.” However, the conclusion that Chesapeake and Harleton were adverse in seeking to recover the “same pot of money” belies the fact that both parties only wanted to recover money from Buffco and Freeman to ensure that Harleton received payment and Chesapeake received Harleton’s interest in the Geisler Unit. Whether this was done directly by Buffco and Freeman paying Harleton who would then convey its interest to Chesapeake or by refunding part of Chesapeake’s payment such that Chesapeake could then purchase Harleton’s interest in practicality did not matter to Chesapeake and Harleton. Harleton’s proper alignment as a plaintiff-intervenor is further illustrated by the fact that the summary judgment order awarded relief to both Harleton and Chesapeake, and both Harleton and Chesapeake are essentially aligned on appeal in seeking affirmance of the order. 5 Further, Harleton 5 Indeed, the district court’s award of summary judgment relief against Freeman and Buffco in favor of Harleton renders unavailing Harleton’s argument that it should be aligned as a defendant because its claims against Freeman and Buffco are merely “collateral to the principal dispute—the enforceability of the contract.” Harleton’s claims against Freeman and Buffco cannot be merely collateral for purposes of determining jurisdiction when they 6 Case: 13-40458 Document: 00512621558 Page: 7 Date Filed: 05/07/2014 No. 13-40458 affirmatively seeks to be aligned with Chesapeake in certain circumstances, such as when it argues that its unjust enrichment claim is timely because its claim can relate back to the timely unjust enrichment claim filed by Chesapeake. Finally, while Harleton brought a claim against Chesapeake, 6 Buffco, and Freeman, no party has brought a claim against Harleton, and Harleton has no potential for liability. Such a lack of potential for liability against a party suggests that the party should be aligned as a plaintiff. See 16 JAMES WM. MOORE ET AL., MOORE’S FEDERAL PRACTICE § 106.46 (3d ed. 2013) (“The intervenor must be potentially liable to the plaintiff on the primary claim in order to be treated as a defendant to whom supplemental jurisdiction may apply under Section 1367(b). An intervening plaintiff within the subsection is a party who voluntarily chooses to intervene in an ongoing federal action to assert its own affirmative claims.”). Indeed, Harleton intervened to seek affirmative relief, not to protect its interests as a defendant. Therefore, based on the nature of Harleton’s claim, it is proper to align it with Chesapeake as a plaintiff-intervenor. Having determined that Harleton should have been aligned as a plaintiff-intervenor, we are bound to conclude that the district court lacked are the principal source of relief for Harleton under the summary judgment order. See Indianapolis, 314 U.S. at 69 (observing that in aligning the parties, courts must look to the “realities of the record” and “look beyond the pleadings and arrange the parties according to their sides in the dispute”). 6 The fact that Harleton filed a claim against Chesapeake does not mean that the parties’ interests were not overall aligned vis-à-vis Freeman and Buffco. For instance, in Griffin, an attorney seeking to recover fees for his representation of a beneficiary through a lien on the beneficiary’s trust was properly aligned with the beneficiary as a plaintiffintervenor as both parties sought recovery from the trust. See Griffin, 621 F.3d at 383, 388. This alignment was appropriate despite the fact that the attorney also sought relief from the beneficiary. See id.; see also Dev. Fin. Corp. v. Alpha Hous. & Health Care, Inc., 54 F.3d 156, 159-60 (3d Cir. 1995) (although the interests of the original plaintiff and intervenor were “nominally” in conflict, the intervenor was still best aligned as a plaintiff when the “actual adversity of interest” pitted the intervenor against the original defendants). 7 Case: 13-40458 Document: 00512621558 Page: 8 Date Filed: 05/07/2014 No. 13-40458 diversity jurisdiction over the Geisler Unit claims. First, original jurisdiction under § 1332 was destroyed because the parties were no longer diverse— specifically, Harleton (plaintiff) and Buffco and Freeman (defendants) are all citizens of Texas. See Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 553 (2005) (“In a case with multiple plaintiffs and multiple defendants, the presence in the action of a single plaintiff from the same State as a single defendant deprives the district court of original diversity jurisdiction over the entire action.”). Second, § 1367(a)’s supplemental subject-matter jurisdiction provision does not afford jurisdiction over the Geisler Unit claims because Harleton’s participation as a plaintiff-intervenor would be inconsistent with the requirements of § 1332. See § 1367(b); see also Griffin, 621 F.3d at 386–87 (“[W]hile Congress codified the concepts of pendent and ancillary jurisdiction in § 1367(a), it apparently chose to circumscribe such jurisdiction in § 1367(b) with respect to plaintiff intervenors.”). Therefore, because there was no subject-matter jurisdiction over the parties’ Geisler Unit claims following Harleton’s intervention, we must vacate the grant of summary judgment with respect to the Geisler Unit claims. We remand these claims to allow the district court to consider in the first instance whether Harleton is an indispensable party such that dismissal of the entire action concerning the Geisler Unit is required. See Brown v. Pac. Life Ins. Co., 462 F.3d 384, 393–94 (5th Cir. 2006) (“If a person who qualifies under Rule 19(a) cannot be made a party because, for example, joinder would destroy subject-matter jurisdiction, a federal court must determine whether that person is ‘indispensable.’”).