Opinion ID: 534892
Heading Depth: 2
Heading Rank: 3

Heading: District Court's Discretion to Decide Third-Party Claims

Text: 80 Having determined that the district court had jurisdiction of Hanson's third-party claims against Langan in the first instance, it is next necessary to consider whether the subsequent settlement of King Fisher's claim against Hanson deprived the court of jurisdiction of the ancillary claims. The district court held it did not lose its power to decide the third-party claims after the plaintiff's cause of action was settled. 717 F.Supp. at 729. Moreover, in light of the facts that Langan had made no claim of unfairness and the time already spent on the case, the trial court believed it did not abuse its discretion in retaining the third-party claims. Id. (citing Cenco, Inc. v. Seidman & Seidman, 686 F.2d 449 (7th Cir.) cert. denied, 459 U.S. 880, 103 S.Ct. 177, 74 L.Ed.2d 145 (1982); Transok Pipeline Co. v. Darks, 565 F.2d 1150 (10th Cir.1977) cert. denied, 435 U.S. 1006, 98 S.Ct. 1876, 56 L.Ed.2d 388 (1978)). 81 We agree with the district court, finding the weight of authority is that, if jurisdictional prerequisites are satisfied when the suit is begun, subsequent events will not work an ouster of jurisdiction. Dery v. Wyer, 265 F.2d 804, 808 (2d Cir.1959); see 3 Moore's Federal Practice p 14.26, at 14-113 (2d ed. 1989). But see Danner v. Himmelfarb, 858 F.2d 515, 523 (9th Cir.1988) (it is our practice to dismiss state law claims once the federal claim has been resolved). [A] rule that ancillary jurisdiction of a third-party claim terminates on a determination of the main claim [would] seriously impair the utility of the Rule, breed confusion and generate many sterile jurisdictional disputes. 265 F.2d at 809 (quoted in Moore's Federal Practice p 14.26, at 14-114). The principle applies as well when the main claim has been settled, as was the case here, or dismissed on its merits. See, e.g., Nishimatsu, 515 F.2d at 1204-05, 1204 n. 2; Pennsylvania R.R. Co. v. Erie Ave. Warehouse Co., 302 F.2d 843, 846 (3d Cir.1962). As the Second Circuit observed in Dery, to hold otherwise would have the undesirable result of discouraging settlements. 265 F.2d at 808. 82 Because ancillary jurisdiction is a doctrine of discretion, Danner, 858 F.2d at 523; cf. United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966), it is axiomatic that it was within the district court's discretion to retain or dismiss Hanson's third-party claims after the settlement of the main claims. The factors relevant to that decision have been summarized elsewhere. See, e.g., Dery, 265 F.2d at 808-09; Twin Falls, 806 F.2d at 868; C. Wright & A. Miller, Sec. 1444, at 234-37 (1971), 97-98 nn. 1-2 (1989 Supp.). We find that the interests of judicial economy, convenience, and fairness, Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139, were served here by the district court's exercise of jurisdiction. We note also Hanson's state claims may have been time-barred if the district court had dismissed them following settlement of the principal claims. Under these circumstances, we hold the district court was within its discretion in hearing and deciding the contested third-party claim. 83 Because we find that the district court properly exercised jurisdiction of the contested claim, we deny the relief requested under Fed.R.Civ.P. 60(b)(4). The judgment of the district court is AFFIRMED.