Opinion ID: 294888
Heading Depth: 1
Heading Rank: 1

Heading: neifeld's appeal

Text: 6 In considering the issue raised by Neifeld in his appeal we must first answer the threshold question as to what body of law this court should look in order to ascertain the applicable rule. The issue raised by Neifeld is whether the joinder of a permissive counterclaim with the defenses of lack of jurisdiction over the person, lack of venue, insufficiency of process and insufficiency of service of process (jurisdictional defenses), is a waiver of these defenses where the defendant later withdraws the counterclaim without leave of court. 7 In Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965), the Supreme Court, confronted with a case where the applicable federal rule of civil procedure was in direct collision with the procedural rule of the state where the district court was sitting, held that if a federal rule of civil procedure (Rule 4(d) (1)) governed a matter of practice or pleading in federal courts, then the rule must be applied even if application of a state rule would require a different result. As will appear at a later point we have concluded that although the Federal Rules of Civil Procedure do not expressly cover the situation at bar, they do so implicitly. Rules 12(b) and (h) manifest an intent to occupy the field with respect to questions relating to the waiver of jurisdictional defenses by a defendant. The policy behind Rule 12(b) — avoidance of the necessity for making a special appearance — is no less applicable because the defendant has asserted a permissive counterclaim. 8 Moreover, even if the Federal Civil Rules did not implicitly cover the instant case, we would not be obliged to follow Pennsylvania procedure. Hanna v. Plumer indicates that the outcome-determination test enunciated in Guaranty Trust Co. of New York v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945), must be read with reference to the twin aims of the principle of Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938): discouragement of forum-shopping and avoidance of inequitable administration of the laws. 380 U.S. at 468, 85 S.Ct. at 1142. 9 While it is true that the application of Pennsylvania procedural rules would alter the outcome of the litigation, the difference between the federal rule and the Pennsylvania Rule would be of scant, if any, relevance to Steinberg's decision to litigate in the state court or to remove to the federal court. 380 U.S. at 469, 85 S.Ct. at 1143. Similar to the plaintiff in Hanna, Steinberg, in choosing his forum, was not presented with a situation where application of the state rule would wholly bar recovery; rather adherence to the state rule would have resulted only in altering the way in which Steinberg would have raised his jurisdictional defenses. 380 U.S. at 469, 85 S.Ct. at 1143. Instead of asserting all the defenses in his answer he would have been required to raise the defense of lack of personal jurisdiction by preliminary objection. See 12 P.S. App. R.C.P. 1017(b) (1), 1032; 1 Goodrich & Amram, Standard Pennsylvania Practice § 1017(b)-3, at 70-73 and § 1032-2, at 216-17 (1960); C. E. Williams Co. v. Henry B. Pancoast Co., 412 Pa. 166, 169-170, 194 A.2d 189, 190-191 (1963). Therefore, we do not think that application of a federal rule dealing with waiver of jurisdictional defenses will encourage forum-shopping. Furthermore, we cannot conclude that our decision will alter the mode of enforcement of state-created rights in a fashion sufficiently `substantial' to raise the sort of equal protection problems to which the Erie opinion alluded. See and compare Hanna v. Plumer, supra, at 469, 85 S.Ct. at 1143. 10 Since we have determined that federal law governs the resolution of the issue raised by Neifeld's appeal, we will now examine the difficult problems presented. Neifeld argues that the filing of the permissive 6 counterclaim by Steinberg constituted a submission by him to the jurisdiction and venue of the District Court. Steinberg rebuts this argument by contending that a syllogistic reading of Rules 15(a) and (c) dictates that a counterclaim was not before the court ab initio since Rule 15(c) states that an amended pleading relates back to the date of the original pleading. 7 We agree with the conclusion sought by Steinberg and hold that the assertion of a permissive counterclaim in the same pleading in which a defendant raises defenses of lack of jurisdiction over the person, lack of venue, insufficiency of process and inadequate service of process does not constitute a waiver of these defenses where the defendant later validly withdraws the counterclaim without leave of court. 11 Want of personal jurisdiction and lack of venue can be waived by consent or conduct of the defendant. Hoffman v. Blaski, 363 U.S. 335, 343, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960); 1A W. Barron & A. Holtzoff, Federal Practice and Procedure With Forms § 370, at 509-10 (rules ed. C. Wright 1960). Prior to the adoption of the Federal Rules of Civil Procedure it was also clear that the filing of a counterclaim by a defendant prevented that defendant from successfully objecting to the plaintiff's claim on the basis of lack of personal jurisdiction or venue. In Merchants Heat and Light Co. v. J. B. Clow & Sons, 204 U.S. 286, 287, 27 S.Ct. 285, 51 L.Ed. 488 (1907), one of the questions presented to the Supreme Court was whether the defendant submitted to the jurisdiction of the court by pleading a set-off and counterclaim. The Court held that by setting up its counterclaim the defendant became a plaintiff in its turn, invoked the jurisdiction of the court in the same action, and, by invoking, submitted to it. Id. at 289, 27 S.Ct. at 286. See, also, American Mills Co. v. American Surety Co. of New York, 260 U.S. 360, 43 S.Ct. 149, 67 L.Ed. 306 (1922). The question remaining is whether this procedural rule enunciated in Merchants Heat and Light Co. was changed by the Federal Rules of Civil Procedure. 12 Rule 12(b) states in part: Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion:    (2) lack of jurisdiction over the person, (3) improper venue, (4) insufficiency of process, (5) insufficiency of service of process    No defense or objection is waived by being joined with one or more other defenses or objections in a responsive pleading or motion.    (Emphasis added.) While Rule 12(b) allows a defendant to answer to the merits in the same pleading in which he raises a jurisdictional defense without waiving the jurisdictional defense, it does not specifically authorize a defendant to couple a counterclaim with a jurisdictional defense without waiving the jurisdictional defense. Although at least two courts interpreted the quoted rule to mean that a counterclaim refers back to [e]very defense and that a counterclaim is a defense or objection which may be asserted with other defenses or objections without waiving them (Keil Lock Co. v. Earle Hardware Mfg. Co., 16 F.R.D. 388 (S.D. N.Y.1954); 8 Sadler v. Pennsylvania Ref. Co., 33 F.Supp. 414 (W.D.S.C.1940)), a close analysis of the language demonstrates that these courts were in error. It seems reasonably clear that counterclaim refers back to claim for relief in any pleading, rather than to [e]very defense. The phrase whether a claim, counterclaim, cross-claim or third-party claim is all-inclusive and this means that the foregoing phrase must refer back to claim for relief since filing a claim, counterclaim, cross-claim, or third-party claim are the only methods of stating a claim for relief. Accord: Hasse v. American Photograph Corp., 299 F.2d 666, 668-669 (10 Cir. 1962); Globig v. Greene & Gust Co., 193 F.Supp. 544, 549 (E.D.Wis.1961); Beaunit Mills, Inc. v. Industrias Reunidas F. Matarazzo, S. A., 23 F.R.D. 654, 656 (S.D.N.Y.1959). Also see 1A W. Barron & A. Holtzoff, Federal Practice and Procedure With Forms § 370.2, at 535-36 (rules ed. C. Wright 1960). Moreover, Rule 8(c) expressly distinguishes between a defense and a counterclaim. 9 Thus, there is nothing in the language of Rule 12(b) which specifically shields the defenses of lack of personal jurisdiction and improper venue from waiver when these defenses are joined with a counterclaim. 13 Although Rule 12(b) does not specifically shield these jurisdictional defenses, the Rule implicitly authorizes a defendant to join these defenses with a counterclaim without waiving these defenses. Rule 12(b) provides a defendant with the option of raising jurisdictional defenses by motion or by answer. If we were to take the position that a defendant, by raising his jurisdictional defenses in the same pleading in which he asserted a counterclaim, waived his jurisdictional defenses, we would in effect be engrafting a judicial exception to Rule 12(b). We would be requiring a defendant to raise his jurisdictional defenses by motion when he intends to file a counterclaim in his responsive pleading. 10 This requirement would be contrary to the option provided to the defendant in Rule 12(b). 11 14 Furthermore, the policy behind Rule 12(b) militates against our finding a waiver where a defendant files a counterclaim in the same pleading in which he asserts jurisdictional defenses. The purpose behind Rule 12(b) is to avoid the delay occasioned by successive motions and pleadings and to reverse the prior practice of asserting jurisdictional defenses by special appearance. 5 C. Wright and A. Miller, Federal Practice and Procedure: Civil § 1362, at 647-48 (1969). Judge Maris clearly articulated the changes which Rule 12(b) made in his seminal opinion in Orange Theatre Corp. v. Rayherstz Amusement Corp., 139 F.2d 871 (3 Cir.), cert. denied 322 U.S. 740, 64 S.Ct. 1057, 88 L.Ed. 1573 (1944); Rule 12 has abolished for the federal courts the age-old distinction between general and special appearances. A defendant need no longer appear specially to attack the court's jurisdiction over him. He is no longer required at the door of the federal courthouse to intone that ancient abracadabra of the law, de bene esse, in order by its magic power to enable himself to remain outside even while he steps within. He may now enter openly in full confidence that he will not thereby be giving up any keys to the courthouse door which he possessed before he came in. Id. at 874. 15 If we were to find a waiver in a case, such as the instant one, we would, in effect, be requiring a defendant to make what amounts to a special appearance for we would be requiring him to raise his jurisdictional defenses before answering to the merits. This result would be insupportable unless there were an important countervailing policy militating in favor of a waiver. Neifeld argues that a party who invokes the power of the court asking for affirmative relief should not be allowed the inconsistent objection that the forum is personally inconvenient for him. 12 In other words, he argues that when Steinberg filed his counterclaim in the same pleading in which his jurisdictional defenses appeared, he utilized the court facilities in a manner inconsistent with his objections to personal jurisdiction, venue, and service of process. 13 16 We find this argument unconvincing in the light of the peculiar facts of the case at bar. As stated earlier, Steinberg filed an amended answer pursuant to Rule 15(a) in which he omitted the counterclaim. Although both Steinberg and the District Court relied upon Rule 15, when in fact the issue should have been governed by Rule 41(a) 14 and (c), 15 , 16 we will treat Steinberg's amendment as the equivalent of a motion for a voluntary dismissal of his counterclaim. Reynolds Jamaica Mines v. La Societe Navale Caennaise, 239 F.2d 689, 692 (4 Cir. 1956); Etablissements Neyrpic v. Elmer C. Gardner, Inc., 175 F.Supp. 355, 358 (S.D.Tex.1959). Since Neifeld had not served a responsive pleading to Steinberg's counterclaim, under Rules 41(a) and (c), Steinberg had the right to voluntarily dismiss his counterclaim without order of court. Thus, it cannot be forcefully argued that Steinberg utilized the District Court's facilities in any meaningful sense, for he was entitled to dismiss his counterclaim on his own without petitioning the court for approval. 17 17 The order of the District Court granting Steinberg's motion to dissolve the Writ of Foreign Attachment and to dismiss Neifeld's suit will be affirmed.