Opinion ID: 2672933
Heading Depth: 1
Heading Rank: 3

Heading: Bowen, Hemby, and Yow Units Claims

Text: We turn next to the district court’s denial of relief on Freeman and Freeman Capital’s counterclaims with respect to the Bowen, Hemby, and Yow 8 Case: 13-40458 Document: 00512621558 Page: 9 Date Filed: 05/07/2014 No. 13-40458 Units. 7 Freeman and Freeman Capital acknowledge on appeal that they have waived any argument concerning the merits of the district court’s decision, arguing instead that the Bowen, Hemby, and Yow Units are compulsorycounterclaims that must be dismissed because subject-matter jurisdiction is lacking with respect to the Geisler Unit claims. When an independent basis for jurisdiction exists with respect to a counterclaim, a federal court may adjudicate the claim even if the original claim was dismissed for lack of subject-matter jurisdiction. McLaughlin v. Miss. Power Co., 376 F.3d 344, 355 (5th Cir. 2004); see also Kuehne & Nagel (AG & Co) v. Geosource, Inc., 874 F.2d 283, 291 (5th Cir. 1989); 8 6 CHARLES A. WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE AND PROCEDURE § 1414, at 130 (3d ed. 2010) (“If the counterclaim does present an independent basis of federal jurisdiction, however, the court may adjudicate it as if it were an original claim despite the dismissal of plaintiff’s claim.”). 7Notably, Harleton did not assert any interest in or claim involving these units, nor has any party suggested that Harleton is an indispensable party with respect to these claims. Therefore, our analysis of Harleton’s intervention has no effect on our consideration of Freeman and Freeman Capital’s claims regarding the Bowen, Hemby, and Yow Units. 8 Freeman and Freeman Capital urge that we not rely on Kuehne, arguing that it conflicts with our earlier-decided opinion in City of Houston v. Standard-Triumph Motor Co., 347 F.2d 194 (5th Cir. 1965). However, Kuehne does not conflict with and indeed cites to Standard-Triumph Motor, among other cases, for the proposition that a counterclaim need not be dismissed when supported by an independent ground for jurisdiction. See Kuehne, 874 F.2d at 291. Even if they did conflict with respect to whether a counterclaim can proceed when supported by an independent basis for jurisdiction, our rule of orderliness requires us to follow the earlier-decided case of Haberman v. Equitable Life Assurance Society of the United States, 224 F.2d 401 (5th Cir. 1955), where we held that a compulsory counterclaim could proceed to a final judgment on the merits, even if the court lacked jurisdiction over the primary claim, because diversity jurisdiction supported the counterclaim. See 224 F.2d at 409 (“[E]ven if the complaint be dismissed, a compulsory counterclaim is not required to be dismissed where it is supported by a proper ground of federal jurisdiction.”); see also United States v. Wheeler, 322 F.3d 823, 828 n.1 (5th Cir. 2003) (explaining that when “two previous holdings or lines of precedent conflict, the earlier opinion controls and is the binding precedent in the circuit” (citation and internal quotation marks omitted)). 9 Case: 13-40458 Document: 00512621558 Page: 10 Date Filed: 05/07/2014 No. 13-40458 Here, an independent basis for subject-matter jurisdiction based on § 1332 exists for the Bowen, Hemby, and Yow Units claims. The parties were completely diverse as Freeman and Freeman Capital were citizens of Texas and Chesapeake was a citizen of Oklahoma. Harleton did not destroy diversity with respect to these claims because its claims were limited to the Geisler Unit. Further, the amount in controversy with respect to these claims exceeded $75,000. Therefore, because Freeman and Freeman Capital’s only challenge on appeal rests on their jurisdictional argument, we affirm the district court’s decision concerning the Bowen, Hemby, and Yow Units.