Court Opinion

ID: 9463950
Source: CourtListenerOpinion
Date Created: 2023-08-04 23:21:14.625682+00
Date Added: 2024-06-11T17:38:22.954157
License: Public Domain

*430BRIGHT, Circuit Judge,
dissenting.
Regretfully, I am unable to join in Judge Talbot Smith’s opinion determining that the district court possessed subject matter jurisdiction over the claims between Kroger and Owen Equipment & Erection Company.
Concededly, the defendant, Owen Equipment, although a Nebraska chartered corporation, maintains its principal business in Iowa, and is, therefore, an Iowa citizen. Congress made clear that for purposes of diversity jurisdiction, a corporation “shall be deemed a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” 28 U.S.C. § 1332(c).
I do not believe that the holding in United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), can be said to authorize the exercise of jurisdiction over a claim made by a plaintiff against an impleaded third-party defendant without diversity between the parties. In Gibbs, the district court already possessed subject matter jurisdiction over a federal claim between the two parties, so it was appropriate and within the federal court’s judicial power to resolve a state claim appended to the federal claim. Here, the threshold question is whether ancillary jurisdiction supports Kroger’s claim even though she has no claim against Owen with an independent jurisdictional basis.
I believe that the Supreme Court’s pronouncements in Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976), and cases such as American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951), require that we dismiss the case for want of jurisdiction.
Aldinger was an action brought under 28 U.S.C. § 1343(3) and 42 U.S.C. § 1983 against several county officials. The plaintiff attempted to join state law claims against the county itself arising out of the same facts on a theory of pendent or ancillary jurisdiction. The Supreme Court rejected that attempt and with it the sort of reasoning found in the majority opinion.
In response to arguments that “pendent party” jurisdiction over a state law claim should be allowed even in the absence of another claim between the same parties with an independent jurisdictional base, the Court said:
Prom a purely factual point of view, it is one thing to authorize two parties, already present in federal court by virtue of a case over which the court has jurisdiction, to litigate in addition to their federal claim a state-law claim over which there is no independent basis of federal jurisdiction. But it is quite another thing to permit a plaintiff, who has asserted a claim against one defendant with respect to which there is federal jurisdiction, to implead an entirely different defendant on the basis of a state-law claim over which there is no independent basis of federal jurisdiction, simply because his claim against the first defendant and his claim against the second defendant “derive from a common nucleus of operative fact.” [Gibbs, 383 U.S. at 725, 86 S.Ct. 1130]. True, the same considerations of judicial economy would be served insofar as plaintiff’s claims “are such that he would ordinarily be expected to try them all in one judicial proceeding . . .” Ibid. But the addition of a completely new party would run counter to the well-established principle that federal courts, as opposed to state trial courts of general jurisdiction, are courts of limited jurisdiction marked out by Congress. We think there is much sense in the observation of Judge Sobeloff, writing for the Court of Appeals in Kenrose Mfg. Co. v. Fred Whitaker Co., 512 F.2d 890, 894 (CA 4 1972):
“The value of efficiency in the disposition of lawsuits by avoiding multiplicity may be readily conceded, but that is not the only consideration a federal court should take into account in assessing the presence or absence of jurisdiction. Especially is this true where, as here, the efficiency plaintiff seeks so avidly is available without question in the state courts.”
[ 427 U.S. at 14-15, 96 S.Ct. at 2420 (emphasis added).]
*431The situation is the same here. That the same facts may have been involved in Kroger’s claim against Owen as those in Kroger’s claim against the Omaha Public Power District is not by itself sufficient basis for ancillary or pendent jurisdiction over the claim against Owen. Had Kroger wished to sue both Owen and the Power District in a single forum, she could have done so in a state court. See Fawvor v. Texaco, Inc., 546 F.2d 636, 640-41, 643 (5th Cir. 1977). Aldinger’s reliance on Kenrose Mfg. Co. v. Fred Whitaker Co., supra, 512 F.2d 890, which also involved an attempt by a plaintiff in a diversity case to assert state law claims against a nondiverse third-party defendant is especially instructive.
The majority in distinguishing Aldinger fails to address the rationale for disclaiming federal jurisdiction presented in Aldinger:
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. [Id. at 18, 96 S.Ct. at 2422.]
As Aldinger makes clear, 427 U.S. at 15-16, 96 S.Ct. 2413, United Mine Workers v. Gibbs, 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966), explicates the federal courts’ power under article III in the face of congressional silence. See also Comment, Aldinger v. Howard and Pendent Jurisdiction, 77 Colum.L.Rev. 127, 128-30, 140-42 (1977). Gibbs does not deal with the issue before us, for here the Congress expressly limits by statute, 28 U.S.C. § 1332, the parties to which diversity jurisdiction extends.
Since Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435 (1806), it has been the rule that general diversity jurisdiction over a state law claim requires complete diversity between plaintiffs and defendants. The parties to this claim do not satisfy this requirement. Congress has commanded that diversity jurisdiction not extend to claims involving parties such as these. See Fawvor v. Texaco, Inc., supra, 546 F.2d at 638-39; Comment, supra, 11 Colum.L.Rev. at 147.41 As Judge Smith correctly observes, supra at 422 and 423 n. 25, citing Fawvor v. Texaco, Inc., supra, 546 F.2d 636, and Kenrose Mfg. Co. v. Fred Whitaker Co., supra, 512 F.2d 890, the majority of federal courts support the view that an independent basis of jurisdiction is necessary to support a plaintiff’s action against a third-party defendant. It also appears that we are the first court of appeals to rule to the contrary. In addition to the cases cited by the majority, see Saalfrank v. O’Daniel, 533 F.2d 325 (6th Cir.), cert. denied sub nom. Saalfrank v. Parkview Mem. Hosp., 429 U.S. 922, 97 S.Ct. 319, 50 L.Ed.2d 289 (1976); Rosario v. American Export-Isbrandtsen Lines, Inc., 531 F.2d 1227, 1233 & n.17 (3d Cir.), cert. denied sub nom. Rosario v. United States, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976). Thus, I would conclude that Congress did not intend that federal courts take jurisdiction over a plaintiff’s claim against a third-party defendant, in the absence of independent jurisdictional grounds.
I agree with Judge Smith’s critical comments relating to Owen’s concealment of the facts concerning diversity until well into the trial. However, it is well settled that a party cannot by his conduct be precluded through laches, waiver, or estoppel from raising a lack of federal subject matter jurisdiction. See, e. g., American Fire & Cas. Co. v. Finn, 341 U.S. 6, 71 S.Ct. 534, 95 L.Ed. 702 (1951) (party who removed case *432to federal court, and successfully resisted plaintiffs attempts to have it remanded, can raise want of jurisdiction after verdict for plaintiff); Mitchell v. Maurer, 293 U.S. 237, 55 S.Ct. 162, 79 L.Ed. 338 (1934) (party never raised lack of jurisdiction in any court); Mansfield, C. & L. M. Ry. v. Swan, 111 U.S. 379, 4 S.Ct. 510, 28 L.Ed. 462 (1884) (same as Finn, supra). That counsel for defendant played fast and loose with the court calls for sanctions by the court against the responsible parties, not the exercise of jurisdiction which the federal court does not otherwise possess. See Mansfield, C. & L. M. Ry. v. Swan, supra, 111 U.S. at 386-89, 4 S.Ct. 510; Basso v. Utah Power & Light Co., 495 F.2d 906, 910 (10th Cir. 1974); Page v. Wright, 116 F.2d 449, 454-55 (7th Cir. 1940).
When a litigant’s attorney has intentionally misled the court as to the jurisdictional facts and thus “sandbags” his opponent and the district judge, as appears to be the case here, the court possesses ample power to impose appropriate sanctions against the malefactor. Under somewhat similar circumstances, the Tenth Circuit dismissed the plaintiff’s cause for lack of diversity, but directed that “all reasonable costs and expenses should be assessed against defendant including a reasonable attorney’s fee for work on this appeal.” That court also noted the existence of a state “savings statute” which would permit the plaintiff to pursue a remedy in state court after the federal dismissal, despite the passage of the usual limitations period for the type of action involved. Basso v. Utah Power & Light Co., supra, 495 F.2d at 910-11.
Similarly, I would remand this case to the district court with directions to dismiss the action for want of subject matter jurisdiction, leaving plaintiff free to pursue her remedy in the Iowa state courts.42 Moreover, on remand, I would direct the district court to conduct a hearing relative to imposing sanctions against defendant or defendant’s counsel, or both. If found appropriate, those sanctions may include all costs and expenses incurred by plaintiff, Geraldine Kroger, in pressing the action against Owen Equipment and may include a reasonable sum for attorneys’ fees for services, pretrial, trial, and on this appeal.
In sum, while I disagree with the majority’s disposition of this appeal, I emphatically agree that a drastic remedy is necessary to deter other litigants from engaging in concealment and delay in presenting known jurisdictional facts to the court by the party in possession of those facts in order to obtain an advantage in the conduct of litigation at the expense, not only of the opposing party, but of the court itself. Such conduct substantially hinders the proper and efficient administration of justice and wastes the time of judges, court personnel, and juries in the already overburdened federal courts. This dissenter suggests that such sanctions may be a more appropriate remedy for the abuse practiced in this case than opening the door to even more diversity cases than those already competing for judicial attention on the crowded dockets of the federal courts, particularly when state courts can dispose of all the state law claims involved in such cases. See Ayoub v. Helm's Express, Inc., 300 F.Supp. 473 (W.D. Pa.1969).

. A congressional intent to negate pendent jurisdiction cannot be inferred from the majority of jurisdictional statutes, which are intended as affirmative grants of jurisdiction only. Some jurisdictional statutes, however, evince a congressional decision that certain claims should not be heard in federal court. The federal question and diversity statutes, in particular, require that the claims exceed $10,000, and, in the diversity statute, that the parties be of diverse citizenship. The policies which called for the exclusion of claims not meeting these requirements also seem to demand that they not be heard through the exercise of pendent jurisdiction. Since Congress excluded these claims from federal jurisdiction, their adjudication through pendent jurisdiction seems clearly to frustrate congressional intent. [77 Colum.L. Rev. at 147 (footnotes omitted).]

. I do not agree with the district court’s conclusion that if this action is dismissed for lack of jurisdiction, Kroger will be barred from all relief by the statute of limitations. Iowa Code Ann. § 614.10 (West), provides that
If, after the commencement of an action, the plaintiff, for any cause except negligence in its prosecution, fails therein, and a new one is brought within six months thereafter, the second shall, for the purposes herein contemplated, be held a continuation of the first.
The facts of this case appear to bring it within this savings provision.