Court Opinion

ID: 3016054
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:15:04.5645+00
Date Added: 2024-06-11T18:05:20.201431
License: Public Domain

___________

                           No. 94-3629
                           ___________

Jay Hiatt,                      *
                                *
     Appellant,                 *
                                *
     v.                         *
                                *
Mazda Motor Corporation,        *
formerly known as Toyo Kogyo    *
Co. Ltd.; Mazda Motor, of       *
America, Inc.,                  *
                                *
     Appellees.                 *
                                *
                                *   Appeal from the United States
                                *   District Court for the
Mazda Motor Corporation,        *   Eastern District of Arkansas.
formerly known as Toyo Kogyo    *
Co. Ltd.; Mazda Motor, of       *
America, Inc.,                  *
                                *
     Third Party Plaintiffs,    *
                                *
     v.                         *
                                *
Rodney D. Wadlow,               *
                                *
     Appellee,                  *
________________________________*
                                *
Product Liability Advisory      *
Council, Inc.,                  *
                                *
     Amicus Curiae.             *

                           ___________

                  Submitted:    May 15, 1995

                      Filed: January 30, 1996
                           ___________

Before MAGILL, Circuit Judge, HENLEY, Senior Circuit Judge, and
     LOKEN, Circuit Judge.

                           ___________

HENLEY, Senior Circuit Judge.
     Jay Hiatt filed this diversity of citizenship action to
recover damages for injuries he suffered as a passenger in an
automobile involved in a one-car accident on a rural road near
Morrilton, Arkansas. Hiatt named as defendants in the action the
manufacturer of the vehicle, Mazda Motor Corporation (Mazda Motor),
and the distributor, Mazda Motor, of America Inc. (Mazda America)
(Mazda Motor and Mazda America sometimes referred to herein
collectively as Mazda).

     Mazda then filed third-party claims for contribution against
Rodney Wadlow, the driver of the automobile, and Lygwna Daughtry,
the car's owner. The claim against Daughtry was dismissed before
trial and the jury returned a verdict in favor of Mazda and against
Hiatt. Judgment was entered on the verdict by the district court.1
Hiatt filed a timely notice of appeal from the judgment of the
district court under 28 U.S.C. § 1291. We affirm.

     The relevant facts are summarized briefly here. On July 4,
1991, Hiatt and Wadlow attended a party where they and others
consumed alcohol.    Although the evidence showed that Wadlow
exhibited signs of intoxication, Lygwna Daughtry agreed to loan
Wadlow her 1983 Mazda 626 automobile and Hiatt and another man,
Joel Thomas, agreed to ride with Wadlow.

     Wadlow, the driver, and Thomas, the front seat passenger, did
not fasten their seat belts.     Sometime after the drive began,
however, Hiatt became concerned about Wadlow's driving and Hiatt,
riding in the back seat of the car, fastened his seat belt. At
approximately 11:30 p.m., the car went off a winding road near
Morrilton, Arkansas and struck a creek bank. Neither Wadlow nor
Thomas was seriously injured.    Hiatt, however, suffered severe
injuries to his lower abdomen.

    1
     The Honorable Stephen M. Reasoner, Chief Judge, United States
District Court for the Eastern District of Arkansas.

                               -2-
     Hiatt, of Arkansas, sued Mazda Motor and Mazda America, both
non-Arkansas corporations, in federal court alleging that his
abdominal injuries were caused by the defective design of the car's
rear seatbelt system. Mazda answered and, seeking contribution,
filed third-party claims against both Wadlow and Daughtry under
Federal Rule of Civil Procedure 14(a). Hiatt opposed the addition
of Wadlow and Daughtry to the suit on grounds that his claim was
solely one of defective design of the seatbelt system and that the
potential liability of Wadlow and Daughtry in causing the accident
was irrelevant. The district court overruled Hiatt's objections
and allowed Wadlow and Daughtry to be impleaded.

     Prior to trial, Hiatt filed a motion in limine seeking to
exclude all evidence regarding the possible negligence of himself,
Wadlow or Daughtry in causing the accident. Hiatt contended that
his claim was only that -- once the accident occurred -- the
seatbelt system caused him serious injury because of its defective
design. The trial court overruled this motion.

     On the eve of trial, because of concern about the possible
application of the Arkansas comparative fault statute, Mazda moved
to dismiss its third-party claims against Wadlow and Daughtry.
Hiatt opposed the motion as to Wadlow on the ground that his fault,
if any, should be compared with the combined fault of defendant
Mazda and third-party defendant Wadlow.        The district court
overruled the motion to dismiss as to Wadlow but dismissed the
third-party claim against Daughtry.

     At no point did Hiatt assert any claims directly against
Wadlow or Daughtry. Although Rule 14(a) would have permitted Hiatt
to file such additional claims once the third-party defendants were
impleaded, the complete diversity required between plaintiff and
all defendants would have been destroyed because Wadlow and
Daughtry were both Arkansas residents.         Hiatt did pursue a

                               -3-
separate action against Wadlow in Arkansas state court.
     At trial, Mazda and Hiatt contested proposed jury instructions
on the issue of comparative fault.     Mazda contended that under
Arkansas law plaintiff Hiatt's fault should be compared with
defendant Mazda's fault and Hiatt could recover only if his
comparative fault was less than that of Mazda's.       Hiatt argued
that, once Wadlow was added as a third-party defendant, Hiatt was
entitled to recovery if his fault was less than the combined fault
of Mazda and Wadlow.    The district court agreed with Mazda and
instructed the jury that it should compare Hiatt's fault only with
that of the two Mazda entities and not with that of the third-party
defendant Wadlow:

     If the fault of Jay Hiatt is of less degree than the
     fault of Mazda Motor Corporation and Mazda Motor of
     America, then Jay Hiatt is entitled to recover any
     damages which you may find he has sustained as a result
     of the occurrence after you have reduced them in
     proportion to the degree of his own fault.

     On the other hand, if Mazda Motor Corporation and Mazda
     Motor of America were not at fault, or if the fault of
     Jay Hiatt is equal to or greater in degree than the fault
     of Mazda Motor Corporation and Mazda Motor of America,
     then Jay Hiatt is not entitled to recover any damages.

Jury Instruction No. 32, Trial Transcript at 1550-51. Based on
this instruction as to the law, the jury found in favor of Mazda
and denied Hiatt recovery for his injuries.

     Hiatt raised two issues in this appeal, but only one remains
for our decision here. First, Hiatt contended that the district
court erred by overruling his motion in limine to exclude evidence
that did not directly relate to his claim that the seatbelt system
was defectively designed. In his reply brief, Hiatt withdrew this
issue from his appeal. Second, Hiatt urged that the district court
erred as a matter of law in instructing the jury to compare Hiatt's
fault, if any, only with that of Mazda and not with that of Wadlow.

                               -4-
Our discussion of that issue follows.

     It is, of course, well-settled that in a suit based on
diversity of citizenship jurisdiction the federal courts apply
federal law as to matters of procedure but the substantive law of
the relevant state. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
Much ink has been spilled on the subtleties and ambiguities of the
substance versus procedure distinction, see, e.g., Ely, The
Irrepressible Myth of Erie, 87 Harv. L. Rev. 693 (1974), but the
general rule has remained firm in the jurisprudence of the federal
courts.   See Walker v. Armco Steel Corp., 446 U.S. 740, 744-48
(1980).    See generally, Boner, Erie v. Tompkins: A Study in
Judicial Precedent, 40 Tex. L. Rev. 619 (1962); Friendly, In Praise
of Erie -- And of the New Federal Common Law, 39 N.Y.U. L. Rev. 383
(1964).

     In the present case, there is no dispute among the parties
that the substantive law of Arkansas -- the forum state and the
state where the relevant events occurred -- governs Hiatt's
liability claim against Mazda. The parties do dispute, however,
the proper application of the Arkansas law of comparative fault,
where, as here, there is a third-party claim for contribution.

     The Arkansas comparative fault statute adopts a modified
comparative fault approach, providing that:

     (a) In all actions for damages for personal injuries or
     wrongful death or injury to property in which recovery is
     predicated upon fault, liability shall be determined by
     comparing the fault chargeable to a claiming party with
     the fault chargeable to the party or parties from whom
     the claiming party seeks to recover damages.

     (b)(1)   If the fault chargeable to a party claiming
     damages is of a lesser degree than the fault chargeable
     to the party or parties from whom the claiming party
     seeks to recover damages, then the claiming party is
     entitled to recover the amount of his damages after they
     have been diminished in proportion to the degree of his

                               -5-
     own fault.

     (2)If the fault chargeable to a party claiming damages is
     equal to or greater in degree than any fault chargeable
     to the party or parties from whom the claiming party
     seeks to recover damages, then the claiming party is not
     entitled to recover such damages.

     (c) The word "fault" as used in this section includes any
     act, omission, conduct, risk assumed, breach of warranty,
     or breach of any legal duty which is a proximate cause of
     any damages sustained by any party.

Ark. Code Ann. § 16-64-122 (1995) (emphasis added). Thus, in a
simple negligence case under Arkansas law, the relative fault of
the plaintiff is compared to the relative fault of the defendant
and the plaintiff may recover damages only if his fault is less
than the defendant's fault. See Riddell v. Little, 488 S.W.2d 34,
36 (Ark. 1972); Bonds v. Snapper Power Equipment Co., 935 F.2d 985,
987 (8th Cir. 1991).

     In a case where there are multiple defendants, the Arkansas
statute provides that a plaintiff is allowed to recover if his
relative fault is less than the combined fault of all defendants.
Ark. Code Ann. § 16-64-122(b)(1). Moreover, the Arkansas Supreme
Court has held that the plaintiff may recover from an individual
defendant in a multiple defendant case even though the negligence
of the individual defendant is less than that of the plaintiff.
See, e.g., Riddell, 488 S.W.2d at 36.

     Because Hiatt sued only two defendants, Mazda Motor and Mazda
America, there would ordinarily be no doubt that the district court
was correct to instruct the jury to compare the fault of Hiatt with
the fault of the two Mazda entities. Hiatt contends, however, that
Mazda's impleader of Wadlow as third-party defendant changed the
applicable rule under Arkansas law and that the district court's
instruction was in error.

                               -6-
     Hiatt rests his argument on his construction of the Arkansas
Supreme Court's holding in Larson Machine, Inc. v. Wallace, 600
S.W.2d 1 (Ark. 1980). In that case, Wallace, a farmer, was injured
while operating a fertilizer spreader. Wallace alleged that the
fertilizer spreader was defective and brought suit against Larson
Machine, the manufacturer of the spreader, and G & G Manufacturing,
the maker of one of the spreader's component parts. G & G then
filed a third-party claim against Oakley, the seller of the
spreader. Wallace amended his complaint to assert a claim against
Oakley, but not until after the statute of limitations for bringing
such claims had expired. Oakley moved to dismiss Wallace's claim
as untimely but the trial court denied Oakley's motion and the
Arkansas Supreme Court affirmed.

     Although Larson Machine was a negligence and product liability
case involving questions of comparative fault, the Arkansas Supreme
Court based its decision that the plaintiff's apparently untimely
claim against the third-party defendant could go forward on the
language of the Arkansas statute on third-party practice, which at
the time provided:

     [After a third-party complaint is filed] [t]he plaintiff
     shall amend his pleadings to assert against the third-
     party defendant any claim which the plaintiff might have
     asserted against the third-party defendant had he been
     joined originally as a defendant. The third-party
     defendant is bound by the adjudication of . . . his own
     liability to the plaintiff. . . .

Ark. Stat. Ann. § 34-1007 (1962) (emphasis added) (now codified as
amended at Ark. Code Ann. § 16-61-207(1)(1995)).

     The court reasoned that because the statute said the
"plaintiff shall amend his pleadings" and that "the third party
defendant is bound" the actual amendment of pleadings was a mere
technical formality and not necessary in order for the plaintiff
Wallace to obtain a judgment against the third-party defendant
Oakley. The court found that Wallace and Oakley were "at issue as
to their rights respecting the claim" from the time Oakley answered

                               -7-
G & G's third-party complaint and thus the statute of limitations
was satisfied although Wallace's actual amendment of his complaint
came after the statute had run. Larson Machine, 600 S.W.2d at 6.
Having been deemed -- by judicial interpretation of the third-party
practice act -- to have brought a claim against Oakley, Wallace's
fault could be compared to that of Oakley under the Arkansas
comparative fault statute.

     Hiatt maintains that under Larson Machine a plaintiff -- even
one in a federal rather than a state court -- need not have amended
his pleadings and asserted a claim against a third-party defendant
in order for the plaintiff and the third-party defendant to be "at
issue as to their rights respecting the claim." Larson Machine,
600 S.W.2d at 6. Thus, Hiatt further maintains, once Wadlow was
impleaded by Mazda, Wadlow became a "party . . . from whom [Hiatt
sought] to recover damages" for purposes of Arkansas' comparative
fault statute. Ark. Code Ann. § 16-64-122(a). Accordingly, argues
Hiatt, as a matter of substantive Arkansas law under Erie v.
Tompkins, the federal district court sitting in diversity should
have instructed the jury to compare Hiatt's fault not only with
Mazda's, but also with Wadlow's.

     As Mazda points out, however, it is not clear whether (or how)
the Arkansas Supreme Court would apply the Larson Machine rule to
the facts of the case at hand. There are a number of differences
between this case and Larson Machine which could lead to a
different result.    For example, unlike the plaintiff in Larson
Machine, Hiatt never amended his complaint -- even in an untimely
fashion -- to seek damages against Wadlow. In fact, if Hiatt had
sought to add a claim against Wadlow complete diversity would have
been absent and the federal court would have had to dismiss the
suit for lack of jurisdiction. Moreover, by the time the present
case went to the jury, the Arkansas legislature had amended the
State's third-party practice statute to provide that a plaintiff
"may" rather than "shall" bring claims he has against a third-party

                               -8-
defendant.   Ark. Code Ann. § 16-61-207.   Thus, it is unclear
whether Larson Machine is still good law in Arkansas, even with
respect to a plaintiff's untimely claims against third-party
defendants.

     The most important aspect of the Arkansas court's decision in
Larson Machine for the present case, however, is that the relevant
portion of the ruling rested not primarily on the language of the
comparative fault statute -- substantive state law -- but on the
court's interpretation of the language of the third-party practice
act -- state procedural law.    On this point the opinion of the
court is quite clear. The plaintiff Wallace was held entitled to
a judgment against the third-party defendant Oakley because of the
specific terms of the third-party practice act:

     Some courts have held that the original plaintiff has a
     choice as to whether he will amend his pleadings to seek
     relief against the third party defendant and that the
     plaintiff cannot recover against a third party defendant
     without having amended his pleadings to assert a cause of
     action against that third party defendant. Most, if not
     all of them, are based upon a rule or statute different
     from ours in important respects.       While our statute
     permits the filing of a third party complaint against one
     "who is or may be liable as a joint tortfeasor to him or
     the plaintiff," it also provides that the plaintiff
     "shall" amend his pleadings to assert any claim against
     the third party defendant that he might have asserted had
     he joined the third party defendant as a defendant in his
     original complaint. Our statute specifically makes the
     adjudication of the third party defendant's liability to
     the plaintiff binding upon the third party defendant.
     Our statute is different from those patterned after Rule
     14 of the Federal Rules of Civil Procedure, under which
     the plaintiff "may" amend his pleadings to assert a claim
     against the third party defendant, and the effect of the
     adjudication of the third party's liability is declared
     by our statute. . . .

     When the third party complaint alleges a direct liability
     of the third party defendant to the plaintiff on the
     claim set out in the plaintiff's complaint, the third
     party "shall" make his defenses to the complaint and no
     amendment to the complaint is necessary or required, and

                               -9-
     the parties are at issue as to their rights respecting
     the claim without any amendment of the complaint by the
     plaintiff.

Larson Machine, 600 S.W.2d at 6 (citations omitted). In Larson,
the Arkansas court also made clear that its earlier decision in
Chapman Chemical Co. v. Taylor, 222 S.W.2d 820 (Ark. 1949), also
rested on the third-party practice act. Larson Machine, 600 S.W.
2d at 6.

     Only by interpreting the Arkansas third-party practice act to
mean that the plaintiff was deemed to have filed a timely claim
against the third-party defendant could the plaintiff's fault be
compared to that of the third-party defendant. Nothing in Larson
Machine, nor in any other Arkansas case to which we have been
referred, suggests that Arkansas follows a substantive comparative
fault rule that a plaintiff's degree of fault should always be
compared with the fault of other possible wrongdoers, even if
plaintiff has asserted no claim against those wrongdoers. Indeed,
given the plain language of the comparative fault statute -- that
the plaintiff's fault should be compared to that of the parties
from whom the plaintiff "seeks to recover damages" -- it is hard to
imagine how the legislature's words could be construed to reach
such a result. See Booth v. United States Industries, Inc., 583 F.
Supp. 1561, 1562 (W.D. Ark. 1984) ("[U]nder Arkansas law the degree
or percentage of fault of Mary Weston, who is not a party
defendant, is not to be considered. . . .").

     Unlike Larson Machine, in this case a federal rule -- not
state law -- governed the third-party claim against Wadlow and the
rights of plaintiff Hiatt against Wadlow. Federal Rule of Civil
Procedure 14(a). Thus, we believe we need not resolve precisely
how significant the Arkansas court would find some of the other
distinctions between the cases.        For, contrary to Hiatt's
contention, a federal district court in a diversity case is neither

                               -10-
required, nor indeed permitted, to apply state law to a matter
covered by a Federal Rule of Civil Procedure.

     The United States Supreme Court has consistently held, at
least since its decision in Hanna v. Plumer, 380 U.S. 460 (1965),
that if a matter is covered by a Federal Rule the federal courts
must apply the Rule without regard to whether the matter might
arguably be labeled substantive or procedural. The Supreme Court
reasoned in Hanna that,

     [w]hen a situation is covered by one of the Federal
     Rules, the question facing the court is a far cry from
     the typical, relatively unguided Erie choice: the court
     has been instructed to apply the Federal Rule, and can
     refuse to do so only if the Advisory Committee, this
     Court, and Congress erred in their prima facie judgment
     that the Rule in question transgresses neither the terms
     of the Enabling Act nor constitutional restrictions.

Hanna v. Plumer, 380 U.S. 460, 471 (1965). Thus, the full-blown
Erie analysis -- first determining whether a matter is substantive
or procedural and then applying state law on substantive matters --
does not apply if the matter in question is covered by a Federal
Rule of Civil Procedure.

     In more recent cases, the Supreme Court has clarified that
federal courts should look beyond the terms of an applicable
Federal Rule only if there is some question whether "the scope of
the Federal Rule in fact is sufficiently broad to control the issue
before the Court." Walker v. Armco Steel Corp., 446 U.S. 740, 749-
50 (1980). The Court has stressed that federal courts must apply
a Federal Rule to a matter within its scope even where it differs
from a state rule and could lead to a different outcome.
Burlington No. R.R. Co. v. Woods, 480 U.S. 1, 6 (1987). This is
because,

     [t]he cardinal purpose of Congress in authorizing the
     development of a uniform and consistent system of rules

                               -11-
     governing federal practice and procedure suggests that
     Rules which incidentally affect litigants' substantive
     rights do not violate this provision if reasonably
     necessary to maintain the integrity of that system of
     rules.

Burlington Northern, 480 U.S. at 5 (citations omitted). Moreover,
the Court has stated that when determining whether a Federal Rule
infringes on state substantive rights, the Federal Rules are
entitled to "presumptive validity" under both the Rules Enabling
Act and the Constitution. Burlington Northern, 480 U.S. at 6.

     In the present case, the issue is whether third-party
defendant Wadlow is a party from whom Hiatt "seeks to recover
damages," Ark. Stat. Ann. § 16-64-122, where Wadlow was impleaded
but Hiatt asserted no claims against him. There is no doubt that
this issue is within the scope of Federal Rule 14(a) which governs
third-party practice in federal courts. Rule 14(a) provides in
relevant part:

     (a) When Defendant May Bring in Third Party. At any
     time after commencement of the action a defending party,
     as a third-party plaintiff, may cause a summons and
     complaint to be served upon a person not a party to the
     action who is or may be liable to the third-party
     plaintiff for all or part of the plaintiff's claim
     against the third-party plaintiff. . . . The plaintiff
     may assert any claim against the third-party defendant
     arising out of the transaction or occurrence that is the
     subject matter of the plaintiff's claim against the
     third-party plaintiff . . . .

Fed. R. Civ. P. 14(a) (emphasis added). Under Federal Rule 14(a),
the plaintiff must affirmatively act to assert a claim he may have
against a third-party defendant.    See, e.g., Monarch Industrial
Corp. v. American Motorists Ins. Co., 276 F. Supp. 972, 981
(S.D.N.Y. 1967) ("Plaintiff . . . could bring a direct action
against a third-party defendant only by an amendment to his
complaint."); Thompson v. Cranston, 2 F.R.D. 270, 271 (S.D.N.Y.

                              -12-
1942) ("Without amending the plaintiffs cannot recover against the
third-party defendants."). On the other hand, the corresponding
Arkansas statute as interpreted in Larson Machine provided that a
plaintiff could be deemed to have asserted a timely claim against
a third-party defendant even where the actual claim was untimely.
Ark. Stat. Ann. § 34-1007 (1962) (now codified as amended at Ark.
Code Ann. § 16-61-207(1)(1995)).

     It is clear that for purposes of the analysis mandated by the
Supreme Court in the Hanna v. Plumer line of cases, Federal Rule 14
(a) "covers the point in dispute." Stewart Organization, Inc. v.
Ricoh Corp., 487 U.S. 22, 26 (1988). Cf. Brown v. E. W. Bliss Co.,
818 F.2d 1405, 1408-09 (8th Cir. 1987) (in diversity case trial
court should apply Federal Rule 15(c) rather than comparable
Missouri rule). Indeed, the state and federal rules are plainly
coextensive. Rule 14(a) and the Arkansas statute differ only in
that Rule 14(a) makes the filing of the plaintiff's claims against
a third-party defendant discretionary while the Arkansas statute
cited made such claims mandatory.

     In this situation, the district court was bound to follow the
federal rule unless it contravenes either the Rules Enabling Act or
the Constitution.    Burlington Northern, 480 U.S. at 5.        The
appellant, however, has made absolutely no argument that Rule 14
violates either the Act or the Constitution. In the absence of any
challenge, the Supreme Court has plainly directed that the Rule
must be treated as presumptively valid. Burlington Northern, 480
U.S. at 6. In any event, we believe that Rule 14(a) as applied is
both constitutional and within the scope of the Rules Enabling Act.
Cf. Burlington Northern, 480 U.S. at 8 (upholding Federal Rule of
Civil Procedure 38 as a valid exercise of Congress' authority);
Hanna v. Plumer, 380 U.S. at 472 ("[T]he constitutional provision
for a federal court system (augmented by the Necessary and Proper
Clause) carries with it congressional power to make rules governing
the practice and pleading in those courts, which in turn includes
a power to regulate matters which, though falling within the

                               -13-
uncertain area between substance and procedure, are rationally
capable of classification as either."); Brown, 818 F.2d at 1409
(upholding Federal Rule 15(c) under the Constitution and Rules
Enabling Act); 19 Wright, Miller & Cooper, Federal Practice and
Procedure § 4504, at 42 (1982) ("to date no Federal Rule has been
found to exceed either constitutional bounds or the authorization
of the Rules Enabling Act").

     In addition, we note that the district court's application of
Rule 14 here satisfies the twin policy aims of the Erie rule:
"discouragement of forum-shopping" and "avoidance of inequitable
administration of the laws," especially unfair discrimination
against one of the parties.    Hanna v. Plumer, 380 U.S. at 468.
Plaintiffs have no incentive to forum shop, because no later
addition of third-party claims by a defendant will change the rule
on allocation of fault. A plaintiff in a federal court knows that
in a diversity case based on Arkansas law his own fault will be
compared only with the fault of those defendants against whom the
plaintiff specifically asserts a claim. Moreover, as the Supreme
Court stated in refusing to exercise jurisdiction over a
plaintiff's claim against a non-diverse third-party defendant:

     the nonfederal claim here was asserted by the plaintiff,
     who voluntarily chose to bring suit upon a state-law
     claim in a federal court. . . .       A plaintiff cannot
     complain if ancillary jurisdiction does not encompass all
     of his possible claims in a case such as this one, since
     it is he who has chosen the federal rather than the state
     forum and must thus accept its limitations. "[T]he
     efficiency plaintiff seeks so avidly is available without
     question in the state courts."

Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 376 (1978)
(citations omitted).      Thus, it does not impede the fair
administration of justice for the plaintiff to be limited to
recovery from those parties against whom he has asserted claims and
over whom he has an independent basis for subject matter
jurisdiction.

                               -14-
     In sum, we believe that there can be no doubt that the
procedure for adding third-party claims and the status in the
litigation of third-party defendants is governed by Federal Rule of
Civil Procedure 14(a) and not the Arkansas state law of third-party
practice. Because the language and purpose of Rule 14(a) clearly
cover the case at hand and the Rule is both constitutional and
within the scope of the Enabling Act, the federal trial court was
bound under the Hanna v. Plumer line of cases to apply Rule 14(a)
rather than the state law of third-party practice.          Stewart
Organization, 487 U.S. at 27.

     As the district court noted, under Rule 14(a) a plaintiff such
as Hiatt "may" assert a claim against a third-party defendant such
as Wadlow. Hiatt, however, did not have an independent basis for
subject matter jurisdiction over third-party defendants Wadlow or
Daughtry. If Hiatt had asserted claims against either, complete
diversity between the plaintiff and all defendants would have been
destroyed and Hiatt could not have maintained an action in federal
court. Hiatt chose to remain in federal court but not to assert
any claim against the third-party defendants there and instead sued
Wadlow separately in state court.

     We believe that having chosen for his own strategic reasons to
sue in federal court and withhold his claims against Wadlow, Hiatt
cannot at the same time prevail on his argument that the relative
fault between himself and Wadlow was at issue in the case.
Contrary to Hiatt's contention, this was a case controlled by
Federal Rule 14(a) and not by the decision of the Arkansas Supreme
Court in Larson Machine. That decision rested on the State Supreme
Court's interpretation of a state rule of procedure that is not
applicable here. Because he did not add a claim against Wadlow
under Rule 14(a), Wadlow was not a "party from whom [Hiatt sought]
to recover damages" for purposes of the Arkansas comparative fault
statute.

                               -15-
     Thus, we find no error in the jury instruction on comparative
fault challenged by Hiatt. The only parties against whom Hiatt
sought to recover damages were Mazda Motor and Mazda America. The
district court was correct to rule that the jury should compare
Hiatt's fault, if any, only with that of Mazda Motor and Mazda
America. Hiatt may now regret, in retrospect, that his fault could
not be compared with that of Wadlow or other possible wrongdoers.
Hiatt's dissatisfaction, however, stems from the requirements of
federal diversity jurisdiction and not from any error by the
district court in instructing the jury.

     For the reasons stated herein we affirm the judgment of the
district court on the verdict for Mazda Motor and Mazda America.
In light of our disposition of Hiatt's appeal, the separate motion
to dismiss the appeal against Wadlow is denied as moot.

     A true copy.

          Attest:

               CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.

                              -16-