Court Opinion

ID: 3037186
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:55:50.743432+00
Date Added: 2024-06-11T11:48:45.244215
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

MATTEL, INC.,                           No. 05-55696
              Plaintiff-Appellant,
                                           D.C. No.
               v.
                                        CV-04-09059-
CARTER BRYANT, AN INDIVIDUAL, ET          NMM/RNB
AL.; MGA ENTERTAINMENT, INC.,
                                           OPINION
           Defendants-Appellees.
                                     
       Appeal from the United States District Court
           for the Central District of California
        Nora M. Manella, District Judge, Presiding

                  Argued and Submitted
         February 13, 2006—Pasadena, California

                    Filed May 2, 2006

    Before: William C. Canby, Jr., John T. Noonan, and
            Marsha S. Berzon, Circuit Judges.

                Opinion by Judge Noonan

                           5009
                    MATTEL, INC. v. BRYANT                 5011

                         COUNSEL

Daniel P. Collins, Ailsa W. Chang, Los Angeles, California,
for the plaintiff-appellant.

Keith A. Jacoby, Dale M. Cendali, Los Angeles, California,
for the defendants-appellees.

                          OPINION

NOONAN, Circuit Judge:

   Mattel, Inc., a Delaware corporation with headquarters in
California, appeals the order of the district court denying Mat-
tel’s motion to remand this action to state court in which Mat-
tel had begun this suit against Carter Bryant, a resident of
Missouri and a product designer formerly in its employ. Hold-
ing that diversity jurisdiction is not defeated by the interven-
tion of MGA Entertainment, Inc., a California corporation not
an indispensable party, we conclude that the district court
properly retained jurisdiction.
5012                MATTEL, INC. v. BRYANT
                       PROCEEDINGS

   On April 27, 2004, Mattel filed a complaint against Bryant
in Los Angeles County Superior Court alleging breach of con-
tract and various torts. On May 14, 2004, Bryant removed the
case to federal court, but the court held that the monetary
requirement for diversity jurisdiction had not been satisfied.
After discovery, Bryant again removed the case, and Mattel
again moved to remand. On December 7, 2004, MGA Enter-
tainment, Inc. (MGA) intervened as a defendant to protect its
rights to Bratz dolls. On March 4, 2005, the district court held
that diversity jurisdiction existed. Mattel was a Delaware cor-
poration with headquarters in California, Bryant was a resi-
dent of Missouri, and the amount in controversy was over
$75,000. The district court held that the intervention of MGA,
a California corporation unmentioned in Mattel’s complaint,
did not destroy the diversity because MGA was not an indis-
pensable party. The district court certified its order for inter-
locutory review under 28 U.S.C. § 1292(b). On May 12, 2005,
a motions panel of this court granted Mattel permission to
appeal.

                          ANALYSIS

   [1] An Indispensable Intervenor? Diversity jurisdiction
exists in the controversy between Mattel and Bryant unless
destroyed by MGA’s intervention as a defendant. Intervention
destroys diversity if the intervening party is indispensable.
Takeda v. Northeastern Nat’l Life Ins. Co., 765 F.2d 815, 819
(9th Cir. 1985). We review a district court’s indispensability
determination for abuse of discretion. ABKCO Music, Inc. v.
LaVere, 217 F.3d 684, 687 (9th Cir. 2000). Mattel argues that
MGA is indispensable to the case, explaining its failure to
name MGA as a defendant by ignorance dispelled only by
discovery that rights to Bratz were at stake. There is, there-
fore, Mattel argues, “a significant risk of prejudice” to MGA
if the ownership of rights to intellectual property, i.e., the
Bratz creations, were decided in the absence of MGA. This
                     MATTEL, INC. v. BRYANT                  5013
significant risk of prejudice is sufficient, Mattel concludes, to
make MGA indispensable and so defeats diversity. In opposi-
tion, MGA in the joint brief it has filed with Bryant denies
that its presence is essential to deciding the controversy
between Mattel and Bryant; declares that Mattel can obtain
complete relief on all the claims it asserts against Bryant with-
out the presence of MGA; notes that Mattel seeks no relief
from MGA; and maintains that, in short, MGA is not an indis-
pensable party.

   [2] Mattel’s solicitude for the rights of MGA appears to be
driven by its desire to have the litigation proceed in a Califor-
nia court. The standard for determining whether a party is
indispensable is set by the rule which requires the determina-
tion to be made “in equity and good conscience.” Fed. R. Civ.
P. 19(b). MGA disavows its indispensability. When, as in this
case, collusion with the plaintiff is manifestly absent, a defen-
dant intervenor’s declaration that it is not indispensable satis-
fies any concern that a decision in its absence would have
prejudiced it. MGA does not need Mattel to tell it what its
risks were. Undoubtedly, MGA’s posture is as much driven
by its desire to be in federal court as Mattel’s posture is driven
by the desire to be in state court. Acknowledging MGA’s
jurisdictional motive, we accept its disavowal. MGA is not
indispensable. The diversity required by 28 U.S.C. § 1332 is
satisfied together with the judge-made rule of complete diver-
sity and the judge-made exception for a non-indispensable
defendant-intervenor. Strawbridge v. Curtiss, 7 U.S. 267,
267-68 (1806) (establishing the complete diversity rule);
Freeport-McMoRan, Inc. v. KN Energy, Inc., 498 U.S. 426,
428-29 (1991) (per curiam) (confirming the rule, established
in Wichita Railroad & Light Co. v. Public Utilities Commis-
sion, 260 U.S. 48, 54 (1922), that the presence of a nondiverse
and not indispensable defendant intervenor does not destroy
complete diversity).

   [3] The Effect of Section 1367. Mattel relies more heavily
on a second objection to diversity jurisdiction, 28 U.S.C.
§ 1367(b), which reads:
5014                MATTEL, INC. v. BRYANT
    In any civil action of which the district courts have
    original jurisdiction founded solely on section 1332
    of this title, the district courts shall not have supple-
    mental jurisdiction under subsection (a) over claims
    by plaintiffs against persons made parties under Rule
    14, 19, 20, or 24 of the Federal Rules of Civil Proce-
    dure, or over claims by persons proposed to be
    joined as plaintiffs under Rule 19 of such rules, or
    seeking to intervene as plaintiffs under Rule 24 of
    such rules, when exercising supplemental jurisdic-
    tion over such claims would be inconsistent with the
    jurisdictional requirements of section 1332.

MGA has been made a party under Rule 24. In becoming a
party, MGA answered Mattel’s claims. Therefore, Mattel
maintains, § 1367(b)’s prohibition against supplemental juris-
diction over claims made by parties under Rule 24 is violated.

   [4] Mattel’s argument overlooks the final clause of
§ 1367(b): the prohibition applies only “when exercising sup-
plemental jurisdiction over such claims would be inconsistent
with the jurisdictional requirements of section 1332.” This
final clause makes the diversity statute, § 1332, decisive. If
that statute is not offended, the prohibition of § 1367(b) does
not apply. We have already determined that the intervention
of MGA does not offend § 1332. Mattel is mistaken in believ-
ing that § 1367(b) trumps § 1332. Neither § 1332 nor § 1367
upset the long-established judge-made rule that the presence
of a nondiverse and not indispensable defendant intervenor
does not destroy complete diversity. The addition of MGA
does not destroy diversity jurisdiction.

   Conclusion. For the foregoing reasons, the order of the dis-
trict court is AFFIRMED.