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OWEN EQPT. & ERECTION CO. V. KROGER, 437 U. S. 365 (1978)

U.S. Supreme Court

Owen Eqpt. & Erection Co. v. Kroger, 437 U.S. 365 (1978)

Owen Equipment & Erection Co. v. Kroger

No. 77-677

Argued April 18, 1978

Decided June 21, 1978

437 U.S. 365


Respondent, a citizen of Iowa, sued for damages based on the wrongful death of her husband, who was electrocuted when the boom of a steel crane next to which he was walking came too close to a high-tension electric power line. The action was brought in federal court on the basis of diversity of citizenship against a Nebraska corporation (OPPD), whose negligent operation of the power line was alleged to have caused decedent's death. OPPD then filed a third-party complaint against petitioner company which owned and operated the crane, alleging that petitioner's negligence proximately caused the death. Respondent was thereafter granted leave to amend her complaint by naming petitioner, which she alleged to be a Nebraska corporation with its principal place of business in Nebraska, as an additional defendant. OPPD successfully moved for summary judgment, leaving petitioner as the sole defendant. Though, in its answer, petitioner admitted that it was a corporation organized and existing under the laws of Nebraska, during trial it was disclosed that petitioner's principal place of business was in Iowa. Since both parties were thus Iowa citizens, petitioner moved to dismiss on the basis of lack of federal jurisdiction. After the jury had returned a verdict. for respondent, the District Court denied petitioner's motion to dismiss. The Court of Appeals affirmed, holding that, under Mine Workers v. Gibbs, 383 U. S. 715, the District Court had jurisdictional power, in its discretion, to adjudicate the claim, which arose from the "core of operative facts' giving rise to both [respondent's] claim against OPPD and OPPD's claim against [petitioner]," and that the District Court had properly exercised its discretion because petitioner had concealed its Iowa citizenship from respondent.

Held: The District Court had no power to entertain respondent's lawsuit against petitioner as a third-party defendant since diversity jurisdiction was lacking. Gibbs, supra, distinguished. Pp. 437 U. S. 370-377.

(a) A finding that federal and nonfederal claims arise from a "common nucleus of operative fact," the Gibbs test, does not suffice to establish that a federal court has power to hear nonfederal as well as

Page 437 U. S. 366

federal claims, since, though the constitutional power to adjudicate the nonfederal claim may exist, it does not follow that statutory authorization has been granted. Aldinger v. Howard, 427 U. S. 1; Zahn v. International Paper Co., 414 U. S. 291. Pp. 437 U. S. 370-373.

(b) Here, the relevant statute, 28 U.S.C. § 1332(a)(1), which confers upon federal courts jurisdiction over civil actions where the amount in controversy exceeds $10,000 and is between citizens of different States, requires complete diversity of citizenship, and it is thus congressionally mandated that diversity jurisdiction is not available when any plaintiff is a citizen of the same State as any defendant, a situation that developed in this case when respondent amended her complaint. Pp. 437 U. S. 373-374.

(c) Under the Court of Appeals' ancillary jurisdiction theory, a plaintiff could defeat the statutory requirement of complete diversity simply by suing only those defendants of diverse citizenship and waiting for them to implead nondiverse defendants. Pp. 437 U. S. 374-375.

(d) In determining whether jurisdiction over a nonfederal claim exists, the context in which that claim is asserted is crucial. Here the nonfederal claim was simply not ancillary to the federal one, as respondent's claim against petitioner was entirely separate from her original claim against OPPD, and petitioner's liability to her did not depend at all upon whether or not OPPD was also liable. Moreover, the nonfederal claim here was asserted by the plaintiff, who voluntarily chose to sue upon a state law claim in federal court, whereas ancillary jurisdiction typically involves claims by a defending party haled into court against his will, or by another person whose rights might be irretrievably lost unless he could assert them in an ongoing action in federal court. Pp. 437 U. S. 375-376.

558 F.2d 417, reversed.

STEWART, J., delivered the opinion of the Court, in which BURGER, C.J., and MARSHALL, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. WHITE, J., filed a dissenting opinion, in which BRENNAN, J., joined, post, p. 437 U. S. 377.

Page 437 U. S. 367

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