Jurisdiction and Venue

Jurisdiction and Venue

Rule 14(a)(1) lets a defending party “serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it,” and it requires leave of court only when the third-party complaint comes more than 14 days after the original answer.¹ That is permission, and permission is not power. Every joinder in federal court raises two independent questions: whether it is procedurally proper and whether it is jurisdictionally proper.² Hart of Massachusetts and Wechsler of New York, injured when Shapiro of Massachusetts hits their car, may join as plaintiffs against Shapiro under Rule 20, yet the joinder fails for want of complete diversity.³ A third-party claim must pass both tests, and it must pass the jurisdictional one claim by claim.

Three jurisdictional questions follow, each aimed at a different target. Subject-matter jurisdiction asks whether the court may hear a particular claim. Personal jurisdiction asks whether the court has power over the third-party defendant as a person. Venue asks whether the district is a proper place for the case. The answers differ by claim. Impleader leaves the plaintiff’s main claim alone. The defendant’s claim against the third party ordinarily rides on supplemental jurisdiction, the power to hear related claims that have no independent federal basis, which older cases call ancillary jurisdiction.⁴ The plaintiff’s own claim against the third party meets a statutory bar in diversity cases, a line the Supreme Court drew in a Rule 14 case.⁵ The third party’s residence is disregarded for venue, but the court must still be able to reach the third party as a person.⁶

Subject-Matter Jurisdiction

The Federal Rules of Civil Procedure do not expand the jurisdiction of the federal courts, so Rule 14 can authorize a claim without giving the court power to hear it.⁷ Once jurisdiction over the case between plaintiff and defendant is secure, the court assesses each additional claim individually.⁸ An impleader case contains three claims that matter, and each draws a different answer. The first is the plaintiff’s main claim, which impleader leaves untouched.

The second claim is Wellington’s claim against Robespierre, and it needs a footing of its own. Wellington and Robespierre are citizens of different states, so ordinary diversity jurisdiction covers the claim if the amount in controversy is met.¹² If the amount falls short, or if the two parties share a state, supplemental jurisdiction under 28 U.S.C. § 1367(a) takes over, because that provision lets a federal court with original jurisdiction over one claim hear all other claims that are part of the same case or controversy.¹³ A claim over almost always qualifies. Rule 14 requires it to arise from the same facts as the main claim, and that satisfies both the common-nucleus test and the statutory test of § 1367(a).¹⁴ Supplemental jurisdiction carries no amount-in-controversy requirement, and the third-party plaintiff and third-party defendant need not be diverse from each other.¹⁵

Rule 14’s own language keeps that grant safe. By confining the defendant to claims against a nonparty who “may be liable to it for all or part of the claim against it,” the rule-makers declined to let the defendant expand the suit with tangential claims that share few witnesses or issues with the main claim.¹⁶ The Supreme Court has treated that dependence as decisive. A third-party complaint “depends at least in part upon the resolution of the primary lawsuit,” so its relation to the original complaint is “not mere factual similarity but logical dependence,” and impleader by a defendant of a third-party defendant “always is” ancillary.¹⁷ The defendant’s position adds weight, because ancillary jurisdiction typically serves a defending party haled into court against his will.¹⁸

Pleading permission does not carry jurisdiction with it when the defendant adds more claims. Rule 18(a) lets a third-party plaintiff join as many other claims as it has against the third-party defendant.¹⁹ Each extra claim still needs an independent federal basis unless it arises out of the same transaction or occurrence as a claim within the court’s original jurisdiction.²⁰ An unrelated claim between diverse parties for more than $75,000 satisfies diversity on its own, so supplemental jurisdiction is unnecessary.²¹ Diversity itself requires that no plaintiff share a state with any defendant and that the amount in controversy exceed $75,000.²²

The third claim, the plaintiff’s own claim against the third-party defendant, gets the opposite treatment in diversity cases, and Owen Equipment & Erection Co. v. Kroger supplied the rule. Mrs. Kroger, a citizen of Iowa, sued OPPD, and OPPD impleaded Owen Equipment. She then asserted a nonfederal claim directly against Owen.²³ The trial court refused to dismiss, and the jury returned a substantial verdict for Mrs. Kroger. The Supreme Court nevertheless held that no jurisdiction existed over a claim by one Iowa citizen against another and set the judgment aside.²⁴ The mistake was apparently one of geography. Owen had its main office in Carter Lake, Iowa, where the accident occurred, but Carter Lake lies west of the Missouri River, which generally marks the Iowa-Nebraska boundary, adjacent to Omaha.²⁵

The Court gave two reasons for treating the plaintiff’s claim differently from the defendant’s. First, Owen’s liability to Mrs. Kroger “depended not at all upon whether or not OPPD was also liable,” so her claim was “entirely separate” and, far from being ancillary and dependent, “a new and independent one.”²⁶ Second, she had voluntarily chosen to bring a state-law claim in federal court, whereas ancillary jurisdiction typically involves a defending party haled in against his will or a person whose rights might be lost unless he could assert them in the pending federal action.²⁷ Behind both reasons stood the majority’s fear that recognizing the claim would let a plaintiff circumvent the complete-diversity requirement and “flout the congressional command.”²⁸ A plaintiff could sue only diverse defendants, wait for one of them to implead a nondiverse party, and then sue that party directly. The claim arose from the same facts as the main claim, so it satisfied the constitutional common-nucleus test, and the Court still held that no jurisdiction existed over it in a diversity case.²⁹

Congress took the same position in § 1367(b).³⁰ In a civil action of which the district courts have original jurisdiction “founded solely on section 1332,” the district courts “shall not have supplemental jurisdiction under subsection (a) over claims by plaintiffs against persons made parties under Rule 14, 19, 20 or 24,” when exercising it “would be inconsistent with the jurisdictional requirements of section 1332.”³¹ Where the bar applies, the plaintiff’s claim against the third-party defendant survives only on its own footing. If the plaintiff and the third party are diverse and the claim exceeds $75,000, diversity supports it directly. The same claim for a smaller amount has no basis at all.³²

The Owen Equipment dissent would have weighed convenience, judicial economy, and fairness, considerations the majority brushed aside. It also doubted the evasion concern. A plaintiff does not bring the third party into the suit, so no occasion for deliberate circumvention exists absent collusion with the defendant, and the court can dismiss a collusive action under 28 U.S.C. § 1359.³³ Because Congress adopted the majority’s position in § 1367(b), that weighing has no room to operate in diversity cases.³⁴

The bar is narrow. By its terms it applies only where original jurisdiction rests solely on § 1332, and it reaches only claims by plaintiffs.³⁵ When the main claim rests on a federal question, a plaintiff’s related claim against a third-party defendant falls under the general grant of § 1367(a).³⁶ A defendant’s claim never meets the bar, since § 1367(b) does not apply to a defendant, so the same facts can produce opposite answers depending on who asserts the claim.³⁷

Personal Jurisdiction and Venue

Subject-matter jurisdiction settles which claims the court may hear and says nothing about its power over the third-party defendant as a person. In practice that power usually exists, because the third-party defendant was often involved in the occurrence or transaction that led to the original claim.⁴² When involvement alone does not carry the day, Rule 4(k)(1)(B) gives an extra 100-mile boost to the court’s jurisdiction.⁴³ Service of a summons is effective to establish personal jurisdiction over a party joined under Rule 14 (or Rule 19) if the party is served within a judicial district of the United States and not more than 100 miles from where the summons was issued.⁴⁴ Courts call the provision the “100-mile bulge.”

Both claims over arise from the main dispute and fall within supplemental jurisdiction, so the fact that moves the answer is the distance between the courthouse and the place of service. Supplemental jurisdiction decides whether the court may hear the claim, while the bulge decides whether the court reaches the person. An answer that stops at the common nucleus of operative facts resolves only the first of those questions.

Objections to personal jurisdiction, service, and venue belong to the party who holds them. A third-party defendant cannot borrow the original defendant’s objections that the court lacks personal jurisdiction over it, that it was improperly served, or that the case was filed in an improper venue.⁴⁶

Venue follows a more forgiving rule, because the third party is disregarded in deciding whether venue is proper.⁴⁷ In the Napoleon illustration, the main action may be brought in the District of Connecticut, where Wellington resides, under 28 U.S.C. § 1391(b)(1), even though Robespierre resides in Maine.⁴⁸ The reason matches the one for subject-matter jurisdiction. If the third party’s residence counted, defendants could defeat a plaintiff’s proper choice of forum in many cases simply by impleading defendants from the wrong district.⁴⁹

The check on unfair impleader lies elsewhere, in the court’s discretion. The court weighs the efficiency of joinder against the possibility of prejudice to any party. Impleader should be permitted unless it clearly will prejudice the plaintiff or third-party defendant by complicating the original suit unduly or delaying its resolution, and if prejudice later appears the court may sever the claim or try it separately.⁵⁰