Owen Equipment & Erection Co. v. Kroger

Brief Fact Summary.

Kroger,  an Iowa citizen, sued a third party, Omaha Public Power District (OPPD), a citizen of Nebraska, for wrongful death in federal district court, based on diversity jurisdiction. OPPD impleaded Owen Equipment. Kroger amended her complaint to allege claims against Owen Equipment. Although it initially appeared that Owen Equipment was from Nebraska, it became clear during trial that Owen Equipment was an Iowa citizen. The district court entered judgment against Owen Equipment on a verdict for Kroger. The Court of Appeals affirmed.

Synopsis of Rule of Law.

Neither convenience of the parties nor considerations of judicial economy justify extending the doctrine of ancillary jurisdiction to allow a plaintiff’s cause of action against a citizen of the same state in a diversity case.

Facts.

Kroger,  an Iowa citizen, sued Omaha Public Power District (OPPD), a citizen of Nebraska, for wrongful death in federal district court. Jurisdiction was based on diversity. OPPD impleaded Owen Equipment, alleging that Owen owned the equipment on which Kroger’s decedent was working at the time of his death. Kroger amended her complaint to allege claims against Owen Equipment. Although it initially appeared that Owen Equipment was a citizen of Nebraska, it became clear during trial that Owen Equipment, like Kroger, was an Iowa citizen. By that time, the applicable statute of limitations would have precluded a state court suit by Kroger against Owen equipment. The district court entered judgment against Owen Equipment on a verdict for Kroger. The Court of Appeals affirmed.

Issue.

Did the doctrine of ancillary jurisdiction apply to provide a basis for jurisdiction of the federal court over plaintiff’s cause of action against a citizen of the same state in a diversity case?

Held.

No. The Court reversed the Court of Appeal’s decision, holding that there was no justification for extending the doctrine of ancillary jurisdiction to apply to the facts presented in this case.

Discussion.

The doctrine of ancillary jurisdiction did not provide a basis for federal jurisdiction in this case because (1) the nonfederal claim was entirely separate (and therefore not ancillary) to Kroger’s initial claim; and (2) the nonfederal claim in this case was asserted by Kroger, who, as plaintiff in the underlying action, chose to bring her claim in federal court.