United States v. Joe Grasso & Son, Inc

Brief Fact Summary.

Man is suing the United States for a refund of federal employment taxes it paid for some of its employees that it wasn’t supposed to pay. The United States attempts to bring a third-party claim against those potentially liable for the federal taxes.

Synopsis of Rule of Law.

An entirely separate and independent claim cannot be maintained against a third-party under FRCP 14 even if it arises out of the same general facts as a main claim.

Facts.

Grasso brought suit against the government for the return of federal employment taxes Grasso paid for fishermen that worked on Grasso’s shrimp boats. In its answer the U.S. filed a third-party complaint against the captains of the boats where the fishermen worked, claiming that if Grasso was not their employer that the boat captains were. The district court dismissed the third-party complaint pointing to the fact that the government did not consider the possibility that the fishermen were employees of no one. The district court found that the third-party claim did not arise out of the main claim, and the government filed an interlocutory appeal.

Issue.

Can an entirely separate and independent claim be maintained against a third-party under FRCP 14 if it arises out of the same general facts as the main claim?

Held.

No, an entirely separate and independent claim may not be maintained against a third-party under FRCP 14 if it arises out of the same general facts as the main claim. The holding below is affirmed.

Discussion.

1. For the United States to implead the captains it would need to be clear that either Grasso or the captains are the fishermen’s employers.
2. There is also a third possibility, that the fishermen are not employed by either but are independent contractors.
3. Because of this possibility the captains cannot be properly joined.
4. The holding below is affirmed.