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26. Which action should the corporation take to add the manufacturer as a party?
The corporation purchased its rear axles from a State A manufacturer. Concerned that any defects in the rear axle may have been the fault of the manufacturer, the corporation wants the manufacturer to be part of the lawsuit.
A cyclist, a citizen of State A, sued a State B corporation with its principal place of business in State C. The complaint, filed in State C federal court, asserted a single claim under State C products liability law, alleging that the cyclist suffered in excess of $85,000 in damage when the wheel on his bicycle detached in transit due to a defect in the bicycle's rear axle.
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If a defendant wishes to implead a nonparty, the proper action is for the defendant, «as third-party plaintiff, 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.» Fed. R. Civ. P. 14(a).
If the third-party claim does not have an independent jurisdictional basis, it will typically fall within the court's supplemental jurisdiction because it will satisfy the «common nucleus of operative fact» standard for supplemental jurisdiction.
Supplemental jurisdiction is governed by 28 U.S.C. § 1367, which generally allows ancillary claims to fall within the court's supplemental jurisdiction in diversity-only cases, thus eliminating the diversity and amount-in-controversy requirements as to the supplemental claim.
FRCP 19 states that joinder is required for any person (i.e., they are deemed a «required party») who either:
(i) is required for the court to be able to accord complete relief among the existing parties; OR
(ii) has such an important interest in the case such that NOT joining them will either:
cause them a practical impairment or impediment in protecting their interest; ORexpose an existing party to a substantial risk of multiple or inconsistent liability.If a party is deemed «required» or «necessary,» then joinder is «compulsory,» meaning the required party should be joined. However, the court must also ensure that joinder of the required party will not destroy its jurisdiction.
If the required party cannot be joined for any reason, such as because their joinder will destroy jurisdiction, the court must make a choice: whether «in equity and good conscience,» the case should proceed without the required party. OR, if the absent (required) party is actually «INDISPENSABLE,» meaning without them, the court should dismiss the case entirely.
Interpleader allows someone considered a stakeholder to a dispute to require two or more parties to resolve a dispute first to determine who has a valid cause of action so that the stakeholder does not face separate actions for one obligation.
B is correct. The corporation should implead the manufacturer in this suit as a third-party defendant because the manufacturer is or may be liable to the corporation for all or part of the cyclist's claim if the manufacturer is responsible for the defective axle. This is the most common usage of FRCP 14 impleader because it allows a defendant who allegedly harmed a plaintiff to «throw» liability on a third-party defendant who might be liable to the original plaintiff.
A is incorrect. The manufacturer does not qualify as a required party under FRCP 19(a) because the court may accord complete relief even if the manufacturer is not joined as a party. Moreover, resolution of the case without the manufacturer joined as a party would not, as a practical matter, impede the manufacturer's ability to protect its interests.
C is incorrect. Interpleader is a procedure that allows a plaintiff or a defendant to initiate a lawsuit in order to compel two or more other parties to litigate a dispute. An interpleader action originates when the plaintiff holds property on behalf of another but does not know to whom the property should be transferred. It is often used to resolve disputes arising under insurance contracts. This question concerns impleader, not interpleader.
D is incorrect. 28 U.S.C. § 1367(b) generally allows ancillary claims to fall within the court's supplemental jurisdiction in diversity-only cases, thus eliminating the diversity and amount-in-controversy requirements as to the supplemental claim. This statute includes many exceptions, none of which apply here. Supplemental jurisdiction applies to FRCP 14 impleader of third-party defendants, for claims by and against third-party plaintiffs and claims by third-party defendants, but NOT claims by the original plaintiff against third-party defendants. The fact that the manufacturer is not completely diverse is irrelevant because the availability of supplemental jurisdiction eliminates the diversity requirement.