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

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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

Primary Holding
In a diversity of citizenship action, a federal court does not have jurisdiction over a plaintiff's claim against a third-party defendant when the claim lacks its own basis for federal jurisdiction, either because of diversity or subject matter. This is known as ancillary jurisdiction.
A steel crane that was owned and operated by Owen Equipment & Erection Co. came too close to a high tension electric power line operated by the Omaha Public Power District. Kroger's husband, who was walking next to the crane, was electrocuted. Kroger, who was a resident of Iowa, sued OPPD for wrongful death in a federal district court in Nebraska, while OPPD brought a third-party claim against Owen on the grounds that its negligence had caused the fatal accident. Owen was the only remaining defendant in the case once OPPD received summary judgment. Eventually, the evidence suggested that Owen was a citizen of Iowa, like Kroger, since it had its principal place of business there despite being incorporated in Nebraska. It moved to dismiss on the basis that diversity jurisdiction had dissolved, but the court denied its motion, and the jury eventually found in Kroger's favor.



  • Potter Stewart (Author)
  • Warren Earl Burger
  • Thurgood Marshall
  • Harry Andrew Blackmun
  • Lewis Franklin Powell, Jr.
  • William Hubbs Rehnquist
  • John Paul Stevens

Complete diversity of citizenship is required under 28 U.S.C. Section 1332(a)(1) to assert diversity jurisdiction in federal court. Ancillary jurisdiction does not permit a federal court sitting in diversity to hear claims by the original plaintiff against a third-party defendant who is not diverse from the plaintiff. Otherwise, plaintiffs would be able to sue in federal court under diversity jurisdiction whenever they chose, for they could simply sue only the diverse defendants and wait for them to bring the non-diverse defendants into the case.


  • Byron Raymond White (Author)
  • William Joseph Brennan, Jr.

Complete diversity under Section 1332 should be interpreted to require only complete diversity between the plaintiff and the parties brought into the case by the plaintiff. Otherwise, the federal court should be able to hear all claims that arise from the same nucleus of operative fact as the plaintiff's original cause of action against the original defendant, which gave rise to jurisdiction in federal court.

Case Commentary

Ancillary jurisdiction is allowed unless the third party could not have been joined by the plaintiff at the outset of the lawsuit because of jurisdictional limitations.

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