Does a federal court sitting in diversity have ancillary jurisdiction over a plaintiff's state-law claim against a third-party defendant who is a citizen of the same State as the plaintiff, where there is no independent basis for federal jurisdiction over that claim?

James Kroger was electrocuted in Carter Lake, Iowa, when the boom of a steel crane came too close to a high-tension power line. His widow, Mrs. Kroger (respondent), an Iowa citizen and administratrix of his estate, sued the Omaha Public Power District (OPPD), a Nebraska corporation, in the United States District Court for the District of Nebraska, alleging negligent construction, maintenance, and operation of the power line. Federal jurisdiction rested on diversity of citizenship.

OPPD impleaded Owen Equipment & Erection Co. (petitioner), alleging that Owen owned and operated the crane and that its negligence proximately caused Kroger's death. Mrs. Kroger then amended her complaint to name Owen as an additional defendant, alleging that Owen was a Nebraska corporation with its principal place of business in Nebraska. Owen admitted it was incorporated in Nebraska. OPPD obtained summary judgment, leaving Mrs. Kroger and Owen as the only parties at trial. On the third day of trial, it was revealed that Owen's principal place of business was in Iowa, making Owen and Mrs. Kroger both Iowa citizens for diversity purposes. Owen moved to dismiss for lack of jurisdiction.

Mrs. Kroger filed a wrongful-death action against OPPD in the United States District Court for the District of Nebraska. OPPD filed a third-party complaint against Owen under Fed. Rule Civ. Proc. 14(a). Mrs. Kroger was granted leave to amend her complaint to name Owen as a defendant, and the District Court granted OPPD's motion for summary judgment, which the Eighth Circuit affirmed in a separate appeal. The case proceeded to trial against Owen alone. On the third day of trial, Owen's Iowa citizenship was disclosed, and Owen moved to dismiss for lack of jurisdiction. The District Court reserved decision, and the jury returned a verdict for Mrs. Kroger. The District Court then denied Owen's motion to dismiss. The United States Court of Appeals for the Eighth Circuit affirmed, holding the claim fell within ancillary jurisdiction under Mine Workers v. Gibbs and that the District Court properly exercised its discretion given Owen's concealment of its Iowa citizenship. Rehearing en banc was denied by an equally divided court. The Supreme Court granted certiorari to resolve a conflict among the Courts of Appeals.

(Stewart, J.)

No. A federal court in a diversity action lacks ancillary jurisdiction over a plaintiff's state-law claim against a nondiverse third-party defendant when there is no independent basis for federal jurisdiction over that claim.

The constitutional test of Mine Workers v. Gibbs, 383 U.S. 715 (1966), requiring claims to derive from a common nucleus of operative fact, establishes only the outer constitutional limit of federal judicial power. Federal jurisdiction is also limited by Acts of Congress. Aldinger v. Howard, 427 U.S. 1 (1976), and Zahn v. International Paper Co., 414 U.S. 291 (1973), show that even where claims share a common nucleus of operative fact, the statute conferring jurisdiction may negate jurisdiction over the nonfederal claim.

The diversity statute, 28 U.S.C. § 1332(a)(1), has consistently been read to require complete diversity: no plaintiff may be a citizen of the same State as any defendant. Congress has repeatedly re-enacted the statute without changing that rule. Mrs. Kroger could not have sued Owen and OPPD together in federal court originally, and her amendment produced the identical nondiverse lawsuit. Allowing ancillary jurisdiction here would let any plaintiff evade complete diversity by suing only diverse defendants and waiting for them to implead nondiverse parties.

The context of the claim also differs from traditional ancillary jurisdiction. A defendant's third-party complaint depends logically on the main claim, but Mrs. Kroger's claim against Owen was entirely independent, since Owen's liability to her did not depend on OPPD's liability. And ancillary jurisdiction typically protects defendants haled into court or parties whose rights would be lost; here the plaintiff voluntarily chose the federal forum and must accept its limits, since the state courts remain available.

Convenience and judicial economy cannot justify extending ancillary jurisdiction against the strict construction the diversity statute demands. Owen's concealment of its citizenship is irrelevant, because subject-matter jurisdiction cannot rest on the parties' conduct or consent. The judgment of the Court of Appeals is reversed.

Dissent (White, J., joined by Brennan, J.) Nothing in Article III or any statute bars ancillary jurisdiction over a plaintiff's claim against a third-party defendant already in the case. Mrs. Kroger's claim against Owen shared a common nucleus of operative fact with her claim against OPPD, as Rule 14(a) itself requires, so the District Court had constitutional power under Gibbs. The complete-diversity rule should be read to require diversity only between the plaintiff and the parties the plaintiff actually brings into the suit, and the majority already accepts ancillary jurisdiction over impleader, cross-claims, and counterclaims despite § 1332(a). Because Owen was already a party, unlike the new party in Aldinger, judicial economy, convenience, and fairness support jurisdiction, and requiring a separate state action is wasteful. A plaintiff cannot control whether a defendant impleads a third party, and genuine collusion can be policed under 28 U.S.C. § 1359. The majority answered that nothing is necessarily collusive about a plaintiff suing only diverse defendants or about defendants impleading joint tortfeasors, so complete diversity would still be eviscerated. District courts could also dismiss such claims in their discretion under Gibbs on a case-by-case basis rather than through an absolute rule.