United States District Court, E.D. Missouri, Eastern Division
REGENT INSURANCE CO. and GENERAL CASUALTY INSURANCE COMPANY, Plaintiffs,
INTEGRATED PAIN MANAGEMENT, SC and MICHAEL C. ZIMMER, D.C., P.C., Defendants.
MEMORANDUM AND ORDER
L. WHITE, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Allstate Insurance
Company's Motion to Dismiss for Lack of Subject Matter
Jurisdiction or, In the Alternative, to Stay (ECF No.
4-.14-CV-1759 RLW, ECF No. 45-1; No. 4:15CV236 RLW, ECF No.
filed this motion, asking this Court to determine whether it
has subject matter jurisdiction over the third-party claim of
Third-Party Plaintiffs Dr. Xia, Integrated Pain Management
("IPM"), S.C, Tian Medical, Inc., and Tian Medical,
LLC (collectively, the "Third Party Plaintiffs")
against Allstate Insurance Company ("Allstate").
Allstate, a resident of Illinois, is not diverse to IPM.
Therefore, the issue before the Court is whether this Court
lacks subject-matter jurisdiction over Allstate because of
the lack of diversity between those two parties, when the
Court would otherwise have supplemental jurisdiction pursuant
to 28 U.S.C. § 1367(a). (ECF No. 54 at 4-5).
1367(a) sets forth when the Court can exercise supplemental
Except as provided in subsections (b) and (c) or as expressly
provided otherwise by Federal statute, in any civil action of
which the district courts have original jurisdiction, the
district courts shall have supplemental jurisdiction over all
other claims that are so related to claims in the action
within such original jurisdiction that they form part of the
same case or controversy under Article III of the United
States Constitution. Such supplemental jurisdiction shall
include claims that involve the joinder or intervention of
Allstate notes that 28 U.S.C. § 1367(b) limits the grant
of jurisdiction in § 1367(a):
the district courts shall not have supplemental jurisdiction
... over claims by plaintiffs against persons made parties
under Rule 14, 19, 20, or 24 of the Federal Rules of Civil
Procedure ... when exercising supplemental jurisdiction over
such claims would be inconsistent with the jurisdictional
requirements of section 1332.
relies on Exxon Mobil Corp. v. Allapattah Servs.,
Inc., 545 U.S. 546 (2005) to support its contention that
this Court lacks subject matter jurisdiction over Allstate.
The Supreme Court in Exxon noted:
Section 1367(a) is a broad grant of supplemental jurisdiction
over other claims within the same case or controversy, as
long as the action is one in which the district courts would
have original jurisdiction. The last sentence of §
1367(a) makes it clear that the grant of supplemental
jurisdiction extends to claims involving joinder or
intervention of additional parties.
Exxon Mobil Corp. v. Allapattah Servs., Inc., 545
U.S. 546, 558 (2005). The Supreme Court, however, considered
whether "the inclusion of a claim or party falling
outside the district court's original jurisdiction
somehow contaminates every other claim in the complaint,
depriving the court of original jurisdiction over any of
these claims." Id. at 560. The Supreme Court
concluded that this "contamination theory" makes
"little sense with respect to the amount-in- controversy
requirement" but that the contamination theory "can
make some sense in the special context of the complete
diversity requirement because the presence of nondiverse
parties on both sides of a lawsuit eliminates the
justification for providing a federal forum."
Id. at 562. Allstate argues that the Exxon
Court indicated that the exercise of supplemental
jurisdiction should not be permitted between nondiverse
parties. Likewise, Allstate cites to the Second Circuit's
decision, Merrill Lynch & Co. Inc. v. Allegheny
Energy, Inc., 500 F.3d 171, 179 (2d Cir. 2007), for the
proposition that Article III does not permit the exercise of
supplemental jurisdiction between nondiverse parties.
(4:14-CV-1759 RLW, ECF No. 45-1, at ¶3).
response, Regent Insurance Company and General Casualty
Insurance Company (collectively, "Regent") assert
that "a federal court's jurisdiction attaches when
an action is filed, and subsequent developments ordinarily
will not divest the court of jurisdiction." Harbison
v. Rich Gullet & Sons, Inc., No. 4:13-CV-1138 SPM,
2014 WL 5483569, at *2 (E.D. Mo. Oct. 29, 2014). In a similar
case, the district court concluded that the third-party claim
against the non-diverse party was part of the same case or
controversy as the plaintiffs original claim. Thus, the
district court concluded that it had supplemental
jurisdiction over the claim unless the exception of 28 U.S.C.
§ 1367(b) applies. Harbison, 2014 WL 5483569,
at *5. The Harbison court held that "§
1367(b) applies by its terms only to 'claims by
plaintiffs, ' and courts have repeatedly held that it
does not apply to claims made by defendants."
Harbison, 2014 WL 5483569, at *5 (citing cases).
Regent asserts that the Third Party Plaintiffs' claim
against Allstate is a third-party claim, rather than a direct
claim, and Allstate is not considered a "plaintiff for
purposes of Section 1367's limitation of supplemental
jurisdiction. (ECF No. 54 at 6-7).
Regent maintains that Allstate's reliance on Exxon
Mobil Corp. v. Allapattah Servs., Inc. is misplaced.
(ECF No. 54 at 7). Regent suggests that the Exxon
Court's dictum can only be read to suggest that
"when considering whether under Section 1367(b) the
exercise of supplemental jurisdiction would be inconsistent
with the requirements of 1332, the existence of nondiverse
parties is more problematic than the lack of the
amount-in-controversy." (ECF No. 54 at 7). Regent notes
that Exxon involved a class of plaintiffs, some of
which did not meet the amount-in-controversy requirement, who
made a direct claim against the defendant. (ECF No. 54 at
7-8) Therefore, Regent maintains that Exxon provides
no precedential value to this case, which involves whether
third-party plaintiffs qualify as "plaintiffs"
under Section 1367(b) such that analysis under of the
requirements of Section 1332 is even necessary. (ECF No. 54
at 8). Likewise, Regent claims that the decision in
Merrill Lynch & Co. Inc. v. Allegheny Energy,
Inc., 500 F.3d 171. 179 (2d Cir. 2007) is also
inapplicable because that case involved the exercise of
supplement al jurisdiction over a direct claim, not a
third-party claim. (ECF No. 54 at 8).
Court holds that a third-party plaintiff does not fall under
Section 1367(b) because a third-party plaintiff is not the
type of "plaintiff' contemplated by the statute.
See Harbison, 2014 WL 5483569, at *5 (citing
Ubben v. Sounder Woodworking Co., No. C05-3043-PAZ,
2006 WL 1285104, at *2 (N.D. Iowa May 10, 2006) (holding that
the defendant's third-party claim against a party not
diverse to the original plaintiff did not destroy diversity
jurisdiction; noting that "section 1367(b) is designed
to prevent plaintiffs from asserting claims they
otherwise would not be able to bring for want of subject
matter jurisdiction"); State Nat'l Ins. Co. v.
Yates, 391 F.3d 577, 580 (5th Cir.2004) (holding that
the court had jurisdiction over a defendant's claims
against a third-party defendant not diverse to the original
defendant; stating, '"plaintiff in § 1367(b)
refers to the original plaintiff in the action-not to a
defendant that happens also to be a counter-plaintiff,
cross-plaintiff, or third-party-plaintiff'); Grimes
v. Mazda N. Am. Operations, 355 F.3d 566, 572 (6th Cir.
2004) ("The supplemental jurisdiction provision, 28
U.S.C. § 1367(b), states congressional intent to prevent
original plaintiffs-but not defendants or third parties-from
circumventing the requirements of diversity.")). Under
the Complaint filed by the original Plaintiffs to the action,
jurisdiction is proper in this Court. The Court finds that
the Supreme Court's decision in Exxon does not
affect this analysis because that case addressed only direct
claims, not third-party claims.
the Court denies the parties' request to stay
proceedings. A stay of the underlying lawsuit is not
warranted because the Court's determination of the
insurers' duty to ...