Day 1 Assignment pg.

652 – 674
CHAPTER 9: JOINDER OF CLAIMS AND PARTIES: EXPANDING THE SCOPE OF THE CIVIL ACTION

SECTION A. JOINDER OF CLAIMS

1. Historical Limitations on the Permissive Joinder of Claims

Harris v. Avery
Supreme Court of Kansas, 1869.
5 Kan. 146 .

PP: Plaintiff-in-error accuser appealed a decision of a District Court of Bourbon County (Kansas), which,
in defendant-in-error accused's action alleging false imprisonment and slander, overruled the accuser's
demurrer to the petition.

Brief Fact Summary. Plaintiff sued Defendant for false imprisonment and slander, alleging Defendant
accused Plaintiff of stealing and that Defendant arrested Plaintiff for no reason. Defendant moved to
dismiss on the grounds that the claims were improperly joined, which the District Court denied.
Defendant appealed.

OVERVIEW: The accuser, in the presence of several other persons, called the accused a thief,
said he had a stolen horse, took the horse from the accused and kept it four or five days,
and arrested the accused and confined him in a county jail with felons for four or five days.
The accused brought an action against the accuser, alleging false imprisonment and slander.
The accuser demurred to the petition on the ground that it appeared that the causes of
action were improperly joined. The trial court overruled the demurrer. On appeal, the court
affirmed, concluding that the two allegations arose out of the same transaction, so there
was no reason, under Kan. Code § 89, which abolished all the common law forms of action
and established a system for the joinder of action, not to join the causes of action. The
court reasoned that a plaintiff could unite as many legal causes of action as he pleased
arising out of the same transaction.

Rule of Law. When claims arise from the same event or events, as opposed to the same circumstance
giving rise to the legal claim, this is considered the same transaction or transactions and such claims can
be joined. This rule is contrary to the common law rule that requires that claims can be joined if the
same circumstance (i.e., what caused the injury) gave rise to two claims in different categories (injury to
person, injury to character, contract, etc.).

Facts. Plaintiff Avery sued Defendant Harris for false imprisonment and slander. The two causes of
action were founded on the following facts: Defendant called Plaintiff a thief and stated that Plaintiff
stole a horse in front of many people. Defendant took Plaintiff’s horse and arrested Plaintiff for no
reason. Plaintiff was in jail for four or five days. Defendant demurred on the grounds that the two
actions were improperly joined. The District Court overruled the demurrer. Defendant appealed.

Issue. Were Plaintiff’s claims of false imprisonment and slander improperly joined in one cause of
action?

Held. No. Affirmed.

Under Kansas law, different claims may be joined when they arise out of “the same transaction or
transactions connected with the same subject of action.”

This rule is very different from the common law rule. At common law, there would be one transaction if
Plaintiff’s arrest were for stealing the horse, which would connect his time spent in prison to the words
spoken regarding him stealing the horse. However, where the false imprisonment appears to be from an
arrest for no reason, it cannot be connected to the slander.

The policy behind the broad joinder of claims rule is to avoid duplicitous actions and to attempt to
resolve as many issues as practicable in one case.

Because the facts of the two claims involve Defendant accusing Plaintiff of stealing a horse and its
subsequent events, this is considered one transaction and thus, the claims can be joined.

Discussion. This case illustrates that the Kansas code, like Rule 18 of the Federal Rules of Civil Procedure
has a broad rule regarding joinder of claims. The case articulates the common law categorization of
claims that often hindered joinder of claims in one action even though the claims were closely
connected.

2. Permissive Joinder of Claims By Plaintiffs Under Federal Rule of Civil Procedure 18

Rule 18.  Joinder of Claims
(a) In General. A party asserting a claim, counterclaim, crossclaim, or third-party claim may join, as independent or alternative
claims, as many claims as it has against an opposing party.
(b) Joinder of Contingent Claims. A party may join two claims even though one of them is contingent on the disposition of the
other; but the court may grant relief only in accordance with the parties' relative substantive rights. In particular, a plaintiff may
state a claim for money and a claim to set aside a conveyance that is fraudulent as to that plaintiff, without first obtaining a
judgment for the money.

M.K. v. Tenet
United States District Court, District of Columbia, 2002.
216 F.R.D. 133 .

PP: Plaintiffs, Central Intelligence Agency (CIA) employees, filed a motion under Fed. R. Civ.
P. 15 to amend their complaint alleging violation of the Privacy Act of 1974, 5 U.S.C.S. §
552a, to add an alleged obstruction of counsel violation of Title VII of the Civil Rights Act of
1964 (Title VII), 42 U.S.C.S. § 2000e et seq. Defendants, the CIA director and unnamed
individuals, filed a motion under Fed. R. Civ. P. 21 to sever plaintiffs' claims.

Brief Fact Summary. Plaintiffs, M.K. et al., amended their complaints against Defendants, CIA director
George Tenet et al., for violations pertaining to their employment at the CIA.

Overview: Plaintiffs' proposed second amended complaint asserted that defendants' acts in denying
plaintiffs' access to effective assistance of counsel violated their rights under the Constitution, the
Privacy Act, and Title VII. Plaintiffs alleged that defendants denied access to CIA documents thereby
preventing plaintiffs' counsel from effectively advising them of their rights. Plaintiffs also contended that
defendants failed to maintain accurate employment records. The court granted plaintiffs' motion to
amend the complaint. The court found that plaintiffs' justifications of addressing prior deficiencies
named by the court and of availing themselves of intervening legal precedent were reasonable.
Although the second amended complaint was lengthy, the court found no justification for defendants'
Fed. R. Civ. P. 8 challenge. The court denied defendants' motion to sever the claims of the six existing
plaintiffs and defendants' related request to deny plaintiffs' proposed Fed. R. Civ. P. 20 joinder of nine
new plaintiffs and 30 new "Doe" defendants. The court found that plaintiffs satisfied Rule 20(a)'s
requirement of logically related events and common questions of law and fact.

Rule of Law. The court has discretion in viewing on a case-by-case basis whether a complaint
amendment is not unduly burdensome on the opposing party, and they will look at factors such as
whether discovery has yet to take place.

Facts. Plaintiffs brought this action after they were effectively denied assistance of counsel when their
counsel was unable to access their employment records. Plaintiffs were accusing Defendants of placing
incorrect or unwarranted material in their employment files. Defendants filed a Rule 12 motion to
dismiss under the Federal Rules of Civil Procedure, which was partly granted. Plaintiffs amended their
complaint, and now Defendants have moved to sever six of the Plaintiffs from their complaint under
Rules 20(b), 21 and 42(b). Plaintiffs wanted to amend after intervening precedent supported their
contention that their rights under the First Amendment to the United States Constitution when they
were not allowed to disclose documents to their attorneys. Plaintiffs also expanded their accusations of
Defendants’ obstruction. Defendants complained that the amended complaint was factually diverse,
lacked a common thread between Plaintiffs and therefore placed an undue burden on them.

Issue. The issue is whether Plaintiffs amended claim should be granted and whether Defendants may
sever six Plaintiffs from the claim.

Held. The court held that there was not an undue burden and allowed the amended claim without
allowing Defendants motion to sever. Discovery has yet to take place, and Defendants were unable to
point to any specific Rule 8 violations (Rule 8 ensures that a claim is plainly stated to ensure that there is
no burden on the party to respond to the complaint). The court also agreed with Plaintiffs’ Rule 20(a)
transactional test that argued that the claims by each Plaintiff were logically related.

Discussion. The court noted that Plaintiffs were not repeatedly going back to the well to amend their
complaints; rather, this was their first amendment and it occurred before discovery.

SECTION B. ADDITION OF CLAIMS BY DEFENDANT

1. Counterclaims (FRCP 13 a-f)

Rule 13. Counterclaim and Crossclaim
(a) Compulsory Counterclaim.
(1) In General. A pleading must state as a counterclaim any claim that--at the time of its service--the pleader has against an opposing party if
the claim:
(A) arises out of the transaction or occurrence that is the subject matter of the opposing party's claim; and
(B) does not require adding another party over whom the court cannot acquire jurisdiction.
(2) Exceptions. The pleader need not state the claim if:
(A) when the action was commenced, the claim was the subject of another pending action; or
(B) the opposing party sued on its claim by attachment or other process that did not establish personal jurisdiction over the pleader on that
claim, and the pleader does not assert any counterclaim under this rule.
(b) Permissive Counterclaim. A pleading may state as a counterclaim against an opposing party any claim that is not compulsory.
(c) Relief Sought in a Counterclaim. A counterclaim need not diminish or defeat the recovery sought by the opposing party. It may request relief
that exceeds in amount or differs in kind from the relief sought by the opposing party.
(d) Counterclaim Against the United States. These rules do not expand the right to assert a counterclaim--or to claim a credit--against the
United States or a United States officer or agency.
(e) Counterclaim Maturing or Acquired After Pleading. The court may permit a party to file a supplemental pleading asserting a counterclaim
that matured or was acquired by the party after serving an earlier pleading.
(f) [Abrogated]

United States v. Heyward-Robinson Co.

United States Court of Appeals, Second Circuit, 1970.
430 F.2d 1077 .

PP: Defendants appealed from a judgment entered for plaintiff in the United States District Court for the
District of Connecticut upon a jury verdict in plaintiff's action brought under the Miller Act, 40 U.S.C.S.
§§ 270a and 270b.

Brief Fact Summary. Plaintiff sued Defendant for breach of a contract performed for the Navy under the
Miller Act, which names the United States as the party plaintiff. Defendant counterclaimed against
Plaintiff for overpayments on both the Navy contract and a private contract and Plaintiff filed a reply
counterclaim against Defendant on the private contract. Judgment was rendered against Defendant on
the reply counterclaim and Defendant appealed arguing lack of subject matter jurisdiction.

Overview: Plaintiff was a subcontractor on two contracts, one was a federal government contract, and
the other was non-federal. The subcontractor sued defendants, the prime contractor and its surety,
under the Miller Act, 40 U.S.C.S. §§ 270a and 270b, to recover payments due on the government job.
The prime contractor counterclaimed for overpayments and the extra costs of completing both
contracts. The subcontractor denied liability on the prime contractor's counterclaims and interposed a
reply counterclaim to recover from the prime contractor monies alleged to be due on the non-federal
contract. The jury awarded a verdict for the subcontractor, and judgment was rendered against the
prime contractor. The district court denied motions for judgment notwithstanding the verdict and for a
new trial. The court of appeals affirmed, holding that the counterclaims were compulsory within the
meaning of Fed. R. Civ. P. 13(a), giving the district court jurisdiction, and that the district court did not
commit reversible error in admitting certain evidence or in its jury instructions.

Rule of Law. Counterclaims need only have similar circumstances to the subject matter of the litigation
in order to be compulsory. There need not be identical facts.

Facts. Plaintiff D’Agnostino Excavators, Inc. sued Defendant Heyward-Robinson Co. in federal court
under the Miller Act (which names the United States as the party Plaintiff) for breach of contract
involving a Navy job. Defendant counterclaimed for overpayments made on the Navy contract and
another contract involving a private party (”the Stelma job”). Plaintiff filed a reply counterclaim against
Defendant on the Stelma job to recover money due from Defendant on that job. Both the Navy job and
the Stelma job were treated together in the lawsuit. Progress payments were to be made on both jobs in
a lump sum. There was one insurance policy covering both jobs. Defendant had the right under the
contract to withhold payment for both jobs if there were any damages suffered on either job. Plaintiff
claimed that Defendant breached both contracts by not making progress payments and Defendant
claimed Plaintiff breached both contracts by allowing its insurance to lapse. The jury found Defendant
liable to Plaintiff for both jobs and judgment was rendered against Defendant’s surety for the Navy job.
Defendant appealed the verdict arguing that the District Court did not have jurisdiction over the Stelma
job counterclaims because the claims were permissive and not compulsory counterclaims.
Issue. Did the counterclaims involving the Stelma job arise out of the same transaction or occurrence of
the Navy job in order to make them compulsory under Rule 13(a) of the Federal Rules of Civil
Procedure?

Held. Yes. Judgment affirmed.

In order for the District Court to have jurisdiction over the Stelma job counterclaims, the Court must
have ancillary jurisdiction from the Navy job claims or there must be an independent jurisdictional basis.
Because there is no argument presented that the Court had an independent basis for jurisdiction, it
must be determined whether the counterclaims were compulsory such as to give the Court ancillary
jurisdiction over the claims.

Under Rule 13(a) of the Federal Rules of Civil Procedure, counterclaims are compulsory if they arise from
the same transaction or occurrence that is the subject matter of the litigation. This does not require
identical facts, but a logical relationship between the claims.
Rule 13(a) of the Federal Rules of Civil Procedure was intended to prevent re-litigation of the same
issues and duplicate claims litigated in different forums.
Because the claims were considered the same by the parties and that an issue concerning one seemed
to affect the other (same insurance policy, breach of both agreements if money due on one, same kind
of job, occurred near same location at around the same time, letters threatening termination involved
both contracts), the claims arose from the same transaction or occurrence and were thus compulsory.
Because the counterclaims were compulsory, the Court had ancillary jurisdiction over the counterclaims
and could therefore render judgment.

Concurrence. Even though the two contracts had similar factual circumstances surrounding the legal
issues arising under them, this does not make the Stelma job claims “compulsory.” The complaint
alleged exactly how Defendant breached the Navy job contract. There was no need to mention the
Stelma job contract other than to bring up new issues involving the contract. In addition, any lump sum
payments involving both contracts could be pro rated by the court. However, permissive counterclaims
should not be required to have an independent jurisdictional basis, so the judgment should be affirmed.

Discussion. The majority opinion gives specific examples of how counterclaims can be considered
“compulsory.” The factual similarities and the parties’ treatment of the two contracts as one hinged on
the Court’s finding that the claims were compulsory. Compare with Judge Friendly’s concurring opinion
that notes that the factual similarities should not be the focus of the analysis but whether a party would
have to bring the counterclaim in response to the original pleading.

2. Cross-Claims (FRCP 13 g and 13h)

(g) Crossclaim Against a Coparty. A pleading may state as a crossclaim any claim by one party against a coparty if the claim arises out of the
transaction or occurrence that is the subject matter of the original action or of a counterclaim, or if the claim relates to any property that is the
subject matter of the original action. The crossclaim may include a claim that the coparty is or may be liable to the crossclaimant for all or part
of a claim asserted in the action against the crossclaimant.

(h) Joining Additional Parties. Rules 19 and 20 govern the addition of a person as a party to a counterclaim or
crossclaim.

Lasa Per L’Industria Del Marmo Societa Per Azioni v. Alexander

United States Court of Appeals, Sixth Circuit, 1969.
414 F.2d 143 .
PP: Appellants, a contractor, subcontractor, architect, and surety, sought review of the dismissal by a
United States District Court the of their counterclaims and cross-claims against appellee supplier. It was
contended that the lower court erred when it dismissed the counterclaims and cross-claims for want of
ancillary jurisdiction under Fed. R. Civ. P. 13(g-h).

Brief Fact Summary. Plaintiff sued many Defendants for breach of contract arising from Defendants’
alleged failure to pay for supplies delivered by Plaintiff on a construction job. Defendants filed
counterclaims, cross-claims and third party complaints against each other in tort and on different
contracts regarding responsibility for delivering the supplies. The District Court dismissed the cross-
claims and Defendants appealed.

Overview: The supplier filed a complaint for payment of marble used in a building. The prime contractor
counterclaimed and the architect and others filed cross-claims against the supplier. The court held that
the lower court erred when it dismissed the cross-claims and counterclaims for want of ancillary
jurisdiction under Fed. R. Civ. P. 13(g-h). The court held that the pleadings showed a logical relationship
between the cross-claims and the transaction or occurrence that was the subject matter of the
complaint and the two pending counterclaims. The contracts all related to the same project and to
problems that arose from the marble used in the building. The question presented by the various
pleadings was who was responsible for the marble problems. The court held that the same or closely
related factual and legal issues were involved and some of the same evidence was required for the
resolution of all the claims. The court held the lower court had the option to order separate trials on one
or more of the counterclaims, cross-claims or issues pursuant to Fed. R. Civ. P. 42(b), if the issues got
confusing.

Rule of Law. Cross-claims are permitted to be filed against co-defendants under Rule 13(g) of the
Federal Rules of Civil Procedure if the claims arise from the same “transaction or occurrence” of the
initial claim. If the claims are centered on the same legal issue involved in the initial claim, this is
considered the same “transaction or occurrence.”

Facts. Southern Builders (Defendant; “Southern”), a Tennessee corporation, was a general contractor
and was hired by Memphis, Tennessee (Defendant) and secured a bond with Continental Casualty
(Defendant; “Continental”) to build a new city hall. Southern subcontracted with Alexander Marble and
Tile Co. (Defendant; “Alexander”), a partnership of Tennessee residents, and Marble International, Inc.
(Defendant; “Marble”), a Texas corporation, to install marble in the new city hall. Alexander hired
Plaintiff Lasa Per L’Industria Del Marmo Societa Per Azioni (”Lasa”), an Italian corporation, to supply
materials.

Plaintiff sued all Defendants for money owed on the contract. Alexander filed an answer and
counterclaim, alleging that Plaintiff had breached the contract because of late delivery, substandard
materials, and wrong contract price. Southern filed an answer and counterclaim, alleging failure to ship
according to the contract and claimed damages. Alexander filed a cross claim against the other
Defendants except Marble for money allegedly due on the contract. Southern and Continental filed
answers and Southern filed a cross claim against Alexander for breach of contract. Alexander filed a
third party complaint against A.L. Aydelott and Associates (Defendant; “A.L.”) and Aydelott (Defendant),
the architect company and the architect individually, seeking actual and punitive damages under a
Tennessee statute for inducement to breach the subcontract. Alexander sued Southern for actual and
punitive damages.

The District Court treated the third party complaint and the counterclaim by Southern against Alexander
as cross claims. The District Court then dismissed the cross claim of Alexander v. Southern, Continental
and Memphis and the cross claim of Southern v. Alexander and the third party complaint of Alexander v.
A.L. and Aydelott. The District Court held, “the cross claims did not arise out of the same transaction or
occurrence that is the subject matter of the original action or of a counterclaim therein.”

Issue. Could Defendants file cross claims against each other under Rule 13(g) of the Federal Rules of Civil
Procedure as claims based on the same “transaction or occurrence” when the claims are founded on the
facts occurring in the initial lawsuit but involving different contracts?

Held. Yes. Reversed and remanded.

The policy behind Rules 13 and 14 of the Federal Rules of Civil Procedure is that the legal rights of all
parties should be handled in one action. This policy is intended to facilitate resolution.

A court has ancillary jurisdiction over cross claims if they arise from the subject matter of the original
action.

The term “transaction or occurrence” as used in Rule 13(g) of the Federal Rules of Civil Procedure is
given a broad and liberal meaning in order to avoid many lawsuits. Although the cross-claims involve
different subcontracts, they all center on the issue of responsibility for the marble job.

In the event that the issues in the case will cause jury confusion, the District Court has discretion to
order separate trials, but not dismiss the cross-claims.

Dissent. Plaintiff’s suit is in contract and all of Alexander and Southern’s claims are in tort. The claims
involve separate legal issues and therefore, the cross claims should not be permitted in the same case.
In addition, even the two contract actions should not be in the same case because they involve different
contracts, which would give rise to different factual issues.

Discussion. This case illustrates that complexity of parties, pleadings and issues are not grounds to
dismiss cross claims. In the event that various claims center on one factual situation, this satisfies the
requirements under Rule 13 (g) of the Federal Rules of Civil Procedure.