Also known as: third-party actions · third party action · third party actions · impleader · third-party claim
Written by attorneys — see sources below.
A claim asserted by a defendant in an existing civil action against a person not previously a party to the suit. The claim typically seeks indemnity, contribution, or other relief arising from the same transaction or occurrence that gave rise to the original complaint. The third-party defendant is brought into the action so that all related liabilities can be resolved in a single proceeding.
Tonya Takahashi sued Threshold Capital for breach of contract. Threshold Capital then asserted a claim against Tidal Energy for indemnity on the same contract dispute. The court permitted the joinder because the indemnity claim was independent of the original breach claim and could be resolved together.
Tobias Thomas sued Tundra Resources on a tort claim. Tundra Resources filed a third-party action against Topaz Mining for contribution. The court entered final judgment on the original claim after determining no just reason for delay existed, allowing immediate appeal while the third-party claim continued.
Theresa Tucker sued several manufacturers in a mass-tort action. One defendant filed a third-party action against its insurers seeking declaratory relief on coverage for any settlement. The insurers remained parties to the overall litigation while the coverage dispute proceeded separately.
In the early 1990s, the Judicial Panel on Multidistrict Litigation transferred all pending federal asbestos cases to the Eastern District of Pennsylvania for pretrial proceedings before Judge Weiner. Attorneys from the Plaintiffs' Steering Committee and the Center for Claims Resolution, a consortium of twenty former asbestos manufacturers, began settlement negotiations that initially addressed pending inventory claims but soon expanded to cover future claims. After CCR settled thousands of inventory plaintiffs' claims for more than $200 million through separate agreements, the parties on January 15, 1993, filed a single-day package. This package consisted of a complaint, answer, proposed settlement stipulation exceeding one hundred pages, and joint motion for conditional class certification in a new action not part of the MDL transfer. The complaint defined the class as all persons in the United States or its territories who had been exposed occupationally or through a spouse or household member to asbestos products attributable to CCR defendants and who had not filed suit as of January 15, 1993. This class encompassed both individuals with manifest diseases such as mesothelioma, lung cancer, and asbestosis and exposure-only individuals with no current symptoms. The group potentially numbered in the hundreds of thousands or millions. The accompanying stipulation created a no-fault administrative compensation matrix with fixed, non-inflation-adjusted award ranges for four disease categories. It imposed numerical caps on extraordinary claims and excluded compensation for medical monitoring, fear of future injury, and loss-of-consortium claims. A three-month opt-out period applied. The District Court conditionally certified the class under Rule 23(b)(3) for settlement purposes only, appointed class counsel, approved an extensive notice plan that reached millions of individuals, conducted fairness hearings, and entered orders finding the settlement fair while enjoining class members from pursuing separate asbestos suits. Objectors appealed, the Third Circuit vacated the certification, and the Supreme Court granted certiorari.
View caseTori Taylor sued a diverse defendant in federal court. The defendant impleaded a nondiverse third party in a third-party action for indemnity. The original plaintiff then attempted to assert a direct claim against the impleaded party, but the court lacked supplemental jurisdiction because the claim destroyed complete diversity.
In 1991, about 10,000 Exxon dealers filed a class-action suit against the Exxon Corporation in the United States District Court for the Northern District of Florida. They alleged an intentional and systematic scheme by which they were overcharged for fuel purchased from Exxon. The plaintiffs invoked the District Court's diversity jurisdiction under 28 U.S.C. § 1332(a). Each dealer's claim was for slightly less than the $75,000 jurisdictional minimum. After a unanimous jury verdict in favor of the plaintiffs, the District Court certified the case for interlocutory review on the question of supplemental jurisdiction over class members who did not meet the jurisdictional minimum. In a separate action, a 9-year-old girl sued Star-Kist in a diversity action in the United States District Court for the District of Puerto Rico. She sought damages for unusually severe injuries she received when she sliced her finger on a tuna can. Her family joined in the suit seeking damages for emotional distress and medical expenses. The District Court granted summary judgment to Star-Kist, finding that none of the plaintiffs met the minimum amount-in-controversy requirement. The Court of Appeals for the Eleventh Circuit upheld the District Court's extension of supplemental jurisdiction to the class members who did not meet the amount requirement. The Court of Appeals for the First Circuit ruled that the injured girl, but not her family members, had made allegations of damages in the requisite amount. It further held that section 1367 authorizes supplemental jurisdiction only when the district court has original jurisdiction over the action. In a diversity case, original jurisdiction is lacking if one plaintiff fails to satisfy the amount-in-controversy requirement. The Supreme Court granted certiorari to resolve the conflict among the Courts of Appeals. The cases were consolidated before the Supreme Court.
View caseTyler Taylor challenged an agency decision. The agency filed a third-party action against a surety to recover on the same underlying obligation. The court exercised jurisdiction over the third-party claim because it related directly to the original dispute.
Tamara Tan sued a theater operator for antitrust violations. The defendant filed a third-party action against a supplier. The court scheduled the third-party claim for separate trial after the main action to preserve the plaintiff's right to a jury trial on the original claims.
Fox West Coast Theatres, Inc. operated a movie theatre in San Bernardino, California and exhibited films under contracts with distributors granting exclusive first-run rights and clearance periods during which no other theatre could show the same pictures. Beacon Theatres, Inc. built a drive-in theatre about 11 miles away and notified Fox that it considered the clearance provisions to be violations of the antitrust laws, threatening treble damage suits against Fox and its distributors. Fox filed a complaint for declaratory relief in the United States District Court for the Southern District of California alleging a controversy under the Sherman Antitrust Act and Clayton Act. The complaint sought a declaration that the clearances were reasonable and not in violation of the antitrust laws together with an injunction preventing Beacon from instituting any antitrust actions against Fox and its distributors arising out of the controversy. Beacon filed an answer denying the threats, a counterclaim against Fox, and a cross-claim against an intervening exhibitor. These pleadings asserted that there was no substantial competition between the theatres, that the clearances were unreasonable, and that a conspiracy existed between Fox and distributors to manipulate contracts so as to restrain trade and monopolize first-run pictures. They sought treble damages. Beacon demanded a jury trial of the factual issues under Federal Rule of Civil Procedure 38(b). The district court directed that the issues raised by Fox's complaint, including the question of competition between the theatres, be tried to the court first under Rules 42(b) and 57 before any jury determination of the antitrust violation charges in the counterclaim and cross-claim. The Court of Appeals for the Ninth Circuit denied Beacon's petition for mandamus to vacate the district court's orders, holding that the trial judge had acted within his discretion. The Supreme Court granted certiorari.
View caseA court may strike, sever, or order separate trial of a third-party claim when doing so serves judicial economy or avoids prejudice. The decision rests on factors such as whether the claim shares common questions with the main action and whether trying the claims together would confuse the jury or delay resolution.
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Dismissal of the main claim does not automatically end a third-party claim. The court retains discretion to keep the third-party action alive if it has an independent jurisdictional basis or if fairness requires resolution of the indemnity or contribution issues.
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A third-party claim for indemnity or contribution usually falls within supplemental jurisdiction because it arises from the same nucleus of facts as the original claim. However, a plaintiff's subsequent claim against a nondiverse third-party defendant cannot rely on supplemental jurisdiction when original jurisdiction rests solely on diversity.
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Fees incurred defending a separate third-party action forced by the defendant's tort may be recovered as consequential damages. Fees incurred in the present suit against the original tortfeasor remain subject to the American rule and are not recoverable as damages.
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…at 377. Federal courts, by the time of Kroger , were routinely exercising ancillary jurisdiction over compulsory counterclaims, impleader claims, cross-claims among defendants, and claims of parties who intervened "of right." See id. , at 375, n. 18 (collecting cases). In Kroger , however, "the nonfederal claim . . . was…