Compumedics USA, Inc. v. Capital Partners Financial Group USA, Inc.
MEMORANDUM OPINION AND ORDER. Signed by Judge Royce C. Lamberth. (mgr)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF TEXAS
SAN ANTONIO DIVISION
COMPUMEDICS USA, INC.
Civil No. SA-16-CV-00522-RCL
CAPITAL PARTNERS FINANCIAL GROUP
HUMBLE SURGICAL HOSPITAL, LLC;
AND MUSTAPHA KIBIRIGE, M.D.
Denying the Third-Party Defendants' Motion to Dismiss the Third-Party Complaint
The third-party defendants in this
caseHumble Surgical Hospital and Mustapha
Kibirige (collectively "Humble Surgical")ask the Court to dismiss Capital Partners's third-party
complaint against them. (ECF #5 5). Humble Surgical argues (1) that the Court lacks subject-
matter jurisdiction over the third-party complaint because the Humble Surgical and Capital
Partners are non-diverse parties, and (2) that venue is improper in this Court because another action
is pending in Harris County covering the same matters alleged in the third-party complaint. The
Court will DENY Humble Surgical's motion in its entirety.
THE MOTION TO DISMISS FOR LACK OF SUBJECT-MATTER JURISDICTION
The problem that Humble Surgical presents to the Court sounds like a sample problem
from a first-year civil procedure class.
The plaintiffCompumedics, a citizen of North
Carolinafiled suit against the
defendantCapital Partners, a citizen of Texasin Minnesota state court. Compumedics asserted
only state-law claims against Capital Partners. Capital Partners removed the action to the United
States District Court for the District of Minnesota pursuant to 28 U.S.C.
1441. The basis for
removal was diversity jurisdiction because the parties are citizens of different states and the amount
in controversy exceeds $75,000. The suit was then transferred to the Western District of Texas.
Once the suit arrived in the Western District of Texas, Capital Partners impleaded
Humble Surgical, also a citizen of Texas, under Rule 14.1 Capital Partners alleges that Humble
Surgical is "liable to [Capital Partners] for all or part of Compumedics's claim against Capital
Partners." (ECF #40 at 2). Given these facts, does the Court have subject-matter jurisdiction over
the impleader claim against Humble Surgical?
The Court clearly does not have original jurisdiction over the impleader claim. First,
Capital Partners asserts no federal claims against Humble Surgical. Therefore, subject-matter
jurisdiction over the impleader claim cannot lie in federal-question jurisdiction.
28 U.S.C. §
1331). Second, although the value of the underlying claim exceeds $75,000, Capital Partners and
the Humble Surgical Parties are all citizens of Texas. And because they are non-diverse parties,
subject-matter jurisdiction over the impleader claim cannot lie in diversity jurisdiction.
In its reply brief, Humble Surgical incorrectly asserts that it is joined under Rule 19. But Rule 19 does not govern
third-party practice. Third-party practice is properly governed by Rule 14, under which a "defending party may, as
third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the
claim against it." (FED R. Civ. P. l4(a)(l)). That is exactly what Capital Partners did in this case.
Because the Court does not have original jurisdiction over the impleader claim, the
Court must examine whether it has supplemental jurisdiction over the impleader claim pursuant to
28 U.S.C. § 1367. Subsection (a)
of that statute says:
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 additional
(28 U.S.C. § 1367(a)). First, there is a civil action over which the Court has original jurisdiction
Compumedics's suit against Capital Partners. The Court's original diversity jurisdiction over that
suit is unchallenged. Second, the impleader claim at issue is "so related" to the claims in that
action as to "form part of the same case or controversy under Article III." (Id.). The impleader
claim seeks indemnity/contribution for the exact claims asserted in the Compumedics action. No
claim could be more related. And third, as the last sentence of § 1367(a) makes clear, it does not
matter that the impleader claim arises from third-party practice.
Humble Surgical argues that
1367(b) prevents the exercise of supplemental
jurisdiction over the impleader claim. The relevant portion of that subsection says:
In any civil action of which the district courts have original
jurisdiction founded solely on section 1332 of this title, the district
courts shall not have supplemental jurisdiction under subsection (a)
over claims by plaintiffs against persons made parties under Rule
Rule 14, 19, 20, or 24 of the Federal Rules of Civil Procedure.
1367(b)). Humble Surgical argues that because it is party to this suit pursuant to the
operation of Rule 14 that supplemental jurisdiction cannot be had over the claim against it. But
this is incorrect. The Court only lacks supplemental jurisdiction over claims by "plaintiffs" against
persons made parties under Rule 14. But "plaintiffs" and "third-party plaintiffs" are not the same.
So the impleader claim is not a claim by a plaintiff against persons made parties under Rule 14.
Rather, it is a claim by a defendant/third-party plaintiff against persons made parties under Rule
14. In the context of this suit, only hypothetical claims by Compumedics (the lone plaintiff in this
case) against Humble Surgical would be barred by
1367(b). But there are no such claims.
As such, it is clear that the Court has supplemental jurisdiction over Capital Partners's
impleader claim against Humble Surgical. Therefore, Humble Surgical's motion to dismiss that
claim pursuant for lack of subject-matter jurisdiction will be DENIED.
THE MOTION TO DISMISS FOR IMPROPER VENUE
Humble Surgical argues that the impleader claim should also be dismissed for improper
venue. Humble Surgical's primary argument is that the same facts and claims asserted in the
impleader claim were also asserted in another action brought by Capital Partners against Humble
Surgical in Texas state court in Harris County. Therefore, according to Humble Surgical (and
according to Compumedics, who also chimed in on this issue), the impleader claim should be
dismissedor at least stayedin accordance with the prior-action-pending doctrine.
Ca. Dep 't of Health Sen's., 487 F.3d 684, 688 (9th Cir. 2007); Curtis v. Citibanck, NA., 226
F.3d 133, 138-39 (2d Cir. 2000)). Not only that, but it appears that Capital Partners has taken
contrary positions in these two suits. (See ECF #56 at 3-4 (relating how Capital Partners alleged
in the Harris County action that Humble Surgical agreed to pay it for the sleep-study systems at
issue in this case, but alleged in this Court that Humble Surgical agreed to pay Compumedics
directly for the sleep-study systems)).
The Court is not persuaded by these contentions. Capital Partners has amended its
claims in the Harris County action, withdrawing the claims that relate to the dispute before this
Court. As such, the problems ofjudicial inefficiency and inconsistent judgments that motivate the
prior-action-pending doctrine are no longer of concern. And to the extent that any concerns
remain, the Court is confident that the application of resjudicata as necessary will likewise avoid
judicial inefficiency and inconsistent judgments.
Therefore, the Court will DENY Humble
Surgical's motion to dismiss for improper venue.
For the reasons given above, the Court will DENY in its entirety the third-party
defendants' motion to dismiss the third-party complaint pursuant to FED. R. Civ. P. 12(b)(1) and/or
A separate order wifi issue.
HON RABLE ROYCE LAMBERTH
UNITED STATES DISTRICT JUDGE
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