Opinion
January 1, 1963
The subjects of intervention and third-party practice have one important feature in common. They both relate to bringing additional parties into a law suit after it has been instituted. Intervention deals with persons who want to become parties to the action and ask permission to enter. Third-party practice is concerned with persons who have no desire and may even be reluctant to join the litigation, but who are brought in against their will. Thus, the two topics are cognate aspects of the same general subject. They are like the obverse and reverse sides of the same coin.
In spite of this similarity, the historical origins of these two types of procedure are entirely different. Intervention has its background in equity, which traditionally has been much more liberal than the common law in permitting multiplicity of parties. In this country, third-party practice seems to have originated in Admiralty at the hands of an eminent admiralty judge, Judge Addison Brown of the Southern District of New York. It had been previously introduced in England by the Judiciary Act of 1873. Considerably later it came into use in some of the Code States. It will be my purpose to discuss the two topics, intervention and third-party practice, separately, for although they have much in common, there are many aspects that pertain to one, but do not affect the other.
The Hudson, D.C., 15 F. 162.
At the outset in dealing with intervention, perhaps it might be well to call attention to the fact that there are many members of the bar who do not seem to distinguish with sufficient clarity between intervention as a party, and leave to file a brief or make an oral argument as amicus curiae. Counsel, who is permitted to be heard, either orally or by brief, or both, as amicus curiae, — and it should be noted that strictly speaking it is counsel who is an amicus curiae rather than the party who retains him or whom he represents —, has no other privilege than that of presenting argument for such enlightenment or help as he may be to the Court. He may not tender any evidence, make any motions, or take or prosecute any appeal. Consequently, there is no reason why leave to be heard as amicus curiae should not be freely granted, provided, of course, the Court feels that it would be helped, or might possibly be aided by hearing an amicus curiae, and would not be unduly burdened by useless material. On the other hand, members of the bar are apt to overlook the fact that a person who is permitted to intervene becomes a party to the law suit for all purposes. An intervenor may make motions; he may participate in the trial by cross-examining witnesses, tendering testimony in his own behalf, and making arguments; and he may prosecute appeals. Consequently, a petition for leave to intervene must, indeed, be scrutinized with care and not granted as a matter of course, lest the litigation be unduly delayed or prolonged, the rights of the original parties prejudiced, and the law suit assume a different or broader aspect than intended by them — in other words, the stream must not be permitted to overflow its banks.
The rule on intervention in the Federal courts, namely, Rule 24 of the Federal Rules of Civil Procedure, 28 U.S.C.A., is brief. It succinctly codifies the pre-existing law relating to the subject. It introduces very few new features. It distinguishes first between intervention as of right and what is denominated as permissive intervention, i.e., intervention in the discretion of the court.
Intervention as of right may, in turn, be subdivided into three kinds. The first category comprises situations in which an Act of Congress confers an unconditional right to intervene. Such cases are few. One illustration is found in the statute that permits the Attorney General of the United States to intervene in any action in which the constitutionality of an Act of Congress affecting the public interest is drawn in question, if the United States, or any officer, agency, or employee thereof, is not already a party to the law suit. In fact subsection (c) of the Rule requires that whenever such a contingency arises the Attorney General must be notified. Another instance is found in the absolute right of the Interstate Commerce Commission to intervene in an action brought by or against the United States to set aside an order of the Commission. The Commissioner of Patents has a statutory privilege of intervening in any action brought to compel the registration of a trademark. Representatives of employes of a carrier are granted by the Interstate Commerce Act an absolute right to intervene in any proceeding arising under the Act and affecting the employes. Still another illustration is the right of a trustee in bankruptcy to intervene in any action to which the bankrupt was originally a party, and which was still pending when the trustee was appointed.
49 U.S.C.A. § 17(11); Brotherhood of R. R. Trainmen v. Baltimore O. R. Co., 331 U.S. 519, 69 S.Ct. 811, 93 L.Ed. 1101.
Meyer v. Fleming, 327 U.S. 161, 165, 66 S.Ct. 382, 90 L.Ed. 595.
The second group of situations in which intervention is permitted as of right, comprises cases in which the petitioner would or may be bound by a judgment in the action and the representation of his interest by existing parties is, or may be, inadequate. An illustration of intervention of this type is found in class actions. Any member of the class has a right to intervene if it appears that the representation of the class by the nominal plaintiff or defendant, is ineffective or insufficient. Examples may be found in derivative stockholders' suits to enforce the rights of a corporation if those in control of the company have declined or failed to do so. Any stockholder has a right to intervene as an additional party plaintiff on a proper showing.
A third class of cases in which parties may intervene as of right consists of instances in which a fund or other property is in custodia legis, and the petitioner may be adversely affected by a proposed distribution or other disposition of the property.
A much larger group of cases of intervention comprehends instances in which intervention is permissive, or more accurately may be granted in the discretion of the court, rather than as a matter of right. The term "permissive" is hardly felicitous in this connection. The Rule enumerates two types of cases within this group: first, if a statute of the United States confers a conditional right to intervene; and, second, if an applicant's claim or defense and the main action have a question of law or fact in common. The Rule specifically provides that whenever any party to an action relies on any statute or Executive order administered by a governmental officer or agency, or on any regulation, order, requirement, or agreement issued or made pursuant to a statute or Executive order, the officer or agency charged with the administration of the matter may be permitted to intervene on timely application, provided the intervention will not unduly delay or prejudice the adjudication of the rights of the original parties. Conditions under which leave to intervene may be granted in the discretion of the Court are legion. For example, a party claiming a right of subrogation may be allowed to intervene in an action brought by his principal. A contractor may intervene in an action brought by another contractor on the same project on a bond given under the Miller Act, 40 U.S.C.A. § 270a et seq. If I may cite an example out of my own personal experience, I had an action before me recently to enjoin the National Labor Relations Board from conducting a representation election. The order of the Board had been granted on the petition of a labor union. It seemed to me appropriate to grant an application of this labor union for leave to intervene as an additional party defendant, because obviously it had an interest and would have been directly affected by any judgment in the action pending before me. To multiply the number of illustrations would hardly be helpful, and would unduly prolong this discussion.
The basic principle relating to jurisdiction and venue of an action in which a petition for intervention is presented, is that the existence of jurisdiction and the propriety of the venue of the action are determined by the status of the original parties as of the date of the institution of the suit. Generally the entry of an intervenor cannot destroy jurisdiction that has once attached as between the original parties, and it would seem to follow that it cannot affect the propriety of the venue. Ordinarily, the advent of an intervenor cannot create jurisdiction nor justify venue, if they, or either of them, does not exist or is not proper as between the original parties.
Glover v. Coffing, 7 Cir., 177 F.2d 234, 236.
Johnson v. Middleton, 7 Cir., 175 F.2d 535, 537.
Schmoil Fils, Inc. v. The Fernglen, D.C., 85 F.Supp. 578.
The decisions are not in accord on the question whether an independent ground for jurisdiction and a separate basis for venue are required in respect to the intervenor. The rulings seem to point to a distinction between cases in which the intervenor asserts rights that are dependent on those of one of the principal parties and, therefore, the intervention may be said to be auxiliary to the main suit; and cases in which the intervenor seeks to vindicate a right that is independent of the rights of the plaintiff or defendant. As to the first category, it may well be argued that no independent ground of jurisdiction or venue is needed for the intervention, while the opposite may perhaps be contended as to the second class of instances.
Johnson v. Riverland Levee District, 8 Cir., 117 F.2d 711, 134 A.L. R. 326.
Glens Falls Insurance Co. v. Cook Bros., Inc., D.C., 23 F.R.D. 269, 271.
I shall pass on now to third-party practice. It seems fitting to devote more attention to this topic than to the subject of intervention, because third-party practice is a far-reaching innovation. It is one of the notable reforms introduced by the Federal Rules of Civil Procedure. It is a potent weapon for avoiding circuity of action, and eliminating the cost, the delay, and the burden of additional and unnecessary law suits, thereby not only aiding the parties but also assisting the courts with congested dockets.
Basically, third-party practice as embodied in Rule 14 permits a defendant to assert a claim against another person who may be liable over to him in the event the plaintiff prevails. Prior to the introduction of this device the defendant had to bring a separate action against the third party, after the plaintiff had recovered judgment in the original suit. Under the present Federal procedure the defendant's claim against the person who is secondarily liable to him may be adjudicated in the same action. In this connection, it must be observed that while at common law the aim was, insofar as possible, to limit every action at law to a single controversy between the plaintiff and the defendant, the present Federal civil procedure seeks to achieve the opposite, namely, to determine as many controversies between as many parties as practicable in the same action. Situations within the orbit of the rule are numerous. They comprize cases in which an unsuccessful defendant is entitled to contribution, indemnity, or exoneration from some third person. Other similar situations of secondary liability arise that are not included within this enumeration.
The following specific instances in which third-party practice has been frequently employed may be mentioned, among many others: an endorser sued on a promissory note may bring in the maker as a third-party defendant; a debtor may assert a third-party claim against a guarantor of the obligation; one of several joint tort feasors may seek contribution from those jointly and severally liable with him; a person who is sued for breach of contract or for negligence may interpose a claim for a breach of warranty against a third party. Numerous other factual situations may arise and, in fact, have occurred. If I may cite an instance out of my own recent experience, there was before me some months ago an action for negligence against a hospital in furnishing a defective appliance to a patient. The hospital, in turn, brought in the manufacturer and vendor of the appliance on the theory of negligence and breach of warranty. The plaintiff then amended her complaint in order to assert a claim against the manufacturer. I suppose that if the famous case of MacPherson v. Buick Motor Co. (N.Y.-1916) 217 N.Y. 382, 111 N.E. 1050, L.R.A., 1916F, 696, had been decided under the present Federal procedure, the defendant could have brought in the manufacturer of the defective part as a third-party defendant, if, in fact, the manufacturer of the car had subcontracted the fabrication of that part of the vehicle.
Not too infrequently, in this connection, the courts are confronted with a confusion of thought on the part of some members of the bar. Some proposed third-party complaints allege that the defendant is not liable to the plaintiff, but that if anyone is, it is the third-party defendant. Obviously, a third-party complaint does not lie under such circumstances. Such facts may be shown by the original defendant under his general denial. A third-party complaint may be maintained only in cases in which the third-party defendant would be liable secondarily to the original defendant in the event that the latter is held liable to the plaintiff. To be sure it was otherwise under Rule 14 as initially framed, but it was promptly discovered that the rule was not operable in its original form. It was amended by limiting its application to cases of secondary liability to the original defendant.
The rule relating to third-party practice is manifestly procedural. Whether, however, the defendant has a right to recover on the third-party claim that he seeks to interpose, is a question of substantive law. In cases in which Federal jurisdiction is predicated on diversity of citizenship, the applicable State law necessarily governs. For example, if a defendant in a tort case seeks to assert a third-party claim for contribution against a joint tort feasor, his right to do so depends on State law. Some States still adhere to the original common law rule denying contribution between joint tort feasors. Other jurisdictions have adopted the progressive, enlightened modern doctrine permitting such contribution as a matter of fairness and justice. This is the view accepted in the District of Columbia, for example. Some jurisdictions permit contribution in cases of certain types, but not in others. Whether such a third-party claim may be prosecuted under the Federal Rules depends in the first instance on the pertinent substantive law. If the governing substantive law permits the assertion of such a claim, then the procedure to be followed in a Federal case is that provided by Rule 14, even if under State practice a separate action would have been required after judgment had been recovered against the original defendant.
A question has arisen in some cases whether a defendant may bring in his liability insurance carrier as a third-party defendant. On principle an affirmative answer seems inescapable. There is no reason why cases of this kind should be distinguished from cases of other types of secondary liability. Actually, however, as a practical matter the problem is very rarely confronted. Ordinarily, the insurance carrier takes over the defense of such an action in the first instance, and furnishes counsel to the defendant. The fact of insurance is not mentioned, and, in fact, in most jurisdictions its disclosure is not permitted. The question is likely to arise only in those exceptional instances in which the insurance carrier takes the position that there is no obligation on its part to the original defendant. In that event, it is conceivable that the defendant might bring in the insurance carrier as a third-party defendant. It is true that as a result the existence of insurance would necessarily be revealed to the jury. The prohibition against such a disclosure is, however, entirely for the defendant's benefit and he has a right to waive it. In fact, I may remark in passing that the reason prohibiting the disclosure of the existence of liability insurance is no longer as potent or vital as it was years ago. With the increased use of automobiles and the spread of liability insurance, the average jury, certainly the average urban jury, is likely to assume that insurance exists in the cases tried before it. In fact, not long ago counsel for the defendant in a personal injury case tried before me asked permission to inform the jury that his client had no liability insurance. My reply was in the negative, stating that so long as the rule was in existence, it had to operate both ways.
Tullgren v. Jasper, D.C., 27 F. Supp. 413, 416; Jenkins v. Black White Cab Co., D.C., 15 F.R.D. 5.
A third-party defendant may himself invoke third-party practice and bring in a person secondarily liable over to him. Conceivably there may be a long chain of successive third-party claims. I am sure that we all have had cases in which there were two or three third-party claims following each other seriatim.
When the Federal Rules of Civil Procedure first came into operation, there was considerable discussion of the question whether a separate basis for Federal jurisdiction and an independent foundation for proper venue were required for the maintenance of a third-party claim. The conclusion was reached at an early date, however, and it is now the prevailing doctrine that a third-party claim must be regarded as auxiliary or ancillary to the original action, and that, therefore, a separate basis for jurisdiction and venue is not requisite. Were it not for this enlightened approach, the rule relating to third-party practice would have become of very little usefulness. All too frequently there is no diversity of citizenship as between the original defendant and the third-party defendant. The minimum jurisdictional amount may be lacking and the venue may be improper, if the third-party claim were regarded as an independent proceeding. All these considerations would have gradually detracted from the usefulness of Rule 14, if it were not for the doctrine that original jurisdiction and venue govern, and that the third-party complaint must be regarded as auxiliary and ancillary.
Tullgren v. Jasper, D.C., 27 F. Supp. 413, 416; Lewis v. United Air Lines Transport Corp., D.C., 29 F.Supp. 112; United States v. Pryor et al., D.C., 2 F.R.D. 382; Millsap v. Lotz, D.C., 11 F.R.D. 161; Bill Curphy Co. v. Lincoln Bonding Ins. Co., D.C., 13 F.R.D. 146; Foster v. Brown, D.C., 22 F.R.D. 471.
The Rules as to service of process, however, are just as applicable to third-party defendants as they are to original defendants. Unfortunately, there are instances in which it is impossible for a defendant to assert a third-party claim because of inability to make service of process on the prospective third-party defendant within the limitations of Rule 4(f), which for most cases permits service to be made only within the territorial limits of the State in which the district court is held.
The courts have at times endeavored to alleviate this hardship in connection with motions made by defendants for a change of venue. On occasion the argument has been advanced in support of such a motion that if the change were permitted, the defendant would be able to bring in a third-party defendant, which he was unable to do in the district in which the action was originally instituted. While this contention is not regarded as conclusive, nevertheless, it is accorded a great deal of weight in determining whether a motion to change the place of trial should be granted in the exercise of discretion.
Fein v. Public Service Coordinated Transport, D.C., 165 F.Supp. 370; Allied Petro-Products, Inc. v. Maryland Casualty Co., D.C., 201 F.Supp. 694.
A word as to procedure for instituting a third-party claim. Leave for that purpose must be obtained from the Court. Prior to the service of his answer, defendant may make his application to the Court ex parte. Thereafter, it must be made on notice to the plaintiff. While the Court may use its discretion in deciding whether to permit the service of a third-party summons and complaint, such leave should be granted liberally and denied only for some imperative reason. Otherwise the liberal practice introduced by this rule might be defeated. One wonders whether the rule might not well be amended by permitting a defendant to bring in a third-party defendant as of right, without requiring leave of court. The additional party can protect itself by moving to dismiss the third-party complaint if the pleading fails to set forth a sufficient claim.
A third-party defendant is not limited to contesting his secondary liability to the third-party plaintiff. He also has the right to interpose against the original plaintiff any defenses that the original defendant has to the plaintiff's claim. This is an important and valuable privilege. A third-party defendant has a vital and direct interest in seeking to defeat the plaintiff's claim against the original defendant, because if the plaintiff's claim falls, there can be no secondary liability on the part of the third-party defendant. Cases may arise in which the third-party defendant may feel that the original defendant is not resisting the plaintiff's claim with sufficient vigor, or that the original defendant is overlooking some matters in his endeavors to meet it.
After a defendant brings in a third-party defendant, the plaintiff has the privilege, if he chooses to exercise it, of amending his complaint in order to assert his claim directly against the third-party defendant as well as against the original defendant. For example, if the latter impleads a third-party defendant on a theory of breach of warranty, the plaintiff may then amend his complaint and advance a claim directly against the third-party defendant on the basis that the rights under the warranty accrue to him as well as to the original defendant. Whether the plaintiff should take advantage of such a remedy depends on his own choice. No person may be compelled to sue any one.
It would seem, perhaps, that a separate basis for jurisdiction and venue should not be needed to justify the assertion of the plaintiff's claim as against a third-party defendant. The prevailing view is, however, to the contrary. This attitude from a practical standpoint, may lead to failure of justice in some cases. Some of the beneficent aspects of third-party practice may be frustrated. As a matter of theory and logic, it would seem reasonable to hold that a third-party claim is ancillary and auxiliary to the main suit for all purposes, and not only as between the third-party plaintiff and the third-party defendant.
Shverha v. Maryland Cas. Co., D.C., 110 F.Supp. 173, 174; Welder v. Washington Temperance Ass'n, D.C., 16 F.R.D. 18; Pasternack v. Dalo, D.C., 17 F.R.D. 420, 425.
A word should be said concerning the position of the United States as a litigant in connection with Rule 14. The question is likely to arise frequently in actions against the Government under the Federal Tort Claims Act, 28 U.S.C.A. §§ 1346, 2671 et seq. There is no doubt that the Government would have a right to implead a third-party defendant. For example, in an action against the United States involving a collision between a Government vehicle and a private vehicle, the Government in an action against it by one of the passengers may bring in the driver and owner of the other vehicle as third-party defendants. The converse is likewise true. It has been held by the Supreme Court that the terms of the Federal Tort Claims Act are sufficiently broad to permit a private individual against whom a tort action is brought, to bring in the Government as a third-party defendant.
United States v. Yellow Cab Co., 340 U.S. 543, 71 S.Ct 399, 95 L.Ed. 523.
A practical objection is at times advanced to the use of third-party practice, that it tends to multiply the issues at the trial and may even serve to complicate and confuse them unduly, in case of a jury trial. Such situations may in fact occur at times. The objection is, however, far from insuperable. The trial judge may still use his discretionary authority under Rule 42(b) to order a separate trial of the third-party claim, if such disposition appears desirable. Actually, the problem does not arise in the great majority of instances in which the third-party practice rule is invoked. In many cases the right to indemnity or contribution follows almost automatically as a matter of law from the disposition of the plaintiff's claim against the original defendant. In fact, in my limited experience, I found parties, at my suggestion, frequently willing to stipulate that the Court determine the third-party claim upon the coming in of the verdict on the plaintiff's claim against the original defendant. In cases in which the plaintiff amends his complaint to assert a claim against the third-party defendant, it is generally eminently appropriate that all of the issues be tried together. An example would be an action for negligence in which the defendant files a third-party complaint asserting a breach of warranty and the plaintiff thereupon amends his complaint in order to advance a similar claim on his own behalf.
I might revert to the illustration to which I have already referred, — the case of a patient who sued a hospital for furnishing a defective appliance. The hospital impleaded the manufacturer of the article, claiming breach of warranty, and the plaintiff then amended her complaint in order to aver a similar claim against the manufacturer, on the theory that lack of privity of contract would not bar her right to recover against the manufacturer. In that case it was obviously desirable to try all of the issues at the same time, because the basic question was whether the appliance was in fact defective.
At times the use of a special verdict may prove to be a helpful device to avoid possible complications and potential confusion on the part of the jury. For example, assume an action for personal injuries arising out of a collision between two automobiles. A passenger in Car A sues the driver of Car B. The defendant denies negligence, but also takes the position that if he were held guilty of negligence, the driver of Car A was equally culpable and is liable for contribution. I am assuming, of course, that this case is governed by the law of a jurisdiction such as the District of Columbia, which permits contribution between joint tort feasors. Accordingly, he brings in the driver of Car A as a third-party defendant. Conceivably, to leave the matter to the jury for two general verdicts might seem to be somewhat involved and confusing. In several such cases, I have called for a special verdict, submitting to the jury questions such as the following:
1. Was Driver B guilty of any negligence that was a proximate cause of the accident?
2. Was Driver A guilty of any negligence that was a proximate cause of the accident?
3. If the first question is answered "Yes", then answer the following:
What was the amount of damages sustained by the plaintiff?
$____________________
Assuming that the jury answers the first question in the affirmative, namely, finding that Driver B was guilty of negligence that was a proximate cause of the accident, then the Court renders judgment in favor of the plaintiff against Driver B for the amount of damages found by the jury.
If the jury responded to the second question in the negative, namely, that Driver A was not guilty of any negligence, then the judgment would contain a provision dismissing the third-party claim on the merits. If, however, the jury replied to the second question in the affirmative, then there would be a provision in the final judgment for contribution in favor of Driver B as against Driver A. Obviously, the Court could make the necessary adjustments in the judgment on the basis of the special verdict.
Ordinarily I do not use special verdicts, because I am a strong believer in the basic, historic idea of a general verdict. In such event the jury has all of the issues before it in their entirety and is in a position to make necessary adjustments and possible compromises, if you will. On the other hand, where there are several parties and separate issues, a special verdict becomes a desirable expedient in simplifying the questions and enabling the Court to dispose of the entire litigation without complication or confusion.
Observing and contemplating the results obtained by the use of third-party practice in the light of actual experience with it, one inevitably reaches the conclusion that third-party practice is an important achievement and a far-reaching progressive advance in the direction of simplifying civil procedure in the Federal courts, eliminating circuity of action and reducing the time consumed and the money expended in litigation. It is one of the many outstanding improvements introduced by the epochmaking Federal Rules of Civil Procedure. Its use deserves to be encouraged and expanded.