Newman-Green Inc v. Alfonzo-Larrain/Dissent Kennedy

by Anthony Kennedy

Justice KENNEDY, with whom Justice SCALIA joins, dissenting.

Our colleagues on the Court of Appeals disagree about whether 28 U.S.C. § 1653, which provides that "[d]efective allegations of jurisdiction may be amended, upon terms, in the trial or appellate court[,]" empowers a court of appeals to dismiss a party who spoils complete diversity. The Court holds today that § 1653 does not give an appellate court the power to cure actual defects in jurisdiction, but extends only to defects in its allegation. See ante, at 830. I agree that this is the correct interpretation of § 1653.

That should end the case. For if Congress thought it necessary to provide by affirmative statutory grant the rather ministerial power to cure defective allegations in jurisdiction, the more awesome power of curing actual defects in jurisdiction ought not be presumed, absent a statutory grant just as explicit. The balance of the Court's opinion in effect demonstrates that no such clear source of authority can be found to rebut the strong negative implication from the Court's interpretation of § 1653. The Court nevertheless holds that the power in question exists, though it cannot provide us with its precise location.

As an initial matter, it is disturbing that the Court does not address in a substantive way the grave, brooding question whether Federal Rule of Civil Procedure 21 affords even the district courts the power to confer jurisdiction retroactively by dismissing a nondiverse party. On this critical point, the Court states only that this question is "well settled" in the lower courts. See ante, at 832. But it has never been the rule that federal courts, whose jurisdiction is created and limited by statute, see Finley v. United States, 490 U.S. 545, 547-548, 109 S.Ct. 2003, 2005-2006, 104 L.Ed. 593 (1989), acquire power by adverse possession. Indeed, I have some doubts that Rule 21 provides this power to district courts. For one thing, it is important to note that Rule 21 governs only misjoinder and nonjoinder. But that is not what is at issue in this case. There is no claim here that Bettison is an improper party to this action, only that his presence defeats federal jurisdiction. It must be remembered, moreover, that Federal Rule of Civil Procedure 82 expressly provides that the other Rules must not be construed to extend or limit the jurisdiction of the district courts. Since dismissing a nondiverse party confers jurisdiction retroactively on the district court, it is questionable whether relying on Rule 21 is consistent with Rule 82's clear admonition. Finally, 28 U.S.C. § 1653 governs the power of not only appellate courts but also trial courts, and if, as the Court holds, that section confers only the authority to cure defective allegations of jurisdiction, then the same negative implication which I discuss above clouds the district courts' ability to cure actual jurisdictional defects under the vague authority of Rule 21. The charming utility of the nunc pro tunc device cannot obscure its outright fiction.

Even on the assumption, however, that Rule 21 provides the district courts with the necessary authority to dismiss a ondiverse party at any stage of the litigation for the sole purpose of creating jurisdiction where none existed before, it is just not possible to rely on that Rule as the source of authority for appellate courts. For notwithstanding some rather odd language to the contrary in Mullaney v. Anderson, 342 U.S. 415, 417, 72 S.Ct. 428, 430, 96 L.Ed. 458 (1952) ("Rule 21 will rarely come into play at this [i.e., in the Supreme Court] stage of a litigation") (emphasis added), it is well settled that "the Federal Rules of Civil Procedure . . . apply only in the federal district courts." Automobile Workers v. Scofield, 382 U.S. 205, 217, n. 10, 86 S.Ct. 373, 381, n. 10, 15 L.Ed.2d 272 (1965).

The two 19th-century cases relied upon by the Court, Horn v. Lockhart, 17 Wall. 570, 21 L.Ed. 657 (1873), and Carneal v. Banks, 10 Wheat. 181, 6 L.Ed. 297 (1825), do not establish the authority of an appellate court to dismiss a nondiverse party to preserve jurisdiction. Both the majority and the dissent in the Court of Appeals recognized that, at most, Horn speaks of the powers of a trial court, see 854 F.2d 916, 921 (1988) (Posner, J.); id., at 931 (Easterbrook, J.), and the Court concedes as much, see ante, at 835-836. Nor does Carneal establish in any explicit way, or even by necessary inference, the authority of an appellate court to preserve jurisdiction by dismissing a nondiverse party who defeats complete diversity.

The majority's reliance on Carneal proceeds from a premise that is most questionable. It assumes that Carneal involved a single action in which this Court dismissed on its own the nondiverse parties. Judge Posner, however, observed that the Court in Carneal may have in fact "treated the suit as if it were two suits, one satisfying the requirement of complete diversity, the other dismissable and dismissed." 854 F.2d, at 921. Judge Posner, perhaps, understated his own case. Carneal involved a contract in which the plaintiff, Banks, "agreed to transfer to Carneal the right of the said Banks in 30,000 acres of land purchased by him from John Harvie," in exchange for which Carneal promised to convey to Banks "a tract of 2,000 acres of land on Green River." 10 Wheat., at 182. Banks claimed that "Carneal was guilty of fraud in pretending to have a good title to the said 2,000 acres of land." Id., at 182-183. Because the contract involved a conveyance of the 30,000 acres from Harvie to Carneal, in order for Banks to obtain complete relief, he prayed both "that the contract [between Carneal and Banks] . . . be rescinded" and "that the heirs of John Harvie . . ., in whom the legal title to the said 30,000 acres remains, . . . be decreed to convey the same to [Banks]." Id., at 183. The jurisdictional problem was that, although there was complete diversity between Banks and Carneal's heirs, there was no diversity between Banks and Harvie's heirs. See id., at 187-188. The Court appears to have treated the claims against Harvie's heirs (the nondiverse parties) as a separate suit which in no way affected jurisdiction over Banks' suit against Carneal's heirs. The Court stated: "If the validity of this objection [the lack of diversity], so far as respects Harvie's heirs, be unquestionable, it cannot affect the suit against Carneal's heirs. . . ." Id., at 188 (emphasis added). Because the Court concluded that Harvie's heirs were not indispensable to the suit against Carneal's heirs, the Court held that "[t]he bill . . ., as to Harvie's heirs, may be dismissed without in any manner affecting the suit against Carneal's heirs." Ibid. (emphasis added). The more plausible interpretation of Carneal is that the Court did not dismiss the nondiverse parties in a single action and then proceed to the merits, but rather dismissed the suit against the nondiverse parties for want of jurisdiction and went on to decide the merits of the separate suit that met the requirements of c mplete diversity. Seen in this light, Carneal does not establish the authority of an appellate court to preserve jurisdiction by dismissing a nondiverse party, but rather evidences only the usual appellate power to dismiss an action in which the federal courts lack jurisdictional authority.

There is, moreover, a more basic reason not to place heavy reliance on Carneal and Horn. As the Court concedes, these cases "were decided in a procedural era different from our own," ante, at 836. The powers of the district courts and courts of appeals are now governed by Federal Rules of Procedure and various other provisions in Title 28. In my view, these cases do not establish an authority in the appellate courts so clear that it survives the plain negative implication from the one statutory provision on point (§ 1653). Whatever may be implied from Carneal, the present statutory authority permits appellate courts to cure only defective allegations of jurisdiction and not jurisdictional flaws.

I am not at all persuaded, either, that practical considerations in the case warrant our holding that courts of appeals have the power to dismiss nondiverse parties. The dissent in the Court of Appeals, and the opinion for the Court here, each assume it would be quite a waste to remand the case to the District Court so that it may determine whether an amendment to the complaint ought to be allowed. But if, as the Court and the dissent below contend, there would be no prejudice to respondents from amending the complaint to dismiss the nondiverse party, how long could it take for the District Court to decide this and reenter its judgment? I should think a limited remand for this purpose, with the appellate panel to resume jurisdiction if amendment is permitted, would be most expeditious. The overriding practical consideration is that the District Court, which managed the process of discovery and the presentation of evidence at trial, is in the much better position to determine whether the dismissal of the nondiverse party, after judgment, would prejudice the defendant.

For these reasons, and with all due respect, I dissent from the opinion and judgment of the Court.

Notes