Herklotz v. Parkinson, No. 07-56657 (9th Cir. 2017)
Annotate this CaseIn 2000, WRS filed suit against Plaza Entertainment and its directors. Plaza cross-claimed, and the district court eventually granted summary judgment for WRS. The district court then granted Defendant Herklotz's motion to sever his state law cross claim and transferred it to the California district court, where it was later dismissed under Federal Civil Rule 12(b)(6). The court explained that a severed action must have an independent jurisdictional basis. Where, as in this case, the claims were stripped of their jurisdictional predicate through severance, they lose their federal hook and must stand on their own. Therefore, the court concluded that the Pennsylvania court lacked jurisdiction to enter the transfer order, and the California court lacked jurisdiction to take the case. The court reasoned that the appropriate course of action would have been either to deny the motion to sever and retain jurisdiction over the supplemental state law claims, or to decline to exercise supplemental jurisdiction under 28 U.S.C. 1367(c)(3) and dismiss the crossclaim, thus permitting Herklotz to seek relief in state court. Accordingly, the court vacated and remanded.
Court Description: Subject Matter Jurisdiction. The panel vacated the district court’s Fed. R. Civ. P. 12(b)(6) dismissal of a state law crossclaim arising out of a diversity action, and remanded with instructions to dismiss for lack of jurisdiction. When the District Court in the Western District of Pennsylvania granted summary judgment in a diversity suit in favor of WRS, Inc., appellant John Herklotz moved to sever his state law crossclaim and transfer it to the Central District of California. The panel held that once Herklotz’s crossclaim was severed, it became an entirely new and independent case that must have an independent jurisdictional basis. The panel held that Herklotz could no longer rely on the supplemental jurisdiction afforded by 28 U.S.C. § 1367(a). The panel concluded that there was no subject matter jurisdiction HERKLOTZ V. PARKINSON 3 because Herklotz’s severed crossclaim included only state law claims against non-diverse parties.
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