# Opposition Brief — Taylor Forge Stainless, Inc. v. Viacom International, Inc.

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1367%3A2

## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2000
- **Citation:** 531 U.S. 1051

## Text

(z.) Ptoms Gow, 8
DEO
No. 00-528 wies
HOV G 200
IN THE OFFOE OF THE CLERM

Supreme Court of the United Stater

TAYLOR FORGE STAINLESS, INC.
and MICHAEL W. KEARNEY,

Petitioners,
v.

VIACOM INTERNATIONAL INC.,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES CouRT OF APPEALS FOR THE SECOND C)RCUIT

BRIEF IN OPPOSITION

WILLIAM R. MAGUIRE

Counsel of Record
JONATHAN D. PRESSMENT
HucGuHes Hupsarp & REED LLP
One Battery Park Plaza
New York, New York 10004
(212) 837-6000

Attorneys for Respondent
Viacom International Inc.

163249 @) Counsel Press LLC
(800) 274-3321 + (800) 359-6859

i

PARTIES TO THE PROCEEDING AND
STATEMENT PURSUANT TO RULE 29.6

The Petition correctly identifies the parties to the
proceeding as Michael W. Kearney, Taylor Forge Stainless,
Inc. and Viacom International Inc. Although third-party
defendants Camp Dresser & McKee and Conolog
Corporation did not submit briefs to either the District Court
or the Second Circuit Court of Appeals, both have been
served with this brief in opposition.

Viacom International Inc. is a wholly-owned subsidiary
of Viacom Inc., a publicly held company.

il

TABLE OF CONTENTS

Parties to the Proceeding and Statement Pursuant to
PME eC re re er ek

Reasons for Denying the Writ .................
DOUIOGNG. oon svcdsaesesaeeeneel oe
PEQUUOEE oo 6 6A aes eee

I. The Petition Fails To Meet Any Criteria For
The Granting Of A Writ Of Certiorari .....

II. The Second Circuit’s Decision Was Required
Veter 26 US. 8 S39 ies

COMNEIIOOD novos kc civ atone Lee ee

Page

10

iit

TABLE OF CITED AUTHORITIES

Cases:
Beaulieu v. United States, 497 U.S. 1038 (1990) ..

Chicago v. Int’l Col. of Surgeons, 522 U.S. 156
EE EA Cebiwe cde eseevrdiceveeuecenevens

D.L. Thomas v. American Home Products, Inc.,
SR OUD ccc acedvarevveasseewe se

Dev. Fin. Corp. v. Alpha Hous. & Health Care, Inc.,
SQ F346 156 (36 Cir. 1995) .. 0 cc cccccccvess

E.R. Squibb & Sons v. Accident & Cas. Ins. Co.,
OO Foe Ses Ce Cir. ISPS)... 5 ce seccecesess

In re: Abbott Laboratories, Inc., 51 F.3d 524
(Ste Civ. BOGS)... nc cect cieeeccccesess

Indianapolis v. Chase Nat'l Bank, 314 U.S. 63
Ee RG ade eh CGN Kaas Nevde cee vw averse

Janney Montgomery Scott, Inc. v. Shepard Niles,
Inc., 11 F.3d 399 (3d Cir. 1993) .............

Leonhardt v. Western Sugar Co., 160 F.3d 631 (10th
a och twos vebvecneceeswescss

Page

6

iv

Cited Authorities
Page
Maryland Cas. Co. v. W.R. Grace & Co., 23 F.3d
617 (2d Cir.), cert. denied, 513 U.S. 1052, 115
Se Sere oer ere rere peer 5
Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d
a EE if sb ak ckucdesdedednd Anan eo 6
Owen Equip. & Erection Co. v. Kroger, 437 U.S.
PPERUED Shi xs vencinscekdvenyees eves 5
Shanaghan v. Cahill, 58 F.3d 106 (4th Cir. 1995)
MiSs Si nae b oa kaw See eeeee tea oe ee 5
Shields v. Barrow, 58 U.S. 130 (1854) .......... 5
Strawbridge v. Curtiss, 7 U.S. 267 (1806) ....... 5
Stromberg Metal Works, Inc. v. Press Mechanical,
Boe. 77 F.0 Fae C7 Ce, COPED. va ove secures 5
Viacom International Inc. v. Kearney, 212 F.3d 721
SG SE. hence s pe peedaens bua 4, 7,10

Wisconsin Dep't of Corrections v. Schacht, 524 U.S.
re EE 6453 enka isd sea eee

Vv

Cited Authorities
Page

Statutes:
yr Ris Som 5) Serer rer r rire rire... 5, 7,8
POUL. O10 3. cisas cee ceaeieess 1, 5, 6, 7, 8,9
26-US. BADR «5 cnc ccncnsveces Kuniecteses 6, 7
y Eis Foe EE: >) | Peeererrr rr rrr rrer er. 8,9, 10
Rule:
U.S. Sap. Ct. Rude 10 2... sees cre rveceecsess 1, 4, 6
Other Authorities:
H.R. Rep. No. 101-734 (1990), reprinted in 1990

if ae ak ©) Sr re rr ee ee 10
4 James Wm. Moore et al., Moore's Federal Practice

§ 19.04[1][b] (3d ed. 1999) ..........- ee eee 9
16 James Wm. Moore et al., Moore’s Federal

Practice § 106.02 (3d ed. 1997) ...........-. 7,8
David D. Siegel, Practice Commentary, The 1990

Adoption of § 1367, Codifying “Supplemental”

Jurisdiction, printed in 28 U.S.C.A. § 1367 (West

SPS re eRe tr Ey ee Eee 8,9

7C Charles A. Wright, Arthur R. Miller & Mary K.
Kane, Federal Practice and Procedure § 1917
(2d Ed. 1986 & 1999 Supp.) ...............-- 9

|

Respondent Viacom International Inc. (“Viacom”),
respectfully submits this brief in opposition to the Petition
of Michael W. Kearney and Taylor Forge Stainless, Inc.
(collectively, “Petitioners”) for a writ of certiorari.

REASONS FOR DENYING THE WRIT

Petitioners Michael W. Kearney and Taylor Forge
Stainless, Inc. challenge the Second Circuit’s decision
concluding that fourth-party defendant Taylor Forge was not
an absent party and therefore could be considered neither a
necessary, nor an indispensable party whose joinder was
required. The Second Circuit held that the District Court
could properly exercise jurisdiction over claims by Taylor
Forge against non-diverse plaintiff Viacom under the
Supplemental Jurisdiction Statute, 28 U.S.C. § 1367, which
grants a District Court supplemental jurisdiction over non-
diverse claims asserted by any party other than plaintiff.

The Petition is devoid of any basis warranting a grant of
certiorari. The Petition fails to satisfy any of the standards
for granting a Writ of Certiorari under this Court’s Rule 10.
The Petition raises four questions, of which only question
three was even arguably implicated below.' The Second
Circuit’s decision is not in conflict with any other circuit.
Nor does the decision involve a state court’s interpretation
of federal law. Similarly, the ruling fails to raise a question
which conflicts with any decision of this Court or which

1. On its own initiative, the Second Circuit requested
supplemental briefing on the issue implicated by petitioners’ question
3 — whether the District Court could exercise supplemental
jurisdiction over Taylor Forge’s claims against Viacom without
destroying diversity jurisdiction.

2

should be settled by this Court. The Second Circuit's ruling
is a well-reasoned application of clear statutory text with no
far-reaching implications. Accordingly, the Petition for Writ
of Certiorari should be denied.

BACKGROUND

This dispute arises from a contract for the sale of Taylor
Forge Stainless, Inc., a Delaware corporation (“Taylor
Forge”) engaged in the manufacture and sale of stainless
steel, alloy fittings and flanges, and based in Somerville,
New Jersey. In 1984, Viacom’s predecessor, Gulf & Western
Manufacturing (“Gulf & Western’’), incorporated Taylor
Forge.

On October 26, 1984, Gulf & Western entered into a
contract with the manager of its Taylor Forge plant, petitioner
Michael Kearney, to sell Taylor Forge to Kearney.
To facilitate the sale, Viacom’s predecessor and Kearney
entered into a consent order with the New Jersey Department
of Environmental Protection and undertook to implement a
cleanup plan on the Taylor Forge premises.

In an indemnity provision of the parties’ sale contract,
Viacom’s predecessor and Kearney agreed to split the future
costs of implementing the cleanup plan. Viacom’s
predecessor agreed to pay the first $1.75 million in third party
costs incurred in implementing a cleanup plan, and Kearney
agreed to pay all such costs in excess of $1.75 million.
Although Viacom (and its predecessors) has, over the past
ten years, spent over $5 million in third party costs in
implcmenting the cleanup plan, and is continuing to incur
such costs, Kearney has yet to pay his indemnity to Viacom.

3

Anticipating litigation on his indemnity, Kearney
fired the first shot. In August 1993, Kearney and Taylor
Forge sued Gulf & Western’s successor, Paramount
Communication Realty Corporation (“Paramount”), in
Superior Court of New Jersey (the “New Jersey Action”).
The complaint sought declaratory and other relief,
challenging the validity or coverage of Kearney’s contractual
indemnity. The complaint alleged that Guif & Western
procured the contractual indemnity by fraud or
misrepresentation. In May 1994, the parties consented to a
dismissal without prejudice of the New Jersey Action.

In September 1998, Viacom filed this breach of contract
suit in federal court in the Southern District of New York to
enforce Kearney’s contractual indemnity. The Complaint
asserts no claim against Taylor Forge — a non-party to the
contract. Kearney responded to the complaint by moving to
dismiss on various grounds including lack of personal
jurisdiction, improper venue and abstention and, in the
alternative, sought transfer to the District of New Jersey.
All of those arguments were rejected by the District Court.?
Kearney then proceeded to re-instate the complaint he and
his company, Taylor Forge, had previously filed and
dismissed against Viacom in New Jersey state court.

2. Kearney eventually responded with an Answer, Separate
Defenses, Counterclaim, Third Party Complaint, and Jury Demand,
in which he asserted twenty-two counterclaims against Viacom.
Kearney also interposed third party complaints against Conolog
Corporation, a neighbor of the Taylor Forge premises whom Taylor
Forge alleged contributed to the contamination, and Viacom’s
environmental consultant, Camp, Dresser & McKee. Conolog
subsequently served a Fourth Party Complaint seeking contribution
and indemnification against Taylor Forge.

4

After his initial attempts to dismiss the federal action
were rejected, Kearney again moved to dismiss, this time
arguing that Taylor Forge was an indispensable party whose
presence would destroy the District Court’s diversity
jurisdiction. Before both the District Court and the Second
Circuit, Viacom argued that Taylor Forge was not, in fact,
an absent party because it had already been impleaded by
third-party defendant Conolog.

While the District Court granted Kearney’s motion to
dismiss, the Second Circuit reversed that decision,
concluding that, as Viacom had previously asserted, “Taylor
Forge was already present in the litigation and could have
joined with Kearney in asserting its 22 claims against Viacom
without destroying the court’s subject matter jurisdiction.”
Viacom International Inc. v. Kearney, 212 F.3d 721, 726
(2d Cir. 2000).

ARGUMENT
I.

THE PETITION FAILS TO MEET ANY CRITERIA
FOR THE GRANTING OF A WRIT OF CERTIORARI

This Court’s Rule 10 dictates thai a “[rJeview on a writ
ef certiorari is not a matter of right, but of judicial discretion.”
U.S. Sup. Ct. Rule 10, 28 U.S.C.A. (West 1984 & Supp.
2000). It follows that “[a] petition for a writ of certiorari
wi'l be granted only for compelling reasons.” /d. While Rule
10 is “neither controlling nor fully measuring [of] the Court’s
discretion,” it provides three instances in which the Court
may consider granting a writ of certiorari. Jd. Only two of

5

those instances involve decisions by a federal court of
appeals.’ Neither of those circumstances is implicated here.

The Second Circuit’s decision does not conflict with
prior decisions of this Court, the Second Circuit or other
courts of appeal. Petitioners’ arguments to the contrary are
based upon cases decided before the enactment of the
Supplemental Jurisdiction Statute in 1990 (Petition at 6-7,
citing Strawbridge v. Curtiss, 7 U.S. 267 (1806); Shields v.
Barrow, 58 U.S. 130 (1854); Indianapolis v. Chase Nat'l
Bank, 314 U.S. 63 (1941); and Owen Equip. & Erection Co.
v. Kroger, 437 U.S. 365 (1978)). None of these cases applies
here.

The remaining cases cited by Petitioners indicate neither
a split amongst authorities on “the same important matter”
nor an “important question of federal law that has not
been ... settled by this Court.” Rather, Petitioners cite
to cases which either fail to address § 1367, or concern
the minimum $75,000 amount in controversy requirement
of 28 U.S.C. § 1332, which is neither implicated nor disputed
here.* (Petition at 6-7, citing E.R. Squibb & Sons v. Accident
& Cas. Ins. Co., 160 F.3d 925 (2d Cir. 1998); Lewis v. Odell,
503 F.2d 445, 447 (2d Cir. 1974); Maryland Cas. Co. v. W.R.
Grace & Co., 23 F.3d 617, 621 (2d Cir.), cert. denied, 513
U.S. 1052, 115 S. Ct. 655 (1994); Stromberg Metal Works,
Inc. v. Press Mechanical, Inc., 77 F.3d 928 (7th Cir. 1996);
Shanaghan v. Cahill, 58 F.3d 106 (4th Cir. 1995); Leonhardt
v. Western Sugar Co., 160 F.3d 631 (10th Cir. 1998);

3. The other circumstance involves a decision by a state court
on a matter of federal law.

4. Petitioners acknowledge that Viacom is seeking costs in
excess of $4 million. (Petition at 2).

6

Meritcare Inc. v. St. Paul Mercury Ins. Co., 166 F.3d 214
(3d Cir. 1999); In re: Abbott Laboratories, Inc., 5\ F.3d 524
(Sth Cir. 1995)).

The Petition is a meritless attack upon a decision which
Petitioners deem “incorrect.” (Petition at 16). “A petition
for writ of certiorari is rarely granted when the asserted error
consists of erroneous factual findings or the misapplication
of a properly stated rule of law.” U.S. Sup. Ct. Rule 10
(emphasis added). Even where a conflict exists amongst
circuits, a petition for writ of certiorari is to be denied if
such conflict is “tolerable” or “narrow.” Beaulieu v. United
States, 497 U.S. 1038, 1039 (1990) (J. White, dissenting).
See also D.L. Thomas v. American Home Products, Inc., 519
U.S. 913, 917 (1996) (J. Rehnquist, dissenting) (petitions
for writ of certiorari should be granted in “exceptional”
circumstances). The Petition fails to identify any conflict
between the Second Circuit’s decision and prior decisions
of this Court or of other circuits. To the contrary, the decision
represents a routine application of the supplemental
jurisdiction statute and lacks any “exceptional”
circumstances warranting this Court’s review.

THE SECOND CIRCUIT’S DECISION WAS
REQUIRED UNDER 28 U.S.C. § 1367

Section 1367(a) provides that “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. .. .” 28 U.S.C. § 1367(a). The statute expressiy

J

provides that this broad grant of jurisdiction includes “claims
involving the joinder or intervention of additional parties.”
Id.

Because the District Court had diversity jurisdiction over
this action between the original parties, Viacom (a Delaware
corporation) and Kearney (a Florida resident), § 1367(a)
provides the court supplemental jurisdiction over “all other
claims” that form part of the same case.* Here, “the substance
of Taylor Forge’s claims are identical to Kearney’s 22
compulsory counterclaims. . . . [and] are, by definition, ‘part
of the same case or controversy.’ ” Viacom International Inc.
v. Kearney, 212 F.3d. 721, 727-28 (2d Cir. 2000) (citation
omitted).

The Petition asserts that this exercise of supplemental
jurisdiction by the District Court would eviscerate the
complete diversity requirements of 28 U.S.C. § 1332.
(Petition at 12). Not so. The very purpose of § 1367 was to
“allow[] federal courts to entertain claims over which they
have no independent basis of subject matter jurisdiction.”
16 James Wm. Moore et al., Moore's Federal Practice

5. Petitioners now argue that this Court's decision in Chicago"

v. Int'l Col. of Surgeons, 522 U.S. 156 (1997) making “clear that
‘original’ jurisdiction is still a condition precedent to the exercise
of supplemental jurisdiction” is somehow in conflict with the Second
Circuit's decision in this case. (Petitiorat 11). Such is not the case.
It is clear that the District Court had jurisdiction over the original
parties to the case, Viacom and Michael Kearney. Viacom
International v. Kearney, 212 F.3d. 721, 726 (2d Cir. 2000) (citing
Wisconsin Dep't of Corrections v. Schacht, 524 U.S. 381, 388
(1998)). Chicago did not equate “original jurisdiction” with
supplemental jurisdiction exercised after additional parties had been
impleaded.

8

§ 106.02 (3d ed. 1997). The Supplemental Jurisdiction
Statute does not affect § 1332’s requirement of complete
diversity between plaintiff and defendant. Section 1367
merely grants supplemental jurisdiction, where such diversity
exists as between the original parties, over additional parties
and claims joined to the litigation. Jd. The Second Circuit
recognized that § 1367(b) provides an explicit exception to
the complete diversity requirements in instances where a
defendant, such as Kearney, impleads a party who chooses
to assert claims against a non-diverse plaintiff, as Taylor
Forge has done in this case.

The Petition’s reliance on § 1367(b) to suggest that the
District Court lacked supplemental jurisdiction over Taylor
Forge’s claims is equally misplaced. (Petition at 6-15).
- “By no means does [§ 1367(b)] exclude [supplemental
jurisdiction] from diversity cases.” See David D. Siegel,
Practice Commentary, The 1990 Adoption of § 1367,
Codifying “Supplemental” Jurisdiction, printed in
28 U.S.C.A. § 1367 at 832 (West 1993). Subsection (b) does
not apply to claims by Taylor Forge nor, for that matter, to
claims by anyone other than plaintiff Viacom:

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 14, 19, 20 or 24
of the Federal Rules of Civil Procedure.
28 U.S.C. § 1367(b) (emphasis added).

Section 1367(b) was designed to prevent plaintiffs from
smuggling in claims against non-diverse parties. See David

9

D. Siegel, Practice Commentary, The 1990 Adoption of
§ 1367, Codifying “Supplemental” Jurisdiction, printed in
28 U.S.C.A. § 1367 (West 1993) (“Subdivision (b) of § 1367
is concerned only with efforts of a plaintiff to smuggle in
claims that the plaintiff would not otherwise be able to
interpose. . . . The repetition of the word ‘plaintiffs’ at several
rule-citing junctures in subdivision (b) makes this clear.”)
(emphasis added). See also Dev. Fin. Corp. v. Alpha Hous.
& Health Care, Inc., 54 F.3d 156, 161 (3d Cir. 1995)
(“[Subdivision (b) of § 1367] does not deprive the district
court of supplemental jurisdiction over a counterclaim or
cross-claim raised by an intervening defendant, even where
the intervenor shares citizenship with an original party.”);
Janney Montgomery Scott, Inc. v. Shepard Niles, Inc.,
11 F.3d 399, 412 n.15 (3d Cir. 1993) (noting that plaintiff
was precluded from amending its complaint to include non-
diverse party as defendant under § 1367(b)).°

The Second Circuit recognized that Ҥ 1367(b) reflects
Congress’ intent to prevent original plaintiffs — but not
defendants or third parties —- from circumventing the

6. See also 7C Charles A. Wright, Arthur R. Miller & Mary K.
Kane, Federal Practice and Procedure § 1917 (2d Ed. 1986 & 1999
Supp.) (“[Section 1367(b)] specifically prohibits the exercise of . . .
[supplemental] jurisdiction in diversity cases for persons seeking to
intervene as plaintiffs ...”); 4 James Wm. Moore et al., Moore's
Federal Practice § 19.04[1][b] (3d ed. 1999) (“[Section 1367(b)]
precludes supplemental! jurisdiction over claims (1) by plaintiffs
joined under Rule 19 (necessary parties); (2) by absentees seeking
to interv..e as plaintiffs under Rule 24 (intervention); and (3) by
plaintiffs against parties josned under Rule 14 (third-party practice
or impleader), Rule 19 (necessary parties), Rule 20 (proper parties),
or Rule 24 (intervention).”) (emphasis added). Petitioners’ argument
that Taylor Forge should be aligned as a cefendant (Petition at 18)
renders § 1367(b) inapplicable as a bar to its claims against Viacom.

10

requirements of diversity.” Viacom International Inc. v.
Kearney, 212 F.3d. 721, 726-27 (2d Cir. 2000) (citing H.R.
Rep. No. 101-734, at 29 (1990), reprinted in 1990
U.S.C.C.A.N. 6860, 6875). There is no conflict among the
circuits about this point.

Nothing in § 1367(b) restricts the District Court’s ability
to exercise supplemental jurisdiction over claims by anyone
other than plaintiff Viacom. Viacom has no claim against
Taylor Forge and has asserted none in either this federal
action or the parallel state court action. Accordingly, as the
Second Circuit concluded, the District Court can properly
exercise jurisdiction over Taylor Forge’s claims against
Viacom without destroying diversity jurisdiction.

CONCLUSION

For all of the foregoing reasons, Respondent respectfully
requests that this Honorable Court deny the Petition in its
entirety.

Respectfully submitted,

WILLIAM R. MAGUIRE >
Counsel of Record

JONATHAN D. PRESSMENT

HuGHes HuBBARD & REED LLP

One Battery Park Plaza

New York, New York 10004

(212) 837-6000

Attorneys for Respondent
Viacom International Inc.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1367%3A2. Public record. Not legal advice.