Case: 3:14-cv-01650-JZ Doc #: 61 Filed: 08/12/15 1 of 4. PageID #: 471
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
WESTERN DIVISION
Mary Ann Jensen, et al.,
Case No. 3:14 CV 1650
Plaintiffs,
ORDER DISMISSING
OBLIC’S COMPLAINT
-vsJUDGE JACK ZOUHARY
Runser & Putman, LLC, et al.,
Defendants.
Pursuant to Federal Civil Rule 24(b), this Court previously granted the Ohio Bar Liability
Insurance Co.’s (“OBLIC”) unopposed Motion to Intervene (Doc. 45 & 51). Defendant Shaun
Putman later moved to dismiss OBLIC’s Complaint for Declaratory Judgment for lack of subjectmatter jurisdiction. Plaintiff Mary Ann Jensen joined in the Motion (Doc. 54–55). OBLIC opposed
(Doc. 57), and Putman replied (Doc. 58).
OBLIC seeks a declaration that, if Jensen establishes her claims, OBLIC “is not obligated to
defend or indemnify” Defendants because of certain exclusions included in Defendants’ malpractice
insurance policy (see, e.g., Doc. 52 at 4). OBLIC calls itself an “intervening plaintiff” (Doc. 57 at 3).
This Court therefore aligns OBLIC and Jensen as Plaintiffs for purposes of subject-matter-jurisdiction
analysis.
This Court had diversity jurisdiction over this case at the time of original filing (see Doc. 1
at ¶¶ 2–9 (alleging Jensen is a citizen of Michigan and Defendants are citizens of Ohio); ¶¶ 37–38
(alleging Defendant Charles Runser wrongfully withdrew more than $471,000 from the Trust)).
Case: 3:14-cv-01650-JZ Doc #: 61 Filed: 08/12/15 2 of 4. PageID #: 472
OBLIC, a citizen of Ohio (see Doc. 52 at ¶ 3), invokes this Court’s jurisdiction under 28
U.S.C. 1367. OBLIC’s claims fall within the “same case or controversy” as Jensen’s claims, and
therefore within the scope of 28 U.S.C. 1367(a). Jensen says, “Defendants committed fraud”; OBLIC
says, “if Defendants committed fraud, an insurance policy exclusion relieves us of an insurer’s normal
duties.”
But the statute goes on to exclude from this Court’s supplemental jurisdiction “claims by
persons . . . seeking to intervene as plaintiffs under Rule 24 . . . when exercising supplemental
jurisdiction over such claims would be inconsistent with the jurisdictional requirements of section
1332.” Id. § 1367(b). OBLIC’s request for declaratory injunction is a claim by an intervening, nondiverse Plaintiff.
That would seem to end matters: The statute denies this Court power to adjudicate OBLIC’s
claims, even though the issues raised in OBLIC’s Complaint overlap to a substantial degree with the
issues raised in Jensen’s Complaint, and judicial efficiency would best be served by trying those
claims together with Jensen’s. Unfortunately, Congress thinks otherwise. But OBLIC latches on to
Section 1367(b)’s concluding clause, arguing this Court may exercise supplemental jurisdiction over
its claims in a manner consistent with the jurisdictional requirements of 28 U.S.C. § 1332. OBLIC
relies on Aurora Loan Servs., Inc. v. Craddieth, 442 F.3d 1018 (7th Cir. 2006), and Westra Const.,
Inc. v. U.S. Fid. & Guar. Co., 546 F. Supp. 2d 194 (M.D. Pa. 2008). Westra largely depends on
Aurora, so this Court begins with the latter case.
Aurora wrestled with “whether the fact that [intervening-plaintiff] Midwest is a citizen of the
same state as the defendants blocks it from intervening, on the theory that its presence as a party to
the foreclosure suit would eliminate the complete diversity that is required to maintain a diversity suit
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in federal court.” 442 F.3d at 1024. That court concluded Section 1367(b) did not bar the claim
because “[t]he evident purpose of [Section 1367(b)] . . . is to prevent a two-step evasion of the
requirement of complete diversity of citizenship by a person who, being of the same citizenship as
the defendant, waits to sue until a diverse party with which it is aligned sues the defendant, and then
joins the suit as an intervening plaintiff.” Id. at 1025.
That conclusion is far from “evident” in the statute’s plain text, which would require an
elaborate structure to mirror Aurora’s interpretation. See Bus. Guides, Inc. v. Chromatic Commc’ns
Enter., Inc., 498 U.S. 533, 547 (1991) (courts should “not reject the natural reading of a rule or statute
in favor of a less plausible reading, even one that seems to [the court] to achieve a better result”).
Instead, “the weight of authority supports the conclusion that § 1367(b) precludes the exercise of
supplemental jurisdiction over claims by nondiverse plaintiff-intervenors, even as of right under Rule
24(a).” Liberty Mut. Grp. v. Hillman’s Sheet Metal & Certified Welding, Inc., 168 F.R.D. 90, 92 (D.
Me. 1996) (collecting cases).
The so-called “rule against ouster” cannot save OBLIC’s claims either. Even if OBLIC is only
a permissive party, Section 1367(b) makes no distinction between permissive and indispensable
parties. Still, Aurora and Westra note that, after adoption of Section 1367, the Supreme Court
reaffirmed the general rule against ouster. See Aurora Loan Servs., Inc., 442 F.3d at 1026; Westra
Const., Inc., 546 F. Supp. 2d at 199. Roughly two months after Congress enacted Section 1367(b)
into law, the Court in Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428 (1991) (per
curiam), declared “[d]iversity jurisdiction, once established, is not defeated by the addition of a
nondiverse party to the action.” Aurora and Westra use this language to avoid the impediment posed
by Section 1367(b).
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But there are at least three problems with reading this general statement as license for OBLIC
to remain a party to this case. First, Freeport-McMoRan does not mention Section 1367(b). Second,
that case dealt with a non-diverse party made a plaintiff under Federal Civil Rule 25(c), a Rule not
mentioned in Section 1367(b). Id. at 427. And third, the court could not have delivered any general
pronouncements about Section 1367(b)’s effect, because that section could not be applied
retroactively to that case. See Judicial Improvements Act of 1990, Pub. L. No. 101-650, § 310, 104
Stat. 5089, 5114 (1990) (“The amendments made by this section shall apply to civil actions
commenced on or after the date of the enactment of this Act.”).
Section 1367(b) denies this Court supplemental jurisdiction over “claims by persons . . .
seeking to intervene as plaintiffs under Rule 24” when “inconsistent with the jurisdictional
requirements of section 1332.” This Court has no choice but to grant the Motions to Dismiss. The
Complaint (Doc. 52) is dismissed without prejudice.
IT IS SO ORDERED.
s/ Jack Zouhary
JACK ZOUHARY
U.S. DISTRICT JUDGE
August 12, 2015
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