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Herklotz v. Parkinson

United States Court of Appeals, Ninth Circuit

February 14, 2017

John Herklotz, Cross-Claimant-Appellant,
v.
Eric Parkinson, Charles von Bernuth, and Plaza Entertainment, Inc., Cross-Defendants-Appellees, and Thomas G. Gehring, Third-Party-Defendant-Appellee.

          Argued and Submitted November 10, 2016 Pasadena, California

         Appeal from the United States District Court for the Central District of California, D.C. No. CV-07-01823-R Manuel L. Real, District Judge, Presiding

          Charles E. Ruben (argued), Law Offices of Charles E. Ruben, Los Angeles, California, for Cross-Claimant-Appellant John Herklotz.

          David S. Fisher (argued), Fisher Law Corporation, Woodland Hills, California, for Cross-Defendant-Appellee Charles von Bernuth.

          David T. Stowell (argued), Stowell Zeilenga Ruth Vaughn & Treiger LLP, Westlake Village, California, for Third-Party-Defendant-Appellee Thomas G. Gehring.

          Before: Marsha S. Berzon and Jacqueline H. Nguyen, Circuit Judges, and Jack Zouhary, [*] District Judge.

         SUMMARY[**]

         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 because Herklotz's severed crossclaim included only state law claims against non-diverse parties.

          OPINION

          ZOUHARY, District Judge:

         This case serves as a reminder of the foundational rule that federal courts are courts of limited jurisdiction. An initial overview of this procedurally tortured, sixteen-year saga may be useful.

         In a nutshell: this action began in 2000 as a diversity suit in the Western District of Pennsylvania by Plaintiff WRS, Inc. against Defendants Plaza Entertainment and its directors John Herklotz, Eric Parkinson, and Charles von Bernuth. Herklotz crossclaimed against Plaza, Parkinson, and von Bernuth. When the district court granted summary judgment in favor of WRS, Herklotz moved to sever his state law Crossclaim and transfer it to the Central District of California. The Pennsylvania district court granted the unopposed motion, severed the Crossclaim, and transferred the ...


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