General Atomic Co. v. Duke Power Co.

553 F.2d 53, 23 Fed. R. Serv. 2d 703
CourtCourt of Appeals for the Tenth Circuit
DecidedApril 8, 1977
DocketNo. 76-1152
StatusPublished
Cited by20 cases

This text of 553 F.2d 53 (General Atomic Co. v. Duke Power Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Atomic Co. v. Duke Power Co., 553 F.2d 53, 23 Fed. R. Serv. 2d 703 (10th Cir. 1977).

Opinion

WILLIAM E. DOYLE, Circuit Judge.

General Atomic Company here has appealed a judgment of the District Court, the effect of which was denial of General Atomic’s claim that the court had jurisdiction pursuant to the interpleader statute, 28 U.S.C. Section 1335. The basis for the trial court’s ruling was that plaintiff had not demonstrated that it was subject to conflicting claims by two or more defendants growing out of a single obligation of the plaintiff.

The suit was commenced by the General Atomic Company on January 10, 1976. Named as defendants were four utility companies, consisting of: Duke Power Company, a North Carolina corporation; Indiana & Michigan Electric Company, an Indiana corporation; Detroit-Edison Company, a Michigan corporation; Commonwealth Edison Company, an Illinois corporation; and also United Nuclear Corporation, a Delaware corporation. Jurisdiction was sought on each of two counts, the first for statutory interpleader, and the second by suit in the nature of an interpleader. The former claim sought to determine entitlement for each of the four utility company defendants, all of whom have contracts with General Atomic requiring the latter to supply uranium concentrates. Count II sought to determine the nature of and the entitlement to all of the parties in and to plaintiff’s rights and obligations concerning the supply of uranium concentrate. This suit alleged that there were adverse claims between two or more of the defendants with respect to a quantity of uranium in which plaintiff was alleged to have some rights.

The several agreements were for the supply of uranium concentrate for the fabrication of cores for nuclear reactors for electric generating plants of the utility defendants. These contracts were made between the United Nuclear Corporation (UNC) and the utility defendants in the late 1960s and early 1970s prior to the formation of General Atomic. UNC was regarded as the source of the uranium concentrate which was to be supplied under the contracts. Thereafter, UNC assigned its rights under the so-called UNC agreements to Gulf United Nuclear Fuels Corp. which in turn assigned to General Atomic. UNC did not relinquish its duties to the utilities under the agreements.

For the purpose of gaining access to the uranium supply to permit the servicing of the contracts of the utilities, Gulf United Nuclear Fuels Corp. entered into an agreement with UNC in 1973, whereby the latter was to supply to Gulf the amounts of concentrate required in order to supply the utilities. Concentrate was to be supplied under the agreement on essentially the same terms and conditions. General Atomic succeeded to Gulf’s rights and obligations under the agreement with UNC.

In recent years the price of uranium concentrates has increased substantially. UNC takes the position that it is entitled to be released from its obligations under the supply contract or that it is entitled to receive the current market prices. It is alleged that UNC and the utilities are in conflict, UNC’s position being as described above, and utilities’ position being that they are entitled to have the concentrates furnished at the agreed prices. UNC also demands that General Atomic indemnify it against claims by the utilities.

Further allegations describe other lawsuits in other states and the possibility of inconsistent and conflicting judgments. Despite the alleged conflicts the trial court refused to accept jurisdiction citing the [56]*56ground which is mentioned above. We in turn are called upon to decide whether the relationships and property interests suffice to confer interpleader jurisdiction.

The statute is simple enough. It declares that district courts have original jurisdiction of a civil action in interpleader filed by a plaintiff having in its custody or possession money or property of the value of $500 or more, or having issued a note, bond, certificate, policy of insurance, or other instrument having a value of $500 or more, or providing for the delivery or payment or the loan of money or property in such amount or value, or being under any obligation written or unwritten to the amount of $500 or more. The provision goes on to say that, first, there must be two or more adverse claimants, of diverse citizenship, who are claiming or who may claim to be entitled to such money or property, or to any one or more of the benefits arising by virtue of any note, bond, certificate, policy or other instrument, or arising by virtue of any such obligation.

Second, it requires that the plaintiff shall have deposited the money or property or shall have paid the amount of or the loan or other value of such instrument or the amount due under such obligation into the registry of the court, to abide the judgment of the court, or shall have given bond in compliance with the order of the court.

Third, the statute states that such an action may be entertained, although the titles or claims of the conflicting claimants do not have a common origin, or are not identical, but are adverse and independent of one another.

The trial court considered the fatal aspect to be plaintiffs failure to show itself to be a party subject to conflicting claims by two or more defendants. We disagree with neither the action thus taken nor with the reason given. We are constrained, however, to add that this is not all that is missing if the case is to satisfy the exacting demands of the interpleader statute.

We are acutely aware that the plaintiff finds itself in a most difficult trap. We are also aware that the public interest might well be served if all of the lawsuits could be brought together under a single roof. As the plaintiff points out, it is threatened with not only a number of lawsuits, but conflicting adjudications. The problem from our standpoint is that we must decide the case within the framework of the inter-pleader statute in view of the obvious limiting principle that federal courts are courts which are dependent upon Congress for the exercise of subject matter jurisdiction. The only jurisdictional offering is the inter-pleader statute and our decision must be made in terms of its specific criteria.

Professor Wright in his hornbook entitled Law of Federal Courts (3rd ed.), Section 74, p. 362, states that “[interpleader is a form of joinder open to one who does not know to which of several claimants he is liable if he is liable at all. The Act allows him to bring the several claimants into a single action and to require them to litigate among themselves to determine which, if any, has a valid claim.”

In its early stages the interpleader jurisdiction was equitable in nature. Now, of course, it is based on statutory law and, it is plain that it lacks equitable flexibility. Since the enactment of the statute, rival claimants, at least two of whom were of diverse citizenship, have been required. It is also clear that complete diversity is unnecessary; that minimal diversity suffices. The Supreme Court has expressly recognized this in State Farm Fire & Casualty Co. v. Tashire, 386 U.S. 523, 530-31, 87 S.Ct. 1199, 18 L.Ed.2d 270 (1967). One condition which appears unavoidable is the presence in the interpleader action of a stakeholder and the deposit in court of the money or property demanded by the claimants. If the stakeholder is disinterested, he is entitled to dismissal. An ancillary aspect is that suits in other states can be enjoined.

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553 F.2d 53, 23 Fed. R. Serv. 2d 703, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-atomic-co-v-duke-power-co-ca10-1977.