Opinion
02 Civ. 7689 (HB)
June 20, 2003
MEMORANDUM ORDER
Defendant Allegheny Energy, Inc. ("Allegheny") seeks reconsideration pursuant to Fed.R.Civ.P. 59(e) of the Court's decision in Merrill Lynch Co. v. Allegheny Energy, Inc., 2003 WL 21254420 (S.D.N.Y. May 30, 2003) ("Merrill Lynch decision"), which denied Allegheny's motion for abstention and ordered Allegheny Energy Supply Company, LLC ("Supply") to join the federal action. Allegheny contends that the Court "misapprehended the alignment of the parties and the nature of the claims that would be interposed by the non-diverse party." Although Allegheny's motion for reconsideration is granted, I find no reason to depart from this Court's decision for the following reasons.
I. DISCUSSION
The Court assumes familiarity with the facts in the Merrill Lynch decision, and they will not be repeated herein. Allegheny takes issue with the Court's alignment of Supply, for jurisdictional purposes, as a "third-party defendant." Allegheny argues that Supply, if joined, would be a "counterclaim plaintiff," which would allegedly destroy this Court's diversity jurisdiction. Although Allegheny is correct, nominally, in claiming that Supply is a "counterclaim plaintiff," it is a misnomer for jurisdictional purposes. The key issue is whether Supply is aligned with the original plaintiffs for jurisdictional purposes. See Viacom Int'l, Inc. v. Kearney, 212 F.3d 721, 726-27 (2d Cir. 2000) ("Significantly, § 1367(b) reflects Congress' intent to prevent original plaintiffs — but not defendants or third parties — from circumventing the requirements of diversity."); see also Merrill Lynch, 2003 WL 21254420, at *3. Allegheny's argument that Supply should be aligned as a "plaintiff" defies common sense. Allegheny does not dispute that the counterclaims it will assert in the federal action will be the same as those that it brought in state court with Supply as a co-plaintiff. Indeed, Allegheny admits that Supply would join the present action "on the defendant's side," see Def. Mem. at 5. Allegheny cannot reasonably argue that Supply is more properly cast as a "plaintiff" here for jurisdictional purposes. See Merrill Lynch, 2003 WL21254420, at *4 ("courts are obligated, based on the realities of the record, to align the parties in relation to their real interests in the matter in controversy." (citing City of Indianapolis v. Chase Nat'l Bank, 314 U.S. 63, 69 (1941); Maryland Casualty Co. v. W.R. Grace Co., 23 F.3d 617, 623 (2d Cir. 1994) (internal quotations omitted)).
Supply's presence in the lawsuit is not as a "counter" claimant (because there is no claim against it), but rather it is merely a "third party" seeking to join the action with the defendant. Accordingly, Supply may be best characterized, for jurisdictional purposes, as a third-party defendant.
II. CONCLUSION
For the foregoing reasons, I find nothing in Allegheny's motion to convince me that the Merrill Lynch decsion was decided incorrectly. The pre-trial scheduling order stipulated to by the parties at the June 19, 2003 pre-trial conference remains in full force and effect.
SO ORDERED