Aaron McCoy v. Iberdrola Renewables, Inc.
2014 U.S. App. LEXIS 14380
| 7th Cir. | 2014Background
- Outland (maintenance contractor) and Gamesa (wind-turbine manufacturer subsidiary) had a commercial relationship; Outland employee McCoy was electrocuted while servicing a Gamesa turbine, spawning a personal-injury suit later removed to federal court.
- Gamesa impleaded Outland; Outland filed extensive third-party counterclaims against Gamesa including federal Sherman/Clayton Act claims and multiple state-law tort and contract claims.
- The district court dismissed most counterclaims on Rule 12(c) grounds, leaving only an indemnification claim tied to the McCoy accident; the parties later settled claims arising from the accident.
- Outland sought leave to amend months later to add new claims (tortious interference, promissory estoppel, fiduciary duty, OSHA indemnity, renewed antitrust allegations) and argued choice of law should be Minnesota rather than Illinois; the district court denied leave as futile and unduly delayed.
- Outland then argued post-judgment that the court lacked subject-matter jurisdiction because its own federal antitrust claims were too weak to invoke § 1331 and thus could not anchor supplemental jurisdiction under § 1367; the district court and this panel rejected that argument and affirmed denial of leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal-question jurisdiction (28 U.S.C. § 1331) over Outland’s antitrust counterclaims | Outland: its federal antitrust claims were so insubstantial that they could not invoke federal-question jurisdiction | Gamesa: the antitrust claims were not frivolous; even if weak, they were sufficient to invoke jurisdiction | The antitrust counterclaims were not “utterly frivolous”; § 1331 jurisdiction existed (federal claims could be dismissed on merits but still confer jurisdiction) |
| Supplemental jurisdiction (28 U.S.C. § 1367(a)) for state-law counterclaims | Outland: state claims were not part of the same Article III case or controversy as the federal antitrust claims | Gamesa: state claims derived from the same nucleus of operative facts as the federal claims | The state-law counterclaims arose from a common nucleus of operative facts; supplemental jurisdiction was proper; Outland forfeited any § 1367(c) discretionary decline argument by not raising it earlier |
| Choice of law (Illinois v. Minnesota substantive law) | Outland: district court should have applied Minnesota law to proposed amendments | Gamesa: Outland waived choice-of-law by litigating under Illinois law and failing to timely assert a different forum’s law | Court affirmed waiver: Outland had acquiesced to Illinois law and raised the choice-of-law issue too late |
| Denial of leave to amend (futility and undue delay) | Outland: proposed amendments (tortious interference, prima facie tort, promissory estoppel, fiduciary duty, OSHA indemnity) were viable | Gamesa: amendments were futile or prejudicially delayed; some theories unsupported by pleaded facts | Court affirmed: Counts I–III (interference/prima facie tort) futile under Illinois law; Counts IV–VI denied for undue delay (and Count VI also futile) |
Key Cases Cited
- Bell v. Hood, 327 U.S. 678 (federal jurisdiction exists where claim arises under federal law even if merits fail)
- Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (limits on invoking federal jurisdiction for claims that are "wholly insubstantial and frivolous")
- International College of Surgeons v. City of Chicago, 522 U.S. 156 (supplemental/pendent jurisdiction is discretionary, not obligatory)
- Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (parent and wholly-owned subsidiary cannot conspire under Sherman Act)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: factual matter must plausibly state a claim)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (plausibility standard for antitrust and other federal claims)
- Foman v. Davis, 371 U.S. 178 (Rule 15(a) — leave to amend should be freely given absent futility, undue delay, or prejudice)
- United Mine Workers v. Gibbs, 383 U.S. 715 (supplemental jurisdiction: claims form part of same case when they derive from a common nucleus of operative fact)
- Myers v. County of Lake, 30 F.3d 847 (district court need not sua sponte consider § 1367(c); parties must raise discretionary-decline arguments)