Scott v. Fancher

William C. Fancher (plaintiff), a Texas citizen, Ray Scott (defendant), an Oklahoma citizen, and E. F. Short (defendant), an Oklahoma citizen, were involved in an automobile accident in Texas. Fancher was driving a truck owned by Petro-Fina Company of Texas (Petro-Fina) (plaintiff) when he collided head-on with Scott and subsequently hit Short. Short was killed, Fancher was seriously injured, and Scott was mildly injured. Short’s estate filed a lawsuit against Fancher, Petro-Fina, and Scott in Oklahoma state court. Petro-Fina and Fancher filed a negligence lawsuit in federal district court against Scott and Short based on diversity jurisdiction. Complete diversity existed because both plaintiffs were citizens of Texas and both defendants were citizens of Oklahoma. Scott filed a counterclaim against Fancher and Petro-Fina, and Short’s estate filed a counterclaim against Fancher and Petro-Fina and a cross-claim against Scott. The jury returned a verdict against Scott. Scott appealed, asserting that the district court did not have jurisdiction over the case. Scott argued that the district court did not have independent jurisdictional grounds to exercise jurisdiction over the cross-claim filed against him. Scott also reasoned that, under the realignment doctrine, he and Short should have been opposing parties because there was no theory of the case under which Short would have been found negligent. Lastly, Scott argued that the counterclaim Short filed against Fancher and Petro-Fina was a permissive, rather than compulsory, counterclaim.