## Facts

- Joe Grasso & Son, Inc. owned seven shrimp boats operating in the Gulf of Mexico, each typically run by a captain with two crewmen.
- The United States assessed federal employment taxes (FICA and FUTA) against Grasso for 1959 through September 30, 1962, on the theory Grasso was the “employer” of the captains and crew.
- Grasso paid the assessments and filed a federal refund action contending it was not the employer for employment tax purposes.
- In its answer, the United States filed a third-party complaint under Federal Rule of Civil Procedure 14(a) against the boat captains.
- The government alleged that if Grasso was not the employer, the captains were the employers of the crew and therefore liable for the same employment taxes.
- The district court dismissed the third-party complaint as improper impleader and certified the order for interlocutory appeal under 28 U.S.C. § 1292(b).

## Issues

1. Whether Rule 14(a) permits impleader of the boat captains in a tax refund suit where the government’s claim against the captains asserts their direct tax liability if Grasso is found not liable as an employer.
2. Whether a third-party claim based on related facts, but not derivative of the defendant’s liability on the plaintiff’s claim, is barred as a separate and independent claim under Rule 14(a).

## Decision

- The Fifth Circuit affirmed the dismissal of the government’s third-party complaint.
- Rule 14(a) did not apply because the government’s claim against the captains was not one in which the captains “are or may be liable to [the government] for all or part” of Grasso’s refund claim.
- The asserted liability of the captains was a direct, separate claim for taxes, not a liability-over theory such as indemnity or contribution.
- The captains’ potential tax liability was not dependent on the outcome of Grasso’s refund claim because the factfinder could conclude neither Grasso nor the captains were employers (for example, if the fishermen were not employees of anyone).

## Legal Principles

- Impleader under Rule 14(a) is limited to derivative liability where the third-party defendant’s potential liability to the impleading party depends on the impleading party’s liability on the main claim.
- A defending party may not use Rule 14(a) to add a third party merely because that third party may be directly liable to the original plaintiff on a related theory.
- A claim remains improper under Rule 14(a) even when it arises from the same events and may involve overlapping evidence, if it asserts an independent right of recovery against the third party.

## Conclusion

The Fifth Circuit held that Rule 14(a) could not be used to implead the shrimp-boat captains in a tax refund action because the government’s proposed third-party complaint asserted a separate, direct tax liability claim rather than derivative liability tied to Grasso’s liability on the refund claim.


United States v. Joe Grasso & Son, Inc., 380 F.2d 749 (5th Cir. 1967)