                                                 United States Court of Appeals
                                                          Fifth Circuit
                                                       F I L E D
                 REVISED JULY 22, 2004
                                                        June 28, 2004
         IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT             Charles R. Fulbruge III
                                                           Clerk


                     No. 03-60214


MAX V MCLAUGHLIN; ET AL

                    Plaintiffs

v.

MISSISSIPPI POWER COMPANY; ET AL

                    Defendants


INTERSTATE FIBERNET INC

                    Plaintiff - Appellant

v.

THIRTY-SEVEN (37) PARCELS; ET AL

                    Defendants

THIRTY-SEVEN (37) PARCELS OF REAL PROPERTY, LOCATED IN
FORREST, HANCOCK, HARRISON, JACKSON, JONES, LAMAR AND
LAUDERDALE COUNTIES, MISSISSIPPI; BANCORPSOUTH BANK; MARY
JANE DELMAS BAUGH; TERRELL ANN FORD; MARGARET FORD MURPHY;
CHANTILLY CORP; CLEMOVER CORP; COLUMBIA VENTURES INC;
COMMUNITY BANK; FEDERAL LAND BANK ASSOCIATION OF SOUTH
MISSISSIPPI FLCA; JOHN FORD, also known as Rena A Ford,
Trustee Of The Rena A Ford Inter Vivos Trust Agreement; MARY
ELIZABETH FORD, also known as Rena A Ford, Trustee of the
Rena A Ford Inter Vivos Trust Agreement; RENA ANN FORD, also
known as Rena A Ford, Trustee of the Rena A Ford Inter Vivos
Trust Agreement; MARIE FORD HORNE, also known as Rena A
Ford, Trustee of the Rena A Ford Inter Vivos Trust
Agreement; H H WHITE LIMITED PARTNERSHIP; DAVID HOBGOOD;
RICHARD HOBGOOD; ROBERT HOBGOOD, also known as Robert
Hobgood; STEVEN A MCRAE, also known as Stephen McRae; DENNIS
L PIERCE; RAY CROWELL REAL ESTATE INC; BRYAN SALIBA; NICK


                           1
     WELCH; WEYERHAEUSER CO; UNKNOWN OTHERS; PLUM CREEK SOUTH
     CENTRAL TIMBERLANDS, LLC

                           Defendants - Appellees

     PURCELL COMPANY INC

                           Defendant-Counter-Claimant - Appellees

     v.

     MISSISSIPPI POWER COMPANY

                           Counter-Defendant - Appellant


          Appeal from the United States District Court
            for the Southern District of Mississippi



Before KING, Chief Judge, and BENAVIDES and CLEMENT, Circuit
Judges.

PER CURIAM:

     Mississippi Power Company (MPC) and Interstate Fibernet,

Inc. (IFN) appeal an order dissolving an injunction, dismissing

IFN’s complaint, and refusing to certify a class.   We affirm.

              I.   FACTUAL AND PROCEDURAL BACKGROUND

     MPC, an electricity provider, owns easements across tracts

of real property owned by Nick Welch, Purcell Company, Inc.,

Weyerhaeuser Company, Plum Creek South Central Timberlands, LLC,

and the other defendants in this suit.   Among other things, these

easements authorize MPC to operate telecommunications lines

across the defendants’ properties “in connection” with their main

business of supplying electricity.


                                  2
     MPC entered into a contract with IFN, wherein IFN agreed to

contribute to the cost of constructing and maintaining a fiber

optic line through MPC’s easements in exchange for the right to

use the line for its commercial telecommunications business.       In

McDonald v. Mississippi Power Co., the Mississippi Supreme Court

held that MPC had the right, under the terms of its easements, to

install and to use fiber optic cables.    732 So. 2d 893, 897

(Miss. 1999).   Additionally, the court held that MPC’s sublease

of the line to IFN did not constitute an additional servitude on

the properties.   Id.    But the court also held that the terms of

the easements prevented MPC from subleasing space on its fiber

optic cables “for purposes other than those which are in

connection with providing electricity.”     Id.   The court then

remanded the case.      Id. at 898.

     While McDonald was pending in the state trial court on

remand, IFN filed this suit in federal district court, seeking a

declaration that it owed no compensation to any of the defendants

for its use of MPC’s fiber optic line, either because MPC had the

right to allow IFN to use its fiber optic line or because IFN’s

use of the line imposed no additional burden or servitude on the

properties.   In the alternative, IFN asked the district court to

condemn an interest across the thirty-seven parcels of land for

its use.   IFN premised jurisdiction on diversity of citizenship.

     Two of the defendants to the suit, Welch and Purcell, filed


                                      3
a class-action counterclaim against IFN and a class-action third-

party complaint against MPC and Southern Company, which owns MPC.

Welch and Purcell’s counterclaim and third-party complaint

alleged violations of the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. § 1961 et seq. (2000),

slander of title, trespass, civil conspiracy, unjust enrichment,

fraudulent concealment, and conversion.   MPC, in turn, filed a

counterclaim against Welch and Purcell, seeking a declaration

that it had the right to allow third parties to use its

telecommunication lines, a declaration that Welch and Purcell

(and any future class members) had suffered no damages, and an

injunction against Welch and Purcell (and any future class

members) to prevent them from interfering with MPC’s use of its

telecommunications lines.

     After MPC was made a party to Interstate Fibernet, the

district court consolidated the suit with McLaughlin v.

Mississippi Power Co., a similar suit filed by Mississippi

landowners against MPC.   The district court’s order consolidated

the two suits “for all purposes.”

     In the meantime, IFN filed a motion with the district court

to enjoin two defendants, Bryan Siliba and Dennis Pierce, from

pursuing an action they had filed in Mississippi state court

against IFN and MPC.   The district court granted IFN’s motion,

pending resolution of the court’s subject-matter jurisdiction.

     In accordance with their class-action counterclaim and

                                 4
third-party complaint, Welch and Purcell filed a motion to

certify a class of similarly situated landowners.    Shortly

thereafter, IFN moved to file an amended complaint that requested

certification of a defendant and counter-plaintiff class

represented by Welch and Purcell.1    Eventually, though, Welch and

Purcell filed a motion to withdraw their motion for class

certification and began to oppose IFN’s attempts to certify a

class.   Welch and Purcell asserted that the typicality and

adequacy requirements for class certification under Federal Rule

of Civil Procedure 23 could not be met.

     On February 19, 2003, the district court issued a memorandum

opinion and order.   After finding that it lacked subject-matter

jurisdiction over IFN’s claims, the district court dismissed

IFN’s complaint, denied IFN and MPC’s motion for class

certification, and vacated the injunction against state-court

proceedings.   The district court also purported to dismiss “the

case styled Interstate Fibernet v. Thirty-Seven (37) Parcels of

Real Property.”   IFN appealed “from the order entered in Civil

Action No. 1:01CV324SR on the 19th day of February,

2003, . . . and from any final judgment to be entered pursuant

thereto under Fed.R.Civ.P. 58.”   The district court did not,

however, dismiss McLaughlin, the case with which Interstate

Fibernet had been consolidated.   Furthermore, the district court

     1
          MPC later joined in IFN’s motion for class
certification.

                                  5
did not enter a final judgment under Rule 58.

     After IFN and MPC filed an appeal with this court, the

district court continued to exercise jurisdiction over Interstate

Fibernet.   The district court issued an order on March 19, 2003

that, inter alia, granted Welch and Purcell’s motion to withdraw

their RICO claims, granted Welch and Purcell’s motion to withdraw

their motion for class certification, and denied as moot Welch

and Purcell’s motion to dismiss for lack of subject-matter

jurisdiction.   The order also dealt with various issues in the

McLaughlin case.   Then, on May 7, 2003, the district court issued

an order granting John M. Deakle’s motion for leave to withdraw

as counsel of record for Welch and Purcell.

     Based on the unusual circumstances surrounding the district

court’s February 19 order, this court requested the parties to

address whether we have jurisdiction to hear this appeal.    Welch

and Purcell took the position that we lack appellate

jurisdiction, and filed a motion to remand.   That motion was

carried with the case.

                   II.   APPELLATE JURISDICTION

A.   28 U.S.C. § 1291

     Before we consider the merits of this appeal, we must first

determine whether appellate jurisdiction exists.   IFN and MPC

contend that we have jurisdiction over this appeal because the

district court’s February 19 order was a “final decision”


                                 6
appealable under 28 U.S.C. § 1291.    Welch and Purcell respond

that the order is not a final decision, under Ringwald v. Harris,

675 F.2d 768, 771 (5th Cir. 1982), because the order dealt only

with Interstate Fibernet, even though Interstate Fibernet had

been consolidated for all purposes with McLaughlin and the two

suits could have been filed as one suit.   IFN and MPC disagree.

We conclude, however, that the district court’s February 19 order

was not a final judgment because it did not dispose of all claims

in the Interstate Fibernet case and the district court did not,

apparently, intend for the order to be a final judgment.

     “A ‘final decision’ generally is one which ends the

litigation on the merits and leaves nothing for the court to do

but execute the judgment.”    Catlin v. United States, 324 U.S.

229, 233 (1945).   Thus, “as a general rule, all claims and issues

in a case must be adjudicated before appeal, and a notice of

appeal is effective only if it is from a final order or

judgment.”    Swope v. Columbian Chems. Co., 281 F.3d 185, 191 (5th

Cir. 2002).   We have also cautioned that “[t]he intention of the

judge is crucial in determining finality.”    Vaughn v. Mobil Oil

Exploration & Producing S.E., Inc., 891 F.2d 1195, 1197 (5th Cir.

1990).

     In its February 19 order, the district court did not dispose

of all the claims before it; Welch and Purcell’s counterclaims

and third-party complaint were still pending, as was MPC’s

counterclaim.   Therefore, the district court’s order would not

                                  7
normally be considered a final judgment.    There are at least two

exceptions to the rule that a district court must dispose of all

issues for its decision to be final, however.    Thus, before

concluding that the February 19 order was not a final decision,

we must consider whether either of these exceptions applies.

     First, a decision is final if the only claims not disposed

of by the district court were abandoned.    E.g., Moreau v. Harris

County, 158 F.3d 241, 244 (5th Cir. 1998); Chiari v. City of

League City, 920 F.2d 311, 314 (5th Cir. 1991).    There is no

argument here that the parties abandoned their claims.

Therefore, this exception does not apply.

     Second, a decision that does not specifically refer to all

pending claims will be deemed final if it is clear that the

district court intended, by the decision, to dispose of all

claims.   Vaughn, 891 F.2d at 1197-98; see also Armstrong v. Trico

Marine, Inc., 923 F.2d 55, 58 (5th Cir. 1991).    Thus, in Vaughn,

we held that a district court’s decision was intended to be

final, even though it left open a cross-claim, because it was

“couched in language calculated to conclude all claims,” and,

after issuing the judgment, the district court closed the case

and the clerk entered judgment.   891 F.2d at 1197-98.   Likewise,

in Armstrong, we held that a district court’s decision was final

even though it failed to address two of the plaintiff’s claims,

because the district court’s decision “facially dismissed [the]

entire complaint” and the clerk subsequently entered judgment

                                  8
against the plaintiff.   923 F.2d at 58.

     Unlike the district courts in Vaughn and Armstrong, the

district court here did not evince an intent to end the

litigation by its order.   True, the order did purport to dismiss

the entire case.   But, importantly, the district court did not

close the case or direct the clerk to enter judgment after

issuing its opinion.   Furthermore, the district court continued

to exercise jurisdiction over the case following its February 19

order, issuing orders on March 19 and on May 7.   Accordingly, we

conclude that the district court did not intend for its February

19 order to be a final judgment.2

     Because the February 19 order did not dispose of all the

claims in the case, and the district court did not, apparently,

intend for the order to be final, the order is not a final

decision.   The parties failed to appeal from the district court’s

subsequent orders on March 19 and May 7.   Therefore, there has


     2
          Moreover, this court did not gain jurisdiction over the
appeal once the district court dismissed Welch and Purcell’s RICO
counterclaim. Although our circuit formerly accepted premature
appeals in cases where the judgment became final prior to the
disposition of the appeal, Alcorn County, Miss. v. United States
Interstate Supplies, Inc., 731 F.2d 1160, 1165-66 (5th Cir.
1984), we held in United States v. Cooper, 135 F.3d 960, 963 (5th
Cir. 1998), that the Alcorn line of cases was no longer good law
after the Supreme Court’s opinion in FirsTier Mortgage Co. v.
Investors Mortgage Insurance Co., 498 U.S. 269 (1991). The rule
announced in Cooper is that we may consider premature appeals
“only where there has been a final decision, rendered without a
formal judgment.” 135 F.3d at 963. Since the district court’s
February 19 order was not a final decision, the appeal cannot be
saved by the rule in Cooper.

                                 9
been no appeal from a final decision, and we do not have

jurisdiction over this appeal under § 1291.

B.   28 U.S.C. § 1292(a)(1)

     In the alternative, IFN contends that this court has

jurisdiction over its appeal under 28 U.S.C. § 1292(a)(1) because

the February 19 order dissolved an injunction.    Section

1292(a)(1) provides that “the courts of appeals shall have

jurisdiction of appeals from . . . [i]nterlocutory orders of the

district courts . . . dissolving injunctions.”

     In its February 19 order, the district court vacated the

injunction it had entered on March 25, 2002, which prohibited

Defendants Siliba and Pierce from pursuing their state-court suit

against IFN and MPC.   Thus, it would appear that we have

jurisdiction over this appeal under § 1292(a)(1).    Nevertheless,

Welch and Purcell, citing Gardner v. Westinghouse Broadcasting

Co., 437 U.S. 478 (1978), argue that jurisdiction under

§ 1292(a)(1) does not exist because dissolution of the injunction

did not have an “irreparable impact on the merits of the

controversy,” id. at 482.

     Welch and Purcell’s reliance on Gardner is misplaced.

Gardner did not deal with a situation where the district court

had explicitly granted or denied an injunction.    Rather, the

question in Gardner was whether an order denying a motion for

class certification could be appealed under § 1292(a)(1) as an



                                10
order denying an injunction.       Id. at 478-79.   The Court held that

the order denying class certification could not be appealed

because it had “no direct or irreparable impact on the merits of

the controversy.”    Id. at 482.    Gardner did not change the rule

that “[o]rders which explicitly grant or deny injunctive relief

are immediately appealable as of right; no additional finding of

a threat of immediate, irreparable injury is required.”        Sherri

A.D. v. Kirby, 975 F.2d 193, 203 (5th Cir. 1992).       But, after

Gardner, “orders which . . . have the practical effect of denying

an injunction, but do not do so in explicit terms, are

immediately appealable if the order threatens ‘serious, perhaps

irreparable consequences’ and can be effectively challenged only

by immediate appeal.”    Id. (quoting Carson v. Am. Brands, Inc.,

450 U.S. 79, 84 (1981)).

     The district court’s February 19 order explicitly dissolved

an injunction that it had previously granted.       Thus, an appeal

from that order fits squarely within § 1292(a)(1) and no finding

of irreparable injury is required.       See Hamilton Plaintiffs v.

Williams Plaintiffs, 147 F.3d 367, 370 (5th Cir. 1998) (“[T]he

challenged order explicitly dissolved injunctive relief . . . .

Accordingly, the order clearly is appealable under 28 U.S.C.

§ 1292(a)(1).”).    Consequently, we have jurisdiction over this

appeal.3

     3
          Given our conclusion that we have jurisdiction over
this appeal under § 1292(a)(1), we deny the motion of Welch and

                                    11
                       III.   SCOPE OF THE APPEAL

     In this interlocutory appeal under § 1292(a)(1), we may

consider only those issues that bear on the district court’s

decision to dissolve the injunction against Siliba and Pierce.

The district court’s decision to dissolve the injunction was

premised on its conclusion that it lacked subject-matter

jurisdiction over IFN’s claims.     Thus, in order to consider

whether the dissolution was proper, we must necessarily consider

whether the district court was correct that it lacked subject-

matter jurisdiction.     See Veldhoen v. United States Coast Guard,

35 F.3d 222, 225 (5th Cir. 1994) (considering the district

court’s subject-matter jurisdiction on an appeal of an order

denying an injunction under § 1292(a)(1)).

     MPC asks us also to consider its counterclaim against Welch

and Purcell.   MPC’s counterclaim, however, has no bearing on the

district court’s decision to dissolve the injunction.      Therefore,

we will not address the issue in this appeal.       See Sherri A.D.,

975 F.2d at 204-05 (declining, in an appeal under § 1292(a)(1),

to consider issues that did not “resolve the legal status of

plaintiff’s claims for injunctive relief.”).

                 IV.    SUBJECT-MATTER JURISDICTION

A.   Standard of Review

     We review for abuse of discretion the district court’s


Purcell to remand for lack of appellate jurisdiction.

                                   12
decision to dissolve an injunction.     Collum v. Edwards, 578 F.2d

110, 113 (5th Cir. 1978).    Here, however, the district court

based its dissolution of the injunction on the legal conclusion

that it lacked subject-matter jurisdiction.    We review this legal

issue de novo.     See Guy Carpenter & Co. v. Provenzale, 334 F.3d

459, 463 (5th Cir. 2003); In re Bissonnet Invs. LLC, 320 F.3d

520, 522 (5th Cir. 2003).    We review a district court’s decision

regarding class certification for abuse of discretion.     Allison

v. Citgo Petroleum Corp., 151 F.3d 402, 408 (5th Cir. 1998).

B.   Diversity Jurisdiction

     In Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806), the

Supreme Court established the rule of complete diversity for

cases arising under 28 U.S.C. § 1332.    “The concept of complete

diversity requires that all persons on one side of the

controversy be citizens of different states than all persons on

the other side.”     Harrison v. Prather, 404 F.2d 267, 272 (5th

Cir. 1968).   IFN concedes that complete diversity does not exist

in this case because it shares state citizenship with some of the

defendants.   Nevertheless, IFN argues that jurisdiction is proper

in this case, for one of three reasons.    First, IFN contends that

Federal Rule of Civil Procedure 71A creates an exception to the

rule of complete diversity.    Second, IFN suggests that any

nondiverse defendants could be dismissed from the case, leaving

the district court with subject-matter jurisdiction over the


                                  13
remaining parties.      Third, IFN points out that complete diversity

is not required under Federal Rule of Civil Procedure 23 and,

thus, that jurisdiction would exist if the district court had

certified a class.      We address each of these arguments in turn.

     1.      Rule 71A

     28 U.S.C. 1367(a) authorizes courts to exercise supplemental

jurisdiction over “claims that are so related to claims in the

action within such original jurisdiction that they form part of

the same case or controversy under Article III.”     Section 1367(b)

provides, however, that when original jurisdiction is based on

the diversity of the parties, the district court may not exercise

supplemental jurisdiction “over claims by plaintiffs against

persons made parties under Rule 14, 19, 20, or 24 of the Federal

Rules of Civil Procedure” when it would be “inconsistent with the

jurisdictional requirements of section 1332.”4

         IFN argues that the defendants were not joined under Rules



     4
          The full text of § 1367(b) provides:
     In any civil action of which the district courts have
     original jurisdiction founded solely on section 1332 of
     this title, the district courts shall not have
     supplemental jurisdiction under subsection (a) over
     claims by plaintiffs against persons made parties under
     Rule 14, 19, 20, or 24 of the Federal Rules of Civil
     Procedure, or over claims by persons proposed to be
     joined as plaintiffs under Rule 19 of such rules, or
     seeking to intervene as plaintiffs under Rule 24 of such
     rules, when exercising supplemental jurisdiction over
     such claims would be inconsistent with the jurisdictional
     requirements of section 1332.


                                   14
14, 19, 20, or 24 of the Federal Rules of Civil Procedure.

Rather, the parties were joined under Rule 71A, which governs

condemnation actions.    Since Rule 71A is not listed in § 1367(b),

reasons IFN, Congress must have meant to exclude it.     Thus,

according to IFN, the district court could have exercised

supplemental jurisdiction (consistent with § 1367(b)) over IFN’s

claims against the nondiverse defendants.

     IFN’s reasoning suffers from a fundamental flaw.     Rule

71A(b) provides that, in condemnation actions, “[t]he plaintiff

may join in the same action one or more separate pieces of

property, whether in the same or different ownership and whether

or not sought for the same use.” (emphasis added).    Thus, Rule

71A permits joinder of “pieces of property,” not parties.        Cf.

Garrett v. United States, 407 F.2d 146, 150 n.5 (8th Cir. 1969)

(“Provisions of Rule 71A(b) permitting joinder of parcels of land

in condemnation are much broader than comparative provisions

governing joinder of parties (Rules 19 and 20) or joinder of

claims (Rule 18).” (emphasis added)).    The defendants in this

suit, therefore, must have been joined under another Rule, such

as Rule 19 or Rule 20.    See FED. R. CIV. P. 71A(a) (“The Rules of

Civil Procedure for the United States District Courts govern the

procedure for the condemnation of real and personal property

under the power of eminent domain, except as otherwise provided

in this rule.”); see also United States v. Smith, 307 F.2d 49, 58

(5th Cir. 1962) (noting that parties could be joined pursuant to

                                 15
Rule 19 in a condemnation proceeding under Rule 71A).      Since

§ 1367(b) provides that there must be complete diversity where

parties are joined in a diversity suit under Rule 19 or Rule 20,

complete diversity is required here.

     2.    Dismissal of nondiverse parties

     Even if Rule 71A does not create an exception to the rule of

complete diversity, argues IFN, diversity in this suit could be

obtained by dismissing any nondiverse parties.      In appropriate

circumstances, a court of appeals may dismiss dispensable

nondiverse parties whose presence defeats diversity jurisdiction.

Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 837-38

(1989).    We conclude, however, that once IFN joined the separate

parcels of real property, the landowners became indispensable

parties.   Thus, we decline to dismiss the nondiverse parties in

this suit.

     In a suit to condemn real property, known property owners

are necessary parties who must be joined.      See FED. R. CIV. P.

71A(c)(2) (“Upon the commencement of the action, the plaintiff

need join as defendants only the persons having or claiming an

interest in the property whose names are then known . . . .”

(emphasis added)); United States v. 194.08 Acres of Land, 135

F.3d 1025, 1031 (5th Cir. 1998).      Since IFN elected to proceed

against multiple properties in this suit, IFN was required to




                                 16
join all property owners.5    Thus, technically, it is not the

parties who were misjoined, but the properties.    Rule 21 gives us

the power to dismiss misjoined parties.     See Rule 21 (“Parties

may be dropped or added by order of the court on motion of any

party or of its own initiative at any stage of the action and on

such terms as are just.” (emphasis added)); Newman-Green, 490

U.S. at 837-38.     But there is no corresponding rule that permits

us to dismiss misjoined properties.     Consequently, we may dismiss

neither the properties nor their (now-necessary) owners from this

suit, in order to establish diversity jurisdiction.

     3.   Rule 23

     Finally, IFN argues that it need not be diverse from every

landowner, if the landowners are certified as a class.    “[I]n a

class action authorized pursuant to Federal Rule of Civil

Procedure 23, only the citizenship of the named representatives

of the class is considered, without regard to whether the

citizenship of other members of the class would destroy complete

diversity. . . .”     Carden v. Arkoma Assocs., 494 U.S. 185, 199-

200 (1990); Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d

720, 723 (5th Cir. 2002).    Thus, the citizenship of the unnamed

class members is irrelevant to whether we have diversity



     5
          Of course, it was not necessary for IFN to join all
properties it sought to condemn. Cf. FED. R. CIV. P. 71A(b) (“The
plaintiff may join in the same action one or more separate pieces
of property . . . .” (emphasis added)).

                                  17
jurisdiction, so long as the named class members are diverse from

the opposing parties.

     Before the district court, IFN and MPC requested that Welch

and Purcell be made representatives of a defendant and counter-

plaintiff class.   A class represented by Welch and Purcell would

not meet diversity requirements because (as IFN concedes) Purcell

is not diverse from IFN.   On appeal, however, IFN and MPC have

changed tactics and now argue that a class should have been

certified with Welch alone acting as class representative.    Since

Welch is diverse from IFN, and the amount in controversy has been

met with regard to Welch, a class represented by Welch would (as

the new theory goes) meet the diversity requirements of § 1332.

We are not disposed to salvage the district court’s jurisdiction

over this case by permitting IFN and MPC to raise for the first

time on appeal an argument that would require us to permit one

class representative to be dropped, leaving only Welch as the

lone class representative.   The propriety of Welch as the lone

class representative was not passed on by the district court, and

it is a sensitive, fact-bound inquiry that ought not be made in

the first instance at the court of appeals level.   Accordingly,

we conclude that the district court did not have diversity

jurisdiction over this case.

C.   Federal-Question Jurisdiction

     IFN argues that even if diversity jurisdiction is lacking,



                                18
federal-question jurisdiction was created when Welch and Purcell

filed their counterclaim against IFN.      According to IFN, the

district court had federal-question jurisdiction over Welch and

Purcell’s counterclaim because the claim--which asserted

violations of RICO, 18 U.S.C. § 1961 et seq.--arose under federal

law.    See 28 U.S.C. § 1331.     Furthermore, IFN contends that, once

it had jurisdiction over Welch and Purcell’s counterclaim, the

district court could have exercised supplemental jurisdiction

over IFN’s state-law claims.

       If an independent jurisdictional ground exists for a

counterclaim, the district court can retain jurisdiction over the

counterclaim even if the original claims are dismissed for lack

of subject-matter jurisdiction.       Kuehne & Nagel (AG & Co) v.

Geosource, Inc., 874 F.2d 283, 291 (5th Cir. 1989).      Moreover, if

the district court retains jurisdiction over the counterclaim, it

may permit the dismissed claims to be asserted as counterclaims

to the retained claim.      Id.   But that does not mean that

dismissal of the original claims is not warranted in the first

place.    See id.    IFN never attempted to re-file its claims as

counterclaims.      Nor did it appeal the district court’s decision

to allow Welch and Purcell to withdraw their RICO counterclaims.

Therefore, we see no error in the district court’s dismissal of

IFN’s state-law claims for lack of subject-matter jurisdiction.

                             V.   CONCLUSION



                                    19
     We AFFIRM the district court’s decision to dissolve the

injunction against Siliba and Pierce for the reason, recognized

by the district court, that it had no jurisdiction to enter the

injunction.




                               20
