New Hampshire Insurance Company ("New Hampshire"), the movant and intervenor, also issued an insurance policy to Perlberg, effective from July 1989 to July 1993. New Hampshire had defended Perlberg in the Estrella case and had paid the entire cost of the defense. New Hampshire contended that it may have had contribution rights against Penn National and sought to intervene in this declaratory judgment action to protect its potential contribution rights.

As both New Hampshire and Penn National are Pennsylvania corporations, Penn National argued that diversity jurisdiction would cease to exist if the Court permitted New Hampshire to intervene. In its consideration of the motion, the Court noted that 28 U.S.C. § 1332 requires complete diversity of the parties where the sole basis for federal jurisdiction is diversity of citizenship. See Strawbridge v. Curtiss, 7 U.S. 267, 268 (1806). The Court also noted that while 28 U.S.C. 1367(b) prohibits supplemental jurisdiction over "claims by plaintiffs against persons made parties"under Rule 24 and those "seeking to intervene as plaintiffs under Rule 24," the statute does not prohibit the Court from having supplemental jurisdiction over a non-diverse defendant intervenor.

Penn national argued that § 1367(b) prohibits supplemental jurisdiction over the claims of a non-diverse defendant. The Court responded by noting that the plain language of § 1367(b) allows for the intervention of non-diverse, but not indispensable, defendants. In addition, where the intervenor's claims closely relate to the original claims, sending the matter to state court defeats judicial efficiency.

The Court then examined the effect of New Hampshire's permissive intervention, as opposed to intervention of right, on the Court's supplemental jurisdiction. § 1367(b) makes no distinction between intervention of right under Rule 24(a) and permissive intervention under Rule 24(b).

Consistent with the aim of judicial efficiency, the Court found that the intervention of a non-diverse, but not indispensable, defendant does not defeat supplemental jurisdiction where the claims of the defendant are a part of the same controversy.

Next, the Court determined whether New Hampshire was an indispensable party that would destroy diversity if allowed to intervene under Rule 24. An analysis of Rule 19(b) helps to determine whether a party is indispensable. In this case, New Hampshire was not an indispensable party because Penn National's obligation to defend and indemnify Perlberg could be decided without the presence of New Hampshire. Accordingly, the Court found that New Hampshire's intervention would not destroy diversity jurisdiction.

While intervention as of right was not appropriate in this case, New Hampshire could intervene permissively. The Court could decide Penn National's declaratory action and New Hampshire's contribution action in a single proceeding, thereby promoting judicial economy. Furthermore, the intervention would avoid a competing suit in state court. The Court further noted that Perlberg had consented to New Hampshire's intervention, and Penn National was not prejudiced by their intervention. In addition, a denial of New Hampshire's Motion to Intervene would have had a negative impact on New Hampshire. The United States District Court for the District of Maryland exercised its discretion and granted New Hampshire's Motion to Intervene.