Stark v. William et al
Filing
26
ORDER granting 11 Motion to Dismiss for Lack of Jurisdiction; denying as moot 18 Motion to Dismiss; denying as moot 22 Motion for Default Judgment. Please see attached memorandum. The Clerk of Court is directed to remand this action to state court. The case shall be closed, but no separate judgment shall enter. Signed by Judge Vanessa L. Bryant on 03/22/2016. (Thomas, R.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JOHN STARK,
:
:
Plaintiff,
:
:
v.
:
:
WILLIAM A. TRYON, UNITED
:
SERVICES AUTOMOBILE
:
ASSOCIATION INSURANCE
:
COMPANY,
:
:
Defendants,
:
:
DEBORAH LIPMAN,
:
:
Defendant / Cross-Claimant,
:
:
NORWALK HILTON GARDEN INN,
:
:
Defendant / Third-Party Plaintiff, :
:
v.
:
:
P&S PAVING, INC.,
:
:
Third-Party Defendant.
:
CIVIL CASE NUMBER:
3:15-cv-373 (VLB)
March 22, 2016
MEMORANDUM OF DECISION
Plaintiff John Stark brought a state-court action against Defendants William
A. Tryon, Deborah Lipman, United Services Automobile Association Insurance
Company (“USAA”), and Norwalk Hilton Garden Inn (“Hilton”). The complaint
purports to assert various state-law claims arising out of a car accident.
Defendant Tryon, who was acting as an employee of the United States Small
Business Administration when the car accident occurred, removed here and
substituted the Government as the named party. Defendant Lipman crossclaims
against the Government. Defendant Hilton files a third-party complaint against
P&S Paving, Inc. (“P&S”) and moves for default entry against P&S.
The
Government moves to dismiss Stark’s and Lipmann’s claims.
This action calls on the Court to decide two questions—one easy, the other
more difficult.
The first issue is whether Stark has demonstrated that he
exhausted his administrative remedies as required by the Federal Tort Claims Act
(“FTCA”). He has not. The second and more difficult issue is whether the Court
has subject-matter jurisdiction over the remaining claims. It does not. The Court
lacks supplemental jurisdiction because a removal-conferring claim dismissed on
jurisdictional grounds may not serve as a jurisdictional hook. The Court lacks
sufficient information to determine whether diversity jurisdiction exists and
declines to embark on a self-guided quest to ascertain those facts, particularly
when doing so may trample on well-established limitations on removal.
Factual and Procedural Background
In
Connecticut
Superior
Court
for
the
Judicial
District
of
Stamford/Norwalk, Stark brought a complaint against Tyron, Lipman, USAA, and
Hilton.
ECF No. 1-1.
The complaint contains the following allegations.
In
February 2013, Stark was a passenger in a rental vehicle driven by Tyron. Id. at
¶ 3. Tyron attempted to exit Hilton’s parking lot, but a pile a snow prevented
Tyron from viewing oncoming traffic.
parking lot, Lipman rear-ended him.
Id. at ¶ 5.
Id.
After turning left out of the
Stark suffered 42 injuries, including
“traumatic brain injury.” Id. at ¶ 8. His complaint alleges that both Tyron’s and
2
Lipman’s negligent driving proximately caused him injury, that Hilton’s parking
lot was unnecessarily dangerous because a snow pile obstructed the line of sight
needed to safely exit the premises, and that USAA was contractually liable
because Tyron, Lipman, and Hilton were either uninsured or underinsured. See
generally id.
The complaint alleges the residence of each party and seeks
damages greater than $15,000. Id. at 1, 22 (.pdf pagination).
Tyron removed the action here on the basis of 28 U.S.C. §§ 1441(a), 1442,
and 2679(d)(2). ECF No. 1. The notice of removal alleges that Tryon “was acting
within the scope of his official capacity and duties with the United States Small
Business Administration.”
Id. at ¶ 2.
He therefore argued that removal was
proper under Section 1441(a) (federal-question removal) because the negligence
claim against him must be asserted pursuant to the FTCA; that removal was
proper under Section 1442 (federal-officer removal) because Tyron was acting in
his official capacity as a Government officer; and that removal was proper under
Section 2679(d)(2) (FTCA removal) because the Attorney General certified that
Tyron was acting within the scope of his official duties with the United States
Small Business Administration at the time the alleged car accident. Id. at ¶ 6.
Tyron properly moved to substitute the Government, and this Court granted the
motion. ECF Nos. 3, 24.
In this Court, Lipman crossclaims against Tryon, arguing that Stark’s
injuries were due to Tyron’s negligence, not her negligence. ECF No. 13. Hilton
files a third-party complaint against P&S, arguing that it was responsible for
3
Stark’s injuries if caused by the snow pile because Hilton contracted with P&S to
conduct snow removal. ECF No. 19. P&S has not appeared, and Hilton moves for
default judgment. ECF No. 22.
The Government moves to dismiss Stark’s claims for lack of subject-matter
jurisdiction. ECF No. 11. The Government argues that Stark did not exhaust his
administrative remedies. ECF No. 11-1. In support, it provides a declaration from
Burton Warner, Trial Attorney assigned to the Department of Litigation and
Claims, Office of General Counsel, Small Business Administration, declaring that
Stark never exhausted. ECF No. 11-2. Stark does not oppose, but Defendant
Lipman objects to dismissal of her claim against Tyron. ECF No. 14. She argues
that crossclaims are exempt from exhaustion under FTCA.
Id. at 2.
The
Government moves to dismiss Lipman’s crossclaim, arguing that Lipman is
incorrect, in part, for the reasons articulated by this Court in a prior decision.
ECF Nos. 18; 18-1. Lipman does not oppose the motion to dismiss.
LEGAL DISCUSSION
The Government’s motion to dismiss for failure to exhaust is properly
addressed in a motion pursuant to Federal Rule of Civil Procedure 12(b)(1).1 See
McNeil v. United States, 508 U.S. 106, 113 (1993) (holding that exhaustion
1
The Supreme Court recently held that the requirement contained in
Section 2401(b)—that is, a claim must be exhausted within two years—is not
jurisdictional. United States v. Kwai Fun Wong, 135 S. Ct. 1625, 1633 (2015). That
case did not, however, alter the Supreme Court’s prior holding that exhaustion
(timely or untimely) is a jurisdictional prerequisite for bringing an FTCA claim.
See Foster v. Fed. Emergency Mgmt. Agency, 2015 WL 5430370, at *9 (E.D.N.Y.
Sept. 15, 2015).
4
requirement contained in Section 2675(a) is jurisdictional); Celestine v. Mount
Vernon Neighborhood Health Ctr., 403 F.3d 76, 82 (2d Cir. 2005) (same). The
plaintiff bears the burden of establishing exhaustion. See In re Agent Orange
Product Liability Litigation, 818 F.2d 210, 214 (2d Cir. 1987) (“[T]he burden is on
the
plaintiff
to
both
plead
and
prove
compliance
with
the
statutory
requirements.”). When ruling on a Rule 12(b)(1) motion, a court may consider
evidence outside the pleadings. Dukes v. New York City Employees’ Ret. Sys., &
Bd. of Trustees, 581 F. App’x 81, 82 (2d Cir. 2014) (citing Makarova v. United
States, 201 F.3d 110, 113 (2d Cir. 2000)).
Section 2675(a) bars a claimant from bringing an FTCA claim “unless the
claimant shall have first presented the claim to the appropriate Federal agency
and his claim shall have been finally denied by the agency in writing and sent by
certified or registered mail.” 28 U.S.C. § 2675(a). The Government argues that
Stark failed to exhaust his administrative remedy prior to bringing suit and
provides evidence to support its position. ECF No. 11-2 (Decl.) at ¶ 6. Stark, who
bears the burden of proof on this issue, does not oppose dismissal, and his statecourt pleadings do not address exhaustion. See Local R. Civ. P. 7(a)(1) (“Failure
to submit a memorandum in opposition to a motion may be deemed sufficient
cause to grant the motion, except where the pleadings provide sufficient grounds
5
to deny the motion.”). Accordingly, the Government’s motion to dismiss for lack
of subject-matter jurisdiction is granted.2
The Court must now figure out what to do about the remaining claims—
those are, the state-law claims asserted in the original complaint and the claims
subsequently asserted in federal court by way of crossclaim and third-party
complaint. The Court begins by assessing whether it has jurisdiction over the
state-law claims asserted in the original complaint.3 See Barbara v. New York
Stock Exch., Inc., 99 F.3d 49, 53 (2d Cir. 1996) (observing that courts may raise
jurisdictional defects in removal cases sua sponte). Two potential jurisdictional
bases jump out: supplemental (pursuant to the jurisdictionally defective FTCA
claim) and diversity jurisdiction. If neither applies, the action must be remanded
to state court. See 28 U.S.C. § 1447(c).
2
Although only tangentially raised by the Government, ECF No. 18-2, the
Court also lacks jurisdiction pursuant to the doctrine of derivative jurisdiction,
see Kennedy v. Paul, 2013 WL 5435183, at *3 (D. Conn. Sept. 30, 2013) (“The state
court had no jurisdiction over the [FTCA claims] at the time of removal, and thus
this Court acquired no jurisdiction over those claims when they were removed to
this Court.”). The doctrine of derivative jurisdiction, which the Court may raise
sua sponte because it concerns subject-matter jurisdiction, constitutes an
alternative ground for dismissal. See id.
3
Neither the crossclaim nor the claim asserted in the third-party complaint
may serve as the jurisdictional hook. See Correspondent Servs. Corp. v. First
Equities Corp. of Florida, 338 F.3d 119, 125 (2d Cir. 2003) (observing that “the
district court correctly found that it could not assert diversity jurisdiction based
upon Kelleher’s cross-claims alone”); Arrow Fin. Servs., LLC v. Massil, 2009 WL
348553, at *2 (E.D.N.Y. Feb. 11, 2009) (observing that third-party complaint cannot
confer original jurisdiction). The viability of these claims thus depends on the
viability of the claims asserted in the original complaint.
6
Let’s begin with supplemental jurisdiction.
Supplemental jurisdiction
exists over “all other claims that are so related to claims in the action within such
original jurisdiction that they form part of the same case or controversy.” 28
U.S.C. § 1367. There’s no dispute that the remaining state-law claims arise out of
the same car accident as the FTCA claim. The issue is whether the FTCA claim
may serve as the jurisdictional hook for asserting the remaining state-law claims
when that claim was dismissed on jurisdictional grounds. It cannot. The reason
is simple. The Court lacked jurisdiction ab initio. Kennedy v. Paul, 2013 WL
5435183, at *3
As the Second Circuit has observed, “a dismissal pursuant to
Rule 12(b)(1) precludes a district court from exercising supplemental jurisdiction
over related state claims.” Nowak v. Ironworkers Local 6 Pension Fund, 81 F.3d
1182, 1188 (2d Cir. 1996).4
jurisdiction exists in
Other district courts agree that no supplemental
these
circumstances.
See,
e.g., Winegardner
v.
Schowengerdt, 2012 WL 253233, at *1 (S.D. Ohio Jan. 26, 2012) (“The presence of
claims subject to the FTCA was the sole basis for removal. Once those claims
are dismissed, the appropriate disposition of the remainder of the case is to
remand it to the Fairfield County Court of Common Pleas.”).
4
The Court does not read Parker v. Della Rocco, 252 F.3d 663 (2d Cir.
2001), to express a contrary conclusion. In that case, the removal-conferring
FTCA claim was voluntarily dismissed, and the court did not explicitly address
whether some jurisdictional bar other than the propriety of removal jurisdiction
would have prevented the district court from merits adjudication. Id. at 665–65 &
n.2. Conversely, here, this Court explicitly rules that it lacked jurisdiction over the
removal-conferring claim ab initio, despite the existence of removal jurisdiction.
7
The Court next ruminates over the question of diversity jurisdiction.
Diversity jurisdiction exists if the amount in controversy exceeds $75,000
(exclusive of interest and costs) and the action is between, as relevant here,
citizens of different states. 28 U.S.C. § 1332(a)(1). The statute requires complete
diversity—that is, the citizenships of all defendants must be different from the
citizenships of all plaintiffs. Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 68 (2d
Cir. 1990).
The Court crashes into a wall when applying this test. Neither the statecourt complaint nor anything else in the record identifies the citizenships of each
of the remaining parties. The complaint identifies where each party resides, but
residence is not synonymous with citizenship. See Canedy v. Liberty Mutual Ins.
Co., 126 F.3d 100, 103 (2d Cir. 1997) (“[I]t is well-established that allegations of
residency alone cannot establish citizenship.”); Comrie v. 3GTMS, Inc., 2015 WL
9581733, at *2 (D. Conn. Dec. 30, 2015) (“There are thus two sources of citizenship
for a corporation: (i) state(s) of incorporation; and (ii) state of principal place of
business.”). And the record doesn’t reveal whether the amount-in-controversy
requirement has been satisfied.
The complaint alleges facts suggesting its
satisfaction, but neither the complaint nor the notice of removal specifically
allege an amount in controversy greater than $75,000. This presents a quandary:
should the Court embark on a self-guided quest to ascertain the facts necessary
to support jurisdiction or should it analyze only those facts and arguments made
available within the removal period?
8
In other contexts, the answer would be obvious. See, e.g., Blockbuster,
Inc. v. Galeno, 472 F.3d 53, 57 (2d Cir. 2006) (“It is well-settled that the party
asserting federal jurisdiction bears the burden of establishing jurisdiction.”); Vera
v. Saks & Co., 335 F.3d 109, 116 n.2 (2d Cir. 2003) (“[W]e generally evaluate a
defendant’s right to remove a case to federal court at the time the removal notice
is filed.”); Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269, 274 (2d Cir. 1994)
(observing that “allowing a hearing to determine [jurisdiction] when the removal
petition fails even to allege the [existence of jurisdiction] contradicts McNutt’s
admonition that if the defendant fails to make the necessary allegations he has no
standing” (internal quotation marks and alterations omitted)).
This case presents an unusual circumstance because the case was not
only properly removed, but there were three bases for exercising removal
jurisdiction over this federal-question case The Court has identified no binding
precedent on this precise issue, but it has come across a case where the Fifth
Circuit addressed a related issue res nova.
In Cuevas v. BAC Home Loans
Servicing, LP, 648 F.3d 242 (5th Cir. 2011), the plaintiffs brought state-law claims
against non-diverse defendants in state court. Id. at 246. The plaintiffs amended
their complaint to assert a federal claim, and the defendants removed to federal
court. Id. The district court dismissed the federal claim and declined to exercise
supplemental jurisdiction over the state-law claims. Id. The defendants appealed
on the basis that the district court erred by failing to exercise diversity
jurisdiction, a ground not asserted in the notice of removal but that was
9
subsequently raised in federal court. Id. at 247. The Fifth Circuit ruled that the
exercise of diversity jurisdiction was mandatory even though defendants did not
remove on that basis. It reasoned that the power to remand a case depends “on
the nature of the district court’s jurisdiction over the claims that comprise the
case at the time of the remand.” Id. at 248. A leading commentator considers the
Fifth Circuit’s approach to be “the better approach,” but observed that other
courts may eventually come to a different conclusion, especially in light of the
“Congressional intent that the forum selection battle end sooner rather than
later.” 16 Moore’s Federal Practice, § 107.41[2][a] (Matthew Bender 3d ed.).
This case presents a slightly different factual scenario because this Court,
unlike the district court in Cuevas, never exercised jurisdiction over the removalconferring claim and because the remaining Defendants, unlike the defendants in
Cuevas, do not stridently proclaim jurisdiction. But if Cuevas and Moore’s stand
for the proposition that a party may assert new jurisdictional grounds after the
time for removal has expired or that the mandatory nature of jurisdiction requires
a district court to launch its own factual investigation into possible bases for
jurisdiction not asserted by any party, the Court respectfully disagrees.
District courts in Connecticut often lack sufficient information in removed
actions to ascertain whether diversity jurisdiction exists. Connecticut does not
require a plaintiff to plead citizenship or an amount in controversy exceeding
$75,000. Conn. Gen.Stat. § 52-91. The failure to predicate removal on diversity
will often force a district court to conduct additional proceedings (and may, as
10
here, force a district court to initiate those proceedings) before being able to
determine the proper forum. Forcing a district court to initiate such proceedings
effectively shifts the burden to the court to disprove jurisdiction when the burden
was clearly placed on the party seeking federal-court assistance.
Blockbuster,
472 F.3d at 57. There’s no justification for this burden shifting. In most cases, all
defendants must join the notice of removal and thus have the ability to initially
assert all bases for removal. See 28 U.S.C. § 1446(b)(2)(A). Even where, as here,
the non-federal defendants need not join the notice of removal, nothing prevented
them from filing an amended notice of removal or asserting an independent
jurisdictional basis by way of federal court notice or motion.
Permitting defendants to assert new jurisdictional bases would also violate
three Congressional restrictions on removal jurisdiction. The Second Circuit has
highlighted the importance of respecting Congressional intent in this context:
“[i]n light of the congressional intent to restrict federal court jurisdiction, as well
as the importance of preserving the independence of state governments, federal
courts construe the removal statute narrowly, resolving any doubts against
removability.” Lupo, 28 F.3d at 274 (quotation marks omitted). As noted above,
delay resulting from new rounds of jurisdictional intrigue would circumvent
Congressional intent to resolve forum disputes sooner rather than later. See 28
U.S.C. § 1446(b).
Two other rules governing removal are relevant.
A forum defendant is
barred from removing a diversity action. 28 U.S.C. § 1441(b). “The justification
11
for this rule is simple.
Given that the purpose of diversity jurisdiction is to
provide litigants with an unbiased forum by protecting out-of-state litigants from
local prejudices, it makes no sense to allow an in-state defendant to take
advantage of removal.”
16 Moore’s Federal Practice, § 107.14[2][e] (Matthew
Bender 3d ed.). Allowing litigants to assert diversity as the basis for original
jurisdiction after the removal-conferring claim is dismissed for lack of subjectmatter jurisdiction would circumvent this justifiable bar to removal.
removal ordinarily requires the consent of all defendants.
Finally,
28 U.S.C.
§ 1446(b)(2)(A). If “the exercise of diversity jurisdiction is not discretionary,” 16
Moore’s Federal Practice, § 107.41[2][a] (Matthew Bender 3d ed.), and jurisdiction
is analyzed “at the time of remand,” see Cuevas, LP, 648 F.3d at 248, Congress
would be divested of its ability to restrict Article III jurisdiction, and the remaining
litigants may be robbed of their choice of forum.
The Court is not alone in its conclusion. The United States District Court
for the District of Columbia has squarely addressed this issue. J.S.R. ex rel.
Rojas Polanco v. Washington Hospital Center Corp., 667 F.Supp.2d 83 (D.D.C.
2009), appeal dismissed, 2010 WL 3260126 (D.C. Cir. 2010). In Polanco, a minor
and his parents brought a medical malpractice case against a hospital and
various individuals in state court. Id. at 83–84. One of the individuals, however,
was an employee of a grantee of the Department of Health and Human Services,
so the United States removed the action to federal court and moved to dismiss
for lack of subject-matter jurisdiction. Id. at 84. Plaintiffs then moved to remand
12
the action to state court, and defendants opposed, in part, by arguing that
diversity jurisdiction existed over the remaining state-law claims. Id. The district
court nonetheless remanded the action because the non-federal defendants
never removed the case and reasoned that “[t]he fact that Non-federal Defendants
might have removed the case on the basis of diversity [was] irrelevant.” Id. at 85.
Various other district courts have followed suit.
See, e.g., Jessup v. Cont’l
Motors, Inc., 2013 WL 309895, at *4 (E.D. Pa. Jan. 24, 2013). For the reasons
articulated above, this Court follows likewise.
Because this Court lacks jurisdiction over the remaining claims, the action
must be remanded to state court. See 28 U.S.C. § 1447(c). The state court must
determine the legal effect of any post-removal claims asserted by way of
crossclaim or third-party complaint.5 See Edelman v. Page, 2008 WL 4925815, at
*3 (Conn. Super. Ct. Oct. 15, 2008) aff’d, 123 Conn.App. 233 (2010) (observing that
other state courts have given effect to pleadings filed in federal court prior to
remand but declining to rule that conduct in federal court may result in waiver
once remanded). The Court therefore DENIES as moot the Government’s second
motion to dismiss and Hilton’s motion for default judgment. See Cunningham v.
BHP Petroleum Great Britain PLC, 427 F.3d 1238, 1245 (10th Cir. 2005)
5
Counsel should pause before pursuing or refiling claims over which
neither the state court nor this Court has jurisdiction for the reasons articulated
here. See Connecticut Practice Book Rule 3.1 (“A lawyer shall not bring or defend
a proceeding, or assert or controvert an issue therein, unless there is a basis in
law and fact for doing so that is not frivolous, which includes a good faith
argument for an extension, modification or reversal of existing law.”).
13
(“[B]ecause the district court never had jurisdiction over the case, it had no
power to rule on any substantive motions or to enter judgment in the case.”).
CONCLUSION
For the foregoing reasons, the Court GRANTS the Government’s motion to
dismiss Stark’s claim, DISMISSES that claim, REMANDS the entire action to state
court, and DENIES as moot the Government’s motion to dismiss Defendant
Lipman’s crossclaim and Hilton’s motion for default judgment.6
IT IS SO ORDERED.
/s/
_
Vanessa L. Bryant
United States District Judge
Order dated in Hartford, Connecticut on March 22, 2016.
6
The Court does not enter judgment because the action was remanded for
lack of subject-matter jurisdiction. “‘Judgment’ as used in these rules includes a
decree and any order from which an appeal lies.” Fed. R. Civ. P. 54(a). Many
claims remain unadjudicated, see 28 U.S.C. § 1291; a plaintiff may not appeal the
grant of sovereign immunity under the collateral order doctrine, Salerno v. City
Univ. of New York, 191 F.Supp.2d 352, 358 (S.D.N.Y. 2001) (“[T]here is no relevant
parallel between grants of sovereign immunity.”); and Defendants may not appeal
an order remanding an action for lack of subject-matter jurisdiction, see Calabro
v. Aniqa Halal Live Poultry Corp., 650 F.3d 163, 165 (2d Cir. 2011) (“Because the
district court’s decision to remand this case rested on its determination that it
was without subject-matter jurisdiction, we lack appellate jurisdiction to review
it.”).
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