United States of America v. Sutton et al

Filing 24

OPINION AND ORDER: The court declines to continue to exercise jurisdiction over the remaining crossclaims under 28 U.S.C. § 1367(c)(3). Because no other claims remain pending, the clerk is directed to dismiss the case. Signed by Senior Judge James T Moody on 2/22/13. (lhc)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
FORT WAYNE DIVISION
UNITED STATES OF AMERICA,
Plaintiff,
v.
KURT A. SUTTON, TOMMY E.
SUTTON, and STEVEN L. MCATEE,
Defendants.

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No. 1:12 CV 27

OPINION AND ORDER
Before the court is the issue of whether the court should exercise supplemental
jurisdiction over the parties’ remaining state-law claims. For the reasons outlined
below, the court declines to exercise jurisdiction over those claims.
I. Background
This suit originated on January 26, 2012, when plaintiff the United States brought
suit against defendants Kurt Sutton and Tommy Sutton (“the Suttons”) and Steven
McAtee (“McAtee”). In its complaint, the United States alleged that the Suttons, who
own land that adjoins land owned by the United States government (“the
government”), hired McAtee to dig a pond on the Sutton’s property, and in the process,
McAtee placed “approximately 7,500 cubic yards of soil, fill material and rubbish” on
the government’s land, destroying plant life and damaging the land. (DE # 1.) The
government’s suit sought damages and the removal of the remaining material from the
government’s land. (Id.) Because the government was the plaintiff in this suit, the court
had jurisdiction over the suit under 28 U.S.C. § 1345.

On February 16, 2012, the Suttons filed an answer and asserted a crossclaim
against McAtee. (DE # 7.) The Suttons’ crossclaim sought to recover from McAtee the
amount of any judgment the government recovered against the Suttons. (Id.) Thus, the
Suttons’ crossclaim appears to be a claim for indemnification.
On March 13, 2012, McAtee filed an answer to the government’s complaint, an
answer to the Suttons’ crossclaim, and asserted a crossclaim against the Suttons.
(DE # 12.) McAtee’s crossclaim against the Suttons sought to recover from the Suttons
the amount of any judgment that the government recovered against McAtee. Thus, like
the Suttons’ crossclaim, McAtee’s crossclaim appears to be a claim for indemnification.
On September 25, 2012, all three parties signed a stipulation that dismissed the
government’s complaint pursuant to FED. R. CIV. P. 41(a)(1)(A)(ii). (DE # 19.) After the
government’s complaint was dismissed, only the original defendants’ crossclaims
remained. But, as Magistrate Judge Cosbey recognized in his November 30, 2012 order
(DE # 22), those remaining claims are state-law claims that have no independent basis
for federal jurisdiction. Judge Cosbey gave the Suttons and McAtee three weeks to file
briefs arguing that the court has supplemental jurisdiction over the remaining claims
and that the court should exercise that jurisdiction. (Id.) The Suttons filed a brief
responding to Judge Cosbey’s order (DE # 23), but McAtee did not.
II. Analysis
In their brief responding to Judge Cosbey’s order, the Suttons argue that despite
the fact that the federal claim that gave the court original jurisdiction has been

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dismissed, the court has supplemental jurisdiction over the parties’ crossclaims, and the
court should exercise its discretion and retain jurisdiction over those claims. (DE # 23.)
The court agrees that it has supplemental jurisdiction over the remaining
crossclaims. Under 28 U.S.C. § 1367(a), when a district court has original jurisdiction
over a civil action, the district court “shall have supplemental jurisdiction 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(a). A district court
“has supplemental jurisdiction over [state-law claims] pursuant to 28 U.S.C. § 1367(a) so
long as they ‘derive from a common nucleus of operative fact’ with the original federal
claims.” Wisconsin v. Ho-Chunk Nation, 512 F.3d 921, 936 (7th Cir. 2008) (quoting Groce v.
Eli Lilly & Co., 193 F.3d 496, 500 (7th Cir. 1999)); see also Houskins v. Sheahan, 549 F.3d
480, 495 (7th Cir. 2008). “A loose factual connection is generally sufficient.” Houskins,
549 F.3d at 495. Both crossclaims and the original federal claim arose out of the same
nucleus of operative fact, and therefore, the requirements of 28 U.S.C. § 1367(a) have
been met.
Because the federal claim which gave the court original jurisdiction over this suit
has dropped out, however, the court may still decline to exercise jurisdiction over the
crossclaims under 28 U.S.C. § 1367(c)(3). That provision states:
(c) The district courts may decline to exercise supplemental jurisdiction over
a claim under subsection (a) if–
(3) the district court has dismissed all claims over which it has original
jurisdiction[.]

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28 U.S.C. § 1367(c)(3)
“When all federal claims in a suit in federal court are dismissed before trial, the
presumption is that the court will relinquish federal jurisdiction over any supplemental
state-law claims.” Al’s Serv. Ctr. v. BP Prods. N. Am., Inc., 599 F.3d 720, 727 (7th Cir.
2010). “The presumption is rebuttable, ‘but it should not be lightly abandoned, as it is
based on a legitimate and substantial concern with minimizing federal intrusion into
areas of purely state law.’” RWJ Mgmt. Co. v. BP Prods. N. Am., Inc., 672 F.3d 476, 479
(7th Cir. 2012) (quoting Khan v. State Oil Co., 93 F.3d 1358, 1366 (7th Cir. 1996)).
The Seventh Circuit has identified three situations where a district court should
retain jurisdiction over a supplemental claim even though all federal claims have
dropped out: “where the statute of limitations would bar the refiling of the
supplemental claims in state court . . . ; where substantial federal judicial resources have
already been expended on the resolution of the supplemental claims; and where it is
obvious how the claims should be decided.” Williams Elecs. Games, Inc. v. Garrity, 479
F.3d 904, 906-07 (7th Cir. 2007).
The Suttons do not address these situations in their brief. The court, however,
has not spent substantial resources on the resolution of the crossclaims. The court has
issued only one written order in this case: the order instructing the parties to brief the
issue at hand. (DE # 22.) Additionally, it is not obvious how those claims should be
decided. Finally, as to the statute of limitations, as noted above, the crossclaims appear

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to be claims for indemnification or contribution,1 and the statute of limitations for a
contribution or indemnification claim does not begin to run until the party seeking
indemnification or contribution actually incurs the monetary obligation that gives rise
to the claim. See Balvich v. Spicer, 894 N.E.2d 235, 244-45 (Ind. Ct. App. 2008); see also
Pflanz v. Foster, 888 N.E.2d 756, 758-59 (Ind. 2008). According to their brief, the Suttons
incurred the expenses they seek to recover from McAtee at some point in 2012 (DE # 23
at 3), and thus, the statute of limitations2 would not bar the refiling of these claims in
state court.
The Suttons cite the Seventh Circuit’s decision in Cenco Inc. v. Seidman & Seidman,
686 F.2d 449, 452 (7th Cir. 1982), in support of their argument that the court has
jurisdiction over the crossclaims in this case. As noted above, however, even though the
court has supplemental jurisdiction over the crossclaims, the court may still decline to
retain jurisdiction over those claims under 28 U.S.C. § 1367(c)(3). As none of the three
situations that would justify retaining jurisdiction over the crossclaims are present in

1

“Under Indiana law, ‘indemnity requires reimbursement of the entire amount
of liability,’ whereas, ‘contribution involves partial reimbursement of one party who
has discharged or paid more than his or her share of a common liability.’” Joshi v. United
States, No. 3:08–cv–498, 2009 WL 2449234, at *3 (N.D. Ind. Aug. 6, 2009) (quoting 6 IND.
LAW ENCYCL., Contribution § 1 (2008)).
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It appears that a ten-year statute of limitations applies to the remaining claims
in this suit. Comm’r, Ind. Dep’t of Envtl. Mgmt. v. Bourbon Mini–Mart, Inc., 741 N.E.2d 361
(Ind. Ct. App. 2000), summarily aff’d by 783 N.E.2d 253 (Ind. 2003); see also Bernstein v.
Bankert, Nos. 11–1501, 11–1523, 2012 WL 6601218, at *17-19 (7th Cir. Dec. 19, 2012).
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this case, Garrity, 479 F.3d at 906-07, the court declines to exercise supplemental
jurisdiction over those claims.
III. Conclusion
In sum, the court declines to continue to exercise jurisdiction over the remaining
crossclaims under 28 U.S.C. § 1367(c)(3). Because no other claims remain pending, the
clerk is directed to dismiss the case.
SO ORDERED.
Date: February 22, 2013
s/James T. Moody
JUDGE JAMES T. MOODY
UNITED STATES DISTRICT COURT