Martelli et al v. Niagara Falls Bridge Commission

Filing 14

DECISION AND ORDER TO SHOW CAUSE on or before 7/29/2013 why action should not be remanded to state court under 28 U.S.C. section 1447(c) for lack of subject matter jurisdiction. Signed by Hon. Richard J. Arcara on 7/16/2013. (JMB)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK

ROCCO J. MARTELLI, and CHIARA
A. MARTELLI,
Plaintiffs,
v.

DECISION AND ORDER
13-CV-652-A

NIAGARA FALLS BRIDGE COMMISSION,
Defendant.

This is a personal injury action brought by the plaintiffs, Rocco J. Martelli
and Chiara A. Martelli, against the defendant, Niagara Falls Bridge Commission.
Defendant Bridge Commission is a federally-chartered body that operates the
Rainbow Bridge, the Whirlpool Rapids Bridge, and the Lewiston-Queenston
Bridge, each of which are toll bridges over the Niagara River at the international
border between the United States and Canada. Plaintiffs Martelli allege that
defendant breached its duty to maintain its premises and caused Mr. Martelli to
contract Legionnaries Disease from contaminated water in restroom faucets in a
commercial warehouse at the Lewiston-Queenston Bridge in Lewiston, New York.
The action was removed to this Court pursuant to 28 U.S.C. § 1441 by
defendant Bridge Commission from the Supreme Court of the State of New York
for the County of Niagara on June 20, 2013. The notice of removal alleges the
action arises within the Court’s subject matter jurisdiction under 28 U.S.C. § 1331

because it raises a federal question and under 28 U.S.C. § 1332 because
defendant and plaintiffs are of diverse citizenship. Dkt. No. 1, ¶¶ 8-10.
The burden to establish that the Court has subject matter jurisdiction is on
the party invoking it. Hertz Corp. v. Friend, 559 U.S. 77, 96-97 (2010). The
Court’s subject matter jurisdiction is strictly limited, and lack of subject matter
jurisdiction can never be waived. See United Food & Commercial Workers
Union v. CenterMark Props. Meriden Square, Inc., 30 F.3d 298, 303 (2d
Cir.1994). The Court has an obligation to confirm that it has subject matter
jurisdiction over every action before it. See Wynn v. AC Rochester, 273 F.3d
153, 157 (2d Cir.2001); see 28 U.S.C. § 1447(c). Based upon these familiar
principles, and the jurisdictional statements in defendant Bridge Commission’s
notice of removal from state court, the Court directed defendant by Text Order
entered June 21, 2013, to show how the action is within the Court’s federalquestion and diversity jurisdiction. Dkt. No. 4.
Defendant Bridge Commission filed its response to the Court’s Text Order
on July 11, 2013. The Court has considered the arguments of defendant and
finds defendant has not met its burden to establish that the action is within the
Court’s subject matter jurisdiction. For the reasons stated below, defendant is
ordered pursuant to Fed. Rule Civ. P. 12(h)(3) to show cause why the action
should not be remanded to state court under 28 U.S.C. § 1447(c) for lack of
subject matter jurisdiction.
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DISCUSSION
Federal-Question Jurisdiction. Plaintiffs Martelli allege in their complaint
a premises-liability negligence claim on behalf of Mr. Martelli and a derivative
negligence claim for loss of Mr. Martelli’s services on behalf of Mrs. Martelli. Dkt.
No. 1-1, pp. 7-13. In its submissions in response to the Court’s June 21, 2013
Text Order, defendant Bridge Commission fails to establish that these state-law
claims arise under federal law pursuant to 28 U.S.C. § 1331.
Defendant Bridge Commission argues there are substantial federal
questions to be resolved in the action that give rise to federal jurisdiction under
the three-part test set out by the United States Supreme Court in Grable & Sons
Metal Products, Inc., v. Darue Engineering & Manufacturing, 545 U.S. 308, 314
(2005). As a more preliminary matter, “[t]he presence or absence of federalquestion jurisdiction is governed by the ‘well-pleaded complaint rule,’ which
provides that federal jurisdiction exists only when a federal question is presented
on the face of plaintiff’s properly pleaded complaint.” Rivet v. Regions Bank of
Lousiana, 522 U.S. 470, 475 (1998) (quoting Caterpillar Inc. v. Williams, 482 U.S.
386, 392 (1987)); Sullivan v. American Airlines, Inc., 424 F.3d 267, 271 (2d Cir.
2005). The two claims of plaintiffs Martelli in this action are a garden-variety
state-law negligence claim and a derivative state-law loss of services claim. Dkt.
No. 1-1, pp. 6-13. No federal-law issue is a component of either claim in
plaintiffs’ complaint.
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It is well-settled that only a “special and small” category of cases that
allege a state-law claim meet the test for arising under federal law pursuant to 28
U.S.C. § 1331. Empire Healthchoice Assur., Inc., 547 U.S. 677, 699 (2006).
Such a claim must raise a federal-law issue “necessary” to a state-law claim,
and the federal issue must be one that is an essential component of the state-law
claim. Empire Healthchoice Assur., Inc., 547 U.S. at 701; Merrell Dow
Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 808-09 (1986) (citing
Franchise Tax Bd. of Cal. v. Construction Laborers Vacation Trust, 463 U.S. 1, 9
(1983) and cautioning that even critical federal-law issues will not alone confer
federal-question jurisdiction). It is equally well-settled that a federal issue that
arises as a defense or as an anticipated defense never confers federal-question
subject matter jurisdiction. Merrell Dow Pharmaceuticals Inc., 478 U.S. at 808;
Franchise Tax Bd. of Cal., 463 U.S. at 14.
Defendant Bridge Commission argues it raises substantial federal
questions of whether it is immune from private tort suits or incapable of being
sued in tort because it is not specifically authorized to pay tort judgments by its
federal charter. Defendant raises the questions as affirmative defenses in its
answer to the complaint. Dkt. No. 5, ¶¶ 48-49.
Defendant Bridge Commission’s charter provides that:
[f]or the purpose of carrying [out its operations, the
defendant] may . . . sue and be sued, implead and be
impleaded, complain and defend in all courts of law and
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equity . . . .
H.R. Resolution 6928, 53 Stat. 1083, § 7, as amended. Nowhere in defendant’s
charter has Congress conferred a sovereign or quasi-sovereign immunity from
suit or liability for defendant’s negligence during defendant’s operations in the
United States; in fact, Congress seems in section 7 of defendant’s charter to have
contemplated the opposite. The capacity of defendant to be sued in tort, since it
is an unincorporated body, is a matter of state law. Fed. R. Civ. P. 17(b)(3). It
therefore appears defendant lacks a basis in federal law for considering itself
incapable of being sued, or immune from suit and liability, for state-law torts that it
may commit during its operations.
Even if defendant Bridge Commission correctly reads its charter to give rise
to immunity from suit or liability, it is firmly-settled that:
[t]o bring a case within the [federal question removal]
statute, a right or immunity created by the Constitution or
laws of the United States must be an element, and an
essential one, of the plaintiff’s cause of action.
Gully v. First Nat. Bank in Meridian, 299 U.S. 109, 112 (1936). Defendant’s
anticipated defenses to payment of a judgment against defendant for negligence
liability raise no federal-law issues necessary and essential to the claims of
plaintiffs Martelli alleged in the complaint.
Defendant Bridge Commission also contends in response to the Court’s
Text Order that plaintiffs Martelli lack standing to sue defendant because

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defendant’s federal charter grants authority to sue in order to enforce terms of the
charter to the New York State Attorney General and to the United States Attorney
for the Western District of New York. H.R. Resolution 6928, 53 Stat. 1083, § 10
(1939). Plaintiffs’ claims seek to establish defendant’s liability for negligence
under New York law during the course of defendant’s duties as a lessor of
commercial warehouse premises. Plaintiffs make no allegations to enforce any
terms of defendant’s charter. See Dkt. No. 1-1, pp. 6-13. Whether plaintiffs have
standing to enforce terms of defendant’s charter is irrelevant to whether plaintiffs
may bring this action alleging state-law negligence and loss-of-services claims.
In the event defendant Bridge Commission is found liable to plaintiffs
Martelli for negligence during defendant’s operations in the United States, and
defendant considers itself left powerless by Congress in its charter to satisfy a tort
judgment of this Court, or a court of the State of New York, defendant has
preserved the anticipated defense that it is judgment proof by pleading its
theories as affirmative defenses in its answer. Dkt. No. 5, ¶¶ 48-49. At this time,
the Court expresses no opinion on the merit of the anticipated defenses.
However, defenses are always insufficient to give rise to federal-question
jurisdiction. See Merrell Dow Pharmaceuticals Inc., 478 U.S. at 808. For these
reasons, defendant is ordered to show cause why the Court should not find
defendant unable to carry its burden to show by competent proof that plaintiffs’
state-law claims are among the “special and small” category of such claims that
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arise under federal law pursuant to 28 U.S.C. § 1331, Empire Healthchoice
Assurance, Inc., 547 U.S. at 699, and why the Court should not remand the
action to state court if there is no other ground for federal subject matter
jurisdiction.
Diversity Jurisdiction. Defendant Bridge Commission argues in response
to the Court’s June 21, 2013 Text Order that defendant is also properly regarded
a citizen or subject of a foreign state for purposes of diversity-of-citizenship
jurisdiction under 28 U.S.C. § 1332. Defendant argues that, as a foreigner, its
citizenship is diverse from plaintiffs Martelli, who are citizens of the State of New
York. Unfortunately, defendant overlooks the critical question whether it is also
citizen of the State of New York for purposes of diversity jurisdiction under §
1332.
Defendant Bridge Commission’s charter provides that:
[t]he Commission shall be deemed for the purposes of all
Federal law to be a public agency or public authority of the
State of New York, notwithstanding any other provision of
law.
H.R. Resolution 6928, 53 Stat. 1083, § 6, as amended. Congress’ use of the
phrase “all federal law . . . notwithstanding any other provision of law” in
deeming defendant a New York State entity plainly encompasses federal law
limiting the jurisdiction of federal courts, including diversity jurisdiction under to 28
U.S.C. § 1332. Accordingly, defendant is a public agency or public authority of

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the State of New York for purposes of assessing its citizenship and whether it
may invoke the Court’s limited removal and diversity jurisdiction under 28 U.S.C.
§§ 1332 and 1441(a)(2).
A political subdivision of a state is a citizen of that state for diversity of
citizenship purposes under 28 U.S.C. § 1332, unless the political subdivision is
simply an arm or alter ego of the state. Moor v. Alameda County, 411 U.S. 693,
719 (1973), overruled in other respects, Monell v. Department of Social Svcs,
436 U.S. 658 (1978).1 Despite this controlling law which may preclude its claim of
diversity jurisdiction, defendant Bridge Commission disregards its charter status
as a political subdivision of New York.
To invoke the Court’s limited diversity jurisdiction, defendant Bridge
Commission stresses its bi-national operations, its ability and obligation to finance
its operations, its ability to sue and be sued, and the international importance of
its operations.2 Defendant’s operations make it unlikely defendant is an arm of
the State of New York, or an alter ego of the State of New York, and not a citizen
of New York for diversity purposes under controlling United States Supreme

1

A state, or an arm or alter ego of a state, is not a citizen of the state for
purposes of diversity jurisdiction. See Moor v. Alameda County, 411 U.S. at 717.
2

Authorization by the United States to construct international bridges was an ad
hoc process of bridge-by-bridge approval until passage of the International Bridge Act
of 1972, 33 U.S.C. §§ 535 to 535i, created processes for administrative consent. See,
Presido Bridge Company v. Secretary of State, 486 F.Supp. 288, 291-93 (W.D.Tex.
1978).
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Court, and relevant Second Circuit Court of Appeals, case law.
Defendant Bridge Commission also argues it is not a citizen of New York,
even though some Commissioners are citizens of New York and its principal
offices are located in Lewiston, New York, because it should not be regarded as
an “unincorporated association” as defined in 28 U.S.C. § 1332(c)(10).
Defendant contends essentially that, as a chartered body, and not just an
amalgam of individual persons joining together to accomplish common goals, it is
not an unincorporated association for purposes of diversity jurisdiction.
Defendant overlooks case law finding that a wide variety of unincorporated legal
entities share citizenship of all of their members for purposes of diversity
jurisdiction, including limited liability companies, Handelsman v. Bedford Vill.
Assocs. Ltd. P’ship, 213 F.3d 48, 51-52 (2d Cir. 2000); limited partnerships,
Carden v. Arkoma Associates, 494 U.S. 185 (1990); labor unions, United
Steelworkers of America, AFL-CIO v. R. H. Bouligny, Inc., 382 U.S. 145 (1965);
joint stock companies, Chapman v. Barney, 129 U.S. 677 (1889); and a state
highway commission, Hunkin-Conkry Constr. Co. v. Pennsylvania Turnp. Comm.,
34 F.Supp. 26 (D.Pa.1940). For all of the foregoing reasons, defendant is
ordered to show cause why the Court should not find defendant is unable to carry
its burden to show it is not a citizen of New York for diversity-of-citizenship
purposes under 28 U.S.C. § 1332 and why the Court should not remand the
action to state court if there is no other basis for subject matter jurisdiction.
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Foreign-State Jurisdiction. Finally, in responding to the Court’s June 21,
2013 Text Order, defendant Bridge Commission sought to invoke, seemingly for
the first time, the Court’s original jurisdiction pursuant to 28 U.S.C. § 1330(a) over
actions brought against foreign states. Statutory authority to remove a case from
state court to federal court, 28 U.S.C. § 1441, et seq., permits removal only when
the case is within federal courts’ limited subject matter jurisdiction and could
properly have been brought in federal court in the first instance. See 28 U.S.C. §
1447(c); Caterpillar Inc. v. Williams, 482 U.S. 386, 392 (1987); Montefiore
Medical Center v. Teamsters Local 272, 642 F.3d 321, 327 (2d Cir. 2011). In
general, 28 U.S.C. § 1330(a), and related provisions of the Foreign Sovereign
Immunities Act, "[are] the sole source for subject matter jurisdiction over any
action against a foreign state." Capital Ventures Int'l v. Republic of Argentina,
552 F.3d 289, 293 (2d Cir.2009).
A notice of removal is required to contain a short and plain statement of the
jurisdictional basis for removal. 28 U.S.C. § 1446(a). “[I]in determining whether
jurisdiction is proper, [courts] look only to the jurisdictional facts alleged in the
Notice[] of Removal.” In re Methyl Tertiary Butyl Ether (“MTBE”) Product Liability
Litigation, 488 F.3d at 24; see Whitaker v. American Telecasting, 261 F.3d 196,
205 (2d Cir. 2001). Defendant Bridge Commission did not allege it was removing
the case on the basis of foreign-state jurisdiction under 28 U.S.C. 1330(a) in its
notice of removal. See Dkt. No. 1. The Court’s discretion to allow a party
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seeking to remove an action to amend jurisdictional statements made in its notice
of removal to add an additional ground for removal is limited. See Lupo v.
Human Affairs Intern., Inc., 28 F.3d 269, 274 (2d Cir. 2004); 28 U.S.C. § 1653.
Nevertheless, the Court does not yet reach whether defendant Bridge
Commission provided a sufficient statement in its notice of removal of the foreignstate jurisdictional basis for removal under §§ 1330(a) and 1441(d) that it now
seems to invoke, however. Defendant is federally-chartered by the United
States. It is not a bi-national entity formed pursuant to the Compact Clause of the
United States Constitution, U.S. Const. art. I, §10, cl. 3, even though it operates
in both the United States and Canada.3 Defendant is licensed to operate in
Ontario, Canada, under the Ontario Extra-Provincial Corporations Act, as a
foreign entity, not an Ontario entity. Even if defendant were a formal political
subdivision under Ontario law or other Canadian law, and even if defendant is a
de facto agency or instrumentality of Ontario or of Canada under § 1603(b),
efendant’s charter deems it a public agency or public authority of the State of
New York, “for the purposes of all Federal law . . . , notwithstanding any other
provision of law.” H.R. Resolution 6928, 53 Stat. 1083, § 6, as amended.
Regardless whether defendant has quasi-governmental status as a government

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A public body responsible for the Peace Bridge, the other international road
and pedestrian bridge over the Niagara River and the border between the United States
and Canada, is a Compact Clause entity. See Mitzkovski v. Buffalo and Fort Erie
Public Bridge Authority, 435 F.3d 127, 135 (2d Cir. 2006).
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agency or instrumentality under Ontario or Canadian law, it therefore seems, for
purposes of the Court’s foreign-state jurisdiction under 28 U.S.C. § 1330(a),
defendant is chartered as a public agency or public authority of the State of New
York.
In addition, 28 U.S.C. § 1603(b)(3) specifically excludes from the definition
of a “foreign state” that applies to the Court’s foreign-state jurisdiction under §
1330(a) any entity that is otherwise a citizen of a State of the United States for
purposes of diversity of citizenship jurisdiction as defined in 28 U.S.C. § 1332(c)
and (e). Again, defendant’s charter deems defendant a public agency or public
authority of the State of New York for purposes of assessing defendant’s
citizenship for purposes of diversity jurisdiction under federal law,
“notwithstanding any other provision of law.” H.R. Resolution 6928, 53 Stat.
1083, § 6, as amended. For all of these reasons, defendant is ordered to show
cause why the Court should not remand the action to state court because
defendant is unable to carry its burden to show it is a foreign state for purposes of
the Court’s subject matter jurisdiction under 28 U.S.C. § 1330(a).
If defendant Bridge Commission seeks to maintain that it validly removed
the action from state court on the ground the action is within the Court’s foreignstate jurisdiction under 28 U.S.C. § 1330(a), defendant is directed to establish the
Court has the power to entertain defendant’s arguments even though defendant
did not timely provide a short and plain statement of the foreign-state
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jurisdictional basis in its notice of removal and did not allege it was a foreign
state, or an agency or instrumentality of a foreign state, other than by citing 28
U.S.C. §§ 1441(d) and 1603 in connection with its statement of the Court’s
diversity jurisdiction under 28 U.S.C. § 1332. Dkt. No. 1, p. 3, ¶ 9.
CONCLUSION
For all of the foregoing reasons, and pursuant to Fed. R. Civ. P. 12(h)(3),
defendant Niagara Falls Bridge Commission is ordered to show cause why this
action should not be remanded to the Supreme Court of the State of New York for
the County of Niagara under 28 U.S.C. § 1447(c) for lack of subject matter
jurisdiction. In addition, if defendant Bridge Commission seeks to maintain in
response to this order that it validly removed the action from state court on the
ground that the action is within the Court’s foreign-state jurisdiction under 28
U.S.C. § 1330(a), defendant is also required to establish that the Court has
authority to entertain the argument. Defendant Bridge Commission shall have
until July 29, 2013 to supplement its prior submissions to the Court to carry its
burden to establish the Court’s subject matter jurisdiction.
The plaintiffs, Rocco J. Martelli and Chiara A. Martelli, are not required to
respond to defendant Bridge Commission’s submissions on the Court’s subject
matter jurisdiction unless later directed by the Court to do so. Oral argument, if

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any, will be at the discretion of the Court.
SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA
UNITED STATES DISTRICT JUDGE
DATED: July 16, 2013

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