Hughes v. United States Trustee's Office et al

Filing 24

DECISION AND ORDER signed by Judge Lynn Adelman on 1/25/17 denying 7 Motion for Preliminary Injunction; granting 8 Motion to Dismiss for Lack of Jurisdiction. The plaintiffs claim against the Trustees Office is dismissed without prejudice for lack of subject matter jurisdiction. Further ordering that the plaintiffs claims against Brunner and Miller are REMANDED to state court for further proceedings. (cc: all counsel, via USPS to plaintiff) (dm)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
DANNY HUGHES,
Plaintiff,
v.

Case No. 16-C-0729

UNITED STATES TRUSTEE’S OFFICE,
PAULA BRUNNER, and
JAMES MILLER,
Defendants.

DECISION AND ORDER
On May 16, 2016, Danny Hughes, proceeding pro se, filed a complaint in
Milwaukee County Circuit Court against Paula Brunner and James Miller, two attorneys
who represented him in bankruptcy proceedings in the Eastern District of Wisconsin.
The complaint purports to state claims for breach of contract and legal malpractice
against Brunner and Miller.

The caption of this complaint also identifies the U.S.

Trustee’s Office as a defendant.

However, the body of the complaint contains no

allegations against the Trustee’s Office, and it is impossible to discern the nature of the
claim the plaintiff believes he has against the Trustee’s Office.
On the same day that he filed the complaint, the plaintiff also filed a motion for a
temporary injunction. The motion requests an injunction “to stop the signing of the deed
for the Germantown land” at a certain address. See ECF No. 1-3. The motion does not
identify the party sought to be enjoined, but presumably that party would be the U.S.
Trustee assigned to the plaintiff’s bankruptcy case in the Eastern District of Wisconsin.
In that case, a bankruptcy judge granted the Trustee’s motion to sell the Germantown
land that is the subject of the plaintiff’s state-court motion. See E.D. Wis. Bankr. Case

No. 15-23793, ECF No. 270. According to the records of the bankruptcy court, the
property was sold on June 1, 2016. See ECF No. 339 in the Bankruptcy Case. Thus,
the plaintiff’s motion would appear to be moot, as it is too late to stop the sale of the
property or the transfer of title.
On June 15, 2016, the Trustee’s Office filed a notice of removal of the state-court
case to this court. The case was properly removed under the federal-officer removal
statute, 28 U.S.C. § 1442. On June 29, 2016, the Trustee’s Office filed a motion to
dismiss the plaintiff’s claims against it. The Trustee’s Office asserted several bases for
dismissing the claims against it. One asserted basis is that, by virtue of the doctrine of
“derivative jurisdiction,” this court lacks subject matter jurisdiction over any claim against
the Trustee’s Office. Under this doctrine, even when a case is properly removed to
federal court under § 1442, the district court will lack jurisdiction to hear the case if the
state court from which the case was removed lacked jurisdiction. See, e.g., Rodas v.
Seidlin, 656 F.3d 610, 615 (7th Cir. 2011).
The Trustee’s Office argues that the Milwaukee County Circuit Court had no
jurisdiction to hear the plaintiff’s claim against it because the plaintiff can point to no
waiver of the United States’s sovereign immunity that applies to the plaintiff’s claim and
that would allow the suit to proceed in a state court. The plaintiff has not meaningfully
responded to this argument. Moreover, the plaintiff has not alleged any cognizable
claim against the Trustee’s Office at all, much less a claim that would fall within a waiver
of sovereign immunity that would authorize a suit against the Trustee’s Office in state
court.

Thus, I conclude that the Wisconsin state court did not have jurisdiction to

entertain the plaintiff’s claim against the Trustee’s Office.

2

See United States v.

Sherwood, 312 U.S. 584, 586–87 (1941) (“The United States, as sovereign, is immune
from suit save as it consents to be sued . . . and the terms of its consent to be sued in
any court define that court's jurisdiction to entertain the suit.”). It follows that, under the
doctrine of derivative jurisdiction, this court also lacks jurisdiction to entertain the claim.
Minnesota v. United States, 305 U.S. 382, 388–89 (1939). I will therefore dismiss the
U.S. Trustee’s Office from this case for lack of subject matter jurisdiction. I will also
deny the motion for a temporary injunction, which is directed at the Trustee’s Office.
The remainder of this case comprises the plaintiff’s claims for breach of contract
and legal malpractice against his bankruptcy attorneys, Brunner and Miller.

Those

attorneys have moved to dismiss the claims against them for failure to state a claim
upon which relief can be granted. See Fed. R. Civ. P. 12(b)(6). However, because
these are state-law claims and the parties are not completely diverse (both the plaintiff
and defendant Miller are from Wisconsin), I do not have an independent basis for
exercising subject matter jurisdiction over those claims. See 28 U.S.C. §§ 1331 & 1332.
Moreover, because I did not have original jurisdiction over the claim against the
Trustee’s Office, I cannot exercise supplemental jurisdiction over the claims against
Brunner and Miller. 28 U.S.C. § 1367(a). Therefore, I cannot address Brunner and
Miller’s motion to dismiss for failure to state a claim. Instead, I must remand the case to
the state court for further proceedings with respect to Miller and Brunner.

Again,

however, the Trustee’s Office is dismissed from this case, and therefore any
proceedings that occur in state court will not involve the Trustee’s Office.

3

Accordingly, IT IS ORDERED that the U.S. Trustee’s Office’s motion to dismiss
for lack of subject matter jurisdiction is GRANTED. The plaintiff’s claim against the
Trustee’s Office is dismissed without prejudice for lack of subject matter jurisdiction.
IT IS FURTHER ORDERED that the plaintiff’s motion for a temporary injunction
is DENIED.
IT IS FURTHER ORDERED that the plaintiff’s claims against Brunner and Miller
are REMANDED to state court for further proceedings.
Dated at Milwaukee, Wisconsin, this 25th day of January, 2017.

s/ Lynn Adelman
____________
LYNN ADELMAN
District Judge

4