Doe v. Allied-Signal, Inc.

• Decision Date: 09 February 1993
• Docket Number: ALLIED-SIGNA,INC,No. 91-3934,91-3934
• Citation: 985 F.2d 908
• Parties: Jane DOE, Plaintiff-Appellant, v., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 908

985 F.2d 908

Jane DOE, Plaintiff-Appellant, v. ALLIED-SIGNAL, INC., Defendant-Appellee.

No. 91-3934.

United States Court of Appeals Seventh Circuit.

Argued Oct. 21, 1992.

Decided Feb. 9, 1993.

Timothy J. Abeska (argued), Roemer & Mintz, Carmen M. Piasecki, Thomas H. Singer, Eugenia S. Schwartz, Nickle and Piasecki, South Bend, IN, for Jane Doe.

Thomas J. Piskorski, Lawrence C. DiNardo (argued), Seyfarth, Shaw, Fairweather

& Geraldson, Chicago, IL, Robert H. Michaud, Allied-Signal, Inc., Law Dept., South Bend, IN, for Allied-Signal, Inc.

Before CUMMINGS, Circuit Judge, PELL, Senior Circuit Judge, and KAUFMAN, Senior District Judge. ^*

CUMMINGS, Circuit Judge.

This Court has not had to decide whether a federal court may remove to its own jurisdiction a suit first filed in state court in order to protect a previous federal judgment based entirely on an interpretation of state law. The district court in this case, assuming that it had jurisdiction, removed plaintiff's action to federal court. It then used res judicata principles to toss out the suit as an attempt to relitigate claims heard and rejected in a case we decided in 1991: Doe v. Allied-Signal, Inc., 925 F.2d 1007 (7th Cir.) ("Doe I "). We need not answer this ticklish question about a federal court's power to guard earlier decisions because the current suit ("Doe II ") is not, in fact, the equivalent of Doe I. Res judicata does not apply. With no federal judgment to protect, and no other basis for federal jurisdiction, the district court lacked subject matter jurisdiction and should not have removed the case from Indiana courts in the first instance. We reverse and remand so that the judge may send the matter back to state court where it belongs.

I.

The plaintiff, known here as Jane Doe, was hired in 1975 as a janitor for Allied-Signal, Inc. ("Allied"). Thirteen years later, in February 1988, Doe was twice attacked while working on Allied's premises. She was first assaulted on February 17 while taking trash to a dumpster. She was attacked a second time and raped just eight days later while cleaning one of Allied's offices. Her attacker or attackers were never found. Doe filed suit in Indiana court against Allied based on the second attack, alleging that the company was negligent in failing to provide adequate security. A negligence suit against an employer is ordinarily barred in Indiana under that state's Worker's Compensation Act, IND.CODE §§ 22-3-1-1 through 22-3-11-6. However, Doe believed that she was no longer an employee because Allied had fired its entire cleaning staff in January 1987 in favor of Acme Service Corporation ("Acme"), a firm that cleans buildings on a contract basis. The contract required Acme to hire former Allied janitors and pay them higher hourly wages than other Acme workers and to provide them with insurance benefits.

Before she was attacked, and so before she filed the first lawsuit, Doe was told repeatedly by Allied that she was no longer its employee. Upon the filing of Doe I, however, Allied switched gears. After having the suit removed to federal court based on diversity jurisdiction, the company claimed that Doe was, after all, a joint employee of Allied and Acme and so could not sue Allied because of the employer exemption for negligence under Indiana law. Allied trotted out numerous examples of how it controlled Doe's workplace: Allied secured Doe's job with Acme and prohibited any transfer, its supervisors heard various complaints from Doe, reprimanded her in one instance, signed her timecards when the Acme supervisor was not present, saw her every day, and occasionally assigned her additional tasks. It was understood that Acme could not fire Doe without Allied's permission and, while Acme owned the cleaning equipment used by Doe, it had bought the equipment from Allied and these items never left Allied's building.

The district court agreed with the company that Allied was Doe's joint employer and dismissed the suit at the summary judgment stage. It also assessed Doe $10,731.76 in costs. We affirmed because Indiana's worker's compensation laws did not leave us room to find that Allied should be estopped, based on its representations to Doe, from claiming it was not her employer. Doe I, 925 F.2d at 1009 n. 2. However, we found it "unsettling that Allied could vehemently deny that Doe was its employee before this lawsuit yet still retain its immunity." Id. Since the 1988 rape, Doe has been disabled and is receiving $190 per week in worker's compensation. After losing her case against Allied, Doe filed this action in Indiana state court alleging fraud and breach of contract against both Allied and Acme, and a separate claim against Allied seeking punitive damages. ¹ The first count alleges that Allied and Acme breached their contract with her. The other counts claim that Allied, with full knowledge of the truth or reckless disregard of the truth, misrepresented to Doe that she was not an Allied employee and led her to file a doomed lawsuit based on a negligence theory.

In response to a motion from defendant, the district court removed the case from state court. Because the joining of Acme destroyed diversity, the only basis for subject matter jurisdiction was the supposed existence of a federal question. This brings us around to the issue posed at the outset of this opinion: whether the protection of a previous federal judgment interpreting state law is a federal question sufficient to confer subject matter jurisdiction on a district court. In dismissing plaintiff's suit, Chief Judge Sharp asked a different and irrelevant question, which is: Does a federal court have jurisdiction generally to protect its judgments? He answered in the affirmative, and that is correct. However, the judge did not consider the precise issue in this case concerning the distinction between judgments based on diversity and those based on a federal question. After simply assuming jurisdiction, the district court proceeded to dismiss Doe's suit against Allied as a rehash of Doe I and sent the claim against Acme back to state court.

The court's resolution of Doe II was mistaken. A federal court may remove to its jurisdiction a civil suit filed in state court so long as the district court has original jurisdiction. 28 U.S.C. § 1441. Courts should interpret the removal statute narrowly and presume that the plaintiff may choose his or her forum. Illinois v. Kerr-McGee Chemical Corp., 677 F.2d 571, 576 (7th Cir.1982), certiorari denied, 459 U.S. 1049, 103 S.Ct. 469, 74 L.Ed.2d 618. Any doubt regarding jurisdiction should be resolved in favor of the states. Jones v. General Tire & Rubber Co., 541 F.2d 660, 664 (7th Cir.1976), and the burden of establishing federal jurisdiction falls on the party seeking removal. Wilson v. Republic Iron & Steel Co., 257 U.S. 92, 42 S.Ct. 35, 66 L.Ed. 144 (1921). One measure of the limited scope of the removal power is the well-established doctrine that a case may not be heard in district court when the only federal question posed is raised by a defense argument, even if the plaintiff anticipated the defense argument and even if both parties concede the federal question is the only real issue in the case. Caterpillar, Inc. v. Williams, 482 U.S. 386, 393, 107 S.Ct. 2425, 2430, 96 L.Ed.2d 318 (1987). There is no dispute that the district court lacked diversity jurisdiction in this case, meaning that the court only had subject matter jurisdiction if it was able to pluck a legitimate federal question out of the filings. Courts usually determine jurisdiction based on a well-pleaded complaint. See Poulos v. Naas Foods, Inc., 959 F.2d 69, 72 (7th Cir.1992) (noting existence of well-pleaded complaint rule). Indeed, a plaintiff may avoid federal court even though certain federal questions may be implicit in his or her claim. Id. (citing Louisville & N.R. Co. v. Mottley, 211 U.S. 149, 29 S.Ct. 42, 53 L.Ed. 126 (1908). However, a plaintiff may not dodge federal court, and so engage in dreaded forum shopping, by "artful pleading." Federated Department Stores, Inc. v. Moitie, 452 U.S. 394, 397 n. 2, 101 S.Ct. 2424, 2427 n. 2, 69 L.Ed.2d 103 (1981) (quoting 14 CHARLES ALAN WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE § 3722 (1976)). In other words, a plaintiff cannot deny a defendant access to federal court if the actual nature of the complaint is federal.

Is a previous judgment in a United States court sufficiently federal in nature such that it gives a district court removal power? The answer is a clear yes if the first judgment is an interpretation of federal law. Franchise Tax Bd. v. Construction Laborers Vacation Trust for Southern California, 463 U.S. 1, 13, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983). In Moitie, for example, the Supreme Court approved removal to support a district court's res judicata judgment. Plaintiffs filed an essentially identical claim in state court after their antitrust action was dismissed in federal court. Id. Though federal jurisdiction in the underlying case in Moitie was based on both diversity and a federal question, the dismissal of plaintiffs' claims under the Sherman Act was unquestionably related to the federal question. Thus in the subsequent suit involving res judicata, there was a judgment on the merits of a federal question to protect. By contrast, in the instant case the only federal judgment to protect is a determination of state law which binds state courts only in the same case. The sole reason the issue was in federal court to begin with was the fortuity that the parties happened to be citizens of different states.

As a matter of policy, state courts are fully capable of invoking res judicata to protect federal judgments if the second case is really an attempt to regenerate dead claims. Indeed, the res judicata impact of a federal judgment is a question of federal law which a state court is bound to apply under the Supremacy Clause. Sullivan v. First...