Armor Elevator Co., Inc. v. Phoenix Urban Corp., Civ. A. No. 77-1335-K

• Decision Date: 30 June 1980
• Docket Number: 77-2084-K and 78-1145-K to 78-1149-K.,Civ. A. No. 77-1335-K
• Citation: 493 F. Supp. 876
• Court: U.S. District Court — District of Massachusetts
• Parties: ARMOR ELEVATOR CO., INC. v. PHOENIX URBAN CORPORATION et al. INTERCITY PAINTING COMPANY v. PHOENIX URBAN CORPORATION et al. FOUNDATION ENGINEERING SYSTEMS, INC. v. PHOENIX URBAN CORPORATION et al. C & M ROOFING COMPANY, INC. v. PHOENIX URBAN CORPORATION et al. UNIVERSAL TESTING SERVICES, INC. v. PHOENIX URBAN CORPORATION et al. MANGANARO BROTHERS, INC. v. PHOENIX URBAN CORPORATION et al. GEOTECHNICAL CONSULTANTS, INC. v. PHOENIX URBAN CORPORATION et al.

493 F. Supp. 876

ARMOR ELEVATOR CO., INC. v. PHOENIX URBAN CORPORATION et al.

INTERCITY PAINTING COMPANY v. PHOENIX URBAN CORPORATION et al.

FOUNDATION ENGINEERING SYSTEMS, INC. v. PHOENIX URBAN CORPORATION et al.

C & M ROOFING COMPANY, INC. v. PHOENIX URBAN CORPORATION et al.

UNIVERSAL TESTING SERVICES, INC. v. PHOENIX URBAN CORPORATION et al.

MANGANARO BROTHERS, INC. v. PHOENIX URBAN CORPORATION et al.

GEOTECHNICAL CONSULTANTS, INC. v. PHOENIX URBAN CORPORATION et al.

Civ. A. Nos. 77-1335-K, 77-2084-K and 78-1145-K to 78-1149-K.

United States District Court, D. Massachusetts.

June 30, 1980.

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Joseph A. Pisarri, Corwin & Corwin, Boston, Mass., for plaintiffs.

Richard D. Glovsky, Asst. U. S. Atty., Boston, Mass., for Patricia Harris.

Geoffrey M. Peters, Boston, Mass., for Phoenix Urban, et al.

MEMORANDUM AND ORDER

KEETON, District Judge.

By a Memorandum of March 4, 1980, the court indicated its tentative views regarding certain controlling jurisdictional issues in these actions. The Memorandum addressed some issues that had not been briefed by the parties. Entry of orders in accordance with the conclusions reached in the Memorandum was deferred, and a Case Management Conference was scheduled, in part to determine whether any party wished to file a request for rehearing or an additional brief on the issues addressed in the Memorandum. Rehearing was requested and allowed, and further briefs were filed.

After consideration of the briefs of the parties and the oral arguments advanced at hearing on June 11, 1980, the court is filing this revised Memorandum and Order.

I.

The matter before the court is the motion to dismiss filed in these seven consolidated cases by the defendant Secretary of the United States Department of Housing and Urban Development (HUD).

Each of the seven plaintiffs, one in each action, claims that defendant Phoenix Urban Corporation (Phoenix) was the general contractor for a project known as Charles River Park "D" and violated its subcontract with the plaintiff; that Phoenix was in fact the agent of a partnership, Charles River Park "D" Company (Charles River), and alternatively that Phoenix and Charles River are one and the same; and that partners of Charles River made material and misleading representations to the plaintiff and committed unfair and deceptive trade practices in violation of Mass.Gen.Laws c. 93A. In a separate count against HUD only, each of the complaints alleges that HUD insured the mortgage for the project and that HUD violated its regulations and guidelines in numerous respects and violated its "equitable" obligations to act responsibly for the protection of the subcontractors on the project, causing the plaintiff to sustain loss by reason of nonpayment for materials and services supplied under its subcontract and change orders. In this count each complaint prays for declaratory relief (e. g., in CA 78-1145-K, the prayer is that the court declare that plaintiff has an equitable lien on all sums which represented funds retained by the owner for payment to plaintiff on account of work done and materials furnished by plaintiff and only partly paid for; that HUD's wrongful misdirection of these retained funds is a nullity; and that HUD's insurance of all construction loan advances, made at any time an undissolved mechanic's lien existed on the project, was made without authorization and in violation of the National Housing Act, 12 U.S.C. § 1701 et seq., and is therefore a nullity) and for damages in the amount of the work and materials for which plaintiff has not been paid — in each case more than $10,000 — plus interest and costs.

One of these actions — No. 77-2084-K — was commenced in this court. HUD argues, not only as to this action but also as to the other six, which HUD removed to this court from the Superior Court of the Commonwealth of Massachusetts, that this court is without jurisdiction over the subject matter and (2) that each complaint fails to state a claim upon which relief can be granted because HUD owed no duty to the plaintiffs.

II. The Removal

The petitions for removal vary somewhat. For example, in the first case filed, CA 77-1335-K, the petition refers to 28 U.S.C. §§ 1442(a) and 1446 and recites (¶ 4) that "the action has been commenced against the petitioner in her capacity as an officer of the United States Department of Housing and Urban Development for acts under the color of her office." In contrast, the petition in CA 78-1145-K recites (¶ 5) that the action is removed "pursuant to 28 U.S.C. §§ 1441(a), (b), and (c); 1442(a) and 1446 for the reason that this action has been commenced against the petitioner in her capacity as an officer of the United States Department of Housing and Urban Development for acts allegedly taken in violation of the National Housing Act and applicable regulations." Section 1442(a) provides for removal by "(1) Any officer of the United States or any agency thereof . . . of an action commenced in a state court against the officer for any act under color of such office or on account of any right, title, or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue." Though the petition in CA 78-1145-K does not explicitly state that the claim is based on an "act under color of such office," a fair reading of the petition supports the conclusion that it so alleges at least by implication.

III. The Burden-of-Pleading Argument

The Secretary's memorandum in support of the motion to dismiss appears to argue, at p. 13, that each plaintiff has an obligation, after removal, to file an amended complaint alleging a basis for federal jurisdiction since "it is axiomatic that a plaintiff bears the burden to properly plead jurisdiction. 5 Wright and Miller, Fed. Pract. § 1206." The axiom, however, does not require a plaintiff who files an action in state court to plead a basis for federal jurisdiction. Nor is the failure of the complaint filed in the state court to state a basis for federal jurisdiction a ground for dismissal after removal to federal court. If the petition for removal erroneously asserted federal jurisdiction and the complaint alleged a basis for jurisdiction in the state court, the appropriate order would be remand, not dismissal.¹ Even if the complaint failed to state a basis for jurisdiction in the state court over the claim against HUD, dismissal might be inappropriate.²

IV. The Exclusive Jurisdiction Argument

HUD's second jurisdictional argument is grounded on the assertion that plaintiff's actions are in essence contract claims in excess of $10,000 each, as to which the United States Court of Claims has exclusive jurisdiction under 28 U.S.C. §§ 1346(a)(2) and 1491 (The Tucker Act).

Parts V and VI consider this argument, and Parts VII and VIII consider other issues that emerge as the exclusive jurisdiction argument is considered.

V. Jurisdiction to Determine Jurisdiction

A threshold question is presented: Does this court have jurisdiction even to determine whether the claims asserted in the present actions are within or outside (1) its jurisdiction and (2) in the case of the six removed actions, the jurisdiction of the state court from which they were removed to this court?

A clear answer to the first of these two questions derives from the fact that federal courts are courts of limited jurisdiction. Inherent in the authoritative prescription of limited jurisdiction, whatever the source of the prescription may be (constitutional, statutory, or decisional), is the necessity that the court of limited jurisdiction be empowered to turn away those litigants who seek to use its processes for the adjudication of claims beyond its limited jurisdiction.³ Absent such jurisdiction to determine whether it has jurisdiction over a particular claim, the purpose of limiting the scope of its judicial activities would be frustrated. It would function in an anomalous aura of uncertainty, either pronouncing judgments almost certain to be overturned by authoritative determinations in other courts that the matters purportedly determined were beyond its jurisdiction, or else declining to act (in itself a kind of jurisdictional determination) until directed by another court to accept jurisdiction. Indeed, the underlying reasons for recognizing jurisdiction to determine jurisdiction are so compelling that it is the duty of a court of limited jurisdiction to notice its lack of jurisdiction, even when no party raises the issue.⁴ For these reasons this court, as a court of limited jurisdiction, has jurisdiction to determine whether and to what extent it has jurisdiction over claims before it.

The second question, relating to jurisdiction of this court to determine whether the state court, before removal to this court, had jurisdiction over the claims asserted against HUD in the removed actions, is a bit more complex.

28 U.S.C. § 1442(a)(1) authorizes removal by any officer of the United States of a civil action commenced in a state court against the officer "for any act under color of such office." Although this removal statute neither confers nor enlarges the "original" subject matter jurisdiction of the district courts, e. g., Martin v. Wyzanski, 262 F.Supp. 925 (D.Mass.1967), it authorizes the district courts to hear cases not within their original jurisdiction when such cases are removed from a state court. 14 Wright, Miller, and Cooper, Federal Practice and Procedure § 3727, at 691-692 (1976) ("the right of removal conferred on federal officers by statute has been held to be absolute, and may be exercised even though the action might not have been brought initially in a federal court"); 1A (Part 1) Moore, Federal Practice ¶ 0.1642, at 323 (1979) ("a suit may be removed by the federal officer which is not within the original jurisdiction of the federal court"). If the state court lacks...