Country Club Estates v. Town of Loma Linda, No. 99-1635

• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)
• Writing for the Court: Before RICHARD S. ARNOLD, LOKEN, and HANSEN; RICHARD S. ARNOLD
• Citation: 213 F.3d 1001
• Parties: (8th Cir. 2000) Country Club Estates, L.L.C.; Country Club Estates, Inc.; Villas of Loma Linda, L.L.C.; Loma Linda Estates, Inc.; Excalibur Land and Investments, Inc.; and Loma Linda Development, Inc., Appellants, v. The Town of Loma Linda, Appellee. WM Submitted:
• Decision Date: 18 February 2000
• Docket Number: No. 99-1635

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213 F.3d 1001 (8th Cir. 2000) Country Club Estates, L.L.C.; Country Club Estates, Inc.; Villas of Loma Linda, L.L.C.; Loma Linda Estates, Inc.; Excalibur Land and Investments, Inc.; and Loma Linda Development, Inc., Appellants,
v.
The Town of Loma Linda, Appellee. No. 99-1635 WM United States Court of Appeals FOR THE EIGHTH CIRCUIT Submitted: February 18, 2000
Filed: June 14, 2000

On Appeal from the United States District Court for the Western District of Missouri.

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Before RICHARD S. ARNOLD, LOKEN, and HANSEN, Circuit Judges.

RICHARD S. ARNOLD, Circuit Judge.

The appellants in this case (plaintiffs in the District Court) are Country Club Estates, a limited liability company, and other affiliated companies operating businesses and owning land in Newton County, Missouri. The appellee (defendant in the District Court) is the town of Loma Linda, Missouri. The plaintiffs challenge the legality of various zoning and taxing actions taken by the Town. In addition, they assert that the Town is in fact not a town, but was illegally formed and has no valid existence as a municipality under Missouri law. The Town filed a motion to dismiss the complaint. The District Court treated the motion as one for summary judgment and granted it. The plaintiffs appeal.

Two main questions are presented: whether this case was within the federal-question removal jurisdiction of the District Court, and whether that Court erred in converting defendant's motion to dismiss into a motion for summary judgment without notice to the plaintiffs. We hold that the District Court did have jurisdiction,

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and that plaintiffs did not have sufficient notice that the motion to dismiss was going to be treated as one for summary judgment. Accordingly, the judgment will be reversed, and the case remanded to the District Court for further proceedings not inconsistent with this opinion. The facts will be stated in more detail as they become relevant to our discussion.

I.

The complaint consists of five counts. Counts I, II, and III are brought in quo warranto, a form of action in which the legal validity of a town or other public entity is drawn in question. Quo warranto is traditionally brought by the sovereign, or some representative of the sovereign. Accordingly, the complaint alleges in paragraph 3, that

Greg Bridges, the prosecuting attorney of Newton County, Missouri, has authorized relators [that is, plaintiffs] to prosecute this action to final conclusion in the name of the prosecuting attorney of Newton County, Missouri.

Joint Appendix (JA) 14. Count IV, brought by the plaintiffs in their own names and capacities, requests a declaratory judgment that certain zoning regulations adopted by the town are invalid. Count V, again brought by plaintiffs on their own behalf, requests a declaratory judgment that certain efforts by the town to collect real estate taxes are invalid.

The case was originally brought in a state court, the Circuit Court of Newton County, Missouri. The defendant Town removed the case to the District Court. The plaintiffs moved to remand, asserting that the District Court had no jurisdiction. Under 28 U.S.C. § 1441(b), the removal statute, any civil action "of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties or laws of the United States shall be removable without regard to the citizenship or residence of the parties." So the question becomes whether the action as originally brought would have been within the District Court's federal-question jurisdiction, see 28 U.S.C. § 1331, if it had been filed in a federal district court in the first place. We think that the answer is yes, and that the District Court correctly denied the motion to remand.

The complaint quite clearly alleges a violation of the federal Constitution at several points. In particular, paragraph 14, JA 16-17, makes the following assertion:

The Court order [referring to an order of the County Commission of Newton County, Missouri, purporting to establish the Town of Loma Linda] is further invalid because Relators were not given proper notice of the hearing as required by the Statutes and Constitution of Missouri and the Constitution of the United States of America, including those provisions which prohibit the taking of property without due process of law, which process requires proper notice.

The reference to the Constitution of the United States is unequivocal. If the Due Process Clause of the Fourteenth Amendment is given one construction, the claim will prevail; if it is given another, the claim will fail. This is a paradigm case for arising-under jurisdiction.

Plaintiffs, insisting that the case should have been remanded to the state court, point out that most of their complaint alleges violations of state law, including state statutes laying out the procedures for the creation of municipal corporations. They assert, in addition, that not every case in which a federal question somehow arises is within the original jurisdiction of federal courts created by Section 1331. Both of these assertions are true, but, in the context of the present case, they are not relevant. A complaint that pleads violations of both state and federal law is within the original jurisdiction of a federal district court. See, e.g., Lacks v. Ferguson Reorganized School District R2, 147 F.3d 718, 721 (8th Cir. 1998), cert. denied, 526 U.S. 1012 (1999); Gaming Corp. of America v. Dorsey & Whitney, 88 F.3d 536, 541-42

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(8th Cir. 1996). And here, the federal question arises not by way of defense, but on the face of the complaint. It is part of the plaintiffs' cause of action, as demonstrated by the words they themselves selected. So the federal court had jurisdiction of the case on account of the inclusion of federal claims in the complaint. Whether that jurisdiction, in its exercise, should extend to the consideration of the state-law issues also contained in the complaint raises a question of supplemental jurisdiction under 28 U.S.C. § 1367. Once the District Court had decided that removal was proper, both parties urged it to exercise supplemental jurisdiction over the state-law aspects of the case, and the Court, in a separate order, agreed. Neither side contests this particular action in this Court.

In sum, the case was properly...