Federal Reserve Bank of Atlanta v. Thomas, 99-13824

Decision Date31 July 2000
Docket NumberNo. 99-13824,99-13824
Citation220 F.3d 1235
Parties(11th Cir. 2000) FEDERAL RESERVE BANK OF ATLANTA, Plaintiff-Appellant, v. ROBERT R. THOMAS, Defendant-Appellee
CourtU.S. Court of Appeals — Eleventh Circuit

Before CARNES, MARCUS and FARRIS,* Circuit Judges.

MARCUS, Circuit Judge:

This appeal raises a question of first impression regarding a Federal Reserve Bank's entitlement to proceed in federal court even where diversity jurisdiction does not exist and the underlying dispute involves so peculiarly a creature of state law as a state worker's compensation statute. Appellant Federal Reserve Bank of Atlanta ("Federal Reserve") initiated this case by filing a "Petition for Determination of Disputed Claim for Worker's Compensation Benefits," seeking a declaratory judgment determining its liability under Alabama's worker's compensation statute to Appellee Robert R. Thomas, a Federal Reserve employee who allegedly injured his back on the job. The Federal Reserve claimed federal subject matter jurisdiction on the basis of 12 U.S.C. § 632, which creates federal jurisdiction over "all suits of a civil nature at common law or in equity to which any Federal Reserve Bank shall be a party." Thomas moved to dismiss, arguing that the dispute belonged in the Alabama state courts. The district court granted the motion, finding that section 632 was inapplicable because the Federal Reserve's cause of action was statutory and therefore was not a suit "at common law or in equity." As alternative grounds for dismissal, the court exercised its discretion to abstain in favor of a related case that Thomas had filed in state court, and also exercised its discretionary authority to decline to hear declaratory judgment suits.

The Federal Reserve now appeals, arguing that the district court's purported "literal" reading of the language of section 632 fails to take account of traditional interpretations of the phrase "all suits of a civil nature at common law or in equity." Moreover, asserts the Federal Reserve, dismissing this action in favor of Thomas's later-filed lawsuit in state court was an abuse of discretion, because under section 632 the Federal Reserve has the absolute right to remove that suit at any time before trial. We agree that the Federal Reserve was entitled to pursue this lawsuit in federal court, and therefore reverse the order of dismissal and direct the district court to reinstate the Federal Reserve's action.

I.

The relevant background and procedural history are straightforward and undisputed. The Federal Reserve is a federally-chartered Federal Reserve Bank operating a branch in Birmingham, Alabama. Thomas, an employee of that branch, allegedly injured his back on the job. The Federal Reserve paid Thomas certain benefits, but has disputed others.

On July 7, 1999, the Federal Reserve filed its "Petition" with the District Court for the Northern District of Alabama. It alleged that a dispute had arisen between the parties as to whether Thomas's injury occurred in the course of his employment, whether he was permanently disabled, and whether it owed him any benefits under Alabama's Worker's Compensation Act. It sought a declaratory judgment regarding its rights and obligations with respect to Thomas pursuant to the Act. Within two days after the Federal Reserve filed its lawsuit, Thomas filed his own worker's compensation claim against the Federal Reserve in the Circuit Court of Jefferson County, Alabama. The Federal Reserve subsequently attempted to remove that lawsuit to the Northern District of Alabama, where it currently is stayed pending resolution of this appeal.

In its Petition the Federal Reserve identified two grounds for federal subject matter jurisdiction: 12 U.S.C. § 632 and 28 U.S.C. § 1332, the diversity statute. In his two-page motion to dismiss for lack of subject matter jurisdiction, Thomas asserted simply "it is clear from the Alabama Worker's Compensation Act, 12 U.S.C.A. § 632, and 28 U.S.C.A. § 1445(c) (workers compensation claims are non-removable actions) that proper jurisdiction and administration of this matter would be in the Circuit Court of Jefferson County, Alabama."

In an order and memorandum opinion dated August 31, 1999, the district court granted the motion and dismissed the Federal Reserve's action. First, the court determined that 12 U.S.C. § 632 did not provide a basis for subject matter jurisdiction over the Federal Reserve's claim, because that claim was predicated on a state statute (the Alabama Worker's Compensation Act), and claims based on statute are not "suits of a civil nature at common law or in equity" as required by section 632. Second, the court ruled that it would abstain from exercising jurisdiction under section 632, even if such jurisdiction existed, under the reasoning of Great Lakes Dredge & Dock Co. v. Huffman, 319 U.S. 293, 63 S. Ct. 1070, 87 L. Ed. 1407 (1943) because the underlying claim was based on state law and an adequate state court remedy was available. Third, the court determined that no diversity jurisdiction existed because the amount in controversy fell below $75,000. Finally, the court ruled that even if jurisdiction existed, it would exercise its discretion under the Declaratory Judgment Act, 28 U.S.C. § 2201, to refuse to hear the Federal Reserve's claim.

In this appeal, the Federal Reserve challenges the district court's determination that section 632 is inapplicable, its decision to abstain on the basis of Great Lakes, and its decision to decline jurisdiction pursuant to the Declaratory Judgment Act. The Federal Reserve does not appeal the district court's finding that no diversity jurisdiction exists.

II.

The proper standard of review is clear. The district court's determination that 12 U.S.C. § 632 does not encompass claims predicated on a state statute, and therefore does not provide a basis for subject matter jurisdiction over this lawsuit, raises a pure question of law that is reviewed de novo. See, e.g., Sims v. Trus Joist MacMillan, 22 F.3d 1059, 1060 (11th Cir. 1994). Although Thomas in his brief states that the district court "did not abuse its discretion in finding that Thomas' workers' compensation claims fall outside of" section 632, Appellee's Brief at 5, he cites no case law to establish that such a finding should be reviewed under an abuse of discretion standard. The parties agree that the district court's alternative decisions to dismiss the case pursuant to Great Lakes and 28 U.S.C. § 2201 are reviewable for abuse of discretion. See Old Republic Union Ins. Co. v. Tillis Trucking Co., 124 F.3d 1258, 1260 (11th Cir. 1997), cert. denied, 523 U.S. 1047, 118 S. Ct. 1363, 140 L. Ed. 2d 513 (1998).

III .
A.

We first address whether 12 U.S.C. § 632 creates federal subject matter jurisdiction over a lawsuit by a Federal Reserve Bank based solely on a state statute. Section 632 provides in pertinent part:

Notwithstanding any other provision of law, all suits of a civil nature at common law or in equity to which any Federal Reserve bank shall be a party shall be deemed to arise under the laws of the United States, and the district courts of the United States shall have original jurisdiction of all such suits; and any Federal Reserve bank which is a defendant in any such suit may, at any time before the trial thereof, remove such suit from a State court into the district court . . . .

12 U.S.C. § 632. The district court found that this provision does not create federal jurisdiction over an action based on state statute, adopting what it described as the "literal" meaning of the phrase "all suits of a civil nature at common law or in equity." The court expressly acknowledged the ample case law stating that section 632 "`reflects a congressional policy to have any litigation affecting the Federal Reserve System centered in a federal forum to promote uniformity of decision.'" Dist. Ct. Op. at 3 (citation omitted). The court nevertheless concluded that under the doctrine of expressio unius est exclusio alterius -- a principle of statutory interpretation meaning that the expression of one thing implies the exclusion of another -- section 632 does not confer jurisdiction over a state statutory action because such an action is not one at common law or in equity. The court further explained that because Alabama's worker's compensation law is a "creature of statute," and because "[r]ecovery under such statutes is based neither on common law nor principles of equity," section 632 did not provide a basis for jurisdiction here. Id. at 4-5.

The Federal Reserve argues that the district court improperly interpreted section 632 to exclude claims based on a state statute. It asserts that the district court failed to consider the entire phrase "all suits of a civil nature at common law or in equity," and instead concentrated solely on the language "at common law or in equity." The Federal Reserve contends that the relevant language has always been construed to include statutory claims. It also asserts that the history of section 632 reinforces this interpretation, because Congress's paramount concern was ensuring that Federal Reserve Banks do not face inconsistent regulation in the various state courts. The Federal Reserve adds that virtually all of the case law regarding section 632 states or assumes that the provision authorizes federal jurisdiction over all civil actions involving the Federal Reserve Banks, including state statutory claims. Thomas responds only that because "the Federal Reserve [has] elected to be placed under the Worker's Compensation Act of Alabama . . . the proper jurisdiction and administration of this matter would be in the" Alabama courts. Appellee's Brief at 6.

Determining whether section 632 provides a basis for jurisdiction over this lawsuit requires an interpretation of...

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