Hairston v. Travelers Casualty & Surety, 99-11417

• Decision Date: 13 November 2000
• Docket Number: No. 99-11417,99-11417
• Court: U.S. Court of Appeals — Eleventh Circuit
• Parties: (11th Cir. 2000) Tommy L. HAIRSTON, Earth Satellite Electronic Distributors, Inc., d.b.a. Private Cable Systems, Plaintiffs-Appellants, v. TRAVELERS CASUALTY & SURETY CO., f.k.a. Aetna Casualty and Surety, Travelers Property Casualty, Defendants-Appellees.

Page 1348

232 F.3d 1348 (11th Cir. 2000)

Tommy L. HAIRSTON, Earth Satellite Electronic Distributors, Inc., d.b.a. Private Cable Systems, Plaintiffs-Appellants, v. TRAVELERS CASUALTY & SURETY CO., f.k.a. Aetna Casualty and Surety, Travelers Property Casualty, Defendants-Appellees.

No. 99-11417.

United States Court of Appeals, Eleventh Circuit.

November 13, 2000.

November 28, 2000

Appeal from the United States District Court for the Northern District of Georgia.(No. 98-00313-2-CV-HLM), Harold L. Murphy, Judge.

Before ANDERSON, Chief Judge, and HILL and KRAVITCH, Circuit Judges.

ANDERSON, Chief Judge:

Tommy Hairston and Earth Satellite Electronic Distributors, Inc. appeal the district court's dismissal of their suit under a flood insurance policy against Travelers Casualty & Surety Co. and Travelers Property Casualty. Appellants appeal the district court's determination that the federal courts have exclusive jurisdiction over claims brought pursuant to National Flood Insurance Program ("NFIP") policies and that filing in state court did not toll the statute of limitations. We affirm.

I. FACTS

Appellants purchased flood insurance in 1993 from Write Your Own ("WYO")¹ company Aetna Casualty and Surety, which later merged with or was purchased by the Appellees. Appellants suffered flood damage in 1995 and received payment for that damage. Almost two years later, Appellants noticed further damage which they thought was from the 1995 flood and filed again. This time, the Appellees would not pay. On November 13, 1997, Appellees notified the Appellants that no further investigation would be conducted and that the claim was denied. On November 11, 1998, Appellants filed suit in state court. The Appellees answered, alleging that federal courts have exclusive jurisdiction of actions arising under NFIP policies and filing for removal. The removal to federal court occurred on December 15, 1998, more than a year after appellees denied the claim. After the action was removed to federal court, the Appellees filed a motion to dismiss because the Appellants had missed the NFIP's twelve month statute of limitations. The district court granted the motion, finding that the federal courts have exclusive jurisdiction and that filing in state court did not toll the statute of limitations.

II. DISCUSSION

A. Federal Courts Have Exclusive Jurisdiction Over Suits Brought Pursuant to Policies Issued Under the National Flood Insurance Program

It is a general principle of law that a state court may assume jurisdiction over cases arising under federal laws in the absence of "a provision by Congress to the contrary or disabling incompatibility between the federal claims and state-court adjudication." Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 477-478, 101 S.Ct. 2870, 2875, 69 L.Ed.2d 784 (1981). Beginning with this presumption that concurrent jurisdiction exists, courts are to determine whether Congress intended to restrict jurisdiction to the federal court. See id. at 478, 101 S.Ct. at 2875. This presumption can be rebutted by a showing of any one of the following: "an explicit statutory directive," an "unmistakable implication from legislative history" or "a clear incompatibility between state-court jurisdiction and federal interests." Id.

1.Explicit Statutory Directive

We begin with an examination of the language in the statute that the parties agree is the governing statute. In 42 U.S.C. 4072,² the claimant is instructed that he "may institute" an action in the district court and that the district courts are given "original exclusive jurisdiction" to hear the action without regard to the amount in controversy.

The Appellants argue that Congress's use in 4072 of the permissive "may" instead of obligatory "must" demonstrates an intention to sustain concurrent jurisdiction. While it is true that some courts have found concurrent jurisdiction because of the use of the permissive "may," see, e.g., Lane v. Central Bank of Ala., N.A., 756 F.2d 814, 817 (11th Cir.1985), the statutes at issue in such cases did not contain the more potent language contained in this statute: "original exclusive jurisdiction." That difference makes the analysis in those cases inapplicable. In Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820, 823, 110 S.Ct. 1566, 1568-69, 108 L.Ed.2d 834, the Supreme Court held that the presumption of concurrent jurisdiction was not rebutted by the language of Title VII. That language simply said: "each United States district court ... shall have jurisdiction of actions brought under this subchapter." 42 U.S.C. 2000e-5(f)(3). In so holding, the Court suggested the kind of language which would rebut the presumption: "Unlike a number of statutes in which Congress unequivocally stated that the jurisdiction of the federal court is exclusive, Title VII contains no language that expressly confines jurisdiction to federal courts." Id. (footnote omitted). The statutory language in the instant case expressly provides that the jurisdiction of the district court is exclusive.

While Appellants argue that the words "original exclusive jurisdiction" do not rebut the concurrent jurisdiction presumption, we have not found any cases that support this view. In fact, the only cases that we have found that interpret this language held that the language confined jurisdiction to the federal courts. See, e.g., Mississippi v. Louisiana, 506 U.S. 73, 77-78, 113 S.Ct. 549, 553, 121 L.Ed.2d 466 (1992) (examining the constitutional grant of original exclusive jurisdiction to the Supreme Court of actions between states); Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820, 823, 110 S.Ct. 1566, 1568-69, 108 L.Ed.2d 834 (1990) (contrasting the jurisdictional language in Civil Rights Act with the ERISA statute which contains the words "exclusive jurisdiction" and finding that that language in the latter evidenced a clear rebuttal of the presumption of concurrent jurisdiction); Hall v. United States Dept. of Veterans' Affairs, 85 F.3d 532, 534 (11th Cir.1996)(discussing exclusive jurisdiction of the Court of Appeals for the Federal Circuit over certain actions for veterans' benefits). Therefore we conclude that the language of the statute rebuts the presumption of concurrent jurisdiction.³

2.An Unmistakable Implication From Legislative History

Although we need not address the legislative history in light of the explicit statutory directive and our holding that the "exclusive" language of the statute rebuts the presumption of concurrent jurisdiction, our review of the legislative history reinforces our holding. As originally enacted, 4072 did not contain the words "original exclusive" before jurisdiction.⁴ This language was added by Congress in 1983. See Supplemental Appropriations Act, 1984; Domestic Housing and International Recovery and Financial Stability Act, Pub.L. 98-181, 451(d)(5), 97 Stat. 1229 (1983). In the accompanying legislative history, Congress made clear that the adoption of the language was purposeful:

In the case where the claimant refuses to accept the amount allowed or the claim, the claimant may institute an action on the claim against the company or other insurer within one year after the mailing of the notice of disallowment or partial disallowment in the U.S. district court for the district in which the insured property is situated. Jurisdiction is conferred on the U.S. district court to hear and determine the action regardless of the amount in controversy. This section is amended to specify that the U.S. district court has original exclusive jurisdiction over this action.

See Joint Explanatory Statement of the Committee of Conference, reprinted in 1983 U.S.S.C.A.N. 1768, 1814 (emphasis added). The inclusion of the clear language restricting jurisdiction to the district court, without any qualifying statements demonstrates Congress's intent to restrict jurisdiction.

The addition of the language in 1983 is especially convincing in light of the split that had developed in the federal courts about whether jurisdiction over actions brought pursuant to NFIP policies was confined to federal courts. Compare Bains v. Hartford Fire Insurance Co., 440 F.Supp. 15 (N.D.Ga.1977)(holding that concurrent jurisdiction existed); Burrell v. Turner Corp. of Oklahoma, 431 F.Supp. 1018 (N.D.Okla.1977)(same) with Schultz v. Director, Federal Emergency Management Agency, 477 F.Supp. 118 (C.D.Ill.1979) (holding the same language in the jurisdictional statute for Part A of the NFIP restricted jurisdiction to the federal courts); Siekmann v. Kirk Mortgage Co., 548 F.Supp. 50 (E.D.Pa.1982)(same). Thus it would appear that Congress was responding to the growing split and amended the statute in order to alleviate any further confusion. Because we conclude that both the language of the statute and the legislative history dictate the conclusion that the federal courts have exclusive jurisdiction, we decline to consider the third potential rebuttal factor, the compatibility of state-court jurisdiction and federal interests.

B. Filing in State Court Will Not Toll the Statute of Limitations

Appellants argue that even if we find that the federal courts have exclusive jurisdiction, the filing of the suit in state court tolled the statute of limitations. In support of this argument, they cite Burnett v. New York Central Railroad Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965), in which the Court found that a plaintiff who properly filed in state court, but in the wrong venue, tolled the statute of limitations on an action arising under the Federal Employers' Liability Act ("FELA"). In Burnett, the plaintiff's initial suit was dismissed for lack of venue, and he later filed in federal court after the statute of limitations had run on the FELA action. The district court dismissed the action. The Supreme Court explained that had the state law permitted transfer of the initial suit to a court with proper venue, the statute would have been...