Johns-Manville Corp. v. U.S.

Decision Date28 December 1989
Docket NumberJOHNS-MANVILLE,Nos. 89-1130,89-1404,s. 89-1130
Citation893 F.2d 324
PartiesCORPORATION and Johns-Manville Sales Corporation, Plaintiffs-Appellants, v. The UNITED STATES, Defendant-Appellee.
CourtU.S. Court of Appeals — Federal Circuit

Robert M. Bruskin, Howrey & Simon, Washington, D.C., argued for plaintiffs-appellants. With him on the brief were Harvey G. Sherzer and Patricia A. Ewing. Also on the brief was Robert D. Batson, Manville Corp., Denver, Colo., of counsel.

Robert D. Kamenshine, Dept. of Justice, Washington, D.C., argued for defendant-appellee. With him on the brief were Stuart E. Schiffer, Acting Asst. Atty. Gen., Jay B. Stephens, U.S. Atty. and William Kanter.

Before BISSELL, Circuit Judge, BENNETT and SMITH, Senior Circuit Judges.

BENNETT, Senior Circuit Judge.

This appeal is from the order and judgment issued by the Claims Court on September 28, 1988, in Johns-Manville Corp. v. United States, Nos. 465-83C, 688-83C, and 1-84C, in which the Claims Court dismissed the complaints for lack of subject matter jurisdiction and awarded costs to the United States. We reverse the award of costs.

BACKGROUND

Johns-Manville Corporation and Johns-Manville Sales Corporation (Manville) filed three cases in the Claims Court seeking indemnification from the United States for amounts paid by Manville to shipyard workers for injuries caused by exposure to asbestos that Manville had supplied to the government. Manville had previously filed similar suits against the government in United States district courts in California and Virginia.

After several years of discovery and pretrial proceedings, and 2 months before trial in one of the cases was scheduled to begin, the Claims Court raised, sua sponte, the issue of whether it had subject matter jurisdiction over Manville's claims in view of the restrictions of 28 U.S.C. Sec. 1500 (1982). That statute provides that the Claims Court shall not have jurisdiction over any claim for which the plaintiff has a suit against the United States pending in any other court.

Subsequently, the Claims Court issued an order dismissing the three actions for lack of jurisdiction over the subject matter. Keene Corp. v. United States, 12 Cl.Ct. 197 (1987). Rather than entering a judgment of dismissal, the Claims Court certified the jurisdictional issue for appeal pursuant to 28 U.S.C. Sec. 1292(d)(2) (1982). While the jurisdictional issue was on appeal, a trial on the merits in one of the cases was held in the Claims Court, resulting in a judgment for the defendant. Johns-Manville Corp. v. United States, 13 Cl.Ct. 72 (1987).

This court affirmed the jurisdictional ruling of the Claims Court in Johns-Manville Corp. v. United States, 855 F.2d 1556 (Fed.Cir.1988) (per curiam), cert. denied, --- U.S. ----, 109 S.Ct. 1342, 103 L.Ed.2d 811 (1989). This court also vacated the merits decision of the Claims Court. Johns-Manville Pursuant to the mandate issued by this court, the Claims Court dismissed the complaints in the three Manville actions. The Claims Court also awarded costs to the defendant. Manville moved for reconsideration of the cost award, and the Claims Court denied the motion. Johns-Manville Corp. v. United States, 16 Cl.Ct. 474 (1989). Manville has now appealed the award of costs to the government.

Corp. v. United States, 855 F.2d 1571 (Fed.Cir.1988) (per curiam).

OPINION

This case presents the novel issue of whether the Claims Court has the power to award costs in a case it has dismissed for lack of subject matter jurisdiction.

A. The Common Law Rule

At early common law, no costs were awarded to either party. At least as early as 1278, English legislation changed that rule in actions at law. See Payne Costs in Common Law Actions in the Federal Courts, 21 Va.L.Rev. 397 (1935). The English practice was adopted by American courts at an early time, and the ability to award costs has become more a part of the inherent authority of the courts than a matter of statutory authorization. In Ex parte Peterson, 253 U.S. 300, 40 S.Ct. 543, 64 L.Ed. 919 (1920), Justice Brandeis stated: "The allowance of costs in the federal courts rests not upon express statutory enactment by Congress, but upon usage long continued and confirmed by implication from provisions in many statutes." Id. at 316, 40 S.Ct. at 548. See also Fairmont Creamery Co. v. Minnesota, 275 U.S. 70, 74-75, 48 S.Ct. 97, 99, 72 L.Ed. 168 (1927).

Nevertheless, the American common law recognized limitations on the ability of a court to award costs. First, under the doctrine of sovereign immunity, the United States cannot be held liable for costs without its consent. United States v. Chemical Foundation, Inc., 272 U.S. 1, 20-21, 47 S.Ct. 1, 8, 71 L.Ed. 131 (1926).

More importantly for this case, under the common law, a court that lacks jurisdiction over the subject matter does not have the power to award costs. See, e.g., Mansfield, C. & L. M. Ry. v. Swan, 111 U.S. 379, 386-87, 4 S.Ct. 510, 513-14, 28 L.Ed. 462 (1884); Lion Bonding & Sur. Co. v. Karatz, 262 U.S. 640, 642, 43 S.Ct. 641, 642, 67 L.Ed. 1151 (1923). The rule was explained in The Mayor v. Cooper, 73 U.S. (6 Wall.) 247, 18 L.Ed. 247 (1868):

The [trial] court held that it had no jurisdiction whatever of the case, and yet gave a judgment for the costs of the motion, and ordered that an execution should issue to collect them. This was clearly erroneous. If there were no jurisdiction, there was no power to do anything but to strike the case from the docket. In that view of the subject the matter was as much coram non judice as anything else could be, and the award of costs and execution was consequently void.

Id. 73 U.S. (6 Wall.) at 250-51 (emphasis added). Accord Lion Bonding, 262 U.S. at 642, 43 S.Ct. at 642.

In this appeal, the government acknowledges the existence of the common law rule; however, the government argues that there is an exception to the rule. According to the government, under the common law, a court may award costs where the lack of jurisdiction is not immediately apparent on the face of the pleadings. In support of its position, the government cites Hornthall v. The Collector, 76 U.S. (9 Wall.) 560, 19 L.Ed. 560 (1869), Lowe v. The Benjamin, 15 F.Cas. 1016 (C.C.E.D.Pa.1847), Young v. City of Florence, 56 F. 236 (E.D.La.1893), and Phoenix-Buttes Gold Mining Co. v. Winstead, 226 F. 863 (N.D.Cal.1914), as well as several state court cases. However, the cases are not persuasive.

The Supreme Court stated in Hornthall, 76 U.S. (9 Wall.) at 566-67, "Costs were improperly allowed in the court below, as the case was dismissed for the want of jurisdiction on the face of the pleadings, and in such cases the general rule is that costs will not be allowed in this court." However, the Court did not indicate whether costs could be awarded if the lack of jurisdiction was not obvious from the face of the pleadings. The court in Lowe cited no federal authority for an exception to the common law rule. Young merely followed Lowe, and Phoenix-Buttes based its award of costs on a statute specifically permitting them in cases where there was no jurisdiction.

The rationale behind the common law rule does not permit an exception which would empower courts to award costs where they have no jurisdiction. As the Supreme Court has stated, where the court has no jurisdiction, it has no power to do anything but strike the case from its docket, the matter being coram non judice. The Mayor, 73 U.S. (6 Wall.) at 250-51. See also Mansfield, 111 U.S. at 387, 4 S.Ct. at 514 ("where there is no jurisdiction in the court to determine the litigation, the cause must be dismissed for that reason, and, as the court can render no judgment for or against either party, it cannot render a judgment even for costs."). Under that rationale, the inability of a court to award costs arises out of its lack of jurisdiction over the case. Whether the lack of jurisdiction is apparent from the pleadings, or whether it is apparent only after matters outside the pleadings are considered, the court has no jurisdiction over the case and, under the common law rule, has no power to award costs.

B. Statutory Provisions

The American common law rules regarding the award of costs have been modified by statute. Section 1919, title 28, authorizes district courts and the Court of International Trade to award costs in cases dismissed for lack of subject matter jurisdiction. Section 2412(a), title 28, waives sovereign immunity and permits awards of costs against the government in certain cases.

1. 28 U.S.C. Sec. 1919

The common law rule against cost awards in cases dismissed for lack of subject matter jurisdiction was first modified by statute in 1875, and similar statutory provisions have continued to the present code. See 28 U.S.C. Sec. 1919 (1982). As the Supreme Court stated in Mansfield, 111 U.S. at 387, 4 S.Ct. at 514, the statute was enacted "to avoid the application of the general rule, which, in cases where the suit failed for want of jurisdiction, denied the authority of the court to award judgment against the losing party, even for costs." In its present form, 28 U.S.C. Sec. 1919 provides, "Whenever any action or suit is dismissed in any district court or the Court of International Trade for want of jurisdiction, such court may order the payment of just costs." The statute does not address the Claims Court.

In this case, the Claims Court adopted the government's argument that the absence of the Claims Court from 28 U.S.C. Sec. 1919 is an "anomaly" attributable to the former Court of Claims' announced practice of not awarding costs in any case. The court reasoned that application of the common law rule would lead to the "incongruous" result of permitting cost awards in favor of the plaintiff if jurisdiction were found, but prohibiting cost awards if the government prevailed in showing a lack of jurisdiction. The court concluded by stating that Congress cannot "be presumed to have...

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