Kruse v. State of Hawai'

• Citation: 68 F.3d 331
• Decision Date: 12 October 1995
• Docket Number: No. 94-16519,94-16519
• Parties: 95 Cal. Daily Op. Serv. 8020, 95 Daily Journal D.A.R. 13,778 Sue KRUSE and Lance Caspary, on behalf of themselves and their minor son Kanoa, Plaintiffs-Appellants, v. STATE OF HAWAI'I, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 331

68 F.3d 331

95 Cal. Daily Op. Serv. 8020, 95 Daily Journal

D.A.R. 13,778

Sue KRUSE and Lance Caspary, on behalf of themselves and their minor son Kanoa, Plaintiffs-Appellants, v. STATE OF HAWAI'I, et al., Defendants-Appellees.

No. 94-16519.

United States Court of Appeals Ninth Circuit.

Argued and Submitted May 1, 1995.

Decided Oct. 12, 1995.

Carl M. Varady, Honolulu, Hawaii, for plaintiffs-appellants.

Steven S. Michaels, Deputy Attorney General, Honolulu, Hawaii, for defendants-appellees.

Appeal from the United States District Court for the District of Hawai'i.

Before: PREGERSON, KOZINSKI, and HAWKINS, Circuit Judges.

PREGERSON, Circuit Judge:

Plaintiffs-Appellants, Sue Kruse and Lance Caspary, filed a 42 U.S.C. Sec. 1983 action in state court against the State of Hawai'i and employees of Hawaii's Department of Human Services ("DHS") for allegedly violating their various rights under the U.S. Constitution and state law. The State removed the case to federal court. The district court granted the State's motion for judgment on the pleadings on claims barred by the Eleventh Amendment and on the supervisory liability claims. The court also granted the State's motion for summary judgment on the qualified immunity issue. The court then remanded the state law claims to state court.

Kruse filed the instant appeal. She claims that the district court did not have jurisdiction because the action was improperly removed. Kruse also claims that the district court erred as a matter of law in: (1) finding that Kruse's claims for injunctive relief against DHS officials in their official capacity were retroactive and therefore barred by the Eleventh Amendment; (2) ruling that the officials were entitled to qualified immunity; and (3) admitting certain pieces of evidence. We have jurisdiction under 28 U.S.C. Sec. 1291. We affirm.

I. BACKGROUND

On July 7, 1991, Kruse gave birth to her son Kanoa. The next day, the hospital staff found that Kanoa was jittery and easily arousable, and that Kruse's breath smelled of marijuana. A urine test revealed the presence of marijuana in Kanoa's system. A hospital social worker reported the results to Child Protective Services ("CPS"), a division of Hawaii's Department of Human Services ("DHS"). That afternoon, Kruse allegedly admitted to a CPS caseworker that she occasionally used marijuana and smoked it once a week during her pregnancy.

On July 10, 1991, Luana Ogi, a CPS social worker, visited Kruse's home. During the visit, Kruse allegedly told Ogi that she smoked marijuana when she was on her way to the hospital to give birth to Kanoa. Kruse then agreed to participate in a family support services program, Mothers and Infants Support Team ("MIST").

During this time, Kruse was employed as a child care worker at the Mauna Lani School, a child care facility under the jurisdiction of DHS. Under Hawai'i Administrative Rules ("HAR"), a child care facility can terminate an employee if the employee's employment history indicates that the employee may pose a danger to children because of prior acts of violence, drug, or alcohol abuse, or if the employee "has been identified as, and substantiated to be the perpetrator of child abuse or neglect." ¹

Some time before July 19, 1991, Kruse allegedly told Angela Thomas, her employer, that she had used marijuana and was under CPS investigation. On July 19, 1991, Ogi related the facts of Kruse's investigation to Deborah Arnett, a DHS official responsible for overseeing the Mauna Lani School. Arnett asked that Kruse submit to a drug test as a condition of her continued employment. On July 25, 1991, Kruse agreed to submit to a drug test but requested a delay of thirty days before taking the test so that she would be certain to test negative.

On August 7, 1991, officials of MIST (the family support services program) found that Kruse was in a high risk situation because (1) she was potentially addicted to marijuana and cigarettes, (2) she and Caspary were not married, (3) her job was potentially at risk because of her drug use, and (4) Kanoa was her first child. MIST officials recommended that Kruse enter a drug rehabilitation program, that CPS monitor Kanoa's condition, that Kruse and Caspary enter counseling, and that Kruse be tested for drugs.

Kruse refused to take a drug test. On August 29, Thomas fired Kruse. The termination letter stated that Kruse was being fired because the in utero transmission of marijuana to a fetus constitutes "abuse and neglect of the child," which disqualifies Kruse from working at a child care facility. Thomas told CPS that she would not rehire Kruse because Kruse's marijuana use had become known in the community, and that this situation could harm the preschool's reputation.

On July 2, 1993, Kruse and Caspary, on behalf of themselves and Kanoa ("Kruse"), filed the instant suit in state court against the State of Hawai'i and various DHS and CPS employees in their official and individual capacities (collectively "the State"). Kruse argued that under Hawai'i law, there was no legal basis for CPS to intervene in traditional family relationships based on prenatal exposure to parental drug-use, and claimed negligence, negligent hiring, emotional distress, and interference with contractual relations. Kruse also claimed that the State's failure adequately to hire, supervise, train, instruct, and control CPS employees violated Kruse's federal constitutional right to privacy and due process. Kruse sought declaratory, injunctive, and monetary relief.

The State removed the case to federal court pursuant to 28 U.S.C. Sec. 1441(b), and moved for judgment on the pleadings under Fed.R.Civ.P. 12(c), and/or summary judgment under Fed.R.Civ.P. 56. Kruse moved for abstention, requesting the district court to abstain until the Hawai'i courts first determine whether a fetus is a "child" and therefore subject to CPS protection under Hawai'i law.

The district court denied Kruse's motion for abstention and granted the State's motion for judgment on the pleadings on the supervisory liability claims and on the claims barred by the Eleventh Amendment. The district court also granted the State's motion for summary judgment in favor of the DHS employees on the ground that they were entitled to qualified immunity. The district court then remanded the state law claims to state court. Kruse now appeals.

II. SUBJECT MATTER JURISDICTION

Kruse argues that the district court lacked subject matter jurisdiction over this case because it was improperly removed from state court. "Removal is a question of federal subject matter jurisdiction and is reviewed de novo." Harris v. Provident Life and Acc. Ins. Co., 26 F.3d 930, 932 (9th Cir.1994).

Kruse did not object to the removal at the district court level. Where a party fails to object to removal and the case is tried on the merits, the threshold question on appeal is not whether the action was properly removed but "whether the federal district court would have had original jurisdiction of the case' at final judgment." Harris, 26 F.3d at 932 (quoting Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702, 92 S.Ct. 1344, 1347, 31 L.Ed.2d 612 (1972)) (the "Grubbs rule").

Although Kruse did not object to removal until this appeal, the case must have been "tried on the merits" for the Grubbs rule to apply. See Stone v. Stone, 632 F.2d 740, 742 (9th Cir.1980), cert. denied, 453 U.S. 922, 101 S.Ct. 3158, 69 L.Ed.2d 1004 (1981). Here, the district court granted judgment on the pleadings on the supervisory liability claims and on the claims barred by the Eleventh Amendment, granted summary judgment on the qualified immunity issue, and remanded the state law claims to state court.

The Grubbs rule applies when the merits are determined on a motion for summary judgment but it does not apply when the district court grants a partial summary judgment and remands the state law claims. See Stone, 632 F.2d at 742 (distinguishing summary judgment on all claims from partial summary judgment and remand of state law claims). Here, the district court's grant of partial summary judgment does not qualify as a decision on the merits under the Grubbs rule. Thus, we must ask whether removal was proper.

A. Removal Jurisdiction

Kruse argues that when the Eleventh Amendment bars some of the claims of an action in federal court, the action cannot be removed from state court.

In McKay v. Boyd Construction Co., 769 F.2d 1084, 1086-87 (5th Cir.1985), the Fifth Circuit ruled that because the Eleventh Amendment barred certain claims of an action, removal was improper because the federal court did not have jurisdiction over all of the claims asserted in the action. Similarly, in Frances J. v. Wright, 19 F.3d 337, 340 (7th Cir.1994), cert denied, --- U.S. ----, 115 S.Ct. 204, 130 L.Ed.2d 134 (1994), the Seventh Circuit held that the removal statute only authorized the removal of "actions" that were within the jurisdiction of the federal court. The court reasoned that barring the removal of such actions promoted judicial economy because rather than splitting the claims, they could all be heard together in state court. Id. at 341.

Following the logic of Frances J. and McKay, district courts in our circuit have ruled that they lack jurisdiction over cases containing Eleventh Amendment immunity claims. See Robinson v. State of Cal., 836 F.Supp. 717 (N.D.Cal.1993); Simmons v. State of Cal., Dept. of Indus. Rel., 740 F.Supp. 781 (E.D.Cal.1990); Kelly v. State of Cal., 687 F.Supp. 1494 (D.Nev.1988); Stephans v. State of Nev., 685 F.Supp. 217 (D.Nev.1988).

The Sixth Circuit, however, has ruled that an Eleventh Amendment bar against some of the claims of an action does not bar the removal of that action. Henry v. Metropolitan Sewer Dist., 922 F.2d 332 (6th Cir.1990). In Henry, the plaintiff brought a Sec. 1983 action in state court against a state agency and the agency's employees in their official and individual capacities....