Kuntz v. Lamar Corp.
| Decision Date | 24 September 2004 |
| Docket Number | No. 03-35065.,No. 03-35032.,03-35032.,03-35065. |
| Citation | 385 F.3d 1177 |
| Parties | James J. KUNTZ, individually and as husband; Jennifer Kuntz, individually and as wife; Courtney Lian Kuntz, minor child; Leighton Wayne Kuntz, a minor child; Madeleine Ruth Kuntz, a minor child; Margeau Ellen Kuntz, a minor child; Evan James Kuntz, a minor child, Plaintiffs-Appellees, v. LAMAR CORPORATION; Lamar Company LLC, a limited liability company d/b/a Lamar Corporation, Defendants, and Kootenai Electric Cooperative Inc, a corporation d/b/a a cooperative marketing association, Defendant-Appellant. James J. Kuntz, individually and as husband; Jennifer Kuntz, individually and as wife; Courtney Lian Kuntz, minor child; Leighton Wayne Kuntz, a minor child; Madeleine Ruth Kuntz, a minor child; Margeau Ellen Kuntz, a minor child; Evan James Kuntz, a minor child, Plaintiffs-Appellants, v. Lamar Corporation; Kootenai Electric Cooperative Inc, a corporation d/b/a a cooperative marketing association; Lamar Company LLC, a limited liability company d/b/a Lamar Corporation, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
v.
LAMAR CORPORATION; Lamar Company LLC, a limited liability company d/b/a Lamar Corporation, Defendants, and
Kootenai Electric Cooperative Inc, a corporation d/b/a a cooperative marketing association, Defendant-Appellant.
James J. Kuntz, individually and as husband; Jennifer Kuntz, individually and as wife; Courtney Lian Kuntz, minor child; Leighton Wayne Kuntz, a minor child; Madeleine Ruth Kuntz, a minor child; Margeau Ellen Kuntz, a minor child; Evan James Kuntz, a minor child, Plaintiffs-Appellants,
v.
Lamar Corporation; Kootenai Electric Cooperative Inc, a corporation d/b/a a cooperative marketing association; Lamar Company LLC, a limited liability company d/b/a Lamar Corporation, Defendants-Appellees.
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COPYRIGHT MATERIAL OMITTED
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William R. Hickman, Reed McClure, Seattle, WA, for appellant/cross-appellee.
Howard M. Goodfriend, Edwards, Sieh, Smith & Goodfriend, Seattle, WA, for appellees/cross-appellants.
Mark A. Barber, Hicks, Casey & Barber, P.C., Marietta, GA, for amicus curiae.
Appeal from the United States District Court for the Eastern District of Washington, Robert H. Whaley, District Judge, Presiding, D.C. No. CV-00-00415-RHW.
Before: CANBY, WARDLAW, and GOULD, Circuit Judges.
CANBY, Circuit Judge:
This is an appeal from a judgment entered upon a jury verdict in a personal injury action. Plaintiff James J. Kuntz was severely injured when a metal rod he was removing from a billboard came in contact with an electric transmission line operated by defendant Kootenai Electric Cooperative, Inc. A year before the accident, the Cooperative had moved the transmission line to within eight feet of the billboard. Kuntz sued in district court, asserting jurisdiction based on diversity of citizenship. See 28 U.S.C. 1332(a), (c)(1). The jury awarded substantial damages against the Cooperative and the company that had engaged Kuntz to work on the billboard, Lamar Corporation ("Lamar").
The Cooperative appeals, contending that the district court lacked jurisdiction over the action because the Cooperative, although incorporated, should be treated as a partnership or unincorporated association for purposes of diversity of citizenship. Because some of its members are citizens of Washington, as is Kuntz, the Cooperative claims that complete diversity of citizenship is lacking. Alternatively, the Cooperative contends that it enjoys sovereign immunity as a federal instrumentality. Finally, it challenges the denial of its motion for judgment as a matter of law on the question of liability for willful or reckless conduct. Kuntz and his family (hereinafter "Kuntz") cross-appeal, contending that the district court erred in denying them leave to amend the complaint to add a claim for punitive damages. We have jurisdiction under 28 U.S.C. § 1291 and we affirm the judgment of the district court in all respects.
At the time of the events in issue, Kuntz was an independent contractor in the business of removing and replacing advertising placards on billboards. He contracted with Lamar to change its billboards, including the billboard located on the east
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side of Highway 95 in Athol, Idaho. This billboard had a vinyl sign that was secured by 14 metal rods.
The Cooperative is a cooperative marketing association organized to generate and distribute electric power to its members. The Cooperative is incorporated in the State of Idaho and has its principal place of business there. It owned and operated the high voltage power line, known as the Chilco line, involved in the accident. About one year before the accident, the Cooperative reconstructed the Chilco line, changing from 40-foot poles with one cross-arm and three conductors, to 50-foot poles with two cross-arms and six conductors. After the reconstruction project was completed, the conductor nearest to the billboard was eight feet from the billboard.1 The Cooperative did not warn Lamar or Kuntz that a conductor was closer to the billboard than before the reconstruction, and undertook no protective measures. The eight-foot distance met the minimum seven-and-one-half-foot clearance requirements of the National Electric Safety Code ("NESC"),2 although the Cooperative did not actually measure the clearance distance between the line and the billboard until after the accident. The Idaho High Voltage Act, however, places a duty on contractors who intend to work within ten feet of a high voltage line to notify the utility so that protective measures can be taken. IDAHO CODE §§ 55-2401 — 55-2405.3 Kuntz's contractor, Lamar, did not give such notice to the Cooperative.
Unless danger against contact with high voltage overhead lines has been effectively guarded against as provided in section 55-2403 ... a contractor ... shall not ... [p]erform or require any other person to perform any function or activity upon any land, building, highway, waterway or other premises if at any time during the performance of such function or activity it is possible that the contractor ... or any part of any tool or material used by the contractor ... could move or be placed or brought closer to any high voltage overhead line than ... ten (10) feet of clearance.
IDAHO CODE § 55-2402. It further provides:
If any contractor desires to temporarily carry on any function, activity, work or operation in closer proximity to any high voltage overhead line than permitted in this chapter, or in such proximity that the function, activity, work or operation could possibly come within closer proximity than permitted in this chapter, the contractor responsible for performing the work shall promptly notify the public utility owning or operating the high voltage overhead line in writing.
IDAHO CODE § 55-2403(1).
When Kuntz was changing the sign on the billboard, the ten-foot metal rod that he was reinstalling either touched the high voltage power line or came close enough to cause electricity to arc. The force of the electrical shock knocked Kuntz from the catwalk to the ground 40 feet below. He suffered severe electrical and traumatic injuries.
Kuntz filed a personal injury action in the Eastern District of Washington against
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Lamar and the Cooperative, alleging negligence on the part of both defendants. He also alleged reckless misconduct by both defendants, proof of which avoids the $400,000 cap on non-economic damages imposed by Idaho law. See IDAHO CODE § 6-1603 (Michie 2000).4 Shortly before trial, Kuntz filed a motion to amend the complaint in order to assert a claim for punitive damages. The district court denied the motion to amend.
The case was tried to a jury. At the close of evidence, the Cooperative moved for judgment as a matter of law on the issue of recklessness. The court denied the motion. The jury awarded Kuntz $19,931,504 in damages and apportioned 12% of the fault to Kuntz, 38% to Lamar, and 50% to the Cooperative. The Cooperative renewed its motion for judgment as a matter of law, and the court again denied the motion.
The Cooperative appeals,5 arguing that the district court lacked subject matter jurisdiction because there was no complete diversity of citizenship, and that the district court erred in denying its motion for judgment as a matter of law on the issue of willful or reckless conduct. In its reply brief, the Cooperative adds a contention that it is entitled to sovereign immunity as a federal instrumentality. Kuntz cross-appeals the district court's denial of his motion to amend the pleadings in order to add a prayer for punitive damages.
A. Subject Matter Jurisdiction6
The Cooperative raises the issue of subject matter jurisdiction for the first time on appeal. For most issues, that would be too late, but challenges to a federal court's subject matter jurisdiction cannot be waived and may be raised at any time. See United States v. Cotton, 535 U.S. 625, 630, 122 S.Ct. 1781, 152 L.Ed.2d 860 (2002); Miguel v. Country Funding Corp., 309 F.3d 1161, 1163-64(9th Cir.2002). We therefore address the Cooperative's argument.
The Cooperative contends that the district court lacked subject matter jurisdiction for three reasons: (1) even though the Cooperative is a corporation, it operates like an unincorporated association and, therefore, the relevant citizenship for diversity purposes is that of its individual members, rather than that of the corporation; (2) even if the Cooperative is treated as a corporation for diversity purposes, its individual members, instead of the corporate entity, are the real parties in interest and their citizenship controls; and (3) the Cooperative, as a rural electric cooperative, is an instrumentality of the United States and this suit is, therefore, barred by sovereign immunity. We address each contention in turn.
For a case to qualify for federal jurisdiction under 28 U.S.C. § 1332(a), there must be complete diversity of citizenship between the parties opposed in interest. See Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 267, 2 L.Ed. 435 (1806). On the face of this record, the requirement appears to be met. Kuntz is a citizen of Washington. The Cooperative is an Idaho corporation with its principal place of business in Idaho. Lamar is a Louisiana corporation with its principal place of business in that state. For the purposes of diversity jurisdiction,
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"a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of...
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