Lewis v. Windsor Door Co., a Div. of Ceco Corp.

• Decision Date: 22 February 1991
• Docket Number: Nos. 90-1441,90-1541,s. 90-1441
• Citation: 926 F.2d 729
• Parties: Tony LEWIS and Linda C. Lewis, Appellants, v. WINDSOR DOOR COMPANY, A DIVISION OF the CECO CORPORATION; Royal Overhead Door, Inc., Appellees. H & L CONSTRUCTION COMPANY, INC., Royal Overhead Door, Inc., Appellee, v. UNITED STATES of America, DEPARTMENT OF DEFENSE. WINDSOR DOOR COMPANY, v. UNITED STATES of America, DEPARTMENT OF DEFENSE. Tony LEWIS and Linda C. Lewis, v. WINDSOR DOOR COMPANY, A DIVISION OF the CECO CORPORATION; Royal Overhead Door, Inc., Appellants. H & L CONSTRUCTION COMPANY, INC., Royal Overhead Door, Inc., Appellant, v. UNITED STATES of America, DEPARTMENT OF DEFENSE, Appellee. WINDSOR DOOR COMPANY, Appellant, v. UNITED STATES of America, DEPARTMENT OF DEFENSE, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 729

926 F.2d 729

Tony LEWIS and Linda C. Lewis, Appellants, v. WINDSOR DOOR COMPANY, A DIVISION OF the CECO CORPORATION;

Royal Overhead Door, Inc., Appellees.

H & L CONSTRUCTION COMPANY, INC., Royal Overhead Door, Inc., Appellee, v. UNITED STATES of America, DEPARTMENT OF DEFENSE.

WINDSOR DOOR COMPANY, v. UNITED STATES of America, DEPARTMENT OF DEFENSE.

Tony LEWIS and Linda C. Lewis, v. WINDSOR DOOR COMPANY, A DIVISION OF the CECO CORPORATION;

Royal Overhead Door, Inc., Appellants.

H & L CONSTRUCTION COMPANY, INC., Royal Overhead Door, Inc., Appellant, v. UNITED STATES of America, DEPARTMENT OF DEFENSE, Appellee.

WINDSOR DOOR COMPANY, Appellant, v. UNITED STATES of America, DEPARTMENT OF DEFENSE, Appellee.

Nos. 90-1441, 90-1541.

United States Court of Appeals Eighth Circuit.

Submitted Oct. 1, 1990.

Decided Feb. 22, 1991.

Barbara L. Robertson, Greenwood, Ark., and Mark W. Webb, Fort Smith, Ark., for appellants, cross-appellees.

Robert T. Dawson, and Joel D. Johnson, Fort Smith, Ark., for appellees, cross-appellants.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, and FAGG, Circuit Judge.

LAY, Chief Judge.

Tony Lewis, a citizen of Arkansas, appeals the district court's grant of summary judgment in favor of Windsor Door Co. ("Windsor"), a Delaware corporation, and Royal Overhead Door, Inc. ("Royal"), an Arkansas corporation, on his product liability and negligence claims. Windsor and Royal appeal the grant of summary judgment to the United States on Windsor and Royal's third-party claim for indemnification. We hold the district court lacked subject-matter jurisdiction over Lewis' action against Windsor and Royal, and therefore vacate the district court's order granting summary judgment to Royal and Windsor. The district court is ordered to remand this action to the state court. We also vacate the order granting summary judgment to the United States, as the district court also lacked subject matter jurisdiction over the third-party action. The district court is ordered to dismiss Royal and Windsor's indemnification claims against the United States without prejudice.

I.

The suit arises out of construction of a building on the United States military base at Fort Chaffee, Arkansas. Royal, who was a distributor of Windsor overhead doors, installed Windsor doors in November, 1981. Lewis, a civilian employee working at Fort Chaffee, was injured in March, 1986 when a pulley system fell. The system was installed by government personnel and attached to the doors. Lewis received compensation under the Federal Employees' Compensation Act ("FECA").

In February, 1988, Lewis brought suit in Arkansas state court against Windsor, alleging products liability and other state law claims. Windsor removed the case to federal court based on diversity of citizenship. Lewis then joined Royal as a defendant, and because complete diversity of citizenship no longer existed, the case was remanded back to state court. Shortly thereafter, Royal impleaded the United States as a third-party defendant under both tort and implied contract of indemnity theories, arguing the government should satisfy any judgment rendered against Royal. The third-party claim was brought pursuant to the Federal Tort Claims Act ("FTCA"), 28 U.S.C. Sec. 1346(b) (1988). Recognizing that the FTCA specifies the federal government can only be sued in federal court, ¹ the United States removed the entire case to the federal district court for the Western District of Arkansas, citing 28 U.S.C. Secs. 1346, 1441, 1446, and 2671 (1988). ² Windsor then joined Royal on the third-party claim against the United States. The district court found Lewis' action time This court sua sponte raised the issue of the district court's subject-matter jurisdiction over the case. "[E]very federal appellate court has a special obligation to 'satisfy itself not only of its own jurisdiction, but also that of the lower courts in a cause under review,' even though the parties are prepared to concede it." Alumax Mill Prods. v. Congress Financial Corp., 912 F.2d 996, 1002 (8th Cir.1990) (citation omitted). ³

barred under Arkansas law and granted summary judgment to Windsor and Royal. The court then granted the United States summary judgment, dismissing the third-party claims for indemnification on the ground that since Windsor and Royal had prevailed in their main defense, the United States could not be required to indemnify them. Lewis appealed the summary judgment against him, and Windsor and Royal cross-appealed the grant of summary judgment to the United States, in case the summary judgment for them on the main claim should get overturned on appeal.

II.

A.

The parties agree the district court did not have an independent basis of jurisdiction over Lewis' state law claims against Windsor and Royal because Lewis and Royal are both citizens of Arkansas. See Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 374, 98 S.Ct. 2396, 2402, 57 L.Ed.2d 274 (1978). The parties argue however that the court had constitutional power to hear the entire case under the doctrine of pendent jurisdiction. See generally Aldinger v. Howard, 427 U.S. 1, 13-16, 96 S.Ct. 2413, 2419-21, 49 L.Ed.2d 276 (1976) (discussing pendent claim and pendent party jurisdiction). They argue that because the district court has the power to hear the third-party action brought by Royal and Windsor against the United States by virtue of section 1346(b), the court also has jurisdiction to hear the state law tort claim brought by Lewis.

In Finley v. United States, 490 U.S. 545, 109 S.Ct. 2003, 104 L.Ed.2d 593 (1989), ⁴ the Court held that in a suit filed against the federal government under the FTCA, the plaintiff could not bring additional claims against any other defendants when no independent basis of subject matter jurisdiction existed over the additional defendants. 109 S.Ct. at 2008-09. The Court found pendent party jurisdiction was not applicable when the basis for jurisdiction was the FTCA. The Court read the language in the FTCA giving federal courts power to hear claims "against the United States" to mean "against the United States and no one else." 109 S.Ct. at 2008. The Court adopted a new and more narrow interpretive rule for pendent party jurisdiction, finding it exists only when Congress has affirmatively granted such jurisdiction. 109 S.Ct. at 2009; see Alumax Mill, 912 F.2d at 1006. ⁵

Although Finley concerned pendent-party jurisdiction, its language and references apply as well to ancillary jurisdiction. Particularly [I]t is not that the 'statutory power to decide this case' is defeated by the joinder of a private party for purposes of a claim over which the District Court has no independent jurisdiction, but that the statutory power to decide a case including such a claim simply does not exist, since the FTCA provides jurisdiction only for claims against the United States.

instructive is this footnote in Finley:

109 S.Ct. at 2009 n. 6 (second emphasis added). ⁶

The Court foresaw the practical difficulties its holding would create, but found these difficulties unpersuasive:

Because the FTCA permits the government to be sued only in federal court, our holding that parties to related claims cannot necessarily be sued there means that the efficiency and convenience of a consolidated action will sometimes have to be forgone in favor of separate actions in state and federal courts.... [T]he present statute permits no other result.

Id. at 2010. ⁷

Pre-Finley authority likewise supports our holding that under the existing circumstances the district court cannot exercise pendent or ancillary jurisdiction over the plaintiff's claim. As stated in 6 C. Wright, A. Miller, M. Kane, Federal Practice and Procedure: Jurisdiction Sec. 1444 (2d ed. 1990):

[W]hen there is no subject-matter jurisdiction over the original action between plaintiff and defendant, it cannot be created by adding a third-party claim over which there is jurisdiction.

Id. at 327; see also, Harris v. G.C. Services Corp., 651 F.Supp. 1417, 1418-19 (S.D.N.Y.1987) (holding that improper removal was not cured by impleading federal government in attempt to gain federal jurisdiction); City of Alma v. Bell, Galyardt & Wells, Inc., 606 F.Supp. 686, 691 (D.Neb.1985) (Beam, J.) (same). Any other rule would encourage parties to make improvident removals and then attempt to cure them by impleading a party that supplied jurisdiction. Harris, 651 F.supp. at 1419. In this case, of course, the government was impleaded in state court and it then removed. The result, however, was the same as if the defendants were to remove and then cure a lack of subject-matter jurisdiction by impleading the government. A rule that would sanction federal jurisdiction over the entire case solely on the basis of a third-party FTCA claim "is to bring into the federal court an action the main part of which is not within that court's original jurisdiction, and is thus to enlarge federal at the expense of state jurisdiction in rather a dramatic way." Thomas v. Shelton, 740 F.2d 478, 486 (7th Cir.1984).

B.

There is another reason why the court lacks jurisdiction over Lewis' claim against Windsor and Royal. We find the United States did not have statutory authority to remove this action. If the United States did not have the power to remove, then the district court could not have gained subject-matter jurisdiction over the case. Nothing in the FTCA itself gives the government the power to remove a claim erroneously filed in state court. As a Section 1441(c) is silent on the question of whether third-party defendants can remove. So far, only two circuits have addressed this issue, and they appear to be divided. Compare Judge Posner's exhaustive opinion in Thomas v. Shelton, 740 F.2d 478, 486 (7th Cir.1984) (holding that in "broad run of third-party cases" the third-party defendant [including the United States] may not remove under Sec. 1441(c)), with Carl Heck...