NCHM v. Milwaukee Housing Authority

• Decision Date: 25 August 1987
• Docket Number: No. 86-C-1374.,86-C-1374.
• Citation: 668 F. Supp. 1230
• Parties: NATIONAL CENTER FOR HOUSING MANAGEMENT, Plaintiff, v. HOUSING AUTHORITY OF the CITY OF MILWAUKEE, Defendant and Third-Party Plaintiff, v. Samuel R. PIERCE, Jr., Secretary of the United States Department of Housing and Urban Development, Third-Party Defendant.
• Court: U.S. District Court — Eastern District of Wisconsin

668 F. Supp. 1230

NATIONAL CENTER FOR HOUSING MANAGEMENT, Plaintiff, v. HOUSING AUTHORITY OF the CITY OF MILWAUKEE, Defendant and Third-Party Plaintiff, v. Samuel R. PIERCE, Jr., Secretary of the United States Department of Housing and Urban Development, Third-Party Defendant.

No. 86-C-1374.

United States District Court, E.D. Wisconsin.

August 25, 1987.

Jeffrey A. Kremers, Milwaukee, Wis., for plaintiff.

Joseph P. Stadtmueller, U.S. Atty. by Mel S. Johnson, Jan E. Kearney, Asst. U.S. Attys., Milwaukee, Wis., for third-party defendant.

Harry Stein, Asst. City Atty., Milwaukee, Wis., for defendant and third-party plaintiff.

DECISION AND ORDER

MYRON L. GORDON, Senior District Judge.

The National Center for Housing Management (NCHM) is a non-profit corporation providing consulting and other services for the development and maintenance of elderly and other specialized housing programs. NCHM provided certain of its services to the Housing Authority of the City of Milwaukee (HACM). Despite repeated requests and invoices, HACM failed to pay NCHM for its services. Consequently the latter party filed a complaint against HACM in Milwaukee County circuit court in order to collect the $60,000 it alleges is due from HACM. After filing an answer, affirmative defenses and counterclaim, HACM also filed a third-party complaint against Samuel R. Pierce, Jr., as Secretary of the United States Department of Housing and Urban Development (HUD).

The third-party complaint alleges that HUD reneged on its promise to authorize the disbursement of 1982 Comprehensive Improvement Assistance Program (CIAP) funds in the amount of $60,000 to subsidize NCHM's services. The defendant and third-party plaintiff states a claim for relief in the amount of "any and all damages deemed due to the plaintiff NCHM," together with corresponding costs and attorney's fees. See Third-party complaint at 4.

HUD, as the third-party defendant, filed a petition for removal to this court pursuant to 28 U.S.C. §§ 1441 and 1442. Shortly thereafter, HUD filed a motion to dismiss the third-party action for lack of jurisdiction on grounds that the third-party plaintiff's claim is within the exclusive jurisdiction of the United States Court of Claims. Along with a brief opposing the third-party defendant's motion to dismiss, the plaintiff, NCHM, filed an alternative motion for remand pursuant to 28 U.S.C. § 1447(c).

A threshold question is this court's removal jurisdiction; reviewing the plaintiff's motion for remand, I conclude that removal was appropriate in this case under 28 U.S.C. § 1442. Thus, the plaintiff's motion for remand will be denied. I also conclude that the third-party plaintiff's claim is in fact within the exclusive jurisdiction of the United States Court of Claims; the third-party defendant's motion to dismiss the third party action will be granted.

MOTION FOR REMAND

Under 28 U.S.C. § 1447(c), a case removed from state court must be remanded "if at any time before final judgment it appears that the case was removed improvidently and without jurisdiction...." Contesting the providence of removal in this case, NCHM contends that neither section 1441 nor section 1442 authorizes removal by third-party defendants. Although I agree that 28 U.S.C. § 1441 does not generally authorize removal by a third-party defendant, removal in this case was nevertheless proper under 28 U.S.C. § 1442(a)(1).

The court of appeals for the seventh circuit has held that "in the broad run of third-party cases" third-party defendants are not entitled to remove a state court action to federal district court pursuant to 28 U.S.C. § 1441(c). Thomas v. Shelton, 740 F.2d 478, 487 (7th Cir.1984). According to the court, "section 1441(c) does not authorize removal by third-party defendants in general or by the United States in particular. ..." Id., at 482.

Nevertheless, 28 U.S.C. § 1442 authorizes the removal of the instant case upon petition of the third-party defendant. Section 1442(a)(1) provides for the removal of any civil action commenced against "any officer of the United States or any agency thereof, or person acting under him, for any act under color of such office...." Although the court of appeals for the seventh circuit has not addressed the question, other circuits have held that the fact that the removing federal officer is a third-party defendant does not defeat removal under this statute. See Smith v. City of Picayune, 795 F.2d 482, 485 (5th Cir.1986); Johnson v. Showers, 747 F.2d 1228, 1229 (8th Cir.1984); IMFC Prof. Serv., Inc. v. Latin Amer. Home Health, Inc., 676 F.2d 152, 156 (5th Cir.1982). Accordingly, I am persuaded that Secretary Pierce, as an officer of an agency of the United States, was entitled to remove this case pursuant to 28 U.S.C. § 1442(a)(1).

The plaintiff argues, however, that Secretary Pierce is not so entitled because he is not threatened with personal liability. In my opinion, the plaintiff's position imposes unnecessary restriction on the federal officer removal statute. Section 1442 was designed originally to "protect federal officers from interference by hostile state courts." Willingham v. Morgan, 395 U.S. 402, 405, 89 S.Ct. 1813, 1815, 23 L.Ed.2d 396 (1969). Thus, "the right of removal under § 1442(a)(1) is made absolute whenever a suit in state court is for any act `under color' of federal office...." Id. at 406, 89 S.Ct. at 1816.

Other than the two cases cited by the plaintiff, decided prior to the Supreme Court's pronouncements in Willingham, my research has not revealed any law imposing the federal officer removal prerequisite that the plaintiff proposes, or any others. See, e.g., IMFC Prof. Serv., Inc., supra, 676 F.2d at 156 (rejecting proposal that remand warranted upon dismissal of federal removing defendant, the court held that the "only prerequisite to removal of a civil action under § 1442 is that it be brought against a federal officer or agency"); Maine Ass'n of Interdependent Neighborhoods v. Petit, 644 F.Supp. 81 (D.Me.1986) (removal proper if the express conditions of § 1442 apply even if case subsequently dismissed for lack of standing).

In the instant case the allegations contained in HACM's third-party complaint involve aspects of the implementation of an official HUD program, CIAP. It is clear, therefore, that such allegations challenge actions taken under color of Secretary Pierce's office. Absent any showing to the contrary, I am persuaded that removal of the entire state case was appropriate under 28 U.S.C. § 1442.

MOTION TO DISMISS

Interpreting the mandates of the Tucker Act, 28 U.S.C. §§ 1346(a)(2) and 1491, the court of appeals for the fourth circuit identified three conditions which, if satisfied, give rise to exclusive jurisdiction in the United States Court of Claims:

The action must be against the United States, seek monetary relief in excess of $10,000, and be founded upon the Constitution, federal statute, executive regulation or government contract.

Portsmouth Redevelopment & Housing Authority v. Pierce, 706 F.2d 471, 473 (4th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983).

The third-party plaintiff in this case acknowledges that HUD makes a showing of the first and third conditions for the exclusive jurisdiction of the claims court; the action is against the United States and is founded upon a government contract. However, HACM contends that HUD has failed...