Schacht v. Wisconsin Dept. of Corrections, 96-3633

• Decision Date: 17 June 1997
• Docket Number: No. 96-3633,96-3633
• Citation: 116 F.3d 1151
• Parties: Keith D. SCHACHT, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF CORRECTIONS, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1151

116 F.3d 1151

Keith D. SCHACHT, Plaintiff-Appellant, v. WISCONSIN DEPARTMENT OF CORRECTIONS, et al., Defendants-Appellees.

No. 96-3633.

United States Court of Appeals Seventh Circuit.

Argued April 21, 1997.

Decided June 17, 1997.

David E. Lasker (argued), Madison, WI, for Plaintiff-Appellant.

Richard Briles Moriarty (argued), Wisconsin Department of Justice, for Defendants-Appellees.

Before BAUER, CUDAHY and DIANE P. WOOD, Circuit Judges.

DIANE P. WOOD, Circuit Judge.

The dispute in this case began when plaintiff Keith Schacht was discharged from his position as a correctional officer at the Oakhill Correctional Institution, located in Oregon, Wisconsin. Believing that the Wisconsin Department of Corrections (WDOC) and several officials at the correctional facility (acting in both their individual and official capacities) denied him his right to both substantive and procedural due process in the pre- and post-termination proceedings, Schacht filed suit in Dane County Circuit Court, alleging various violations of 42 U.S.C. § 1983. The defendants, relying on 28 U.S.C. § 1441(a), then removed the case to federal court, where the district court below dismissed the claims against the state defendants that were barred by sovereign immunity and granted summary judgment to the defendants on all remaining claims. Unfortunately, all of these efforts were for naught. Because the district court lacked subject matter jurisdiction over this case, we must vacate its judgment and instruct the district court to send all claims back to square one--Dane County Circuit Court.

I

On the morning of January 21, 1993, Keith Schacht had just completed his overnight shift at Oakhill and was headed for the exit door when he was stopped by defendant Captain Thomas Laliberte, who pulled Schacht aside and asked Schacht to empty his backpack. Schacht complied, and the ensuing search established that his backpack contained (among other things) two garbage bags, six pens, two pounds of government commodity butter, and a three-ounce tube of toothpaste. To the defendants, each of these items appeared similar to items used in the facility. Their presence in the backpack therefore confirmed the defendants' suspicions that Schacht had been stealing items from the prison. Schacht, however, maintained that the pens, butter, and toothpaste all belonged to him, and that it was a common practice, in which the prison management acquiesced, for Oakhill employees occasionally to take garbage bags for their personal use.

The upshot of all this for Schacht was a suspension without pay pending an investigation. The prison officials conducted a series of interviews and hearings, but Schacht believed the deck was stacked against him, as the hearings were conducted by Laliberte and Randall Hepp, both of whom Schacht believed were biased against him for being too much of a "by the book" officer. Ultimately, Schacht was formally discharged on February 18, 1993, and after aborted efforts at various grievance proceedings, Schacht filed suit in Wisconsin state court. In his complaint, which named the WDOC and a host of employees at Oakhill as defendants, Schacht asserted that he had been wrongfully discharged and deprived of his constitutionally protected liberty and property interests in continued employment, all in violation of the due process clause of the federal Constitution. The complaint asked for compensatory and punitive damages against all defendants, as well as costs, fees and any other relief the court deemed appropriate.

II

At this point, all was well. Unbeknownst to both sides, however, the roof fell in when the defendants removed (without objection from Schacht) the case to federal court and the district court proceeded to resolve the case on the merits. The Achilles' heel of the case was the group of claims for monetary damages against the WDOC and the state officials in their official capacities, which were barred by sovereign immunity. The presence of these claims meant that the district court did not have original jurisdiction over the entire action, and thus that the defendants' removal under 28 U.S.C. § 1441 was improper.

We explained why this is so in Frances J. v. Wright, 19 F.3d 337 (7th Cir.1994), in which state defendants similarly tried to remove an action containing claims barred by state sovereign immunity as reflected in both the Eleventh Amendment and Hans v. Louisiana, 134 U.S. 1, 10 S.Ct. 504, 33 L.Ed. 842 (1890). We concluded that the district court lacked jurisdiction over the case because sovereign immunity acted as a limit on the original subject matter jurisdiction of the courts with respect to the barred claims (rather than as a form of common law immunity). Frances J., 19 F.3d at 340, citing Crosetto v. State Bar of Wisconsin, 12 F.3d 1396, 1400 (7th Cir.1993). The lack of jurisdiction over some claims in the case precluded removal of the action as a whole, because § 1441(a) confers removal jurisdiction only where the district court has the authority to adjudicate all of the claims in the case. Frances J., 19 F.3d at 341. In so holding, we rejected the notion that the district court could cure this problem by simply dismissing or remanding the barred claims. Section 1441(c) contemplates certain cases in which separate and independent removable claims are joined with others that are not removable, but it gives the district court the choice of retaining the full case and "determining all issues" therein, or remanding all matters in which state law predominates. As we pointed out in Frances J., this implies that the district court must have the power to determine all the issues in the case, either through original or supplemental jurisdiction. Claims barred by sovereign immunity stand on different footing than other claims that are not independently removable, because of the affirmative limitation on jurisdiction imposed by the sovereign immunity doctrines. See Frances J., 19 F.3d at 340 n. 4. Under § 1441, "if even one claim in an action is jurisdictionally barred from federal court by a state's sovereign immunity, or does not otherwise fit within the original or supplemental (see 28 U.S.C. § 1367) jurisdiction of the federal courts, then, as a consequence of § 1441(a), the whole action cannot be removed to federal court." Frances J., 19 F.3d at 341. See also International College of Surgeons v. City of Chicago, 91 F.3d 981, 987 (7th Cir.1996) ("removal is proper only if the action originally could have been brought in the district court"), cert. granted, --- U.S. ----, 117 S.Ct. 1424, 137 L.Ed.2d 534 (1997); Gorka by Gorka v. Sullivan, 82 F.3d 772, 774-75 (7th Cir.1996) (following Frances J.); 28 U.S.C. § 1441(a) (discussing removability of actions, rather than claims).

In Schacht's case, it is evident that at the time of removal, the complaint included several claims that were barred by sovereign immunity. Schacht wanted monetary relief from the WDOC and from five Oakhill employees, whom he was suing in both their official and individual capacities. Since the State of Wisconsin would be the real party in interest with respect to the official capacity and WDOC claims, the district court could not adjudicate those claims without an authoritative waiver of the state's sovereign immunity. See Frances J., 19 F.3d at 342, citing Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 1006, 10 L.Ed.2d 15 (1963) (noting that a lawsuit is against a sovereign if the judgment...