Town of Ogden Dunes v. Bethlehem Steel Corp.
| Decision Date | 26 January 1998 |
| Docket Number | No. 2:97 CV 191 AS.,2:97 CV 191 AS. |
| Citation | 996 F.Supp. 850 |
| Parties | The TOWN OF OGDEN DUNES, et al., Plaintiffs, v. BETHLEHEM STEEL CORPORATION, National Steel Corporation, Indiana Port Commission, The United States of America, and Little Calumet River Basin Development Commission, Defendants. |
| Court | U.S. District Court — Northern District of Indiana |
Jeffrey F. Gunning, Pinkerton and Friedman PC, Munster, IN, John J. O'Connell, Solomon, Zauderer, Ellenhorn, Frischer and Sharp, New York City, for plaintiffs.
J.B. Smith, Beckman Kelly and Smith, Hammond, IN, Mark E. Shere, Squire Sanders and Dempsey, Columbus, OH, for Bethlehem Steel Corp.
James M. Matthews, Baker and Daniels, South Bend, IN, Kevin M. Toner, Baker & Daniels, Indianapolis, IN, for Nat. Steel Corp.
Evan E. Steger, III, Ice Miller Donadio and Ryan, Indianapolis, IN, for Indiana Port Commission, defendant.
J. Philip Klingeberger, United States Attorneys Office, Dyer, IN, for United States of America, defendant.
Steven J. Strawbridge, Locke Reynolds Boyd and Weisell, Indianapolis, IN, Louis M. Casale, Sr., Casale and Foley, Merrillville, IN, James M. Spivak, Merrillville, IN, Thomas
J. Wendt, Locke Reynolds Boyd and Weisell, Indianapolis, IN, for Little Calumet River Basin Development Com'n.
Barbara L. Crawford, A. Scott Chinn, Office of Indiana Attorney General, Indianapolis, IN, for State of Indiana, third-party defendant.
This cause is before this court on the motions to dismiss filed by Bethlehem Steel Corporation ("Bethlehem"), National Steel Corporation ("National"), and the Little Calumet River Basin Development Commission ("Little Calumet")1. Additionally, Bethlehem has filed a motion for partial summary judgment. All of the motions have been responded to by plaintiff Town of Ogden Dunes ("Ogden Dunes") and the one hundred plus property owners joining Ogden Dunes in this suit. As the court has been fully briefed on the issues, it is now ready to rule.
In the 1960's, the Army Corps of Engineers constructed the Burns International Harbor on the shoreline of Lake Michigan in Lake County, Indiana in conjunction with the Indiana Port Commission and the two steel companies. In the 1980's, Little Calumet, together with the Army Corps of Engineers, developed the Burns Waterway Small Boat Harbor. The town of Ogden Dunes and the individual plaintiffs that reside in Ogden Dunes have suffered erosion of their shoreline which they assert is caused by the shoreline structures at the Burns International Harbor and Burns Waterway Small Boat Harbor interfering with the littoral (shoreline) flow of sand around the shoreline.
In 1984, the town of Ogden Dunes, the Save the Dunes Council, and two couples that resided in Ogden Dunes (not a party to this case) filed suit against the Army Corps of Engineers, the Indiana Port Commission, Bethlehem and Little Calumet in this district. Little Calumet entered into a consent decree with the plaintiffs of that case and was dismissed. The other defendants were dismissed pursuant to Rules 12(b)(1), 12(b)(2) and 12(b)(6) of the Federal Rules of Civil Procedure in an order by Judge Kanne, sitting by designation, dated December 4, 1987. Specifically, Judge Kanne dismissed the claims against the federal defendants on the basis that the plaintiffs had failed to comply with the notice provisions of the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq., dismissed the 42 U.S.C. § 1983 claim against Bethlehem Steel on the grounds that Bethlehem was not a state actor, dismissed the pendent state claims against Bethlehem Steel because no federal claims remained against Bethlehem, dismissed the federal claim against the Indiana Port Commission on the basis of absolute immunity under the Eleventh Amendment, and dismissed the pendent state claims against the IPC because no federal question remained and no diversity existed.
Ogden Dunes then filed suit in 1990 against the Indiana Port Commission in state court, seeking damages for the erosion of Ogden Dunes Beach. IPC settled with Ogden in October, 1993, for $300,000, which money was to acquire a dredge to be used by the town to maintain the beach. In August, 1996, an individual resident of Ogden Dunes, William Suarez, filed suit against the State of Indiana, the Indiana Port Commission, the Little Calumet Rive Basin Development Commission, Midwest Steel Division of National Steel Corporation, Bethlehem Steel Corporation, and Northern Indiana Public Service Company, alleging that the construction of the structures in Burns Harbor had blocked the littoral flow of sand, causing severe erosion to Suarez' beachfront property in Ogden Dunes. The IPC filed a third-party complaint against the City of Ogden Dunes, alleging breach of the settlement agreement reached in the second case. In part of its answer, Ogden Dunes admitted that it had not purchased a dredge as required. Although most of the parties here are involved in the ongoing state court action, Ogden Dunes filed the current action in this court on May 27, 1997.
National and Bethlehem have filed their motions to dismiss under Rule 12(b)(1) of the Federal Rules of Civil Procedure. There are two types of challenges to jurisdiction which may be made under Rule 12(b)(1): (1) a facial attack that challenges the sufficiency of the allegations of jurisdiction in the pleadings on their face; and (2) a factual attack that challenges the truth of the jurisdictional facts alleged in the pleadings. United States v. Ritchie, 15 F.3d 592, 598 (6th Cir.), cert. denied, 513 U.S. 868, 115 S.Ct. 188, 130 L.Ed.2d 121 (1994); Freiburger v. Emery Air Charter, Inc., 795 F.Supp. 253 (N.D.Ill.1992). When reviewing a motion raising a facial attack, the court must accept the well-pleaded allegations in the complaint as true and draw all reasonable inferences in the plaintiff's favor. Ezekiel v. Michel, 66 F.3d 894, 897 (7th Cir.1995). This standard is similar to that applied in a motion to dismiss under Rule 12(b)(6). Brown v. Keystone Consolidated Industries, Inc., 680 F.Supp. 1212, 1215 (N.D.Ill.1988).
However, if the challenge to jurisdiction is factual, no presumption of truthfulness applies to the plaintiff's factual allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. Ritchie, 15 F.3d at 598. The court may receive competent evidence such as affidavits, deposition testimony and the like in order to determine the factual dispute. Land v. Dollar, 330 U.S. 731, 735 n. 4, 67 S.Ct. 1009, 1011 n. 4, 91 L.Ed. 1209 (1947). Thus, when faced with a factual challenge, the court "may properly look beyond the jurisdictional allegations of the complaint and view whatever evidence has been submitted on the issue to determine whether in fact subject matter jurisdiction exists." Capitol Leasing Co. v. F.D.I.C., 999 F.2d 188, 191 (7th Cir.1993).
In the case, the complaint asserts both federal question and diversity jurisdiction, as well as supplemental jurisdiction, over the parties. No federal claim has been raised against Bethlehem or National, and thus this court has no federal question jurisdiction over them. As to the question of subject matter jurisdiction, Howell v. Tribune Entertainment Co., 106 F.3d 215, 217 (7th Cir.1997). The City of Ogden Dunes and its residents are clearly domiciled in Indiana, as are the Indiana Port Commission and Little Calumet River Basin Development Commission. Plaintiffs cite Kauth v. Hartford Ins. Co., 852 F.2d 951 (7th Cir.1988) for the proposition that "the rule of Strawbridge v. Curtiss does not require dismissal of claims against nondiverse defendants if plaintiff has an independent basis of jurisdiction over them." 852 F.2d at 958. However, plaintiffs fail to recognize that they do not have an independent (i.e. federal question) basis of jurisdiction over Bethlehem and National, and the presence of IPC in the counts against the steel companies destroys complete diversity. Thus, this court does not have subject matter jurisdiction over the steel companies.
The plaintiffs finally argue that even if they do not have federal question or subject matter jurisdiction, this court should exercise its supplemental jurisdiction under 28 U.S.C. § 1367. Section 1367(a) provides as follows:
Except as provided in subsections (b) and (e) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district court shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
Subsection (b) relates to cases that have only diversity as a basis for jurisdiction, but subsection (c) of 28 U.S.C. § 1332 provides when courts may decline to exercise supplemental jurisdiction.
(3) the district court has dismissed all claims over which it has original jurisdiction, or
(4) in exceptional circumstances, there are other compelling reasons for declining...
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