Venable v. La. Workers' Comp. Corp.

• Decision Date: 30 December 2013
• Docket Number: No. 12–30965.,12–30965.
• Citation: 740 F.3d 937
• Parties: Timothy R. VENABLE; Julia Marie Cloteaux Venable, Plaintiffs–Appellants Cross Appellees, v. LOUISIANA WORKERS' COMPENSATION CORPORATION, Defendant–Appellee Cross Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

740 F.3d 937

Timothy R. VENABLE; Julia Marie Cloteaux Venable, Plaintiffs–Appellants Cross Appellees,

v.LOUISIANA WORKERS' COMPENSATION CORPORATION, Defendant–Appellee Cross Appellant.

No. 12–30965.

United States Court of Appeals,Fifth Circuit.

Dec. 30, 2013.

Louis Roy Koerner, Jr. (argued), Koerner Law Firm, Houma, LA, Warren A. Perrin, Perrin, Landry, deLaunay, Dartez & Ouellet, Lafayette, LA, for Plaintiffs–Appellants Cross–Appellees.

David Keith Johnson (argued), Esq., Johnson, Stiltner & Rahman, Baton Rouge, LA, for Defendant–Appellee Cross–Appellant.

Appeals from the United States District Court for the Eastern District of Louisiana.

Before SMITH, PRADO, and ELROD, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Timothy and Julia Venable appeal a summary judgment in favor of the Louisiana Workers' Compensation Corporation (“LWCC”), which cross-appeals the denial of its motion to dismiss for want of subject-matter jurisdiction. Because the district court lacked subject-matter jurisdiction, we reverse the summary judgment and render a judgment of dismissal.

I.

While employed by Greene's Energy Company, LLC (“Greene's”), Timothy Venable suffered a heart attack at work in Louisiana waters aboard the Stingray drilling barge, which was owned and operated by Hillcorp Energy Company (“Hillcorp”). LWCC, Greene's insurance carrier for purposes of the Longshore and Harbor Workers' Compensation Act (“LHWCA”), immediately began providing Venable medical and indemnity benefits pursuant to that act.

The Venables sued Hillcorp for negligence in federal court, alleging that an unreasonable delay in obtaining medical care had resulted in further harm. ¹ After extensive pre-trial litigation related to the issue of indemnity, the parties participated in a settlement conference. Although LWCC was not yet a party, its representative was present.² Hillcorp and the Venables tentatively agreed to settle for $350,000. The Venables contend that, during the settlement conference, the representative for LWCC expressed that LWCC would consent to the proposed amount. The district court conditionally dismissed the Venables' claim based on the understanding that it had been settled.

After the settlement conference, however, LWCC refused to sign the LS–33 form that the Venables' counsel had forwarded to LWCC's attorney. At some point after the settlement conference, LWCC learned that Venable would likely need a heart transplant, meaning that LWCC would be left liable for significant future exposure even with the settlement of third-party claims.

Because LWCC refused to sign, the district court vacated the conditional dismissal. The Venables then joined LWCC as a party to enforce LWCC's purported consentto the settlement, asking the court to order LWCC to execute the LS–33 form and otherwise to approve the third-party settlement with Hillcorp. In the alternative, the Venables requested the court to find that LWCC had waived § 933(g)'s written-approval requirement by consenting to the settlement, such that no written approval was required. LWCC moved to dismiss for lack of subject-matter jurisdiction, but the court determined that the waivability of the § 933(g) written-approval requirement raised a substantial federal issue that conferred federal-question jurisdiction.

The Venables then moved for partial summary judgment. In turn, LWCC filed a cross-motion for summary judgment, contending that the written approval requirement of § 933(g) is not waivable, and even if it can be waived, the conduct of LWCC's representative did not constitute a waiver. The district court granted summary judgment for LWCC and dismissed the complaint with prejudice, holding that LWCC's decision to withhold consent on the settlement was a proper exercise of its power under the LHWCA. The Venables appeal that order, and LWCC cross-appeals the denial of its motion to dismiss for lack of jurisdiction.

II.

We review a ruling on subject-matter jurisdiction de novo. See PCI Transp., Inc. v. Fort Worth & W. R.R. Co., 418 F.3d 535, 540 (5th Cir.2005) (quoting Hoskins v. Bekins Van Lines, 343 F.3d 769, 772 (5th Cir.2003)). “As a court of limited jurisdiction, a federal court must affirmatively ascertain subject-matter jurisdiction before adjudicating a suit.” ³ A district court should dismiss where “it appears certain that the plaintiff cannot prove a plausible set of facts that establish subject-matter jurisdiction.” ⁴ The plaintiff has the burden of establishing jurisdiction.⁵

The district court incorrectly found that it had federal-question jurisdiction under 28 U.S.C. § 1331. Because the federal issue raised does not satisfy the well-pleaded-complaint rule, the court lacked such jurisdiction.

Section 1331 vests lower federal courts with jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States.” An action can arise under federal law for purposes of § 1331 in two ways: In a well-pleaded complaint (1) the party has asserted a federal cause of action, see Am. Well Works Co. v. Layne & Bowler Co., 241 U.S. 257, 260, 36 S.Ct. 585, 60 L.Ed. 987 (1916), or (2) the party has asserted a state cause-of-action claim that “necessarily raise[s] a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial responsibilities,” see Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005).

First, the Venables have not asserted any federal cause of action against LWCC and instead only point to state causes of action in their amended complaint.⁶ The Venables cannot rely on § 933, which does not create a private cause of action.⁷

Because state law, and not federal law, creates the causes of action at issue, we turn to Grable, 545 U.S. at 314, 125 S.Ct. 2363, under which a federal court can exercise federal-question jurisdiction over a state-law claim if (1) the state-law claim raises a substantial federal issue; (2) the parties actually dispute the federal issue; and (3) exercising jurisdiction over the particular category of cases will not disturb any “congressionally approved balance of federal and state judicial responsibilities.” The district court found it had subject-matter jurisdiction because it determined that the state-law claims satisfied Grable.⁸

A federal court can exercise jurisdiction only where the case satisfies the well-pleaded-complaint rule, according to which, to assess whether the case arises under federal law, the court must look only to “what necessarily appears in the plaintiff's statement of his own claim ... unaided by anything alleged in anticipation of avoidance of defenses which it is thought the defendant may interpose.” Taylor v. Anderson, 234 U.S. 74, 75–76, 34 S.Ct. 724, 58 L.Ed. 1218 (1914). Federal courts lack jurisdiction “over a case in which the complaint presents a state-law cause of action, but also asserts that federal law deprives the defendant of a defense he may raise, or that a federal defense the defendant may raise is not sufficient to defeat the claim.” Franchise Tax Bd. of State of Cal. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 10, 103 S.Ct. 2841, 77 L.Ed.2d 420 (1983) (citations omitted).

Furthermore, although the parties may ultimately litigate a federal issue in their case, that fact does not “show that the suit, that is, the plaintiff's original cause of action, arises under the Constitution” or the laws of the United States. See Louisville & Nashville R.R. Co. v. Mottley, 211 U.S. 149, 152, 29 S.Ct. 42, 53 L.Ed. 126 (1908). “[A] right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action.” Gully v. First Nat'l Bank in Meridian, 299 U.S. 109, 112, 57 S.Ct. 96, 81 L.Ed. 70 (1936).

The federal issue the district court relied upon—whether a party can waive the written-consent requirement under § 933—anticipates LWCC's prospective defense. That issue would otherwise come up in litigation in the following hypothetical situation: First, without obtaining LWCC's written consent, the Venables entered into the settlement agreement with Hillcorp. In response, LWCC terminated benefits. After that, the Venables sought judicial intervention to have the benefits reinstated. At that point, LWCC would argue that the Venables had not complied with § 933's written-consent requirements. The Venables would then reply as they have here (and would urge, among other reasons) that LWCC had waived § 933's requirements). In line with this hypothetical, the district court's assessment demonstrates that the Venables raised this federal issue in anticipation of LWCC's defense.⁹

Furthermore, none of the Venables' claims requires proving a federal issue as an element of the claim. To the extent they have asserted valid Louisiana claims, the Venables have not shown that those state-law claims require proving a substantial federal issue. Certainly, none of them would require proving that LWCC had waived § 933's written-consent requirement.

Even assuming arguendo the district court was correct that the issue of waiver under § 933 raises a substantial federal issue for purposes of Grable, the well-pleaded-complaint rule forecloses federal-question jurisdiction. We therefore do not need to address whether the § 933 written-consent requirement poses a “substantial” federal issue.

III.

We still must examine whether the Venables have established any other basis for federal jurisdiction. As a threshold matter, they do not posit that § 933 itself vests federal-court jurisdiction over their claims. Instead, they offer a myriad of other theories to demonstrate that the district court had subject-matter jurisdiction: (1) diversity jurisdiction under 28 U.S.C. § 1332; (2) supplemental jurisdiction under 28 U.S.C. § 1367; (3)...