### IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

No. 12

- 30965

TIMOTHY R. VENABL E; JULIA MARIE CLOTEAUX VENABLE , Plaintiffs

− Appellants Cross Appellees ,

versus LOUISIANA WO RKERS ’ COMPENSATION CORPORATION , Defendant

− Appellee Cross Appellant

.

Appeal s 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 Lou i siana 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 United States Court of Appeals Fifth Circuit 

### FILED December 30, 2013 Lyle W. Cayce Clerk Case: 12-30965 Document: 00512484265 Page: 1 Date Filed: 12/30/2013No. 12

- 30965
summary judgment and re nder a judgment of dismiss al

.

I. While employed by Greene’s Energy Company, LLC (“Greene’s”), Tim o thy Venable suffered a heart attack at work in Louisiana waters aboard the Stingray drilling barge, which was owned and operated by Hillcor p Energy Company (“Hillcorp”)

. LWCC , Greene’s insurance carrier for purposes of the Longshore and Harbor Worker s ’ Compensation Act (“LHWCA”) , imme di ately began providing Venable medical and indemnity b enefits 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 confere nce. Al though LWCC was not yet a party, its representative was present

. 2 Hillcorp and the Venables tentatively agreed to settle for $350,000. The Ven ables contend that, during the settlement con

fer ence , the representative for LWCC expressed that LWCC would c onsent to the proposed amount. The district court conditionally dismissed the Venables’ claim based on the understanding tha t i t had been settled. After the settlement conference, however, LWCC r efused to sign the

1 The district court found that it had admi ralty and maritime jurisdiction.

2 U nder the LHWCA, Venable would forfeit any future benefit from LWCC if he settled his claims against Hillcorp without receiving written approval of the settlement from LWCC on a Department of Labor

- issued form, as required by statute

. See 33 U.S.C. § 933(g)(1) (2012) (“If the person entitled to compensation . . . enters into a settlement with a third person

. . . for an amount less than the compensation to which the person

. . . would be entitled under this cha pter, the employer shall be liable for compensation as determined under subsection (f) of this section only if written approval of the settlement is obtained fro m the employer and the employer’ s carrier, before the settlement is executed, and by the person entitled to com

pensation

. . . . The approval shall be made on a form provided by the Secretary and shall be filed in the office of the deputy commissioner within thirty days after the settlement is entered into.”). 2 Case: 12-30965 Document: 00512484265 Page: 2 Date Filed: 12/30/2013No. 12

- 30965 LS

- 33 form that the Venables’ counsel had forwarded to LWCC’s attorney . A t some point after the settlement conference, LWCC learned that Venable would likely need a heart transplant , meaning that LWCC would be left liable for sig nificant future exposure even with the set tlement of third

- party claims. Because LWCC refused to sign , the district court vacated the condi tional dismissal. The Venables then joined LWCC as a party to enforce LWCC’s pur

ported consent to the settlement , asking the court to order LWCC to execute the LS

- 33 form and otherwise to approve the third

- party settlement with Hill

corp. In the alternative, the Venables request ed th e court to find that LWCC had waived § 933(g)’s written

- approval requirement by con senting to the set

tle ment, s uch that no writ ten approval was required. L WCC moved to dismiss for lack of subject

- matter jur isdiction , but the court determin ed that the waiva

bility of the § 933(g) written

- a pproval requirement raised a substantial federal issue that conferred federa l

- 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 u nder the LHWCA. The Venables appeal that orde r , and LWCC cross

- appeal s the d enial of its motio n 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) (quot ing Hoskins v. Bekins Van Lines , 343 F.3d 769, 772 (5th Cir. 2003)). “ As 3 Case: 12-30965 Document: 00512484265 Page: 3 Date Filed: 12/30/2013No. 12

- 30965 a court of limited jurisdiction, a federal court must affirmatively ascertain subject

- matter jurisdiction before adjudicating a suit. ” 3 A distri ct court should dismiss where “it appears certain that the plaintiff cannot prove a plausible set of facts that establis h subject

- matter jurisdiction.” 4 The plaintiff ha s the bur den of establishing jurisdiction. 5 T he district court incorrectly found that i t had federal

- question juris dic

tion under 28 U.S.C. § 1331. Because t he 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: I n a well

- pleaded complaint (1) the party has asserted a federal cause of action, see Am. Wel l Works Co. v. Layne & Bowler Co. , 241 U.S. 257, 260 (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 fed eral forum may entertain without dist urbing any congressionally approved balance of fed

er al and state judicial responsibilities,” see Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg. , 545 U.S. 308, 314 (2005). F irst, the Venables have not asserted any federal c ause of action against LWCC and instead only point to state cause s of action in their amended

3 Sawyer v. Wright , 471 F. App ’ x 260, 261 (5th Cir.) (per curiam), cert. denied , 133 S. Ct. 615 (2012) ; see also Ashcroft v. Iqbal , 556 U.S. 662, 67 1 (2009)

. 4 Castro v. United States , 56 0 F.3d 381, 386 (5th Cir. 2009), vacated on other grounds , 608 F.3d 266 (5th Cir. 2010).

5 Ramming v. United States , 281 F.3d 158, 161 (5th Cir. 2001) (“The burden of proof for a Rule 12(b)(1) motion to dismiss is on the party asserting jurisdiction. Accordingly, the plain tiff constantly bears the burden of proof that jurisdiction does in fact exist.” ( citations omitted))

. 4 Case: 12-30965 Document: 00512484265 Page: 4 Date Filed: 12/30/2013No. 12

- 30965 complaint

. 6 T he Venables cannot rely on § 933 , which does not create a private cause of action

. 7 Because state law, and not federal law, creates the cause s of action at issue, we turn to Grable , 545 U.S. at 314, u nder 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 fed eral issue; and (3) exercising jurisdiction over the particular category of cases will not disturb any “congressionally approved balance of federal and state judicial respons i bil ities.” The district court found it had subject

- matter jur isdiction becaus e 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 , a ccording to which, to assess whether the case arises under federal law, the court must look only to “ what necessarily appears

6 The amended complaint includes the following counts: (1) “LWCC should be ordered to execute the LS

- 33 or judgment should be entered providing that written consent to the set tlement is unnecessary”; (2) “The parties to this litigation detrimentally relied on the
assur ances of LWCC that the amount and other terms of the settlement being negotiated would be approved by LWCC and its consent would be given ”; (3) intentional misrepresent a tion; (4) making impossible a condition of the settlement; and (5) abuse of rights. During oral argument, the Venables’ counsel indicated that he was relying on federal common law. In his view, one “could supplement or inform the district court’s discretion by using analogous situations under state law.” Therefore, counsel “gave [the district court] concepts in Louisi

ana law that would be helpful to inform [the court of its] discretion.” Counsel, however, acknowledged that his pleadings had not mentioned this reliance on federal common law. More over, this theory of federal

- question jurisdiction does not appear in the briefing , so it is waived

. See United States v. Thibodeaux , 211 F.3d 910, 912 (5th Cir. 2000).

7 See McLaurin v. Noble Drilling (U.S.) Inc. , 529 F.3d 285, 291

– 92 (5th Cir. 2008 ) (“Impor tantly, § 933 recognizes that a covered employee may have tort remedies against third parties under federal or state law. Section 933 preserves and codifies a maritime worker’s
com mon law right to pursue a negligence claim against a third party that is not the employer
or a co worker; it does not create a cause of action nor establish a third party’s liability for neg li gence.” (citations omitted) )

. 8 In its order, the district court noted that it was “persuaded that the proper inter

pretatio n of the settlement provision of the LHWCA presents a substantial question of federal law whose resolution is crucial to the state law claims at issue.” 5 Case: 12-30965 Document: 00512484265 Page: 5 Date Filed: 12/30/2013No. 12

- 30965 in the pla intiff’ 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 (1914). F ederal court s lack jurisdiction “ over a case in which the complaint presents a state

- law cause of action, but also asserts that federal law deprives the defen dant of a defense he may raise, or that a federal defense the defendant may raise is no t 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 (1983) (citations omitted)

. Furthermore, although the parties may ultimately litigate a federal issue in their case , that fact does not “ show that t he suit, that is, the plaintiff’ s original cause of action , arises under the Constitution ” or the law s of the United States

. See Louisville & Nashville R. R. Co. v. Mottley , 211 U.S. 149, 152 (1908). “[A] ri ght or immunity create d by the Constitution or laws of the United States must be an element, and an essential one, of the plain tiff ’ s cause of action.” Gully v. First Nat’ l Bank in Meridian , 299 U.S. 109, 112 (1936). T he federal issue the district court relied upon

— whether a party can waive the written

- consent requirement under § 933

— anticipate s LWCC’s pro spective defense. Th at issue would otherwise come up in litigation in the fol

low ing hypothetical situation : First, without obtaining LWCC’s written con sent , the Venab les enter ed into the settlement agreement with Hillcorp. In response, LWCC terminated benefits. After that , t he 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 ha ve here (and would urge , among other rea sons ) that LWCC had waived § 933’s requirements). In line with this hypothet i cal, t he district court’s assessment demonstrates that the Venables

6 Case: 12-30965 Document: 00512484265 Page: 6 Date Filed: 12/30/2013No. 12

- 30965 raised this federal issue in anticipation of LWCC’s defense. 9 Furthermore, none of the Venables ’ claims require s proving a federal issue as an element of the claim. To the extent the y have asserted valid Loui

siana claims, the Venables h ave not shown that th o se state

- law claims require provin g a substantial federal issue. Certainly, none of the m would require
prov ing that LWCC had waived § 933 ’s written

- consent requirement. E ven assuming arguendo the district court was correct that the issue of waiver under § 933 raises a substantial federal issue for pur poses of Grable , the well

- pleaded

- complaint rule forecloses feder al

- question jurisdiction. We there fore do not need to address whether the § 933 wr itten

- consent require

ment poses a “substantial” federal issue.

III. W e still must examine whether the Venables have established any other basis for federal jurisdiction. As a threshold matter, the y do not posit that § 933 itself vests federal

- court jurisdiction over the ir 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) sup ple mental jurisdiction under 28 U.S.C. § 136 7 ; ( 3 ) admiralty and mari time jur

isdiction under 28 U.S.C. § 1333; and (4) jurisdiction under the district court’s “inherent power to enforce [] settlement[s].” As to the first theory , § 1332 requires “t he matter in controversy [to] exceed [] the sum or value of $75,000, exclusive of interest and costs, and [be]

9 The district court’s order notes, “ I f a § 933(g) is enforced as written then Plaintiffs cannot prevai l on their state law claims because the LHWCA will necessarily control and preempt any state law to the contrary.” If § 933(g)’s written

- consent requirement would nec

essarily preempt any contrary state law, LWCC would raise this issue as an affirmative d efense. 7 Case: 12-30965 Document: 00512484265 Page: 7 Date Filed: 12/30/2013No. 12

- 30965 betwe en . . . citizens of different States . . .

. ” 10 Both t he Venables and LWCC , however, a re citizens of Louisiana. As to the s econd theory , § 1367 “ grants supplemental jurisdiction over other claims that do not independently come within the jurisdiction of the dis

trict court but for m part of the same Article III ‘ case or controversy. ’ ” State Nat ’l Ins. Co. v. Yates , 391 F.3d 577, 579 (5th Cir. 2004)

. “ [I] n any civil action of whic h [a] district court [has] original jurisdiction, [that] court [] shall have supplemental jurisdiction over all other claims that are so related to claims in the action

. . . that they form part of the same case or con troversy

. . . . ” 28 U.S.C. § 1367 (a) (2012). 11 A claim forms part of the same case or controversy if the “claim[ is] so related to the original claims that [it] derive [s] from a co m mon nucleus of operative fact.” Bella v. Davis , 531 F. App’x 457, 459 (5th Cir. 2013) (per curiam). The claims the Venables assert against LWCC in their amended com

plaint do not derive from the same nucleus of operative facts as does their neg

ligence claim against Hillcorp. LWCC ’s potential waiver of § 933(g)’s written

consent requirement occasioned b y its conduct during and after a settlement conference depends on facts that are completely different from those related to any torts committed by Hillcorp years before. T he district court therefore could not have exercised supplemental jurisdiction ov er the claims the Venables bring against LWCC

. As to the third theory, § 1333 vests exclusive federal jurisdiction involv

ing “[a]ny civil case of admiralty or maritime jurisdiction, saving to suitors in

10 28 U.S.C. § 1332 (2012); see also Mumfrey v. CVS Pharmacy, Inc. , 719 F.3d 392, 397 (5th Cir. 2013).

11 E ven if the claim falls within § 1367(a) , the exceptions specified in § 1367(b) and (c) may apply. Because § 1367(a) do es not apply, however, we do not need to determine whether an exception nevertheless precludes jurisdiction. 8 Case: 12-30965 Document: 00512484265 Page: 8 Date Filed: 12/30/2013No. 12

- 30965 all cases all other remedies to which they are other wise entitled. ” 28 U.S.C. § 1333 (2012). “ [A] party seeking to invoke federal admiralty jurisdiction pur

suant to 28 U.S.C. § 1333(1) over a tort claim must satisfy conditions both of loca tion and of connection with maritime activity.” Jerome B. Grubar t, Inc. v. Great Lakes Dredge & Dock Co. , 513 U.S. 527, 534 (1995)

. The locality test assesses “ whether the tort occurred on navigable water or whether injury suf

fered on land was caused by a vessel on navigable water .” Id. The connection
test requires two showings:

A court , first, must assess the general features of the type of i nci

dent involved, to dete rmine whether the incident has a potentially disrupti ve impact on maritime commerce. Second, a court must determine whether the general character of the activ ity giving rise to the incident shows a substantial relationship to traditional mar

i time activity.
Id. (citations and internal quotation marks omitted). The Venables’ claims against LWCC do not satisfy the locality test. 12 The Venables conflate the district court’s jurisdiction over their negligence claim

― the basis of which appears to have occurred on navigable water

― with the claims they assert against LWCC. The y allege that LWCC com mit ted var i ous state

- law torts by its conduct during or after the settlement conference. But none of th at conduct occurred on navigable waters , nor were these alleged
torts caused by a vessel on navigable water

. 13 Therefore, the Ven ables cannot claim adm iralty jurisdiction as the basis for subject

- matter jurisdiction

. As to their fourth and final theory, t he Venables assert that the district

12 We therefore do not need to address whether the Venables’ claims satisfy the con

nec tion test.

13 See Miller v. Griffin

- Alexander Drilling Co. , 8 73 F.2d 809, 812 (5th Cir. 1989) (“ We see no reason for expanding admiralty jurisdiction to cases with such scant involvement of maritime locations. ”). 9 Case: 12-30965 Document: 00512484265 Page: 9 Date Filed: 12/30/2013No. 12

- 30965 court could exercise jurisdiction over these claims by its “ inherent power to enforce [] settlement[s].” The y appear to suggest that the court could exercise its ancillary

- enforcement jurisdiction as a basis for subject

- matter jurisdiction. In Kokkonen v. Guardian Life Insurance Co. of America , 511 U.S. 375 (1994) , the Court explained when a federal court c an ret ain jurisdiction over a settlement agreement by exercising this ancillary enforcement jurisdiction

. There, Guardian Life Insurance Company (“Guardian”) terminate d Kok kon

en’s general agency agreement, prompting Kokkonen to sue in state court , where upon Guardian removed to federal court

. See id. at 376. B efore jury delib eration s , “ the parties arrived at an oral agreement settling all claims and counterclaims, the substance of which they recited, on the record, before the Dis trict Judge in chambers. ” Id. Although the judge was aware of the set tle

ment, the dismiss al order made no reference to the settle ment agree ment. Id. at 377. Thereafter, the parties disagreed as to Kokkon en’s oblig a tion to return certain files , and Guardian moved to enfo rce the agree ment. Id. In determining whether a federal court could exercise its inherent juris

diction, the Kokkonen Court first explained that state law govern s the enforce

ment of contracts, including settlement agreement s that result in the dismissal of federal suits. See id. at 378. T he Court therefore held that an action to enforce a settlement agreement “is more than just a continuation or renewal of the dismissed suit, and hence requires its own basis for jurisdictio n .” Id. Having established that federal courts require an independent juris dic

tional basis to enforcement settlement agreements, t he Court then described
two general situations in which a federal court c an exercise independent “ancil

lary jurisdiction”: “ (1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees.” Id. at 379

– 80 (citations omitted). As 10 Case: 12-30965 Document: 00512484265 Page: 10 Date Filed: 12/30/2013No. 12

- 30965 was the case in Kokkonen , the first basis does not generally apply in th e instant context because the terms of a settlement agreement usually will not be “fac

tually interdependent” with the claims underlying the original lawsuit. 14 The Court further noted that the second basis did not apply to the circumstances we face here because (1) the district court, in its order, had not expressly retained jurisdiction over the settlement agreement , and (2) the order did not incorporate the settlement agreement. 15 Applying Kokkonen , we likewise require one of th o se two showing s for a dis trict court to exercise ancillary jur is diction in enforcing a settlement agree

ment. 16 T he Venables do not have a settlement agreemen t that they seek to enforce but i nstead want a federal court to compel LWCC to consent to their tentative agreement with Hillcorp. Under Kokkonen , a district court cannot

exer cise ancillary jurisdiction to compel a third party’s cons ent to a proposed , but not final , settlement agreement ; n one of the slew of cases cited by the

14 Kokkonen , 511 U.S. at 380 (“[T] he facts underlying respondent ’ s dismissed claim for breach of agency a greement and those underlying its claim for breach of settlement agree

ment have nothing to do with each other; it would neither be necessary nor even particularly efficient that they be adjudicated together. ”).

15 Id. at 381 (“ The situation would be quite different if the parties’ obligation to comply with the terms of the settlement agreement had been made part of the order of dismissal

— either by separate provision (such as a provision ‘retaining jurisdiction’ over the settlement agreement) or by incorporating the terms of the set tlement agreement in the order. In that event, a breach of the agreement would be a violation of the order, and ancillary jurisdiction to enforce the agreement would therefore exist.” ).

16 See, e.g. , Hospitality House, Inc. v. Gilbert , 298 F.3d 424, 430

– 31 (5th Cir. 2002); Woolwine Ford Lincoln Mercury v. Consol. Fin. Res., Inc. , No. 00

- 60314 , 245 F.3d 791 (table), 2000 WL 1910184, at *2 (5th Cir. Dec. 27, 2000) (per curiam) (unpublishe d). See generally Andrew S. Hanen & Jeffrey M. Benton, The Enforceability of Settlement Agreements , 40 T HE A DVOC

. (T EX .) 69, 70 (2007) (“ It is clear after Kokkonen

. . . that a party wishi ng to preserve a district court’ s jurisdiction over a settlement a greement can only do so in one of two ways: (1) through an express retention of j urisdiction by the court or (2) by incorporation of the set tle ment agreement into the judgment. ” ). 11 Case: 12-30965 Document: 00512484265 Page: 11 Date Filed: 12/30/2013No. 12

- 30965 Venables suggest s as much. 17 Therefore, the y have not demonstrated that the district court could exercise ancillary jurisdiction. Because the district court lacked subject

- matter jurisdiction over the state claims the Venables brought against LWCC , we need not decide whether the court correctly determined that LWCC’s decision to withhold consent on the settlement was a proper exercise of its pow er under the LHWCA . The

sum mary judgment is REVERSED, and a judgment of dismissal for want of jur isdiction is RENDERED.

17 The Venables principally rely on Bell v. Schexnayder , 36 F.3d 447 (5th Cir. 1994), decided shortly after Kokkonen . In Bell , however , the parties had entered into a settlement agreement , and the district court ’s order expressly retained jurisdiction over the settlement agreement. See id. at 449 (“On October 14, the court sig ned a sixty day order of dismissal. The order states that the court, ‘having been advised by counsel for the parties that the above action has been settled,’ was dismissing the case ‘without prejudice to the right, upon good cause shown within sixty (60) days, to reopen it if settlement is not consummated and seek summary judgment enforcing the compromise.’”). Bell does not apply where the parties have not entered into a settlement agreement. 12 Case: 12-30965 Document: 00512484265 Page: 12 Date Filed: 12/30/2013