*

Honorable Jerome Farris, Senior U.S. Circuit Judge for the Ninth Circuit, sitting by

designation. 

 1

Ingram's father, Thomas Trammell, owned the car that Ingram was driving and is also a

plaintiff-appellant in this lawsuit. 

United States Court of Appeals,

Eleventh Circuit.

No. 97-6078.

Angela Suzanne INGRAM, individually and as Custodial Parent of Zachary James Glass, a

deceased minor; Thomas H. Trammell, Plaintiffs-Appellants,

v.

CSX TRANSPORTATION, INC., a corporation; Albertville, City of, Defendants-Appellees.

July 16, 1998.

Appeal from the United States District Court for the Northern District of Alabama. (No. CV-95-AR1314-M), William M. Acker, Jr., Judge.

Before HATCHETT, Chief Judge, and FAY and FARRIS*

, Senior Circuit Judges.

HATCHETT, Chief Judge:

Angela Ingram suffered injuries and her ten-year-old son, Zachary Glass, died when the car

Ingram was driving collided with a train at a railroad crossing in Albertville, Alabama. Ingram,

individually and on behalf of Zachary, filed the present state law negligence action against the City

of Albertville (the City), which owned and operated the railroad crossing, and CSX Transportation,

Inc. (CSX), which owned and operated the train and railroad tracks.1

 Ingram's complaint alleged

that the warning devices at the railroad crossing were inadequate. The district court granted

summary judgment in favor of the City and CSX, finding the Federal Railroad Safety Act of 1970

(FRSA), as amended, 49 U.S.C.A. §§ 20101 et seq. (West 1997 & Supp.1998), and accompanying

federal grade crossing regulations, 23 C.F.R. §§ 646.214(b)(3) and (4) (1997) preempted the claim.
We affirm.

I. BACKGROUND

The accident giving rise to this lawsuit occurred shortly after 5 p.m. on January 10, 1995,

as Ingram, traveling down McKinney Avenue with Zachary, her oldest son, in the front passenger

seat, was on her way to a child day care center to pick up her youngest son. Although Ingram had

often taken this route and knew that it required her to cross CSX's railroad tracks, she had never

before seen a train at the crossing.

Advance warning signs, such as no-passing zone signs and crossbucks, preceded the

McKinney crossing on each approach. These passive warning devices had been installed pursuant

to appropriations of funds from the Federal Highway Administration. No active warning devices,

such as flashing lights and gates, preceded the intersection.

Before reaching the crossing, Ingram slowed down to 25 miles per hour, but does not recall

whether she stopped. She looked both ways and saw no oncoming train. A building and fence to

her right may have obstructed her view, as well as cars traveling on Railroad Avenue, which runs

perpendicular to McKinney Avenue and parallel to the railroad tracks. As Ingram proceeded across

the tracks, a CSX train struck her car.

In April 1995, Ingram, an Alabama resident, filed this lawsuit in the Circuit Court of

Marshall County, Alabama against CSX, a corporation incorporated under the laws of Virginia with

its principal place of business in Florida. In May 1995, CSX removed the case to the United States

District Court for the Northern District of Alabama, asserting diversity of citizenship as the basis

for federal jurisdiction. Several months later, Ingram moved to amend her complaint to add the City

as an additional defendant. The district court granted her motion.

In October 1996, the City and CSX filed separate motions for summary judgment. The
district court granted these motions, holding that FRSA preempted Ingram's inadequate signalization

claim because federal funds had "materially participated" in the installation of the warning devices

at the McKinney crossing.

II. ISSUES AND STANDARDS OF REVIEW

 We address two issues in this appeal. The first is whether the addition of the City, a

nondiverse defendant, destroyed federal subject matter jurisdiction and, if so, whether this court may

dismiss the City in order to retroactively restore diversity of citizenship. We review subject matter

jurisdictional issues de novo. Broughton v. Florida Int'l Underwriters, Inc., 139 F.3d 861, 863 (11th

Cir.1998).

After resolving the jurisdictional question, the second issue we consider is whether the

district court erred in granting summary judgment in favor of the appellees on federal preemption

grounds. This court reviews the district court's grant of summary judgment de novo, applying the

same legal standard that the district court employed in the first instance. Hairston v. Gainesville Sun

Publishing Co., 9 F.3d 913, 918-19 (11th Cir.1993).

III. DISCUSSION

A. Jurisdiction

 Ingram first raised the issue of whether federal subject matter jurisdiction exists at oral

argument. "Questions of subject matter jurisdiction may be raised ... at any time during the

pendency of the proceedings." United States v. Ayarza-Garcia, 819 F.2d 1043, 1048 (11th Cir.),

cert. denied, 484 U.S. 969, 108 S.Ct. 465, 98 L.Ed.2d 404 (1987). Indeed, we are "bound to

ascertain whether we possess ... subject-matter jurisdiction whether it is challenged by the litigants

or not[.]" Escobedo v. Estelle, 655 F.2d 613, 614 (5th Cir, Unit A.1981). Thus, although "we

normally will not address issues raised for the first time at oral argument, "[a]ny time doubt arises
 2

It is undisputed that, as an alleged joint tortfeasor, the City is a "dispensable" party. See

Temple v. Synthes Corp., Ltd., 498 U.S. 5, 7, 111 S.Ct. 315, 112 L.Ed.2d 263 (1990) (citing

Advisory Committee Notes to Fed.R.Civ.P. 19(a), which state that "a tortfeasor with the usual

"joint-and-several' liability is merely a permissive party to an action against another with like

liability"). 

as to the existence of federal jurisdiction, we are obliged to address the issue before proceeding

further.' " Rice v. Ford Motor Co., 88 F.3d 914, 917 n. 5 (11th Cir.1996) (quoting Atlanta Gas Light

Co. v. Aetna Cas. and Sur. Co., 68 F.3d 409, 414 (11th Cir.1995)). After oral argument, the parties

submitted supplemental briefs on the jurisdictional issue.

This case involves no federal question. Jurisdiction therefore depends upon diversity of

citizenship. It is axiomatic that lack of complete diversity between the parties deprives federal

courts of jurisdiction over a lawsuit. Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267, 2 L.Ed. 435

(1806). At the time CSX removed this case to federal district court, complete diversity

existed-Ingram is an Alabama resident and CSX is incorporated in Virginia and maintains its

principal place of business in Florida. After removal, however, Ingram moved to amend her

complaint to add the City as an additional defendant. The district court granted the motion and

entered an order stating that it had done so "with the EXPRESS UNDERSTANDING that the

addition of a non-diverse defendant [would] not destroy [the] court's diversity jurisdiction which

[had] already attached."

The appellees argue that the district court's diversity jurisdiction was determined at the time

CSX filed its notice of removal. The appellees rely on the Supreme Court's decision in FreeportMcMoRan, Inc. v. K N Energy, Inc., which held that "[d]iversity jurisdiction, once established, is

not defeated by the addition of a nondiverse [dispensable] party to the action." 498 U.S. 426, 428,

111 S.Ct. 858, 112 L.Ed.2d 951 (1991).2

 In Freeport, a gas seller brought a breach of contract

action against a buyer. The seller then assigned its interest in the contract and substituted the
 3

Ingram's supplemental brief assumes, and the appellees do not seem to contest, that the City's

addition may be construed as a joinder. 

nondiverse assignee as a plaintiff pursuant to Fed.R.Civ.P. 25(c). In a per curiam opinion, the

Supreme Court held that "diversity of citizenship is assessed at the time the action is filed[,]" and

that "if jurisdiction exists at [that] time ... such jurisdiction may not be divested by subsequent

events." Freeport-McMoRan, 498 U.S. at 428, 111 S.Ct. 858. The court rejected the opposite rule,

which it reasoned could "have the effect of deterring normal business transactions during the

pendency of what might be lengthy litigation." 498 U.S. at 428, 111 S.Ct. 858. The appellees assert

that, under Freeport, federal diversity jurisdiction attached at the time of removal and was not

destroyed when the district court added the City as a defendant. We disagree.

 CSX and the City construe Freeport 's holding too broadly. Freeport does not stand for the

proposition that all additions of nondiverse parties are permissible as long as complete diversity

existed at the time of commencement of the lawsuit. Instead, the holding in Freeport relies upon

the assignee's having been substituted as a plaintiff under Fed.R.Civ.P. 25(c). In this case, the City's

addition was unrelated to rule 25. As a result, we find Freeport to be inapplicable. When the

district court granted Ingram's motion to add the City as a defendant, complete diversity no longer

existed between the parties, thereby destroying subject matter jurisdiction.

Although Ingram styled her motion to add the City as a motion to amend her complaint

pursuant to Fed.R.Civ.P. 15(a), this amendment amounted to a joinder, pursuant to Fed.R.Civ.P. 20.

We presume that Ingram sought to add the City because her alleged right to relief against it arose

out of the same transaction or occurrence as her alleged right to relief against CSX, and because

questions of law or fact common to both defendants were likely to arise in the action. See

Fed.R.Civ.P. 20(a).3

 Thus, in determining whether to grant Ingram's motion, the district court
 4

In relevant part, Fed.R.Civ.P. 21 provides as follows:

Misjoinder of parties is not ground for dismissal of an action. Parties may be

should have considered 28 U.S.C.A. § 1447(e), which provides: "If after removal the plaintiff seeks

to join additional defendants whose joinder would destroy subject matter jurisdiction, the court may

deny joinder, or permit joinder and remand the action to the State court." 28 U.S.C.A. § 1447(e)

(West 1994).

The district court had no discretion to add the City as a defendant, retain jurisdiction and

decide the case on the merits. Indeed, section 1447(e)'s legislative history indicates that Congress

rejected a proposal that would have allowed district courts to join certain nondiverse parties and still

decide the merits of the dispute. H.R.Rep. No. 889, 100th Cong., 2nd Sess. 72-73 (1988), reprinted

in 1988 U.S.C.C.A.N. 5982, 6033-34 (indicating that the proposal was rejected because it "would

[have] provide[d] a small enlargement of diversity jurisdiction"); see also David D. Siegel,

Commentary on 1988 Revision of Section 1447, in 28 U.S.C.A. § 1447 (West 1994). Because

section 1447(e) was applicable here, the district court was left with only two options: (1) deny

joinder; or (2) permit joinder and remand Ingram's case to state court. The district court chose to

permit the diversity-destroying joinder and, as a result, it should have remanded this action to

Alabama circuit court.

 Ingram urges this court to reverse the summary judgment ruling and remand to the district

court with directions to remand this case to Alabama circuit court. We find this course of action

unnecessary. In Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 109 S.Ct. 2218, 104

L.Ed.2d 893 (1989), the Supreme Court held that federal courts of appeals have the authority-like

that given to the district courts in Fed.R.Civ.P. 21-to dismiss dispensable, nondiverse parties to cure

defects in diversity jurisdiction.4

 Ingram argues that dismissing the City in this case would be
dropped or added by order of the court on motion of any party or of its own

initiative at any stage of the action and on such terms as are just. 

inappropriate for two reasons. First, Ingram asserts that this court is as limited in its options as the

district court was once it permitted the City to be joined-the district court's only option under section

1447(e) was to remand the case to state court. Likewise, Ingram claims, section 1447(e) leaves this

court with no alternative but to direct the district court to remand this case to state court. NewmanGreen 's broad language, however, belies Ingram's contention that the district court's joinder ruling

absolutely deprives this court of any discretion to retroactively restore subject matter jurisdiction.

See, e.g., Casas Office Machines, Inc. v. Mita Copystar America, Inc., 42 F.3d 668, 677-78 (1st

Cir.1994) (citing Newman-Green and dismissing dispensable diversity-spoiling defendants who

were added as parties to the lawsuit after the case was removed to district court).

Second, Ingram emphasizes the Supreme Court's qualifying language in Newman-Green, i.e.,

that appellate courts' authority to dismiss dispensable nondiverse parties "should be exercised

sparingly" and that the appellate court "should carefully consider whether the dismissal ... will

prejudice any of the parties in the litigation." Newman-Green, 490 U.S. at 837-38, 109 S.Ct. 2218.

Ingram claims that she will be prejudiced if we exercise our dismissal power here because the statute

of limitations has expired on any claim she may have had against the City. This consideration might

be persuasive where a litigant raises the jurisdictional issue at an earlier stage in the proceedings.

Ingram, however, waited until her oral argument presentation on appeal-long after the district court's

adverse ruling on the merits of her case. We decline to reward such delay. We therefore exercise

our authority, pursuant to Newman-Green, to dismiss the City of Albertville, Alabama. Having

retroactively restored complete diversity, we retain subject matter jurisdiction and reach the merits.

B. Preemption
 5

In its entirety, FRSA's preemption clause reads as follows:

Laws, regulations, and orders related to railroad safety shall be nationally uniform

to the extent practicable. A State may adopt or continue in force a law,

regulation, or order related to railroad safety until the Secretary of Transportation

prescribes a regulation or issues an order covering the subject matter of the State

requirement. A State may adopt or continue in force an additional or more

stringent law, regulation, or order related to railroad safety when the law,

regulation, or order—

(1) is necessary to eliminate or reduce an essentially local safety hazard;

(2) is not incompatible with a law, regulation, or order of the United States

Government; and

(3) does not unreasonably burden interstate commerce.

49 U.S.C.A. § 20106. 

Congress enacted FRSA "to promote safety in every area of railroad operations and reduce

railroad-related accidents and incidents." 49 U.S.C.A. § 20101. In furtherance of these goals, FRSA

gives the Secretary of Transportation the power to "prescribe regulations and issue orders for every

area of railroad safety." 49 U.S.C.A. § 20103(a). FRSA contains an express preemption clause,

which provides that the states may "adopt or continue in force a law, regulation, or order related to

railroad safety until the Secretary of Transportation prescribes a regulation or issues an order

covering the subject matter of the State requirement." 49 U.S.C.A. § 20106.5

 Congress enacted the Highway Safety Act of 1973, 23 U.S.C.A. §§ 101 et seq. (West 1990

& Supp.1998), in response to the Secretary's reports on grade crossing safety problems. This Act

makes federal funds available to the states in order to improve grade crossings. In return, the states

must "conduct and systematically maintain a survey of all highways to identify those railroad

crossings which may require separation, relocation, or protective devices, and establish and

implement a schedule of projects for this purpose." 23 U.S.C.A. § 130(d). The Secretary, through
 6

In relevant part, 23 C.F.R. § 646.214(b) reads as follows:

(b) Grade Crossing Improvements. ...

(3)(i) Adequate warning devices, under § 646.214(b)(2) or on any project where

Federal-aid funds participate in the installation of the devices are to include

automatic gates with flashing light signals when one or more of the following

conditions exist:

(A) Multiple main line railroad tracks.

(B) Multiple tracks at or in the vicinity of the crossing which may be

occupied by a train or locomotive so as to obscure the movement of another train

approaching the crossing.

(C) High Speed train operation combined with limited sight distance at

either single or multiple track crossings.

(D) A combination of high speeds and moderately high volumes of

highway and railroad traffic.

(E) Either a high volume of vehicular traffic, high number of train

movements, substantial numbers of schoolbuses or trucks carrying hazardous

materials, unusually restricted sight distance, continuing accident occurrences, or

any combination of these conditions.

(F) A diagnostic team recommends them.

(ii) In individual cases where a diagnostic team justifies that gates are not

appropriate, FHWA may find that the above requirements are not applicable.

(4) For crossings where the requirements of § 646.214(b)(3) are not applicable,

the type of warning device to be installed, whether the determination is made by a

State regulatory agency, State highway agency, and/or the railroad, is subject to

the approval of FHWA.

23 C.F.R. §§ 646.214(b)(3) and (4). 

the Federal Highway Administration (FHWA), promulgated additional regulations setting out further

conditions on the states' use of federal aid to improve grade crossings. At issue in this case are 23

C.F.R. §§ 646.214(b)(3) and (4) (hereinafter "(b)(3)" or "(b)(4)").6 These provisions require that a

grade crossing improvement project either include an automatic gate or receive FHWA approval if
federal funds "participate in the installation" of the warning devices. The issue presented here is

whether these regulatory provisions preempt Ingram's state law negligence claim based on

inadequate signalization at the McKinney crossing.

The Supreme Court specifically addressed the preemptive effect of sections (b)(3) and (b)(4)

in CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993). The

Court concluded that these regulatory provisions "displace state and private decision-making

authority by establishing a federal-law requirement that certain protective devices be installed or

federal approval obtained." 507 U.S. at 670, 113 S.Ct. 1732. The Court therefore held that "when

[these regulations] are applicable, state tort law is pre-empted." 507 U.S. at 670, 113 S.Ct. 1732.

The Court in Easterwood found, however, that the petitioner's state law claims were not preempted

because "the preconditions for the application of either regulation [had not] been met." 507 U.S. at

671, 113 S.Ct. 1732. Namely, the record in Easterwood did "not establish that federal funds

"participate[d] in the installation of the [warning] devices' " at the subject grade crossing. 507 U.S.

at 672, 113 S.Ct. 1732.

In this case, it is undisputed that federal funds participated in the installation of the passive

warning devices at the McKinney crossing. Three other circuit courts have held that such funding

equates to federal approval of the warning devices installed, thereby triggering federal preemption

of a plaintiff's state law negligence claim based upon inadequate signalization. See Armijo v.

Atchison, Topeka and Santa Fe Ry. Co., 87 F.3d 1188 (10th Cir.1996); Elrod v. Burlington

Northern R. Co., 68 F.3d 241 (8th Cir.1995); Hester v. CSX Transp., Inc., 61 F.3d 382 (5th

Cir.1995), cert. denied, 516 U.S. 1093, 116 S.Ct. 815, 133 L.Ed.2d 760 (1996). The Eighth Circuit

explained that "[f]ederal funding is the touchstone of [FRSA] preemption ... because it indicates that

the warning devices have been deemed adequate by federal regulators." Elrod, 68 F.3d at 244.
Similarly, the Tenth Circuit reasoned that "[t]he Secretary of Transportation's authorization of

passive warning devices [is] tantamount to a determination, pursuant to [section (b)(4) ], that only

passive, rather than active, warning devices [are] sufficient[.]" Armijo, 87 F.3d at 1190. Likewise,

the Fifth Circuit held that "[t]he fact that federal funds participated in the installation of the warning

devices legally presupposes that the Secretary approved and authorized that expenditure, which in

turn legally presupposes that the Secretary determined that the safety devices installed were

adequate to their task." Hester, 61 F.3d at 387.

Ingram argues, however, that the expenditure of federal funds should not, in and of itself,

trigger federal preemption in this case. She contends that section (b)(3) was not complied with and,

therefore, the railroad should not be permitted to use section (b)(4) to shield it from liability via the

defense of FRSA preemption. Specifically, Ingram asserts that she presented evidence tending to

indicate that the sight distance at the McKinney crossing was "unusually restricted," and that unsafe

conditions at the McKinney crossing gave rise to "continuing accident occurrences." Ingram argues

that, given these circumstances, active warning devices should have been installed pursuant to

section 646.214(b)(3)(i)(E), unless a diagnostic team "justifie[d] that [active warning devices were]

not appropriate," pursuant to section 646.214(b)(3)(ii). Ingram emphasizes that CSX failed to

present any evidence that a diagnostic team ever evaluated the McKinney crossing to make such a

determination regarding the appropriateness of passive warning devices. Thus, under Ingram's

theory, we have no occasion to consider section (b)(4)'s method for obtaining federal approval,

because section (b)(4) only enters into the analysis "[f]or crossings where the requirements of §

646.214(b)(3) are not applicable." 23 C.F.R. § 646.214(b)(4) (emphasis added).

Ingram's position is not without support. The Seventh Circuit in Shots v. CSX Transp., Inc.,

38 F.3d 304 (7th Cir.1994), held that mere federal financial participation in a grade crossing upgrade
project was insufficient to trigger FRSA preemption unless some evidence existed that the Secretary

of Transportation actually approved of the specific warning devices installed. The Seventh Circuit

declined to presume such approval from the expenditure of federal funds. At the time of the accident

giving rise to the claim in Shots, the grade crossing was equipped only with reflectorized crossbucks,

which had been installed pursuant to an agreement between the state of Indiana and the railroad to

"upgrade" thousands of the railroad's crossings to "minimum standards, as established by the

State[.]" 38 F.3d at 306. The Secretary of Transportation approved the project and provided federal

funding without receiving a report from a diagnostic team regarding the type of warning systems

required at each individual crossing. In concluding that the plaintiff's claims were not preempted,

the Seventh Circuit explained:

The agreement [between the state and the railroad] does not state or imply that the thousands

of crossings covered by it would be adequately safe if equipped with reflectorized

cross-bucks.... [T]he agreement is explicitly limited to providing the "minimum" in passive

protections.... Minimum is not a synonym for optimum, or even adequate.... So far as can

be gathered from the record compiled in the district court, the agreement was a step on the

road to adequate safety rather than a determination by the State of Indiana or the federal

Secretary of Transportation as to what safety devices would be adequate at each of the

thousands of crossings covered by it.

Thus we do not think it can be realistically said, to use the formulation in Easterwood, that

"the Secretary has determined the devices to be installed" at these crossing merely because

he authorized federal funds to bring them up to minimum standards, utilizing passive

warning devices solely. Indeed, it would have been an extraordinary act of irresponsibility

for the Secretary of Transportation, by approving the agreement, to preclude tort liability for

the railroad's failing to have active warning devices at any of the thousands of crossings

covered by the agreement, or otherwise to prevent the state from requiring adequate safety

devices at the busiest or most dangerous of these crossings, when no one in the federal

government had made a determination that the improvements to be made would bring all the

crossings up to a level of safety adequate to satisfy federal standards.

Shots, 38 F.3d at 308-09.

 We decline to adopt the Seventh Circuit's approach. Instead, we join the Fifth, Eighth and

Tenth Circuits in holding that the participation of federal funds in a grade crossing improvement
project triggers FRSA preemption of a plaintiff's inadequate signalization claim. We recognize that

the Secretary of Transportation's approval of funds to improve the McKinney crossing was only a

portion of a larger project to improve numerous grade crossings in Alabama. We do not think,

however, that this undermines our conclusion. It is true that the Secretary made no specific

administrative finding, pursuant to section (b)(4), that passive warning devices were sufficient to

address whatever safety hazards may have existed at the McKinney crossing. Such an express

finding, however, is not the only way for the Secretary to have "approved" of the safety devices that

were installed. The Secretary's approval may also be inferred. Thus, in authorizing the expenditure

of federal funds to install the passive devices at the McKinney crossing, we presume that the

Secretary approved of those devices. We think that this approval eliminates the need to consider

whether section (b)(3) conditions existed. As the Fifth Circuit explained in Hester,

The regulations direct the Secretary to authorize the expenditure of federal funds only on

projects that satisfy, inter alia, the requirements of federal law, specifically 23 U.S.C. §

109.... Under that section, "[n]o funds shall be approved for expenditure ... unless proper

safety protective devices complying with safety standards determined by the Secretary at

that time as being adequate shall be installed or be in operation at any highway and railroad

grade crossing...." 23 U.S.C. § 109(e)(emphasis added).

61 F.3d at 387 (footnote omitted).

Contrary to Ingram's assertion, this court's decision in Michael v. Norfolk Southern Ry. Co.,

74 F.3d 271 (11th Cir.1996), is inapposite. In Michael, the plaintiff alleged that the active warning

device at the subject crossing, an automatic gate, had been negligently installed because the gate arm

was too short. The Michael court labeled this type of claim a "negligent design or construction"

claim. 74 F.3d at 273. Ingram, however, does not allege that the actual passive warning devices at

the McKinney crossing were negligently installed or otherwise failed to comply with federal design

specifications. Rather, she contends that the entire passive warning design itself is "defective"

because active warning devices should have been installed. The court in Michael seems to allude
to this type of claim and labels it one for "defective design." 74 F.3d at 273. Citing Easterwood,

the court in Michael observed that "there can be no state law claim against the railroad for defective

design" because "[t]he crossing devices at issue ... were federally funded[.]" 74 F.3d at 273. Thus,

Michael supports our conclusion that Ingram's claim is preempted.

For the foregoing reasons, we affirm the judgment of the district court.

AFFIRMED.