1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

th Circuit Rul e 206

ELECTRO NIC CIT

ATION: 2004 FED App . 0073P (6th C ir.) File Name: 04a00 73p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
U NITED S TAT ES OF A MERICA ,

Plaintiff-Appellee,

v.

C ERTAIN L AND S ITU AT ED IN
THE C ITY OF D ET ROIT , W AYNE C OUNTY , M ICHI GAN ; 0.74 A CRE OF L AND , M ORE
OR L ESS , S ITUATED I N THE C ITY OF D ET ROIT , W AYNE C OUNTY M ICHI GAN , et al.,

Defenda nts,

D ETROI T I

NTERNATI ONAL B RIDGE C O ., Proposed Interve nor-Appe llant,

C OMM ODITIES E XPORT C OMPANY ; W ALTER H. L UBIENSKI , Defenda nts-Appe llees. X - - - -
> , - - - - - - - - - - - - - - - - - - - - - - N No. 02-1591 2 United Sta tes v. Cer tain Land, e t al. No. 02-1591

Appeal from the United States District Court for the Eastern District o f Michig an at Detroit. Nos. 79-73934; 96-75494; 96-75495; 01-70391—Gerald E.

Rosen, District Judge. Argued: October 29, 2003
Decided and Filed: March 9, 2004

Befor e: NORRI S, BATCHELDER, and COL E, Circuit Judges.

_________________ COUNSEL

ARGUED: Cra ig L. Jo hn, DYKEMA GOSSETT, Bloomfie ld

Hills, Mich

igan, f or Appel lant. Stephanie Ta i, UNI TED STATES DEPA RT MENT OF JU STICE , Washington, D.C., Walter H. Lubie nski, Dearborn, Michigan, for Appellees. ON BRI EF: Mark H. Su t ton, DYKE

MA GOSSETT, Bloomfield Hills, Mich igan, f or Appel lant. Stephan ie Tai, Lisa E. Jones, UNI TED STATE S DEPARTMENT OF JUSTICE, Washington, D.C., Walter H. Lubie nski, Dea rborn, Mi chigan , for App ellees.

NOR RIS , J. delivered the opinion of the court, in which BATCHEL

DER, J., joined. COLE, J. (pp. 8-13), delivered a separate concurring opinion.

_________________ OPINION

_________________ ALAN E. NORRI S, Circuit

Ju dge. Proposed intervenor Detroit International

Bridge Co. (“DIBCO”)

appeals from the denial of its motion to interv ene of right. I t sought t

o intervene as a defendant in a condemnation act ion in whichNo. 02-1591 United Sta tes v. Cer tain Land, e t al. 3

the condemned land was owned by a third party. The district court denied DIBCO’s motion for f ailure to meet th e req u irements of interv ention of

right un der Fe d. R. Civ. P. 24(a). We conclude that inter vention w as improp er beca use t he district court lacked jurisdiction to hear DI BCO’s underly ing cla im. In 1979, the United States determined to expand aDetroit customs facility and commenc ed a condemnation action agai nst DIB CO’s land . DIB CO challe nged th e condemnation. In1991, the United States and DIBCO a greed to settle the

condemn ation pr oceeding. They agreed to a memorandum

of agr eement ( “MOA”)under wh ic h the Unite d States agreed to enlarg e the scope of its expansion and condemn third party proper

ty, including the totality

of a lot owned by Commodities Export Co. and Walter H. Lubienski (“Commodities”). DIBCO ag reed to compensate the United States for the c osts of condemnation. DIBCO claims that the MOA ga ve it the r ight to be consulte d rega

rding th e costs of conde m nation, and that it only required D IBCO to pay condemnation

costs that were reasonable in li ght of federal regula tions.

In1996, the

United Sta

tes broug ht a condemnation

action agains tCommodities. DIBCO’s counsel was in attendance at conferences inthat action at which the United States indicated that it would not seek to condemn the entirety of Commodities ’ land. DI

BCO regarded the failure

to condem

n all of Commodities’ land as a breach of the MOA, but it did notseek to intervene in t his co ndemn ation procee ding. Instead, DIBCO sought to re open the 197 9 con demnation actionon the grounds that the MOA had been breached. The 197 9 act ion went to trial, and on February 21, 2002, a jury awarde d DIB CO nearl

y $4 .1 million in

compensa

tion for it s land.

Inthe mean

time, the U

nited State s c ha nged its position regarding Commodities’ land and in 2001 commenced a new condem nation procee ding ag ainst the e ntir et y o f 4 United Sta tes v. Cer tain Land, e t al. No. 02-1591

Commodities ’ property. DI BCO again f

ailedto intervene. DIB CO contends that it had no reason to intervene unt i l November

of 2001, when it learned that the United States and Commodities had entered a settlement und er which the United States wou

ld compen sate Commo dities in the amount of $14.9 million, far in excess of the $36 6,000 a t which its land had been appraised, and after the United States indicated that it may seek to enfor

ce the MOA against DI BCO. On December

28, 2001, DIBCO broug

htthis motion to intervene inthis conde

mnation pr

oceedin g, see king de claratory an d injunctive relief from enforcement of the MOA, and

seeking to challenge the grant of

a motion to vacate an opi nion that al lo we d C om mo di ti es ’ v al ua ti on te st im on y.
The district court denied DIBCO’ s motion t o intervene of right for fail ure to me et the re quireme nts of Fed. R. Ci

v. P. 24(a). DIB CO appea

ls that fin ding. We a

ffir m the d istrict court’s denial be cause

the district court lacked jurisdiction to hear DI BCO’s un

derly ing cla im.

This court is under an

“indepe ndent obli gation t

o police i ts
ownjurisdict ion, ” regardless of whether the parties challenged

jurisdiction. SE C v . B as ic En er gy & Affi liated R es., Inc. , 273 F.3d 657, 665 (6th Cir. 2001). We lac k appella te jurisdict

ion wher e the distr ict court lacked subject matter jurisdiction. We review the district court’s exercise of sub ject matter jurisdiction de novo

. Care Choices HMO v

. Engstrom , 330 F.3d 786, 788 (6th Cir. 2003).

The district court could not permit interventionunder Rul e 24(a) becau se it lacked subject matter jurisdiction over DIBCO’sunderlying

claim. DIBCO soug

ht declaratory

and injunctive relief against the United States, and the United States had not wa

ived its sov ereig

n immunity

to such a c laim. No st atute wa

ives the U

nited State s’ sover

eign immu

nit y fromcontract claims for declaratory or inju nctive r

elief in districtcourt . DIBCO ar gu es that the district court had subject matter ju risdiction to hear

its claim u

nder 28 U .S.C. § 1367. Tha

t statute provides i

n part as follows:No. 02-1591 United Sta tes v. Cer tain Land, e t al. 5

Exceptas provided in subsections (b) and (c ) or a s expressly pr ov id ed ot he rw is e b y F ederal statute, in any civilaction of

which th e district courts have original jurisdiction, the d istrict courts shall have supplemental j urisdi ctionover all

other cl aims that a

re so re lated to claims in the action within such original jurisdiction that they form part of the same case or contro v ersy under Article II I of t he United

States Cons t ituti on. Such supplemental jurisdict

io n shall include claims that involve th e joinder

or interv ention of

additiona l parties

. 28 U.S.C. § 1367(a). This provision does not constitut e a waiver of sovereign immunity. “ A waive r of so vereign immunity mu st be unequivocally e xpressed in the statutory text . . . and will not be implied.” La ne v. Pena , 518 U.S. 187, 192 (1996) (citations omitted). “Moreover, a waiver of the Government’s sov ereig n immunity

will be str

ictly construed
, in term s of scope, in favor of the sovereign.” Id

. (citing United States v. Williams , 514 U.S. 527, 531 (1995)). The s tatut e that DI

BCO cite s does not “

unequivo cally express” an intent to waive s overeig

n immunity, and th eref

ore cannot constitute a grant of subj ectmatter jurisdiction over DIB CO’s cla

im.

The district court also lacke d subject matter jurisdiction over DIBCO’s

underlying

claim because it was presented as grounds for a motion to intervene in a condemnat io n procee ding. Because DI

BCO seeks to intervene t o assert a claim agains t the Unite d States, i t seeks to interve ne as a defendant inthe condemnation proceeding. Federal Rule of Civil Procedu

re 71A( e) describes the ty pes o f defen se plead ings p ermit ted in a cond emnat ion p roceed ing: Appearance or Answer

. If a defenda nt has no objection or defe nse to the taking of the defendant’s proper ty, the defendant may

serve a notice of

appearance designa

ting the propert

y in whic h the defendant claims to be interested. Thereafter, the defendant sha ll receive notice of all proceeding s affec ting it. If a defe ndant has any 6 United Sta tes v. Cer tain Land, e t al. No. 02-1591

objectionor defense to the taking of the p roperty, the defendant shallserve a

n answer within 20 days afte

r the service of notice upon the defenda nt. The a nswer sh all iden tify the prope

rty in which the defen

dant cla im s t o have aninterest, state the nature a nd extent of

the inter est claimed, and state

all t he defendant’s objections and defenses to t he taking of the property . A defendant waives all the defenses and objections not so presented, butat the trial of the issue of just compensation, whether
or not the defend ant has previously appe ared or
a ns wered, the defendant may present evidence as to the amount of the compensation

to be pa id fo r t he pr op er ty, and the defendant may

share in the distribution of the award. No other

pleading or motion a sse rtin g any additional defense or objection shall be allowed.

The Rule evidences that distr ict cour ts only have jurisdiction to hear defenses and ob jec tions from

defenda nts in condemnation

cases. A district c ourt lacks jurisdic t ion to hear counter claims against the United States in co ndemn ation
cases. United States v. Banisadr Bldg. Joint Ven ture , 65 F.3d 374, 380 (4th Cir. 1995).

Inaddition, case law indicates that even a party that holds
a property intere st in the tak en land c ould not pr esent a contract claim in a

condemnation proceeding against its own pro pe rt y. Id. at 380. Th erefor e, DI BCO, whic

h lacks an y propert y interest in Comm odities ’ land, is also barred from assertinga contract claim in a condemnation proceeding , and the district court had no subject matter jur is diction to hear DIB CO’s cla

im.

Eve n if DIB CO asser

ts that it se eks to inte

rvene so lely

to challenge the reasona

bleness o f the sett

lement am

ount, a ba sis for intervention which could be classif ied as a defense or objection
, it would

stil l not fall w ithi n the c lass o f plead ings that a district court has jurisdiction to hear in a condemnation procee ding. Rule 71A(e) requires that thedefendant “identify th e proper ty in which the defe ndant claims to have anNo. 02-1591 United Sta tes v. Cer tain Land, e t al. 7

inter est[. ]” Fed. R. Civ. P. 71A(e). The Rule thus evidences that a district court only has jurisdiction to enterta in defenses and objections from pa

rties who

could ass er t proper

ty interest s in the condemned l and. DIBC O holds no prope rty i n terest in Commodities’ land, and the district court lacked subject matter jurisdiction to hear its purported defense or objection.

For the foregoing reasons, the judg ment of the district court is AFFIRMED

. 8 United Sta tes v. Cer tain Land, e t al. No. 02-1591

_________________ CONCURRENCE

_________________ R. GUY COLE, JR., Circuit Judge, concur ring. I conc

ur only in the judgment of the majority’s opinion affirming the districtcourt’s denial of DIB CO’s motion t o int ervene as of right pursuant to Fed. R. Civ. P. 24(a)(2). I would a ffirm the denial of DIBCO’s motion to intervene on the ground that the districtcourt did not ab use its discretion in finding that DIBCO’smotion pursuant to Fed. R. Civ. P. 24(a)(2) w as untimely.

The majority opinion fails to reach the Rule 24(a)(2) factors and instead c oncludes

that DI BCO’s mot

ion to intervene as of right was properly

denied bec ause the district court lacked jurisd iction to hear D IBC O’s “und erly ing cla im

. ” The majority opinion, however, fails to take into account the fact that DIBCO asserte d two ground s for inte rvention , the firs t concerning

(and seeking

a declaratory

judgm ent co ncerni ng) its duty to reimburse the Gove rnment for the settlement of the Commodities condemna

tion pursu

an t to the MOA, and the
secon d c oncerning the reasonableness of the settlement amount agreed to between the Gove rnment and the Commodities defendants. In other words, beca u se DI BCO faces being the de facto remuner ato r for the propert ies, it sought to intervene i n o rder fo r the d istr ict co urt to adjud ge (1) whether or not it wa s liable as such a remunerator pursuant to the MOA and (2) whether the $14.9 million settlement

agree d upon bet

ween the Governme nt an d the defendants was reasonable.

Ingrounding its decision

concerning a motion to intervene
as of right in questions of independent jurisdiction, the majority turns a bl in d e ye to the longstanding principle that interventionas of

right pursuant

to Rule 24(a)(2) requires no independent

ground of jurisdiction to support the applicant’s claim. 32A A M

. J UR . 2d Fede ral Court s § 700 (2003); JamesNo. 02-1591 United Sta tes v. Cer tain Land, e t al. 9

Wm. Moore et al., 6 M OORE ’ S F EDERA L P RACTICE § 24.22 (3rd ed. 1998); Charles Alan Wright et al., F ED ERAL P RACTI CE AND P ROCEDURE § 1917 (2n d ed. 1986 ); see also International

Paper Co. v. Inhabitants of Town Jay
, Me. , 887 F.2d 338, 346 (1st Cir. 1989) (parties entitled to intervention as of rig ht fall within a federal court’s ancillary jurisdiction;
no independ

ent basis of jurisdi ction is ne cessar y) ; Cu r tis v. Sears, Roebuck &

Co. , 754 F.2d 781 (8th Cir. 1985) (same). Only where intervention is permissive, pursua nt to Rule 24(b), must independent jurisdictional grounds be show n

. M OORE ’ S F EDERA L P RACTICE § 24.22 (3rd ed. 1998). But intervenors as of right

– the category

in which DIB CO claims to belong – need not

show independent jurisdictional grounds because the cour t has suppl emental j uri sdiction o ver thei r claims. Owen Equi

pment & Erection Co. v. Kroger , 437 U.S. 365, 376 n. 18 ( 1978). I

t is unclear

why the majority

forgoes
an analysis under Rule 24(a )(2). Moreover, our circuit has
ne ver dismissed a case pursuant to Rule 24(a)(2) for l ack o f
anindependent basis for jurisdiction – indeed , i t seems that no federal court of appeals has eve r done so.

Jurisdiction to hear c laims by intervenors of right depends only upon the cour

t’s j ur is di ct io n t o h ea r t he pr im ar y, underlying

actionand

the terms of supplemental jurisdiction set forth in 28 U.S.C. § 1367. DIBCO eas ily satisfies that standard here: as the potential remunerator for the property

at issue, its claims

are “so related to claims i

n the act ion within suchoriginal jurisdiction thatthey form par t of the sa me case or controversy .” 28 U.S.C. § 1367. There is no dispute that the district court had jurisdiction to hear the action between the United Sta

tes and th e Commoditie s defend ants. Ac co rd in gl y, the “inquiry into the substantiality of the claimed interest” by DI

BCO “is necessarily

fact specific” and tied only to the fac to rs enume rated in Rule 24(a

)(2), th at is, the extent of DIBCO’s interest in the subject of the action and the exte nt to which not i nterv ening m ay impa ir or impede DIBCO’s ability

to protect that interest. Id. 10 United Sta tes v. Cer tain Land, e t al. No. 02-1591

Not only does the majority

opinion erroneously conc lude that DI BCO wa s required to demonstrate an independent basis for jurisdiction in order to interve

ne pursua nt to Rule 24(a)(2), but it als o g rounds that conclusion in a theory of
sover eign immunity that runs co nt ra ry t o l eg al au th or it y. The majority concludes that “[n]o statute waives the United States’ sovereign immunity fr om contract claims for declaratory

or i n junctive relief i n district court.” Yet as a general proposition, irrespective of a statutor y pr ovision waiving sover eign immunity , the “g overnme nt consen ts to be sued

. . . by those with whom it has privity of contract.” First Hartford Corp. Pension Plan & Trust v. United States , 194 F.3d 1279, 1289 ( Fed. C ir. 19 99) (q uoti ng EricksonAir Crane Co. of

Wash. v. U.S. Dep’t of the Air Force
, 731 F.2d 810, 813 (Fed. Cir. 1984). DIBCO was in privity of contract with the Government by vir

tue of the MOA and, as such, our circuit recognizes that a district court would have jurisdiction
over such an action for equitable or injunctive relief

. S ee Veda, Inc. v. United States , 111 F.3d 37 (6th Cir. 1997). At the very lea st, the privity

-of-contract q

uestion f ollows, rather than precedes, the Rule 24(a)(2) dete rmination.

Ev enif the Government had not waived its sover eig n im mu ni ty, DIBCO would still be permitted to i nte rvene because DIBCO’s attempt to have its voice heard with respect to the set tle ment amount is not a counterclaim at all. The districtcourt would have jurisdiction to entertain DIBCO’ s c oncerns relating

to the re asonable

ness of th e sett lemen t amount in the same way tha

t it would h ave jurisdict

ion to enterta inobjections by the Commodi ties defenda nts concerning the reasonablene ss of the settlement amount.

The ma jo ri ty o pinion also errs in its Rule 7 1(A) analy sis. Th e majority

conclude s that DI

BCO has f

ailed to a ssert a

n “objection” to the amount of the settlement. H owever, DIBCO’sobjectionto the sett lement am

ount and it s attempt to have a voice in the settlement’s ul timate v alue is the explicit basis for its motion to intervene. Fur therm ore, the majority opinion’s conclusion that district courts lackNo. 02-1591 United Sta tes v. Cer tain Land, e t al. 11

jurisdiction to determine any thing other than the condemnor and condemnee’s interests in a condemnation action has no support in the l a w of our circuit or in the plain languag e of Rule 71(A) (e). To the co ntrar y, it is r ecogn iz ed that Rul e 71A(e) is not exhaustive of al l parties

who migh

t become defenda nts in a condemnation

procee ding: “Since there is no provision in Rule 71A for int ervention, Rule 24's standard governs.” 13 M OORE ’ S F EDERA L P RACTICE § 71A.04[2][b] (3rd ed. 1998). Moreo ver, Rule 71(A)(e ) is not a jurisdictional bar to the district court’s cons iderati on of the interventionmotion and the majority opinion fails to present any binding authority or le gal reasoning otherwise. Alth ough
caselaw may

support th e proposi

tio n th at only condemnee s may be compensated pursuant to a condemnation action
, the re is no leg al autho rity

barring a party ’s interv ention as a defendant where, a s i s the cas e here, a propose d defendantintervenor

has a leg

itima te basi s for objecting to the settlement amount.

Inde ed, the only authority the majority cites for i t s proposition that only condem nors or condemnees may intervene as defendants in condem nati on proce edings i s United States v. Banisadr B ldg. Joint Venture , 65 F.3d 374, 380 (4th Cir. 1 995). Not

only is Banisadr

not binding upon this Court, but t

he Four th Circuit itself conceded (in the very passa ge referred to by

the maj ority) that the ca se law on whic h it relied w as “sparse” and only “sugg est[ed]” th at a contract claim could not

be asser ted in a motion to intervene ina condemnation proceeding. Id. Indeed, the case law upon whichthe Fourth Circuit itself relied was a lone district court opinion from 1977 . Finally , it i s worthwhile to note that no subse quen tFourth Circuit panel, district court, or other federal court of

appeals has ever cited Banisadr for the proposition for which the majority now invokesit as decisive legal s upport for its nove l conclus ions.
Here, the Gove

rnment a nd the Commo diti es de fendant s intend to set tle for

$14.9 million – an amount for which the Government

m a y seek to h old DIBC O liab le. Ev en tho ugh 12 United Sta tes v. Cer tain Land, e t al. No. 02-1591

DIB CO seeks no compensation, it co uld appro priately intervene as a d e fendant to challenge the settlement amount for whi ch it mig

ht be responsible, so long as it satisfies the require ments for int ervent ion set forth in Rule 24(a)(2). A
casesuch as th

is one, however

rare it may

be, is par adigma tic of an appro

priate in stance i

n which to

permit a party to intervene as a defendant in a condemnation procee ding where that party is not a conde

mnee. Having determinedthat inde pendent j urisdicti on is imma t erial to our con siderati on of DI BCO’s mot

ion to intervene as of right, I turn now to the r elevant analy sis pursuant to Fed. R. Civ. P. 24(a)(2). In order to intervene as of right pursuant to Rule 24(a)(2), D IBCO ha d to establish: (1) the timeliness of its application to interven e; (2) a substantial legal i

nterest in the Commodities/Lubienski
co n demnationcases; (3) impairment of its ability to prote ct that interest inthe absence of interv ention; a nd (4) ina dequate representation

of that int

erest by partie s alrea dy before

the court. Michigan State AFL-CIO v. Miller
, 103 F.3 d 1240, 1245 (6th Cir. 1997) (citations omitted). The condemnation actions at issu e were fi led in 1996 ; DIB CO did not mo ve to intervene until 2001. The district court found that DIBCO’ s motion to interve

ne was un

timely and denie d it s mo tion to intervene as of right on that basis. The district court’s timelines s d ecision is reviewed for an abuse of discre tion. Grubbs v. Norris , 870 F.2d 343, 345 (6th Cir. 1989).

The timeliness prong of Rule 24(a)(2) requires the mova nt to file its motion to intervene promptly after discover y of its interest inthe litigation. United States v. Tennessee , 260 F.3d 587, 594 (6th Cir. 2001). D IBC O conten ds that its respon sibility

to timely intervene ar

ose on November 15, 2001, when it learned the amo unt of the Commodities defenda nts’ recent settlement

with the Government – that is, when DIBCO learne d the amou nt of its pot ential lia bility pursuant to the MOA. The district c ourt, how ever, pr operly concluded

that DIBCO s hould have moved to intervene within a reasonable period after

Decemb er 12, 19 96, which isNo. 02-1591 United Sta tes v. Cer tain Land, e t al. 13

when DIB CO received notice that the first two condemnation suits had been filed. In short, 1996 wa s when DIBCO lea rned of the fact of its potentia

l liability under the MOA. I t should have intervened then, and not waited u ntil it learned the

amo unt of that potential liability in 2001. See Stott s v

. Memphis Fire Dep’t , 679 F.2d 579, 584 & n.3 (6t h Cir. 1982) (applic ants for intervention “should have a ttempted t o inte rv ene when they first became aware of the action, ra ther than adopting a ‘wait-and-see’ a pproach.”).

Ac co rd in gl y, the district court did not abuse its discre tio n infinding DIBCO’ s motion to intervene untimely. Alth ough Iwould find

that DI BCO – as t

he potent i al remunerator for the hefty $14.9 settlement reached between the Government and the Commodities def

enda nts – easily satisfies the remainingrequire

ments for intervention, the untimeliness of its motion is fa

tal. I would therefore affirm the district court’s denial of DI

BCO’s mot

ion to inte

rvene on that basis alone.