* The Honorable Karl S. Forester , Chief United St ates District

Judge for the Eastern Dist

rict of Kentucky, sitt ing by designati on.

1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Six

th Circuit Rul e 206

ELECTRO NIC CIT

ATION: 2003 FED App . 0367P (6th C ir.) File Name: 03a03 67p.06



### UNITED STATES COURT OF APPEALS

FOR THE SIXT H CIR CUIT

_________________
M ARGO H UDSON ,

Plaintiff- Appellant

,

v.

B RYAN C OLEMAN ; E RIC R ODGERS , Defenda nts-Appe llees,

C ITY OF F LINT ,

Garnishee-Appellee. X

- - - -
> , - - - - - - - N No. 01-1653

Appeal from the United States District Court for the E astern D istrict of Michiga n at Detr oit. No. 97-71145—Denise Page Hood, District Judge.

Argued: December 12, 2002
Decided and Filed: October 14, 2003

Befor e: BATCHELDER and MOORE , Circuit Jud ges; FORESTER, Chief District Judge. * 2 Hudson v. Coleman e t al. No. 01-1653

_________________ COUNSEL

AR GUED: Dav id J. Nic kol a, N ICKO LA & N IC KOLA , Flint, Michig an, for Ap pella nt. P atric k L. Ros e, Lansi ng, Michigan, for Appellees. ON BRI EF: David J. Nickola, NICK OLA & NI CKOL

A, Flint, Michiga

n, for Ap pellant. Patrick L . Rose, L ansing, Michiga n, for Ap pellees

. FOR ESTER, D. J., delivered the opinion of the cour t, i n whichBATCHELDER, J., joined. MOORE, J. (pp. 15-21), delivered a separate dissenting opinion.

_________________ OPINION

_________________ FORESTER, District Jud ge. Pla intiff ap peals t he d istrict court’s order gr anting t

he City of Flint’ s (“City

”) motion t

o quash Plaintiff’s garnishment action against the City . For the followi ng re asons, we AFFI RM the judgment of the district court.

I

. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff filed an a ction in

state court asserting state and federalcauses o f action

againstOfficers Bry

an Colema

n, Eric Rodgers, and the City of Flint arising from the Officers’ theft of Hudson’s Cocker Spaniel, “Brandy .” The City removed the action to

the Easte

rn Dis tr ict of Michigan based on Plaintiff’s 42 U.S.C. §§ 1983 and 1985 claims.

The facts givin g ri se to this dispute are undisputed and
me ri tonly a brief discussion bef ore turning to the determinative legal i s su e of subject matter jurisdiction. Hudsonre port ed that her car had been stolen with her dog inside the car. Officers Coleman and Rodg ers res ponded to
a radio callto in vesti gate Hu dson’ s mis sing v ehicl e and d og.No. 01-1653 Hudson v. Coleman e t al. 3

1 Officers Colem an and R odge rs agree d to p ay $3 00,0 00 to settle Plain tiff’s claims aris ing from th e Off icer s’ thef

t of the dog. As wil l be disc uss ed, t he l egal issue present ed is whether the f ederal courts have juri sdic ti on to deter

mine w het her the City is liable for this de bt in Plain tiff’s garnishm ent actio n again st the City. The Officers located

the stolen vehicle and

proceeded to take the dog from the car

and ultim ately

to Officer Coleman’s house. The Offi cers then lied by repor ting that they did not find a dog inside the car. The truth concerning the theft of the would-be “$300,000 Cocker Sp aniel 1 ” finally surfa

ced five months later during an internal police depar tment investigation

in which the Of

ficers admitted to stealing the dog. The Cocke

r Spaniel was retu rned to H udson and

th e Officers faced discipline by the Police Department.

Af t er the district court granted the City ’s motion for summary judgme

nt dismissing it from the case, Hudson and the Officers entered into a c onsent judgment whereby Colemanwould pay $200,000 and Rodg ers would pay $100,000 in settlement of Hu dson’s cl aims. I

n an eff ort to collect upon the consent judgment against Coleman and Rodgers, Hudson fi led writs of gar nishment a

gainst th e C it y. Hudsonasse rted thatthe City would be liable to pay the consent judgmen

t becaus e of an indemnity ag reement between the City and the

Police Officers Union.

The i n demnification agreement under which H udson attemptsto coll ectthe conse nt judgme

nt from the

City provides :
Whenever

an y cl ai m i s m ad e o r a ny c i vil action is commenced

against an Employ

ee for injuries to persons
or propert y c aused by

negli gence or other acts of the Employee while in the c ourse of his employment, and whileacting

within th e sco pe of his authority, the Employer will pay for or e

ngage in or furn

i sh the services of an Attorney

to advise the Employee a s to the 4 Hudson v. Coleman e t al. No. 01-1653

2 We commend Magistrate Judge Paul J. Komives for a thorough and well- reasoned repo rt and r eco mm end ation, m u ch of whi ch has been ado pted in this op inion. cl aim an d t o a pp ea r f

or an d r ep re se nt th e E mp lo ye e i n the action. The Employer may

compromise, settle and pay such claim before o r a fter the

commenc ement of

any civil action. Whenever any

judgment for damages, excluding punitive damage s, is awar ded ag ainst

an Employee a s the result of any civil act ion for pe rsonal in juries or propert y damage cau se d by the Employ ee while in the course of his employ

ment, and while acting within the scope of his
au th or it y, the Employer will indemnify the employee or will pa y, settle, or

compromis e the judg

ment. The Chief Legal Offic er will make the selection of the attorney or at to rn eys to represent the Employee in any p articular case, and allow the Employee to object to the sele ction if he has cause to do so.

Pursuant to t he above ind

emnity agree ment, the

City provided the Officers with legal counsel during the course of the proceedings. There is noevidence in the record indicating that the City’s liability

under the indemnification agreement has been established, or, more specifical l y, whether the Officers were acting withi n the scope of their employ ment and authori ty when

they stole the dog . By the time Hudson i nstitutedth e g ar ni sh me nt pr oc ee di ng ag ai ns t t he Ci ty, th e Offic e rs each had paid $12,500 to Hudson in partial satisfac tion of the ir debts.

The City filed a motion to q uash t he garnishment on the basis of sever

al t he ories, including lack of subject matter jurisdiction. After t he Magi strat e Jud ge 2 filed a rep o rt and recommendation

concludi ng that t h e court lacked jurisdict

i on, the district court adopted the report and recommendation and granted the City ’s motio n to qu ash. Hudson timely filed a notice of appeal.No. 01-1653 Hudson v. Coleman e t al. 5

II

. ANALYSIS

We review de novo a district c ourt’s determination of
s ubject matter jurisdiction. See, e.g., Greater Detroi t ResourceRecovery Authority v. EPA , 916 F.2d 317, 319 (6th Cir. 1990). As an initial observation, it is well established that federa

l courts a

re cour ts of limite d jurisdicti on , possessing only

that p ow er authorized by the Constitution and statute, see Willy v

. Coastal Corp ., 503 U.S. 131 (1992); Bender v. Williamsport Area School Di st ., 475 U.S. 534, 541 (1986), which isn ot to be expanded by judicial decr ee, American Fire & Casua lty Co . v. Finn , 341 U.S. 6 (1951). Ac co rd in gl y, “[i]t is to be presumed thata cause lies outside this limited jur

is d iction, and the burden of establishing the contrary rests upon the party asser

ting jurisdiction.” Id (citing Turner v. Bank o

f N

. Am ., 4 U.S. (4 Da ll.) 8, 11 (1799); McNutt v. General

Motors Acceptanc e Corp ., 298 U.S. 178, 182-183 (1936)).

The district

court found that it lacked jurisdiction over the garnishment, primarily beca use the action attempts to hold t he Ci ty, a third

part y, liable for pa

yment of a judg

ment on an independent

legal theory , the indemnity ag reement, which would require separate analy sis and possible discovery concerning

the City ’s defe

nses to lia

bility . As set forth above, the City wasdismissedfrom the action on September 30, 1998. The

Office rs then se ttled wit h the Plaintiff and a consent judgment was entered on Febr uary 29, 2000. I

t was notuntil Ju

n e 30, 2000, that the Plaintiff served writs of garnishment on the City r elying upon F ed. R. Civ. P. 69.

The ju risdictional analysis in this gar nishmen t action begin s with a considerat ion of Peacock v. Thomas , 516 U.S. 349 (1996), and its disc

ussion of a

ncill ary subject matter jurisdiction. As a starting point, it is necessary to understand that ther e are two situation s in which a court ma y exercise ancillary jurisdict io n ove r a claim otherwise not within the jurisdiction of the court : “‘(1 ) t o p er mi t d is po si ti on by a single court of claims that are, in var ying respects and 6 Hudson v. Coleman e t al. No. 01-1653

degre es, factua

lly i nterdep endent; a

nd (2) to e nable a c ourt to functionsuccessfully, that is, to m anage its proce edings, vindicat e its authority, and ef

fectuate its decrees.’” Peacock
, 516 U.S. at 354 (quot ing Kokkomen v. Guardian Life Ins. Co.
, 511 U.S. 375, 3 79-80 (19 94) (cita tions o mit ted)). T

he first category of ancillary jurisdiction

identifie d above has larg ely been codifie d in th e supplemental jurisdiction statute, 28 U.S.C. § 1367. The second category of ancillary

jurisdiction is generally

referred to as “ancillary enforcement jurisdiction.”

In Peacock

, the plaintiff obtained a

federal court judgment againsta corporation pursuant to the Employ ee Retirement Inc ome Security

Act of 19 74 (ERI SA), 88 Stat. 83 2, as amended, 29 U.S.C. § 1001 et seq . After efforts to collect on the judgment

failed, the plaintiff filed a second suit seek ing to hold Peacock, an

officer and shareholder of the c orporation, persona lly liable under a piercing

of the co rp or at e v ei l t he or y. The Supreme Court determined that it was without an independent

jurisdict ional bas is for the

suit beca use ER ISA does not aut hor iz e a v eil -pi erc in g ac ti on. In addit ion, the Courtrejected the plaintiff’s argument that the federa l courts had anc illary

enforc ement jur

isdiction over the s econd su it.

The Court began i ts ana lysis by emp hasiz ing t ha t it has “reserved the use of ancillary

jurisdiction in subsequent procee dings for the exercise of a federal cour t’s inherent power to enforc e its judgments.” Peacock , 516 U.S. at 356. The Cour t further explained that, “[i]n defining that power,
we have ap

proved the exerci se of anc illary jurisdic tion over
a broad ra nge of suppleme

ntary procee dings involvi ng third parties to assist in

the protection and enforcement of feder al judgme n ts–including attachme

nt, manda

mus, gar nishment, and the prej udgmen

t av oidance of fraudulent convey ances.” Id. (citations omitted).

Nevertheless
, Peacock concluded that it was without ancillary jurisdict ion to ente

rtain pla intiff’s second su

it. The Court cautione d that th e recognition of an cillaryNo. 01-1653 Hudson v. Coleman e t al. 7

supplem entary

proceedings has not extended bey ond attempt s to execute, or

guarantee the

eventual executability of a f ederal judgmen t. Mo re sp ec if

ic al ly, the Court has “never authorized the exercise

of ancil lary

jurisdict ion in a sub sequent l awsuit to impose an obligation to p ay an e x isting federal judgment
ona person not already

liable for that judgment.” Id. at

357. The Court further explained that [i]n determining the reach of the fe deral courts’ ancillary juris di ction, we have cautioned against the exerc ise of jurisdiction over proceedings that are “‘entirely

new and original,”’ or where “the relief [sought is] of a different kind or on a dif

ferent principle ” than tha

t of the prior decree.

Id . at 358 (citations omitted).

Peacock concluded that the federal court s were without ancillary enfo rc ement jurisdiction because plaintiff’s action
was “founded not only upon differ ent facts than the

ERISA suit, but also upon entirely new theorie s of liability.” Id.
Here, it is undisputed that Plaintiff’s indemnity claim does notraise a

federa l q uest ion and that the parties are not diverse. Accordingly , t he Cou rt is without independent subject matter jurisdiction over the “wri ts of garnishment.” Peacock’s analysis contro ls r egard ing exer cise of the first category of ancillary

jurisdiction, i.e ., “ordinary ” ancil l ary jurisdiction. According to Peacock :
The basis of the d octrine of ancillary jurisdiction is the pra ctical need “to protect legal rig hts or effectivel y t o resolve an ent ire, logically e ntwined lawsuit. [ Owen E quipment

& Ere ction Co. v.] Kroger , [437 U.S. 3 65 , 377 (1978)]. But once judgment was en t ered in the original suit, the a

bility to resolv e simultaneously factua lly inte rtw ined issues vanished. As in Kroger , “neithe r the convenience of litigants nor considerations of judicial e conomy

” can justify

the extens io n of 8 Hudson v. Coleman e t al. No. 01-1653

3 The Plaintif

f att empts to disti nguish Peacock on the basis tha t it invol ved a separ ate sui t an d the case at ba r involv es wr it s of garnishment against the non-party Cit y proceeding under the same case number as the origi nal suit. Thi s dist inction has no bearing on “ordinary ” ancillary juri sdic ti on analysis, as such j urisdicti on is discreti onary with t he Court and contemplat es proce edings und er the same ca se numb er in any e vent. See 28 U.S.C. § 1367. The “ separ ate sui t” i ssu e and i ts beari ng on anci ll ary enf

orcemen t juris dict ion i s di scus sed infra at pp. 7-13. ancillary juris d iction ove

r [plaintif

f’s] clai ms in this subsequent proceeding.

Peacock , 516 U.S. at 255. 3

Just as i n Peac ock, there is no rationale to support
ex er cising ancillary jurisdiction over Plaintiff’s state law indemnity

claim ag ainst the C ity. The in demnity claim was notasserted until after

the C ity was dismisse d and the c ase again s tth e i nd iv id ua l d ef en da nt s w as se tt le d. Ac co rd in gl y, there are no factually

intertwined issues to resolve and neither the convenience of the litigants nor considerations of judicial economy justify the exercise of anc illary jurisdiction over Plaintiff’s state law indemnity claim. Turningto the purported ancillary “enforcement” grounds for jurisdi cti on, we find that a proper reading of Peacock dictates that the fede ral co urts are without jur

isdiction t

o enterta inthis garnishment

action. The precise issue presented by the Plainti ff in ac tu ali ty is whether the fa ct that the garnishment

actionis proceeding under the same case number
as the original action, rather than in a second la wsui t , sufficie ntly distingu ishes the case fr om Peacock

. Peacock explained

that anc illary

jurisdict

ion is inappropriatein two distinct proceedings, only one of which involves a subsequent lawsuit. First, the Court indicated that ancillary jurisdiction is inappropriate in “proceedings that are entirely new and original.” Peacock , 516 U. S. at 358 (internal quotation and citation omitted). Assuming withoutNo. 01-1653 Hudson v. Coleman e t al. 9

decidingthat the garnishment action falls outside this fi r st precept, the action is squarel y prohibited by the second category identif ie d in Peacock

“where ‘the re lief [soug

ht is] of a different kind or on

a different principle’ than that of the pr ior decree.” Id. (quot ing Dugas v. American Surety C o. , 300 U.S 414, 428 (1937)) (alteration in original).

Plaintiff’s garnishment claim seeks to impose liability on the City , a third p arty

not a par ty to the consent

judgment, on the basis of the indemnity ag reement, a l egal t

heory entirely independent

from that in the original action. As stated above, th ere is no ev id en ce in th e r ec or d i nd ic at in g t ha t t he Ci ty’ s liability under the indemnification agreemen t has been established, or, more specifically , whether the Officerswere actingwithin the

scope of their emp loy

ment or authority when they stole the do g. In fa

ct, the Cit y w as not ser

ved with the writs of

garnishment until one year and nine months after beingdismissed f

rom the la

wsuit . At th is stage, there has simply been no interpret atio n of the indemnity clause in the labor agreement between the City and the Police O fficer’s union. The City has not been adjudg ed liable to indemnify the Office rs’ settl ement wit

h the Plain

tiff, in that there remain substantial questions regarding the interpre tation of the labor agree ment, e.g. , whether

each Of ficer was actin

g “whil e in the
course of hi s employ

ment” an d “within t

he scope of his authority.”

The interpretation of the indemnity provision present s unre so lved issue s such as w hether e ach Off

icers’ conduct giving rise to the suit con stituted a frolic or a mere de to ur fr om du ty.

Insum, the r

elief sou ght by the Plainti ff is base d upon a vastly different principle than that of the prior

consent decree. We find Hudson’s reading of Peacock far too narrow and conclude that she has not carried her burden of demonstra ting that this suit falls within either cat e gory of ancillary jurisdiction.

Hudsonrelies up on the sta tement in Peacock

that “we have approved the exerc ise of ancillary

jurisdic tion ov er a broad 10 Hudson v. Coleman e t al. No. 01-1653

4 Like wise
, Fed. R. Civ. P. 69(a), providing supplementary procee ding s in ai d of execut ing a j udgment, does not purport to confe r anci llary subject matter jur isdicti on for all garnishment proceedings arising out of a common nucleus of fac t to t he origi nal f

ederal proceeding. Instead
, Peacock explains the l imits of federal ancil lary juri sdiction. range of supplementary

proceedings involving third partiesto assist in the protection and en forcement of federal judgments–includingattachment, mandamus, garnishment
, and the prejudgment avoidance of f raudulent convey

ances.” Peacock
, 516 U.S. a

t 356 (emphasi s adde d) (citations omitted). The Supreme Court’s acknowledgment of the fact that garnishment sometimes falls within ancillary jurisdiction is obviously not imprimatur for all ga rnishment actions arisingfrom pre

vious fac tually similar un

derly ing federal claims to proce ed in

federa l court. 4 The type of garnishment proceeding

referred t o in Peacock

does not c ontempla

te making the gar

nishee pe rsonally liableon the judgment based
onsome inde

pendent l egal theory

as Hudson

seeks to d

o in th is case. Instead, the ty pical garnishment proceeding ref eren ced in Peacock contemplates the garnishee’s pay ing the ju dg me nt cr ed it or /g ar ni sh in g p ar ty d ir ec tl y for funds, suc h
as a salary , owed by the g arnishee to the d efendant in the underlying

a ction. Cf. Sandlin v. Corporate Interiors, Inc
., 972 F.2d 1212, 12 16- 17 (10 th Ci r. 199 2) (app lying H.C. Cook Co. v. Beecher , 21 7 U.S . 497 (191 0), a ca se with renewed vitality post- Peacock ); Merrell v

. M iller , No. 91- 493-A, 1998 WL 329264, at *2 (E.D. Va. June 8, 1998) (noting tha t P eacock

prohibits “efforts, unsupported by an independent

basis for federal jurisdiction, to establish a new defendant’s personal liability for an existing judgment.”).

Mi ch igan law apparently

acknowledges the above distinction in the forms of garnishment by labeling the ty

pical formof garnishment

as “periodic” and thetype g arnishment sought by Hudson a s “non-periodic.” To be sure, Hudson is notreques tin g that any

wages owed by

the City to the Officers be pa id by t he City to Hudson. I nstead, HudsonNo. 01-1653 Hudson v. Coleman e t al. 11

5 Yang relies on the pre vious S even th Circ uit dec ision o f Argento v. Vi ll ag e of Me lrose Pa rk , 838 F.2 d 1483 ( 7th Cir . 198 8). The Supreme Court in Peacock implied that Arg ento and its progeny were on the wrong side of a circ uit split. S ee Peacoc k , 516 U.S . at 532 n.2; see al so Yang , 137 F.3d at 52 6. Arg ento , predating Peacock , permits anc ill ary juri sdic ti on “when the plaint iff is proceeding i n his origi nal su it r ather than by means of

a new sui t.” Yang , 137 F.3d at 526 (citations omitted). Th is jurisdict ional analys is based upon “original sui t” ve rsus “new su it” labeling is ir

reconcilable with Pea cock’s more sub st ant ive ana lysis prohibiting jurisdict ion “ whe re ‘the rel ief [sought is] of a dif

ferent ki nd

or on a d ifferent pr inciple ’ th an that of th e prior decr ee.” Peacock , 516 U.S. at 358 (quoting Du gas v. A meric an Su ret y Co. , 300 U.S. 414, 428 (1937)) (alteration in original). seeks to hold

the City individua

lly l iable und

er the indemnity clausef or the full amount of the Officers’ settlement. Th e stateform used by

Hudsonis labele d “non-p eriodic ” reque st and writ for garnishment and Hudson’s attorney has mailed

a letter to the City

on July 10, 2000, i

ndicatin g th e belief that the City is responsible for pay ment of the en tire judgment under the indemnity clause. As stated a b ove, the type garnishmen

t sought by

Hudson contemplates making the third party City, a non-p ar ty t o the cons ent judg ment, personally li able on the consent judgment entered into by the Officers based on the independent

legal theory

of the indemnification agreemen t. The City’s liability

under the newly

presented indemnity

principle is far from established; thus, the issues to be litigated under

the indemnity ag

reement deprive the Court of ancil la ry jurisdiction. See Peacock , 516 U.S. a

t 358; see also, Travelers Indemnity Co. of Ill. v. Hash Managem en t, Inc ., 173 F.R.D. 150, 153 (M.D.N.C. 1997) (“However, if the procee dings are entire ly new and original or seek relief different in kind, on a

differe nt princip le, or to im

pose liability on persons not already

bound by the previous ac tion and judgment, the moving party must be able t o assert an indepen dent

basis for federal jurisdiction over the controversy with the third party.”).

Hudsonalso relies on Yang v. City of Chicago 5 , 137 F. 3d 522 (7th Ci r. 1998), permitting ancillary jurisdiction under 12 Hudson v. Coleman e t al. No. 01-1653

Fed. R. Civ. P. 6 9 for an indemnification action against the City of Chicago after

the City was dismissed from the original lawsuit. Yang involved police officer d efendants who, after respondingto a break-in at Ya ng’s sto re, proc eeded to
c ontin ue the looting started by the original thieves. After Yangobjected to the officers’ looting, the office rs drove for two blocks with Yang hanging on to the ca r door. One officer eventua lly pulled his gun and punched Yan g before fleeing the scene.

The Yangd istrict court entered judgment aga inst the officers and dismissed

th e a ct io n a ga in st th e C it y. Yang then sought indemnification from the City on thebasis of I llinois’ indemnificationstatute, 745 IL CS 10/9-102, providi ng in pertinent part tha t a local public entity must pay any tort judgment againstan employee

“while acting

within the scope of his employment.” The di strict court dismissed the indemnificationpetition on the basis of the Peacock decision.

The Seventh Ci

rcuit held t hat the federal courts had jurisdiction over th e ind emnification petition because the petition was not a separate lawsuit and involved the same core of operative facts as theoriginal action. According to Yang , “aRule 69 garnishment proceeding to collect a judgment froma third person not party to the o riginal suit is within a court’s ancillary jur

i sdiction, providing the additional proceeding

does not inject so many new issue s that it is functionally

a separate case.” Yang , 137 F.3d at 526. (internal quotationomitted). Yang co ncl uded that interpreting the scope of employment

issue in or

der to re solve the

indemnity questiondid

notinject so many new issues into the ac tion as to make it functionally a sepa rate case. The Seventh Ci rcuit then proceeded to resolve the scope of employment issue

by concludingthat unde rIllinois law the officer was a cting within the sco pe of his employment when he pulled the gun on Yang. Id. at 525.

As an initial matter, Yang acknowl edges that w het her the garn i shmentarises by wa y of a sepa

rate action or under theNo. 01-1653 Hudson v. Coleman e t al. 13

6 We acknowledge that

the Peacock fr amework fordenying ancill ary juris di cti on “where ‘the r elief [ sought is] of a different

kind or on a different principle’ t

han tha t of t

he prior dec ree” permits a cert ain degr ee of subjectivity in decision mak ing. Perhap s Yang can be explai ned on this basis in t hat the li ti gati on resul ted in a more than six y ear saga due in part to delays by the City , in cludin g mult iple r eviews by the S even th Circ uit. Ya ng in volv ed a re mand wi th di rect ions tha t t he cas e be re assi gned t o a different distri ct judge due to ino rdinat e del ays. See Yang , 137 F.3d at 527. In addition, t

he Court expressed, “Yang has waited long enough for this lawsu it t o come to an end.” Id . at 527. We regret th e inconven ience and delay that may be associat ed with a separate st ate court garnis hment proceeding; howe ver, as sta ted ea rlier, it is well -est ablis hed that we must pres ume tha t a c ause of ac ti on li es out side the li mit ed fe deral juri sdic ti on when prese nted w ith a sub jectiv e choice or close call concerning t he existence of jur isdicti on. same case num

ber as the origi

nal action is f

ar f rom determinative of ancillary jurisdiction. Instead, Yang focuses
onwhether the garnishment injects sufficient new issues as to make the garnishment

functionally separ

ate, thus destroying ancillary jurisdiction. Yang’s “functionally sepa rate” subjective framework is fact-specific and ca n be interpreted
as faciall y

consistent with the Supre me Court’ s pronounc ement tha

t ancilla ry jurisdict ion is inap

propria te in “proce edings that are

entirely new and origina

l” and in proceedings “where ‘ the relief [sought is] of a different kind
or on a di fferent principle’ than that of the prior dec ree.” Pea cock
, 516 U.S. a

t 358 (inte

rnal quot ation omit

ted ) (quoting Dugas v. American Surety Co. , 300 U.S 414, 428 (1937)) (alteration in original).

We disagree with Yang’ s applica tion of the

“functi onally separate” framework 6 in deciding the i ndem nification issue and hold th at legitimate, unresolved disputes concerning whe ther conduct occurs within the scope of employ ment or authority deprive s a fede

ral cour t of anci llary

jurisdict ion in
a garnishment action

pursuant to Peacock

. As stated , the City of Flint’s liability un d er the ne wly present ed indemn

ity principle is far from established; thus, the issues to be litigated under the indemnity agr

eement deprive the Court of 14 Hudson v. Coleman e t al. No. 01-1653

ancillary jurisdiction. It is inappropriate for a Courtto decide legitima te scope of employ

ment and/or sc ope of au thority questions without the benefit of fact-finding and briefing

. Our determinati o n in this action over rules Childress v. Williams
, 121 F. Supp.2d

1094 (E.D. Mich. 2000). Childress attemptsto distinguish the disputed application of the indemnity

agree ment from Peacoc

k’s ambit by

stating : [I] f all the prerequisites of the indemnification agree ment
were met, the Cit

y would be liable for indemnification at the time the judgment was rendered ag ains t t he defendant Williams . . . . Bec ause De fendant Williams may

have a right to collect from the City , so too may plaintiff.

Childress , 121 F. Supp.2d at 1096 (emphasis added). Instead, as we have set forth above, the very conting encies identified in Childress

(“if,” “would be,”and

“may”) require sufficient fact-f inding a nd lega l analy sis to dist inguis h the ga rnishment

procee ding fr

om the orig

inal acti on, rend

erin g the federal courts without ancillary jurisdiction.

III. CONCLUSION

Based upon the above, we AFFI RM the district court’s ord er granting the City

of Flint’s motion to quash Plaintiff Hudson’s garnishment action.No. 01-1653 Hudson v. Coleman e t al. 15

1 Hudson nam ed the City as a d efend ant in he r com plaint, b ut th e district court gran ted s ummary

judgme nt i n fa vor of the City on Septembe r 30, 1998. _______________

DISSENT

_______________ KAREN N EL SON MOORE, Circuit Judge, dissenting. I respectfully

dissent fr o m the majority’s conclusion that the districtcourt lacks subject matter jurisdiction over

PlaintiffAppellan t, Margo Hudson’s (“Hudson”), g arnishment action againstDefendant-Appellee, the City of Flint (“City”). Contrary to the majority, I

co nclude that Hudson’s garnishment

action is merely a post-judg ment proceeding following her prior § 1983 action against De fendantsApp ellees, Bry

an Colema

n and Eric

Rodgers (collec

tively “police officers”), and that the gar nishment actionwill not inject so many

new issue s as to become a functionally
s eparat e lawsuit. I

further conclude that Hudson is merel

y seekingto collect her judg ment, ra ther tha n to impose

liability uponsomeone n

ot otherw

ise liab le for the

judgmen

t. Therefore
, the doctrine of ancillary jurisdiction gives the districtcourt subject matter jurisdiction over

the garnishment action. For th e fo ll owi ng r eas ons , I would REVERSE the districtcourt’s o rder g

ranting the City ’s motion to

quash Hudson’s garnishment action and REMAND f or f urther procee dings.

As discussed in the majority opinion , Huds on brought §§ 1983, 1985, and

state law claims against

the police officers arising from the p olice of

ficers’ theft of

Hudso n’s do g. 1 On February 29, 2000, Hudson and the p olice officers entered into a consent judgment, whereby the police off

ice rs agreed to pay $300,000in settlement of Hu dson’s cl aims. Then, on June 30, 2000, H

udson, se eking to

colle ct the consent judgmen t, filed w rits of g arnishme

nt on the Cit

y pu rsuant to 16 Hudson v. Coleman e t al. No. 01-1653

2 Rule 69 dir ects dis tri ct c ourt s t o emp loy the procedur es f or executing judg men ts of th e stat e in whi ch the di stri ct cour t sits. See Fed. R. Civ. P. 6 9(a). Rule 6 9(a) pro vides: The procedure on exec ution, in p roce eding s supp leme ntary to and in a id of

a judg ment, and i n proce eding s on an d in a id of

execu ti on shal l be in accor dance wit h the pra ctic e and procedure of the state in which t

he distri ct court is held, exist ing at t he ti me the remedy i s sought , except that any st atut e of th e United St ates governs t o the ext ent t

hat i t is applicabl e. Id

. The Michigan gar nishmen t st atut e a llows a pre vailing p laintiff to seek a writ of ga rnishm ent aga inst an o bligatio n owe d to t he de fenda nt, if the ob ligor is sub ject to p erson al jurisd iction in M ichigan

. See M ic h

. Com p. Laws § 600 .4011 (1). Section 6 00.40 11(1 ) provide s: [T]he cour t has po wer b y garnish men t to app ly the follow in g propert y or oblig ation, or both, to the sati sfact ion of a cl ai m evidenced by con tra ct, judgme nt of thi s st ate, or f

oreign judg men t, whether or no t the state has j ur isdicti on over the person agai nst whom t he cl aim i s as sert ed: (a) Personal pro perty belon gin g to t he per son against whom the cla im is a sserted but which i s in the posses sion

or cont rol of

a third person if

the thi rd perso n is subj ect to the judi cial juri sdic ti on of

the state a nd t he pe rsona l prop erty to b e app lied is with in t he boundaries of th is s tate

. (b) An obligat ion owed to t he perso n agai nst

whom the claim is asserted if the ob ligor is subject to the judici al jur isdi ction of the stat e. Id

. FederalRule of Civil Procedure 69(a) ( “Rule 69(a)") and Mich. Comp. Laws § 600.4011(1). 2 The district court found that it lacked subject

matter jurisdiction over the garnishment actionbecause the garnishment action see ks “t o h ol d t he Ci ty,
a third par

ty, liable for pay

ment of a

judgme nt on an independent

legal theory , the indemnity ag reement, which would require separate analy sis and possible discovery
concer ning the City ’s defe

nses to liability.” Majority Op. at 5. The majority aff

irms the district court’s o rder quashing Hudson’s garnishment

actionbased upon the same reasoning employ ed by the distri ct court

.No. 01-1653 Hudson v. Coleman e t al. 17

Contrary to th e m aj or it y, I would hold that the doctrine of ancillary jurisdiction gives the district court subject matter jurisdiction ov er th e g ar ni sh me nt ac ti on . U nl ik e t he ma jo ri ty, Iconclude that the Supreme Court’s ho lding in Peacock v. Thomas
, 516 U.S. 349 (1996), does not prohibit this use of ancillary juri sdict ion. I

nstead, I conclude that the Se

venth Circuit’s reasoning in Yang v. City of Chicago , 137 F.3d 522 (7th C ir. 1998), cert. denied, 525 U.S. 1140 (1999), and the Eastern D ist rict of Michigan’s reasoning in Childress v. Willia ms, 121 F. Supp. 2d 109 4 (E.D. Mi ch. 2000) , corre ctly
ana ly ze Peacock’ s effect on the doctrine of ancillary jurisdict ion in Rule 6 9 procee dings.

In Peacock

, Thomas had b een awarded a judgment of $187,628.93 by t

he distr ict cour t in his ERISA class action againstTru-Tech, his former employer. Peacock

, 516 U.S. at 351. The distr

ict cour t had foun

d that Tru-Tech breache d its fiduciary duties in a

dminister in g the corporation’s pension benefit s plan, but the district court had also explicitly ruled that Peacock, an

officer and shareholder of Tru-Tech, was not
a fiduciary. Id . Unable to obtain the money f rom Tru-Tech, Thomas sued Pea

cock in f

ederal court al le ging various theorie s, including a veil-piercing claim under E RISA. Id

. at 352.

The Supre

me Cou rt he ld tha

t ERI SA doe s not a

uthor ize veil-piercing

claims; therefore, ERISA did not provide a basis for federal jurisdi cti on over Thomas’s veil-piercing claim. Id

. at 353. The Court further held that the doctrine of anc il lary jurisdiction did n ot app ly to Tho mas’s veil- pierci ng c lai m, and as a r esult, the district court lacked subject matter jurisdiction over Thomas’s action a gainst Peacock. Id . at 355-59. In so

holding, th e Co urt stated that “a federal court may exercise ancillary jurisdiction ‘(1) to permit disposition by a single court of claims that are, in vary ing respec ts and degre es, factua

lly i nterdep endent; a

nd (2) to e nable a c ourt to functionsuccessfu lly, that is, to m anage its proce edings, vindicat e its authority, and

effectuate its decrees.’” Id

. at 354 (quoting Kokkonen v. Guardian Life Ins. Co. , 511 U.S. 375, 18 Hudson v. Coleman e t al. No. 01-1653

3 Th is hold ing is not in con sistent wit h the T enth C ircuit’s view in San dlin v. Corp ora t e Inter iors, Inc. , 972 F.2d 12 12, 1217 (10th Cir. 1 992), a pre- Peacock dec ision, in wh ich the c ourt he ld that th e distric t

cou rt l acked subject matter juris diction over the plai ntif f’s s ubsequent veil-pi ercing claim beca use the claim involved new parties, new iss ues, and new the ories o f liability. The Tenth Circui t expl icitly not ed that t he 379-80 (1994)). The Court held that Thomas’s veil-piercing claim did not in

vol ve the first accepted usage of ancillary jurisdiction, as Thomas brought his vei l- piercing claim in a subsequent

lawsuit, and thus “the ability to resolve simultane ously

factua lly intertwined issues vanished.” Id . at 355. The Court further held that Thom as ’s veil-piercing claim did notinvo lve th e secon d accep ted us age of ancillary juri sdic tion because, although ancillary jurisdiction may be used to enforce judgments, the Court has “never autho rized the exercise

of ancil lary

jurisdict ion in a sub sequent l awsuit to impose an

obligat ion to pay an existing feder al judgment
ona person

not alre ady

liablefor that judgment.” Id . at 357.

In Yang , a post-

Peacock decision , the Seve

nth Circui theld tha t the doctrine of ancillary jurisdiction gave the district court subject matter jurisdiction over Yang’s Rule 69 garnishment

action. Yang , 137 F.3d at 526. Yang had been awarded a substantial monetary judg ment in his §§ 1983 and 1985 actions against two police officers. Id . at 522- 2 3. Approximately three

months later, “Yang filed a petition for indemnification and w rit of execution, s eekin g indemnificationof [his judg ments ag ainst

the officers] from the City of Chicago pursuant to 745 IL CS 10*9-102. Section 9-102 directs a

municipa

lity to indemnif

y a to rt j udgment entered against an employ

ee if the employe e’s misconduct
was within th e sc ope of his employment.” Id . at 524. The court held that “a

Rule 69 garnishment proceeding to collect
a judgmen t from a th

ird pers on not part y to

the original suit is within a c ourt’s a

ncill a ry jurisdiction, providing ‘the additional proceeding does not inject so many new issues that it is functionally a separ

ate cas e.’” Id . at 526 (quotations omitted). 3 The court concluded that Yang’s g ar nis hmentNo. 01-1653 Hudson v. Coleman e t al. 19

plaintiff was not br inging a tradition al inde mnity cla im. Id

. actionfell within the district court’s ancillary jurisdiction because the only new

iss ue raised in the action was whether the officers were acting w ithin the scope of

their employment when they violated Yang ’s constitutional rights. Seeid . The Yang court further distingui shed Pe acock by noting that the plaintiff in Yang was not trying to impo se liabil ity for a money ju dgment o n a person not otherwise liable for the judgmen t, because if the officers were acting within the scope of their emp loy

ment, the city would be l iable for their judgmen t. Id . at 525 n.1. Sim

ilarly, in Childress , the Eastern District of Michigan held that the doctrineof ancillary jurisdiction gave it subject matter jurisdiction ov er Childress’s Rule 69 g arnishme nt proce eding b ecause

the only
newissu e rais ed in t he pro ceedin g w as whether the officer
was acting

within the

scope of his em ployment when he viol ate d Childress’s constitutional rights. Childress , 121 F. Supp. 2d at 1096.

The c ourts in both Yang and Childress reasone d that th e Rule 69 garnishment actions were not separa te l aws uits because they were

post-judgment pr o ceeding s, and be cause the factual issues in t

he garnishment actions would overlap substantia lly with the factual issues in the unde rly ing cla ims. S e e Yang , 137 F.3d

at 526; Childress , 121 F. Supp. 2d at 109 6. Thus, the

garnishment actions involved the fi rst accepted use of anc il lary

jurisdict ion—reso lving fa

ctually i nterdependent

claims in a single proceeding. The c ourts i n both Yang

and Childress

also reasoned that the district court’s
exerc ise o f ancillary

jurisdiction over the Rule 69 garnishment

proceeding was nece ssary to effe ctuate the districtcourt’s prior judgment. Ya ng , 1 37 F.3d at 526; Childress
, 121 F. Supp. 2d at 1096-97. Thus, the garnishment actions involved the second accepted u s age of ancillary 20 Hudson v. Coleman e t al. No. 01-1653

4 Federal courts have exercised ancil lary juri sdict ion in supplement al proceedings to effectu ate jud gme nts for over one hund red ye ars. See Root

v. Wo olwo rth , 150 U.S. 401, 410- 11 (18 93)

. Peacock did no t strip federal

cou rts of sub ject m att e r jurisd iction o ver p roce eding s to effectu ate judg men ts. Peacock v. Thomas , 516 U.S. 349 , 356 (1996 ).

5 Further more, in a footnote i n Peacock , the Supreme Court explic itly stat ed that a R ule 69 (a) pr oce eding was an effectiv e me chan is m for a dist rict court to us e ineff

ectu ati ng i ts judg ment

. Pea coc k, 516 U.S. at 359 n.7. jurisdiction—protecting judgmen ts

. 4 In fa

ct, the c ourts in b o th Yang and Childress relie d upon the fo llow ing pas sage from Peacock to support

their holdings: “we have approved the exercise of ancillary

jurisdiction over a broad range of supplementary

proceedings involving third parties t o assist in the protection and enforcement of feder a l judg ments — including attachment, manda mus , garnishment, and the preju dgment avoidance of fraudul ent conveya nces.” Peacock

, 516 U.S. at 356 (cit ed in Yang, 137 F.3d a t 525; Childress
, 121 F. Supp. 2d at 1096). 5

Ifind the reason ing of the courts in Yang and Childress both convincing and applicable to the pres ent case. Here, Hudsonentered into a consent judgment wi th the police officers for $300,000. Hudson then brought a gar ni shment proceeding

against the City pursua

nt to Rule 69 se eking to collect fromth e City in accorda nce with City’s i ndemnifi cationagreement with the police officer s. Hudson’s Rul e 69 proceeding was a post-judgme nt proceeding, n ot a separa te lawsuit. The factual issues in th e garnishment procee dings will overlap substantia lly with those in Hudson’s underlying

§§ 1983, 1985, and state-law claims; therefore, the Ru le 69 proce eding w

ill not inje ct so many

new issue s as to become a functionally sepa

rate lawsuit. Unlike the plaint if f in Peacock

, Hudsonis not seeking to impose liability on the City for po st-ju dgment conduct; rather, the City ’s potential liability arose when the police officers committed the conductNo. 01-1653 Hudson v. Coleman e t al. 21

6 For the sam e reas on, the Cit y canno t b e con sidere d a p arty that is not otherwise liable, because if the police officer s were acting wi thin t he scope of their employment, the City would be liable for the police officers’ c ond uct.

7 The indemnificat ion agreement between the City and the Flint Po lice O fficers As socia tion pr ovid es, in pe rtinent p art: W hene v er any judgment for damages, excluding punit ive dama ges, is awarde d agai nst an Employee as the result of any civil acti on for

pers onal inj uri es or

propert y damag e caus ed b y the Employe e whi le i n th e cour se of his emp loyme nt, and while acting within the sc ope of his auth ority, the E mplo yer will indem nify the em ploye e or w ill pay, se ttle, or comprom ise the judg men t. Joint App end ix at 51 2 (P ls.’ Br. in O pp’n to the C ity of Flint’s M ot. to Quash Ga rnishment, Ex. A). underlying

Hudson’s ini tial § 1983 action. 6 The only new factual issue invo lved in

the Rule 69 garnishment proceeding will be whether the police off icers were acting within the scope of their e

mploy ment. 7 This is the exac t same factual issue that both the Seventh Circuit and the Eastern District of Michi gan foun d insufficient to render the Rule 69 garnishment

proceedings separate, subsequ en t lawsuits. Ad di ti on al ly, the Rule 69 garnishment pr oceedin

g is necessary to enable

the distri ct court

to effec tu ate its prior ju dgmen tagainst the polic e offic ers. Req uiring a separa te state-court

lawsuit to enforce a federal-c ourt judgmen t would compromi se the federal interests that were resolved in the initial federal-court proceeding s and would impo se an unnecessary

burden on state courts. Childress , 121 F. Supp. 2d at 1097 . I re spectfu

lly d issent.