Opinion ID: 489481
Heading Depth: 2
Heading Rank: 1

Heading: The District of Columbia's Claim

Text: 9 In order to decide whether the district court had subject matter jurisdiction over Long's claim against the District, we address two questions. We first consider whether diversity jurisdiction allowed the district court to hear the claim against the District. We next consider whether pendent party jurisdiction allowed the court to hear this claim. Our two-step approach to deciding the ultimate question requires some explanation. The parties in this case do not dispute the issue of diversity jurisdiction: the District contends that it is not amenable to diversity jurisdiction, and Long nowhere directly contests this point. The dearth of argument on this question suggests that we should assume, without discussing or deciding, that the district court lacked diversity jurisdiction over the claim against the District and consider only whether the court also lacked pendent party jurisdiction over the claim. Analysis of the relevant law, however, shows that we may not take this path. For reasons that will become clear in the course of this decision, we cannot sensibly discuss or decide the issue of pendent party jurisdiction in this case until we have addressed the issue of the District's amenability to diversity jurisdiction. We therefore undertake the two-step inquiry that we have outlined above. 10 We begin our consideration of whether the District of Columbia is subject to diversity jurisdiction by noting the established law regarding the capacity of states and their political subdivisions to sue and be sued in diversity. The statute conferring diversity jurisdiction provides, in relevant part, that federal district courts shall have original jurisdiction of all civil actions where the matter in controversy ... is between ... citizens of different states. 28 U.S.C. Sec. 1332. The Supreme Court long has held that states are not subject to diversity jurisdiction under this provision. In Postal Telegraph Cable Co. v. Alabama, 155 U.S. 482, 15 S.Ct. 192, 39 L.Ed. 231 (1894), the Court wrote:A State is not a citizen.... [Therefore,] a suit between a State and a citizen or corporation of another State is not between citizens of different States[,] and ... the Circuit Court of the United States has no jurisdiction of it, unless it arises under the Constitution, laws or treaties of the United States. 11 Id. at 487, 15 S.Ct. at 194. The Court later extended this rule to a state's arms or alter egos. See State Highway Commission v. Utah Construction Co., 278 U.S. 194, 199, 49 S.Ct. 104, 105, 73 L.Ed. 262 (1929). The Court also has held, however, that municipalities, counties, and other political subdivisions of a state are subject to the diversity jurisdiction of the federal courts. See Moor v. County of Alameda, 411 U.S. 693, 718, 93 S.Ct. 1785, 1800, 36 L.Ed.2d 596 (1973); Loeb v. Columbia Township Trustees, 179 U.S. 472, 485-86, 21 S.Ct. 174, 179-80, 45 L.Ed. 280 (1900); Cowles v. Mercer County, 74 U.S. (7 Wall.) 118, 121-22, 19 L.Ed. 86 (1868). The Court has reasoned that the independent status of these governmental bodies dictates that they be treated as citizens of states. Moor, 411 U.S. at 720, 93 S.Ct. at 1801; see id. at 717-21, 93 S.Ct. at 1799-1802. Thus, the question we must decide is whether to treat the District like a state or like a political subdivision when a person attempts to sue the District under the diversity statute in federal court. We think we must treat the District like a state, although we reach this conclusion through analysis that differs from the analysis the District offers. 12 The District argues that Congress spoke directly to the question we confront by enacting subsection (d) of the diversity statute. Subsection (d) says that [t]he word States, as used in this section, includes the Territories, the District of Columbia, and the Commonwealth of Puerto Rico. 28 U.S.C. Sec. 1332(d). The District contends that both the intent and the result of Congress's enactment of this clause was to place the District (as well as Puerto Rico and the Territories) in the same position as the fifty states with respect to amenability to diversity jurisdiction. In other words, Congress enacted subsection (d) to insulate the District from diversity jurisdiction, and the language of the clause in fact has this effect. 13 We think, however, that subsection (d) alone fails to answer the question before us. Congress enacted subsection (d) to replace a similar clause added to the diversity statute eight years earlier. The sole purpose of subsection (d) was to clarify the predecessor clause. See Reviser's Note to 28 U.S.C. Sec. 1332. The sole purpose of the predecessor clause was to reverse the holding of the Supreme Court in Hepburn & Dundas v. Ellzey, 6 U.S. (2 Cranch.) 445, 2 L.Ed. 332 (1805), that individual and corporate citizens of the District could neither sue nor be sued in diversity because they were not citizens of a State. See H.R.Rep. No. 1756, 76th Cong., 1st Sess. 1 (1940); see also National Mutual Insurance Co. v. Tidewater Transfer Co., 337 U.S. 582, 583-84, 602, 69 S.Ct. 1173, 1173-74, 1183, 93 L.Ed. 1556 (1949) (discussing the purpose of the clause in the context of upholding its constitutionality). In labeling the District a State in subsection (d), Congress did not intend to decide the question whether the District itself is subject to diversity jurisdiction. And the subsection does not in fact decide that question. Subsection (d), when read in conjunction with other language of the diversity statute, provides that diversity jurisdiction will extend to suits between a citizen of the District and a citizen of a state. The subsection does not address whether suits involving the District of Columbia fall within the scope of this jurisdictional grant. The District therefore errs in thinking that subsection (d) alone answers the question whether courts should treat the District like one of the fifty states when persons attempt to sue it in diversity. 14 We nonetheless reach the result the District urges and hold that the District is like a state for this purpose. As we have noted, the language of the diversity statute (including subsection (d)) provides that diversity jurisdiction will extend to suits between citizens of different States, including the District of Columbia. To bring the District within the coverage of this jurisdictional grant, a court must hold that the District is a citizen of one of the statutorily defined States. The only State of which the District could conceivably be a citizen is the District itself; thus, the District is subject to diversity jurisdiction only if the District is a citizen of itself. We cannot subscribe to such a bizarre characterization of the District of Columbia. As we have noted, the Supreme Court has held repeatedly that the fifty states are not citizens of themselves. See, e.g., Postal Telegraph Cable Co., 155 U.S. at 487, 15 S.Ct. at 194. We can think of no reason for holding that the fifty states are not citizens of themselves, but the District is a citizen of itself. The rationale underlying the Supreme Court's teaching is that a whole cannot be a citizen of the whole. This rationale applies as well to the District of Columbia as to any of the fifty states. We therefore think the conclusion inescapable that the District, like the fifty states, is not subject to diversity jurisdiction. 15 A possible objection to this analysis is that the District possesses many of the characteristics of a municipality, and the Supreme Court has held that municipalities are subject to diversity jurisdiction. See Loeb v. Columbia Township Trustees, 179 U.S. at 486, 21 S.Ct. at 180. This holding, however, rests on the rationale that a municipality is an independent entity located in a state and therefore may be counted as its citizen. See Moor v. County of Alameda, 411 U.S. at 717-21, 43 S.Ct. at 1799-1802. Such a rationale is inapplicable to the District of Columbia. Even if we label the District a municipality, that municipality is coterminous with the State as defined in the diversity statute: to use the Supreme Court's words, the municipality is the alter ego of the State. State Highway Commission v. Utah Construction Co., 278 U.S. at 199, 49 S.Ct. at 105. Given this circumstance, labeling the District a municipality will not avail those who wish to sue the District in diversity. Irrespective of any labels, the District is not subject to the diversity jurisdiction of the federal courts. 16 We turn, then, to the question whether the district court had pendent party jurisdiction in this case. Pendent party jurisdiction enables a federal court to join to a suit properly in that court certain parties as to whom no independent basis of jurisdiction exists. The lower court invoked pendent party jurisdiction to join the District to the suit between Long and PEPCO, which was properly in federal court on the basis of diversity. Analysis of this decision requires brief review of two recent Supreme Court cases relating to the proper exercise of this kind of jurisdiction. 17 The seminal case concerning pendent party jurisdiction is Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976). In Aldinger, a plaintiff brought a federal civil rights action under 42 U.S.C. Sec. 1983 in federal court against county officials and the county. She asserted federal jurisdiction under 28 U.S.C. Sec. 1343, a special statute giving federal district courts original jurisdiction of any civil action authorized by law to be commenced ... to redress a Sec. 1983 violation. The plaintiff also brought several related state law claims against the county. At that time (prior to Monell v. Dept. of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978)), courts believed that counties were immune from suit under Sec. 1983, and so the district court dismissed the federal claim against the county. The court then dismissed the state law claims against the county, claiming an absence of authority to make the county a pendent party to the suit. The Supreme Court affirmed. 18 The Court's decision declined to lay down any general, all-encompassing jurisdictional rule, Aldinger, 427 U.S. at 13, 96 S.Ct. at 2419, but provided a framework for analysis of assertions of pendent party jurisdiction. The Court held that a federal court can join to a suit properly in that court a party not otherwise subject to federal jurisdiction if Article III permits the joinder and if Congress, in the statute conferring subject matter jurisdiction over the primary claim, has not expressly or by implication rejected the particular use of pendent party jurisdiction. Id. at 18, 96 S.Ct. at 2422. Applying this framework to the case before the Court, a majority first concluded that Article III allowed the exercise of pendent party jurisdiction because the federal claim (i.e., the claim as to which there was an independent basis for federal jurisdiction) and the nonfederal claim (i.e., the claim as to which there was no independent basis for federal jurisdiction) arose from a common nucleus of operative fact. Id. at 13, 96 S.Ct. at 2420 (quoting United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966)). The Aldinger Court then held, however, that Sec. 1343, when read in conjunction with Sec. 1983, impliedly rejected the exercise of pendent party jurisdiction in the case. The Court reasoned: 19 Parties such as counties, whom Congress excluded from liability in Sec. 1983, and therefore by reference in the grant of jurisdiction under Sec. 1343(3), can argue with a great deal of force that the scope of that civil action over which the district courts have been given statutory jurisdiction should not be so broadly read as to bring them back within that power merely because the facts also give rise to an ordinary civil action against them under state law. 20 Id., 427 U.S. at 17, 96 S.Ct. at 2421 (emphasis in original). In other words, in enacting a jurisdictional statute that addressed and excluded certain parties (in this case, by reference to an underlying substantive statute), Congress impliedly rejected the exercise of pendent party jurisdiction over those parties in a suit based on the jurisdictional statute. The Court concluded by emphasizing the narrowness of its holding: Other statutory grants and other alignments of parties and claims might call for a different result. Id. at 18, 96 S.Ct. at 2422. The Court indicated, for example, that when a grant of jurisdiction to a federal court is exclusive, courts should hesitate to find that Congress had intended to bar the use of pendent party jurisdiction. Id. 21 Owen Equipment & Erection Co. v. Kroger, 437 U.S. 365, 98 S.Ct. 2396, 57 L.Ed.2d 274 (1978), presented the Court with an opportunity to resolve a similar problem in a case involving the diversity statute. In Owen, the plaintiff, a citizen of Iowa, sued the defendant, a citizen of Nebraska, under the diversity statute. The defendant filed a third party claim against another citizen of Iowa under Federal Rule of Civil Procedure 14(a). The district court then granted the plaintiff's request to file an amended complaint naming the (nondiverse) third party as an additional defendant. On appeal, the Eighth Circuit affirmed the district court's decision, but the Supreme Court reversed. 22 Although Owen technically involved ancillary rather than pendent party jurisdiction because the defendant had brought the third party into the suit, the Court minimized the distinction between the two kinds of jurisdiction and applied the Aldinger analysis. The Court first assumed without deciding that the exercise of jurisdiction fell within the constitutional limits of federal judicial power. See id. at 371 & n. 10, 98 S.Ct. at 2401 & n. 10. The Court then turned to examine whether the statute conferring jurisdiction over the federal claim (in this case, the diversity statute)  'expressly or by implication negated' the exercise of jurisdiction over the particular nonfederal claim. Id. at 373, 98 S.Ct. at 2402 (quoting Aldinger, 427 U.S. at 18, 96 S.Ct. at 2422). As in Aldinger, the Court held that the statute conferring jurisdiction over the federal claim impliedly rejected the exercise of jurisdiction over the particular nonfederal claim. The Court reasoned that the diversity statute incorporated a congressional mandate that diversity jurisdiction is not to be available when any plaintiff is a citizen of the same State as any defendant. The Court continued: 23 Thus it is clear that the [plaintiff] could not originally have brought suit in federal court [under the diversity statute] naming [the defendant] and [the third party] as codefendants. Yet the identical lawsuit resulted when she amended her complaint.... In either situation, in the plain language of the statute, the matter in controversy could not be between ... citizens of different states. 24 Id., 437 U.S. at 374, 98 S.Ct. at 2403. The Court thus concluded that in suits brought under the diversity statute, federal courts lack jurisdiction to hear a plaintiff's claims against a citizen of the same state. 25 Long argues that Owen does not control this case. She concedes that Owen prohibits the exercise of pendent party jurisdiction to hear a claim against a citizen of the same state as the plaintiff in a suit based on diversity of citizenship. She contends, however, that Owen does not bar the exercise of pendent party jurisdiction to hear a claim against a stateless entity, like the District of Columbia, in such a suit. Long cites several decisions of district courts supporting her view. See Parker v. District of Columbia, 515 F.Supp. 10, 11 (D.D.C.1981); United Pacific Insurance Co. v. Capital Development Board, 482 F.Supp. 541, 545-46 (N.D.Ill.1979). In addition, Long points to a panel decision of this court, which the en banc court later vacated in relevant part. See Rieser v. District of Columbia, 563 F.2d 462, vacated and reinstated in part, 580 F.2d 647 (1978) (en banc). Although Long concedes, as she must, that this panel decision does not bind us, she contends that it remains [t]he only evidence of this Circuit's view of pendent party jurisdiction in a diversity case and a correct statement of the law. All of these decisions, as Long claims, take the position that a court may exercise pendent party jurisdiction over a claim against a stateless entity in a suit based on diversity because Congress neither explicitly nor implicitly has rejected the use of pendent party jurisdiction in such a case. 26 We cannot accept this view. We think Owen stands for the general proposition that Congress, in enacting the diversity statute, impliedly rejected the use of ancillary or pendent party jurisdiction in a suit based on diversity to hear a plaintiff's claim against a party whom the plaintiff could not initially have sued in diversity. Owen, of course, speaks in somewhat narrower terms: because of the factual pattern of the case, the Court explicitly considered only the question whether the lower court had jurisdiction over a claim against a party who was a citizen of the same state as the plaintiff. But the rationale of Owen applies as well to a case in which the plaintiff wishes to bring a claim against a stateless party. The Owen Court reasoned that Congress limited diversity jurisdiction to matter[s] in controversy ... between ... citizens of different states and that the use of pendent party or ancillary jurisdiction in a suit based on diversity to hear a plaintiff's claim against a citizen of the same state would flout Congress's intent. We think that the use of pendent party jurisdiction in a suit based on diversity to hear a plaintiff's claim against a stateless party would flout Congress's intent no less; this claim, too, would not constitute a matter in controversy ... between ... citizens of different states. We thus return to our prior holding that the District of Columbia is not a citizen of a state under the diversity statute--that the District is indeed a stateless entity. This holding compels the conclusion not only that the District is not subject to diversity jurisdiction, but also that the District is not subject to pendent party jurisdiction in a case based on diversity. Courts that have ruled otherwise, in our view, have erred. The diversity statute, by speaking directly to the kinds of parties who can use it to enter federal court, impliedly prohibits courts from exercising pendent party jurisdiction to hear claims against persons or entities falling outside of the statute's scope in suits based on diversity. 27 We finally address in this part of our decision whether we must dismiss Long's entire suit because of the jurisdictional defect in her complaint or, alternatively, whether we may remedy this defect by dismissing only her claim against the District. Federal Rule of Civil Procedure 21 enables district courts to follow the latter route: so long as the nondiverse party is not indispensable to the action, a district court may dismiss only the claim against this party and retain jurisdiction over the rest of the case. See 7 C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: Civil 2d Sec. 1685 (1986). District courts may drop nondiverse parties in this manner at any stage of the litigation--even after trial and the entry of judgment. See Publicker Industries, Inc. v. Roman Ceramics Corp., 603 F.2d 1065, 1069 (3d Cir.1979). Although Rule 21, like all of the Federal Rules of Civil Procedure, technically applies only at the district court level, many appellate courts have claimed for themselves the powers stemming from the Rule. See, e.g., Mullaney v. Anderson, 342 U.S. 415, 417, 72 S.Ct. 428, 429, 96 L.Ed. 458 (1952); Reed v. Robilio, 376 F.2d 392, 394 (6th Cir.1967). We therefore think we have the authority, given that all parties concede that the District is not an indispensable party, to respond to the jurisdictional defect in Long's complaint by dismissing only Long's claim against the District and retaining jurisdiction over her claim against PEPCO. 28 We choose to exercise this authority given the circumstances of this case. The jurisdictional error that occurred in this suit did not prejudice PEPCO; indeed, even PEPCO has not argued that the error caused it harm. Had the district court dismissed Long's claim against the District, her suit would have proceeded against PEPCO. There is no reason to think that the jury, which found PEPCO liable in the actual suit, would have taken a different view of PEPCO's liability in such a case. We agree with our dissenting colleague that PEPCO could have impleaded the District in such a suit to bring claims for indemnification and/or contribution. But if we were to reverse the verdict against the District and uphold the verdict against PEPCO, we would not deprive PEPCO of these claims. PEPCO could still bring suit against the District for contribution or indemnification in the District of Columbia's courts: under District of Columbia law, the statute of limitations on such claims begins to run only after a judgment has been paid. See Keleket X-Ray Corp. v. United States, 275 F.2d 167, 169 (D.C.Cir.1960); Bair v. Bryant, 96 A.2d 508, 510 (D.C.Mun.App.1953). In a separate suit for contribution or indemnification, the District of Columbia court would determine the District's responsibility for Long's accident and its consequent liability to PEPCO in precisely the manner in which the district court would have determined these questions had PEPCO impleaded the District in the original suit. See Jones v. Schramm, 436 F.2d 899, 901 (D.C.Cir.1970); United States Fidelity and Guaranty Co. v. Doctors' Hospital, 265 A.2d 774, 775 (D.C.1970); Early Settlers' Insurance Co. v. Schweid, 221 A.2d 920, 922-23 (D.C.1966). The jurisdictional error that occurred in this case thus had no prejudicial effect on PEPCO's liability or rights. Given the absence of such prejudice, we can see no reason to respond to the jurisdictional error by throwing out Long's entire suit and erasing nearly four years of litigation. Judicial economy, convenience and fairness to litigants, Gibbs, 383 U.S. at 726, 86 S.Ct. at 1139, all counsel the opposite course.