Court Opinion

ID: 9477366
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:21:43.03728+00
Date Added: 2024-06-11T17:45:50.555702
License: Public Domain

SCHROEDER, Circuit Judge,
dissenting.
The majority holds that although the district court has jurisdiction to terminate a bonding company’s obligation on a bail bond before trial, the court lacks jurisdiction to order a corresponding return of the premium owed to the defendant as a result of the cancelled obligation. Thus, the majority forces the defendant to file a separate action in state court for a refund of the premium paid to obtain bail ordered pursuant to 18 U.S.C. § 3142 and under the protections of the Eighth Amendment. This is an awkward, unjust, and unnecessary result. I therefore respectfully dissent.
Understanding what happened in this case is important. The defendant was arrested on serious charges and ordered to post $250,000 bond. In April 1984, he obtained bond from the appellant bonding company in return for posting collateral, and paying, up front, a $30,000 premium. About six months later, the bonding company asked to be relieved of its obligations as surety, apparently because it feared the defendant would not appear. The district court granted the request, and ordered the bond exonerated and the collateral released. It also granted the defendant’s motion for a pro-rata return of the premium. The district court agreed with the defendant that if the bonding company was to be released of its obligations earlier than anticipated, then the defendant should be treated similarly.
The bonding company neither responded to Arnaiz’s motion nor returned the premium when ordered to do so. Instead, when *223it was served with an order to show cause why it should not be held in contempt for violating the court’s order, it challenged subject matter jurisdiction with respect to the premium. At no time during the proceedings before either the district court or this court has the appellant given any reason why Arnaiz is not entitled to a return of the premium in question. The district court, in my view, very properly held that the bonding company had not shown good cause for failing to return the premium, and correctly refused to revoke its original order.
The district court clearly has jurisdiction to conduct bail proceedings pursuant to 18 U.S.C. §§ 3041 and 3141. The majority pointedly recognizes that Fed.R.Crim.P. 46(f) provides for the exoneration of a bond. Further jurisdictional authority is found in Rule 46(e)(3), which provides that “[b]y entering into a bond the obligors submit to the jurisdiction of the district court and irrevocably appoint the clerk of the court as their agent upon whom any papers affecting their liability may be served.” The Rule further provides that the obli-gors’ “liability may be enforced on motion without the necessity of an independent action.” Fed.R.Crim.P. 46(e)(3). In this case, the practical effect of the district court’s order is to condition exoneration upon return of the premium. The majority never explains why the order is not within the purview of bail proceedings conducted pursuant to federal statutes and Rule 46.
The majority cites absolutely no authority for the proposition that a federal criminal defendant’s contract to obtain court-ordered bail is outside the scope of federal subject matter jurisdiction. The only circuit decision cited is Rader v. Manufacturers Casualty Insurance Co., 242 F.2d 419 (2d Cir.1957), which involved a collateral dispute between bond cosureties concerning an indemnity agreement. In concluding that no federal jurisdiction existed, the Second Circuit noted that none of the agreements at issue was required in connection with a giving of a surety bail bond. Id. at 428. Exactly the opposite is true in this case. This case directly concerns the contract to obtain the bond. The district court case relied upon by the majority, United States v. Soucy, 60 F.Supp. 500 (D.Minn.1945), similarly involved a dispute between cosureties for contribution after judgment had been entered on a bond, and did not involve a criminal defendant’s initial obligation.
Even if the rules and statutes are insufficient to create jurisdiction expressly and independently, this is almost a classic case for exercising ancillary jurisdiction. As a leading treatise describes that concept, it means that
a district court acquires jurisdiction of a case or controversy in its entirety, and, as an incident to the disposition of the matter properly before it, it may decide other matters raised by the case of which it could not take cognizance were they independently presented. Thus, if the federal court has jurisdiction of the principal action, it also may hear any ancillary proceeding therein, regardless of the citizenship of the parties, the amount in controversy, or any other factor that normally would determine subject matter jurisdiction.
13 Wright, Miller & Cooper, Federal Practice and Procedure § 3523 (1984).
Ancillary jurisdiction historically focused on the relationship of defendants’ and in-tervenors’ nonfederal claims to property in the possession of the federal court. An early and instructive case is Freeman v. Howe, 24 How. 450, 65 U.S. 450, 16 L.Ed. 749 (1861). In Freeman, mortgagees of some railroad cars brought a state replevin action against a marshal who had attached the cars to secure judgment in a federal diversity suit. Although the mortgagees prevailed at trial, the Supreme Court reversed, holding that the state court was powerless to interfere with property within the control of the federal court. The Court noted that ancillary jurisdiction was available in federal court over the mortgagees’ claims, and therefore they could have intervened in the federal action.
Likewise, in Fulton National Bank v. Hozier, the Supreme Court stated:
*224The general rule is that when a federal court has properly acquired jurisdiction over a cause it may entertain, by intervention, dependent or ancillary controversies; but no controversy can be regarded as dependent or ancillary unless it has direct relation to property or assets actually or constructively drawn into the court’s possession or control by the principal suit.
267 U.S. 276, 280, 45 S.Ct. 261, 262, 69 L.Ed. 609 (1925). From this narrow initial approach, ancillary jurisdiction expanded until it covered other types of claims, such as compulsory counterclaims, cross-claims, and impleader.
Although the purpose of bail is to secure the defendant’s presence, United States v. Velez, 693 F.2d 1081, 1084 (11th Cir.1982), a bail bond is deposited with the court and is itself a “written undertaking, executed by the defendant or one or more sureties, that the defendant ... [will] appear in a designated criminal action ... and that in the event he fails to do so, the signers of the bond will pay to the court the amount of money specified in the order fixing bail.” Black’s Law Dictionary 128 (5th ed. 1979). Thus, a bail bond is property in the possession of the federal court, and even if express jurisdiction is otherwise lacking, ancillary jurisdiction may properly be invoked for disputes involving it.
Furthermore, the exercise of ancillary jurisdiction is consistent with policy considerations. The bail bond dispute is a civil matter whose scope is governed by the Federal Rules of Civil Procedure, which provide broadly for the joinder of claims, joinder of parties, and intervention. The policy of efficient litigation is fostered by permitting the Federal Rules their intended scope to avoid burdensome litigation in different forums over related issues. See Fed.R.Civ.P. 1; United Mine Workers v. Gibbs, 383 U.S. 715, 724-25, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966) (“under the Rules, the impulse is toward entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged”). Permitting the district court ancillary jurisdiction over the contractual relationship between the defendant and the bonding company furthers these policies. The majority decision thwarts them.
I respectfully dissent.