Court Opinion

ID: 4647973
Source: CourtListenerOpinion
Date Created: 2020-12-30 19:02:19.735996+00
Date Added: 2024-06-11T08:01:09.998947
License: Public Domain

Case: 19-51123      Document: 00515689015           Page: 1     Date Filed: 12/30/2020

                              REVISED 12/30/2020

            United States Court of Appeals
                 for the Fifth Circuit                                 United States Court of Appeals
                                                                                Fifth Circuit

                                                                              FILED
                                                                      December 14, 2020
                                     No. 19-51123                        Lyle W. Cayce
                                                                              Clerk

   Matthew Mitchell,

                                               Plaintiff—Appellant Cross-Appellee,

                                        versus

   Orico Bailey,

                                                              Defendant—Appellee,

   Hoopa Valley Tribe, doing business as Americorps Hoopa
   Tribal Civilian Community Corps,

                                            Defendant—Appellee Cross-Appellant.

                   Appeal from the United States District Court
                        for the Western District of Texas
                             USDC No. 5:17-CV-411

   Before Owen, Chief Judge, and King and Engelhardt, Circuit Judges.
   King, Circuit Judge:
          Matthew Mitchell sued Orico Bailey and the Hoopa Valley Tribe in
   federal district court for violations of state tort and contract law. The district
   court, ruling on a 12(b)(1) motion to dismiss, found sovereign immunity
   barred suit against Bailey, in his official capacity, and the Hoopa Valley Tribe.
Case: 19-51123      Document: 00515689015           Page: 2   Date Filed: 12/30/2020

                                     No. 19-51123

   The district court then dismissed the claims asserted against these parties
   with prejudice. This appeal followed. Because we find the district court
   lacked original jurisdiction, we VACATE the judgment in part, AFFIRM
   the district court’s order of dismissal in part, REVERSE in part, and
   REMAND with instructions to dismiss without prejudice.
                                          I.
          Defendant-appellee cross-appellant Hoopa Valley Tribe (“Hoopa
   Valley”) is a federally recognized Indian tribe. Hoopa Valley created the
   AmeriCorps Hoopa Tribal Civilian Community Corps (“Hoopa Tribal
   CCC”) with a federal grant. Following severe floods and the resulting federal
   disaster declaration covering certain Texas counties, several AmeriCorps
   Disaster Response Teams, including Hoopa Tribal CCC, were deployed to
   Wimberley, Texas.
          Plaintiff-appellant cross-appellee Matthew Mitchell, a Texas resident,
   was injured while participating in the Wimberley disaster-relief efforts.
   Mitchell’s injuries were allegedly caused by defendant-appellee Orico
   Bailey’s negligence. Bailey is a California citizen who, at all relevant times,
   was acting in his capacity as a member of the Hoopa Tribal CCC.
          Mitchell filed suit in federal district court against Bailey and Hoopa
   Valley, to recover damages for his injuries. Mitchell asserted a negligence
   claim and a breach-of-contract claim against Hoopa Valley, and a negligence
   claim against Bailey. Pursuant to Federal Rule of Civil Procedure 12(b)(1),
   Bailey and Hoopa Valley filed a motion to dismiss for lack of subject matter
   jurisdiction. They argued, inter alia, that Mitchell’s claims against Hoopa
   Valley and Bailey were barred by sovereign immunity. Hoopa Valley and
   Bailey also filed a motion seeking to substitute the United States as the proper
   defendant.
          The district court granted the Rule 12(b)(1) motion on the basis of
   sovereign immunity and dismissed with prejudice the claims asserted against

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                                      No. 19-51123

   Bailey, in his official capacity, and Hoopa Valley. Without addressing the
   merits, the district court dismissed as moot the motion seeking to substitute
   the United States as the proper defendant. The district court then allowed
   any remaining individual capacity claims to proceed. The parties stipulated
   to the dismissal of such claims, the district court entered final judgment, and
   this timely appeal followed.
                                          II.
          We review de novo a Rule 12(b)(1) dismissal, applying the same
   standards as the district court. Block v. Tex. Bd. of Law Exam’rs, 952 F.3d 613,
   616 (5th Cir. 2020). And, we may affirm on any ground supported by the
   record, including one not reached below. Ballew v. Cont’l Airlines, Inc., 668
F.3d 777, 781 (5th Cir. 2012).
          The party asserting jurisdiction bears the burden of proof and must
   establish, by a preponderance of the evidence, that the court has jurisdiction
   based on: “(1) the complaint alone; (2) the complaint supplemented by
   undisputed facts evidenced in the record; or (3) the complaint supplemented
   by undisputed facts plus the court’s resolution of disputed facts.” Id.
   (quoting Ramming v. United States, 281 F.3d 158, 161 (5th Cir. 2001)).
                                          III.
          Although much of the district court’s opinion and most of Mitchell’s
   arguments on appeal center on the question of sovereign immunity, on cross-
   appeal, Hoopa Valley asserts that the district court lacked original
   jurisdiction. We agree and engage in analysis addressing all potential bases
   for original jurisdiction, rejecting each in turn. As we are free to affirm a Rule
   12(b)(1) dismissal on any ground supported by the record, see Ballew, 668
F.3d at 781, we find no occasion to reach the issue of sovereign immunity.

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                                      No. 19-51123

      A. Federal-Question Jurisdiction
          We begin by addressing whether the district court had federal-
   question jurisdiction over this case and conclude that it did not.
          Under 28 U.S.C. § 1331, a federal court has original jurisdiction over
   cases “arising under the Constitution, laws, or treaties of the United States.”
   To determine whether a claim arises under federal law, the court examines
   the “well pleaded” allegations of the complaint and “ignore[s] potential
   defenses.” Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 6 (2003). The artful-
   pleading doctrine serves as a corollary to the well-pleaded complaint rule. See
   Roland v. Green, 675 F.3d 503, 520 (5th Cir. 2012). Under the artful-pleading
   doctrine, a federal court may have federal-question jurisdiction over a state-
   law claim in only two circumstances: when Congress expressly so provides or
   when a federal statute wholly displaces the state-law cause of action through
   complete pre-emption. Anderson, 539 U.S. at 8.
          Mitchell’s complaint does not allege any federal claims; his claims are
   limited to state-law negligence and breach of contract. On the face of
   Mitchell’s complaint, there are no federal questions which might support
   federal-question jurisdiction. The prospect of a tribal sovereign immunity
   defense does not, in and of itself, “convert a suit otherwise arising under state
   law into one which, in the statutory sense, arises under federal law.” Okla.
   Tax Comm’n v. Graham, 489 U.S. 838, 841 (1989); see TTEA v. Ysleta del Sur
   Pueblo, 181 F.3d 676, 681 (5th Cir. 1999) (“Under the well-pleaded complaint
   rule, an anticipatory federal defense is insufficient for federal jurisdiction.”).
   Ordinary negligence and breach-of-contract claims have not been completely
   pre-empted by any federal law, nor does the resolution of these claims turn
   on the answer of an important federal question. Cf. Grable & Sons Metal
   Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308, 313 (2005).
          Yet, Mitchell posits that because Bailey and Hoopa Valley sought to
   have the United States substituted as the proper defendant, pursuant to the

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   Westfall Act, 28 U.S.C. § 2679, the district court had federal-question
   jurisdiction over this case. Mitchell is incorrect.
            To be sure, 28 U.S.C. § 2679(d)(2) “conclusively” vests federal
   jurisdiction over a suit against a federal employee whom the Attorney
   General has certified “was acting within the scope of his office or
   employment.” Id. And, under 28 U.S.C. § 2679(d)(3), “upon . . .
   certification by the court, such action or proceeding shall be deemed to be
   [one] brought against the United States . . . and the United States shall be
   substituted as the party defendant.”
            But make no mistake, the Westfall Act does not confer independent
   jurisdiction on a federal court to hear a certification petition at the request of
   a purported employee. See Sanchez v. Beacon Info. Tech. & Staffing & Serv.,
   LLC, No. EP-08-CV-332-KC, 2009 WL 4877705, at *5 (W.D. Tex. Dec. 10,
   2009) (citing Osborn v. Haley, 549 U.S. 225, 241 (2007)); see also Moncrief v.
   Moncrief, No. 4:98-CV-528-E, 1998 WL 567988, at *3, *5 (N.D. Tex. Aug. 3,
   1998) (“[The defendant’s] Petition for Certification is, in essence, a motion
   now pending before this Court rather than a new cause of action/lawsuit
   asserted by [the defendant] against the United States.”) (collecting cases
   from the Fifth Circuit and sister circuits characterizing the certification
   process as a motion to substitute); cf. Foster v. Hill, 497 F.3d 695 (7th Cir.
   2007); B & A Marine Co. v. Am. Foreign Shipping Co., 23 F.3d 709 (2d Cir.
   1994).
            Here, it was Bailey and Hoopa Valley that moved, pursuant to the
   Westfall Act, to have the United States substituted as a proper defendant. 1

            1
              Under the Westfall Act, if an action is commenced in a federal court, and the
   Attorney General (or the court) certifies that the employee “was acting within the scope of
   his office or employment at the [relevant] time,” the United States must be substituted as
   the defendant. 28 U.S.C. § 2679(d)(1). “If the action is launched in a state court, and the
   Attorney General makes the same certification, the action ‘shall be removed’ to the

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   The Attorney General never granted a certification in this case, and the
   district court never entertained the motion for certification at all. In short,
   there is no support for Mitchell’s position that an unresolved motion, filed
   by Bailey and Hoopa Valley asserting a federal law as a defense, should vest
   the district court with original jurisdiction over the action.
           Mitchell’s arguments to the contrary notwithstanding, Gutierrez de
   Martinez v. Lamagno, 515 U.S. 417, 421 (1995), does not support the
   conclusion that Hoopa Valley’s motion pursuant to the Westfall Act vested
   the court with jurisdiction. In Lamagno, unlike in this case, the federal district
   court had an independent source of original jurisdiction over the action. Id.
   Also unlike Lamagno, here, Mitchell was not challenging a certification made
   by the Attorney General. Rather, Mitchell opposed a motion for certification
   before the district court, arguing Bailey and Hoopa Valley were not acting as
   federal employees. Critically, Mitchell’s complaint does not allege that
   Bailey was a federal employee covered by the Westfall Act. Nor does the
   complaint present any claims under the Westfall Act. Again, to be clear, the
   complaint does not implicate any issues arising under federal law. 2
           Looking to the well pleaded allegations of the complaint, ignoring
   potential defenses, and finding no applicable exception, the district court did
   not have federal-question jurisdiction over this case. We turn next to
   diversity jurisdiction.

   appropriate federal district court, and again the United States must be substituted as the
   defendant.” Osborn, 549 U.S. at 241 (quoting 28 U.S.C. § 2679(d)(2)).
           2
              Mitchell also relied heavily on Osborn v. Haley to defend his position at oral
   argument. But Osborn’s holding on jurisdiction is inapposite to the case at bar. Specifically,
   on the “jurisdictional issues,” Osborn concluded only “that the Attorney General’s
   certification is conclusive for purposes of removal.” Osborn, 549 U.S. at 231. It does not
   save Mitchell, here, and leaves our conclusions unaffected.

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          B. Diversity Jurisdiction
             For a district court’s original jurisdiction to be properly premised on
   28 U.S.C. § 1332, two requirements must be met. First, a statutorily-
   determined amount in controversy—at present, $75,000—must be at issue.
   28 U.S.C. § 1332(b). And, next, there must be complete diversity between all
   parties. That is, the citizenship of each plaintiff must be diverse from the
   citizenship of each defendant. See Vantage Drilling Co. v. Hsin-Chi Su, 741
F.3d 535, 537 (5th Cir. 2014). We start by addressing the parties’ citizenship,
   and conclude Hoopa Valley is a stateless entity. Then, we examine the effect
   of naming a stateless entity as a party to the suit and conclude Hoopa Valley
   destroyed complete diversity.
     i.      Indian tribes are stateless entities for the purpose of diversity jurisdiction.
             Although neither the Supreme Court nor the Fifth Circuit has
   squarely addressed this question, it appears all courts to have considered it
   agree: Indian tribes are not citizens of any state for the purpose of diversity
   jurisdiction. See Am. Vantage Cos., Inc. v. Table Mountain Rancheria, 292 F.3d
1091, 1096 (9th Cir. 2002); see also Frazier v. Brophy, 358 F. App’x 212, 213
   (2d Cir. 2009) (concluding that an Indian tribe is not a citizen of any state).
   Tribes are thus viewed as “stateless entities” for purposes of an analysis
   under 28 U.S.C. § 1332. See Wells Fargo Bank, Nat’l Ass’n v. Lake of the
   Torches Econ. Dev. Corp., 658 F.3d 684, 692-93 (7th Cir. 2011) (“[M]ost
   courts agree that Indian tribes are not citizens of any state for purposes of the
   diversity statute . . . .”); Miccosukee Tribe of Indians of Fla. v. Kraus-Anderson
   Constr. Co., 607 F.3d 1268, 1276 (11th Cir. 2010) (“[T]he majority view—
   followed by every court of appeals that has addressed the issue—is that
   unincorporated Indian tribes . . . are not citizens of any state.”); Standing
   Rock Sioux Indian Tribe v. Dorgan, 505 F.2d 1135, 1140 (8th Cir. 1974) (“[I]t
   is clear that an Indian tribe is not a citizen of any state and cannot sue or be

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   sued in federal court under diversity jurisdiction . . . .”); cf. Victor v. Grand
   Casino-Coushatta, 359 F.3d 782, 785 (5th Cir. 2004) (noting, without analysis
   or comment, a district court’s conclusion that a tribe was a stateless entity).
            We are persuaded by the weight of authority from sister circuits.
   Hoopa Valley, a federally recognized Indian tribe, is to be considered a
   stateless entity when establishing whether there is complete diversity
   between all parties.
     ii.    Hoopa Valley’s presence as a party to the suit destroyed complete diversity,
            and therefore, the district court did not have jurisdiction under 28 U.S.C.
            § 1332.
            As is well settled, the presence of a single stateless entity as a party to
   a suit destroys complete diversity. “When a plaintiff sues more than one
   defendant in a diversity action, the plaintiff must meet the requirements of
   the diversity statute for each defendant or face dismissal,” Newman-Green,
   Inc. v. Alfonzo-Larrain, 490 U.S. 826, 829 (1989), and the presence of a
   “stateless” party operates as a “jurisdictional spoiler” that destroys
   complete diversity, id. at 829-30.
            Because Hoopa Valley was named as a defendant, complete diversity
   did not exist between the parties. See Ninigret Dev. Corp. v. Narragansett
   Indian Wetuomuck Hous. Auth., 207 F.3d 21, 27 (1st Cir. 2000)
   (“[N]otwithstanding the joinder of other diverse parties, the presence of an
   Indian tribe destroys complete diversity.”). Consequently, original
   jurisdiction under 28 U.S.C. § 1332 3 could not have been properly

            3
              Section 1332(a)(4) allows for diversity suits between “a foreign state, defined in section
   1603(a) of this title, as plaintiff and citizens of a State or of different States.” But it is settled that
   Indian tribes are not foreign states. See Cherokee Nation v. Georgia, (30 U.S.) 5 Pet. 1, 16-18, 8 L. Ed.
25 (1831).

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   established. Finally, we address the parties’ arguments on supplemental
   jurisdiction.
      C. Supplemental Jurisdiction
          Federal    courts   may—in certain classes          of   cases—exercise
   supplemental jurisdiction over additional claims that are part of the same case
   or controversy. Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546, 552
   (2005); see 28 U.S.C. § 1367. In order for a federal court to invoke
   supplemental jurisdiction, however, it must first have original jurisdiction
   over at least one claim in the action. Id. at 554. Incomplete diversity
   eliminates the prospect of establishing original jurisdiction with respect to all
   claims. See Arena v. Graybar Elec. Co., 669 F.3d 214, 223-24 (5th Cir. 2012).
   The joinder of a defendant that destroys diversity, then, leaves nothing to
   which supplemental jurisdiction can adhere. Allapattah Servs., Inc., 545 U.S.
   at 554. This is so because allowing supplemental jurisdiction over non-
   diverse parties in cases wholly based on diversity would undermine the
   complete-diversity requirement. Id. at 553-54.
          Despite Mitchell’s contention that the district court could have
   properly established supplemental jurisdiction under 28 U.S.C. § 1367, his
   position is indisputably wrong. Mitchell points us to a number of cases in the
   class-action context discussing exercises of supplemental jurisdiction over
   absent class members. See, e.g., Miss. ex rel. Hood v. AU Optronics Corp., 571
U.S. 161, 165 (2014) (noting that “CAFA . . . loosened the requirements for
   diversity jurisdiction for two types of cases—‘class actions’ and ‘mass
   actions,’” and discussing supplemental jurisdiction over claims that do not
   independently meet the requisite amount in controversy); Rosmer v. Pfizer
   Inc., 263 F.3d 110, 114 (4th Cir. 2001) (“We must decide whether § 1367
   authorizes supplemental jurisdiction in the diversity class action context.”).
   This case, involving two defendants and a single plaintiff, falls comfortably
   outside the scope of the Class Action Fairness Act and its loosened

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   jurisdictional requirements. For our purposes, the cases Mitchell relies on do
   not alter the well-established conclusion that supplemental jurisdiction will
   not serve as an end-run around 28 U.S.C. § 1332’s complete-diversity
   requirement.
          Mitchell named both Bailey and Hoopa Valley as defendants in his
   original complaint. The naming of a stateless entity as a defendant destroyed
   complete diversity and all prospects of establishing diversity jurisdiction. As
   we concluded above, an independent basis of federal-question jurisdiction
   likewise did not exist. Any exercise of supplemental jurisdiction under 28
   U.S.C. § 1367 would not have been proper, for there was no claim over which
   the district court had original jurisdiction and to which supplemental
   jurisdiction could adhere. The district court, therefore, did not have original
   jurisdiction over this case at all.
          We affirm, in part, the district court’s dismissal pursuant to Fed. R.
   Civ. P. 12(b)(1), albeit on different grounds. But as we establish next, any
   dismissal predicated on Fed. R. Civ. P. 12(b)(1) must be without
   prejudice. Accordingly, we reverse in part and remand with instructions to
   dismiss the claims against Bailey, in his official capacity, and Hoopa Valley
   without prejudice.
      D. Dismissal Without Prejudice
          A court’s dismissal of a case resulting from a lack of subject matter
   jurisdiction is “not a determination of the merits and does not prevent the
   plaintiff from pursuing a claim in a court that does have proper jurisdiction.”
   Ramming, 281 F.3d at 161. Accordingly, such a dismissal should be made
   without prejudice. See Fed. R. Civ. P. 41(b); see also Warnock v. Pecos
   Cnty., Tex., 88 F.3d 341, 343 (5th Cir. 1996) (vacating the district court’s
   “judgment of dismissal, revers[ing] in part and remand[ing] with
   instructions” to dismiss without prejudice). The district court erred when it
   dismissed claims pursuant to Rule 12(b)(1) with prejudice, and we therefore

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   reverse in part.
                                                IV.
           Because we conclude that the district court lacked original jurisdiction
   over Mitchell’s claims, we VACATE the district court’s judgment in part, 4
   AFFIRM the order of dismissal in part, REVERSE in part, and
   REMAND with instructions to dismiss all claims against Orico Bailey, in his
   official capacity, and the Hoopa Valley Tribe without prejudice. Plaintiff-
   appellant cross-appellee Matthew Mitchell is to bear the costs.

           4
              We vacate in part to leave undisturbed the parties’ stipulation of dismissal of the
   individual capacity claims, effectuated by the district court in its final judgment. To be sure,
   the parties do not challenge this on appeal. After dismissing Hoopa Valley and Bailey, in
   his official capacity, as defendants, the district court allowed any remaining individual
   capacity claims to proceed. Thereafter, the parties stipulated to the dismissal of such
   claims. The court was, by then, free to effectuate the parties’ stipulation as it had cured any
   defect in its jurisdiction. See Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 572-73
   (2004) (“[D]ismissal of the party that . . . destroyed diversity [is a] method of curing a
   jurisdictional defect.”).

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