Court Opinion

ID: 771247
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:47:50+00
Date Added: 2024-06-11T17:55:56.210479
License: Public Domain

233 F.3d 532 (7th Cir. 2000)
Norfolk Southern Railway Company, Plaintiff-Appellant,v.James E. Guthrie, Buddy W. Snyder,  and Lakin Law Firm, Defendants-Appellees.
No. 00-1763
In the  United States Court of Appeals  For the Seventh Circuit
Argued October 24, 2000Decided November 15,  2000

Appeal from the United States District Court for the Southern District of Illinois, East St.  Louis Division.  No. 99 C 639--William L. Beatty, Judge.
Before Flaum, Chief Judge, and Manion and  Evans, Circuit Judges.
Flaum, Chief Judge.

1
Norfolk Southern  Railway Company ("NS") appeals the  dismissal of its declaratory judgment  action against Buddy W. Snyder and Lakin  Law Firm ("Lakin").1 The district  court dismissed NS's claims for lack of  subject-matter jurisdiction under Article  III. We affirm the lower court's  decision, but on different grounds.

I.  Background

2
Part of NS's extensive railroad  operations are located in Illinois. NS's  relations with its employees in this area  are governed by a collective bargaining  agreement ("CBA") and the Railway Labor  Act ("RLA"), 45 U.S.C. sec. 151 et seq.  Under the CBA, NS must hold a fair and  impartial investigation to discipline  workers who have been employed for sixty  or more days. Such a worker is entitled  to be represented by an officer of the  union during these hearings. NS requires  any employee who is injured while on duty  or on company property to report to his  or her supervisor before the end of that  day. Any employee who obtains medical  attention for such injuries must also  notify his or her supervisor.

3
Current defendant Snyder and former  defendant Guthrie are employees of NS who  suffered apparently work-related injuries  and received medical treatment for these  during June, 1999 without informing their  supervisors. When NS's management learned  of their failure to follow the company's  rules, it notified both Snyder and  Guthrie that they were to attend  disciplinary investigations that were  originally scheduled in July but were  postponed until September. After  receiving these notifications, both  Guthrie and Snyder hired Lakin.

4
On August 27, NS received two letters  from Lakin regarding Guthrie and Snyder.  Lakin informed NS that it represented  both employees. Both letters state that  any disciplinary investigation by NS  would interfere with Lakin's attorney-  client relationships with Guthrie and  Snyder. Lakin requested that NS cancel  the investigation until after Lakin had  filed and litigated Guthrie and Snyder's  claims under the Federal Employer's  Liability Act ("FELA"), 45 U.S.C. sec. 51  et seq., and asked to be notified of NS's  decision by August 31.

5
In response to these letters, NS filed  a complaint for declaratory and  injunctive relief on August 31, 1999. The  complaint asked the district court to  find that the disciplinary investigations  were permitted by the RLA and CBA and  that any attempt by Lakin to prevent such  investigations through state law means  would be preempted by federal law. NS was  aware that Illinois recognized a tort for  interference with an attorney-client  relationship and that law firms could sue  in their own names to recover under this  cause of action. NS also knew that on  eight different occasions within the  preceding year-and-a-half Lakin had filed  suits in state court employing this claim  to prevent Union Pacific, another  railroad operating in southern Illinois,  from conducting disciplinary  investigations of its employees.

6
Lakin moved to dismiss NS's action on a  variety of theories. The district court  chose one not argued by the parties: lack  of a case or controversy under Article  III. The court stated that it did not  have subject-matter jurisdiction over the  case because Lakin had not taken any  actions against NS and NS was not in  immediate danger of sustaining direct  injury caused by Lakin. NS filed a  Fed.R.Civ.P. 59(e) motion asking for an  opportunity to brief the case or  controversy issue and for the court to  reconsider its decision, but this was  denied.

7
NS appealed to this court. During the  appellate briefing schedule, Northeast  Ill. Reg'l Commuter R.R. Corp. v. Hoey  Farina & Downes, 212 F.3d 1010 (7th Cir.  2000) ("Metra"), whose legally relevant  facts are identical with the instant  case, was decided. Metra holds that,  because of the well-pleaded complaint  rule, the federal courts lack statutory  subject-matter jurisdiction over  declaratory actions that seek to  challenge threatened state law actions by  non-governmental declaratory defendants.  Id. at 1014-16.

II.  Discussion

8
The parties present two arguments: one  concerning constitutional subject-matter  jurisdiction and the other regarding  statutory subject-matter jurisdiction. We  may exercise our discretion in choosing  which of these threshold issues to  address initially. See Steel Co. v.  Citizens for a Better Environment, 523  U.S. 83, 97 n.2 (1998) (stating that "a  statutory standing question can be given  priority over an Article III question,"  (emphasis added) suggesting that a court  has the discretion to consider either a  constitutional or statutory subject-  matter jurisdiction question first). Even  though Article III jurisdiction need not  always be examined before any other  issue, it is an antecedent question of  every case. Id. at 101. Thus, we choose  to analyze the case or controversy issue  before the well-pleaded complaint  question.

A.  Case or Controversy

9
The district court's legal determination  that it lacked Article III jurisdiction  is reviewed de novo. See Love Church v.  City of Evanston, 896 F.2d 1082, 1085  (7th Cir. 1990). NS argues that its  complaint against Lakin and Snyder  presents a case or controversy and thus  should not have been dismissed for lack  of constitutional subject-matter  jurisdiction. NS is correct.

10
Where a declaratory plaintiff files a  complaint in anticipation of litigation  by the declaratory defendant, a case or  controversy exists if the threat of such  litigation is real and immediate. See GNB  Battery Technologies, Inc. v. Gould,  Inc., 65 F.3d 615, 620 (7th Cir. 1995).  Only the actions of the declaratory  defendant known to the declaratory  plaintiff at the time the action is  commenced can be considered in determining whether such a threat exists.  See Trippe Mfg. Co. v. American Power  Conversion Corp., 46 F.3d 624, 627 (7th  Cir. 1995). NS knew that Lakin had filed  tortious interference claims against  Union Pacific on eight occasions when  that railroad had tried to conduct  disciplinary investigations against  Lakin's clients. These incidents show  that Lakin is likely to litigate whenever  it believes a railroad is interfering  with its attorney-client relationships.  NS received two letters from Lakin  stating that NS's proposed investigations  against Snyder and Guthrie would  sointerfere. Lakin's propensity to sue  whenever it believes that a railroad is  interfering with its attorney-client  relationships combined with its letters  to NS stating that Lakin believed that  NS's proposed disciplinary investigations  would constitute such interference is  sufficient to demonstrate a real and  immediate threat of litigation. Thus, the  district court had the constitutional  subject-matter jurisdiction necessary to  proceed with NS's declaratory action.

11
International Harvester Co. v. Deere &  Co., 623 F.2d 1207 (7th Cir. 1980),  relied upon by Lakin, is not to the  contrary. In that case, Deere would  frequently use litigation against parties  that it believed infringed on its  patents, much the same way Lakin sues  railroads that it believes are about to  interfere with its attorney-client  relationships. However, declaratory  plaintiff International Harvester failed  to show that Deere believed that  International Harvester's product design  infringed on Deere's patent, which is the  fact that would trigger a suit by Deere.  Id. at 1212. In contrast to International  Harvester, the letters from Lakin to NS  show that Lakin believed the disciplinary  investigations would interfere with its  attorney-client relationships, which is  the fact that would trigger litigation by  Lakin, and thus a real and immediate  threat of suit existed.

B.  Metra Decision

12
Unfortunately for NS, it faces another  barrier in its attempt to bring Lakin and  Snyder into federal court. This circuit's  decision in Metra holds that in a  declaratory judgment action anticipating  litigation by a non-governmental  declaratory defendant, statutory subject-  matter jurisdiction exists only where  federal jurisdiction would be present in  a suit filed by the private declaratory  defendant against the declaratory  plaintiff. 212 F.3d at 1014-16. In this  case, the declaratory defendant is Lakin,  which is not a government entity, and its  only claim in a putative suit filed  against NS would be a state law tortious  interference action. Under Metra, the  well-pleaded complaint rule of Louisville  & Nashville Co. v. Mottley, 211 U.S. 149  (1908) applies because Lakin's complaint  would not allege a federal cause of  action and thus federal question  jurisdiction under 28 U.S.C. sec. 1331  (the only type of statutory jurisdiction  NS alleges) does not exist.

13
NS correctly admits that the facts of  the instant case are identical to those  of Metra for all legally relevant  purposes and concedes that Metra bars its  suit if that decision stands. Thus, NS  argues that Metra and the Seventh Circuit  cases on which it relies are incorrect  and should be overruled. NS claims that  Metra lacks support in Supreme Court  holdings and is in tension with a prior  Seventh Circuit decision. NS's  contentions, or variations on these, were  considered in and rejected by the Metra  opinion. Petitions for rehearing by the  panel and rehearing en banc were filed in  Metra, but were denied. NS does not claim  that the Metra holding conflicts with a  Supreme Court decision. NS has not  demonstrated that Metra goes against the  bulk of Seventh Circuit law, nor does NS  cite opinions from other circuits showing  that Metra deviates from the decisions of  other courts that have considered the  issue. In these circumstances, we decline  to overrule Metra and instead reaffirm  it. See In re Bentz Metal Prods. Co., 231 F.3d 1029, 1033 (7th Cir.  2000). Applying Metra to NS's complaint,  we hold that the lowercourt lacks  statutory subject-matter jurisdiction  over this case.

III.  Conclusion

14
NS's declaratory complaint presents a  justiciable case or controversy under  Article III. However, Lakin's claims  against NS would be based only on state  law, and thus no federal jurisdiction  exists under sec. 1331. Because of this  lack of federal question jurisdiction,  the judgment of the district court is  Affirmed.

Notes:

1
 James E. Guthrie was also a defendant in the  original complaint, but NS named only Snyder and  Lakin in its amended complaint which is the  subject of this appeal.