Court Opinion

ID: 622352
Source: CourtListenerOpinion
Date Created: 2012-02-07 20:05:04+00
Date Added: 2024-06-11T17:51:00.250548
License: Public Domain

In the

United States Court of Appeals
               For the Seventh Circuit

No. 10-3408

G REGORY W. H EINEN,
                                                  Plaintiff-Appellant,
                                  v.

N ORTHROP G RUMMAN C ORPORATION,

                                                 Defendant-Appellee.

             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
              No. 10 C 3565—Suzanne B. Conlon, Judge.

    A RGUED JANUARY 12, 2012—D ECIDED F EBRUARY 7, 2012

   Before E ASTERBROOK, Chief Judge, and R OVNER and
T INDER, Circuit Judges.
 E ASTERBROOK, Chief Judge. While living in California,
Gregory Heinen agreed to take a job with Northrop
Grumman in Illinois. He contends in this suit that
Northrop failed to pay the relocation benefits it promised.
 The suit was filed in a state court and removed by
Northrop under the diversity jurisdiction. Northrop is
a Delaware corporation with its principal place of
2                                                 No. 10-3408

business in California. The notice of removal asserted
that Heinen was a “resident” of Massachusetts and there-
fore a “citizen” of that state. The jurisdictional section
of Northrop’s brief contains the same assertion. But
residence may or may not demonstrate citizenship,
which depends on domicile—that is to say, the state
in which a person intends to live over the long run. An
allegation of “residence” is therefore deficient. See, e.g.,
Gilbert v. David, 235 U.S. 561 (1915); Steigleder v. McQuesten,
198 U.S. 141 (1905); Denny v. Pironi, 141 U.S. 121 (1891);
Robertson v. Cease, 97 U.S. 646 (1878).
  When the events at issue began, Heinen was a citizen
of California. In February 2006 he agreed to relocate
to Illinois to work for Northrop. In April 2006, when he
moved to Illinois, his family stayed behind. He quit in
September 2006; his family was still in California. The
record does not show whether he moved back, but the
principal item of damages asserted in this suit is a loss
that Heinen alleges he incurred when the lender fore-
closed in April 2008 on the house in California. For
all we could tell, Heinen may still be a citizen of
California, intending to return there after a short stay
in Massachusetts.
  When we raised this issue at oral argument, counsel for
both sides were surprised to learn that “citizenship” for
the purpose of 28 U.S.C. §1332 depends on domicile
rather than residence. We directed Northrop to amend
the jurisdictional allegations in its notice of removal, a
step that can be taken even while a case is on appeal.
28 U.S.C. §1653. The amended notice shows that Heinen
No. 10-3408                                             3

and his family had a home in Massachusetts when the
case was removed, that he was registered to vote there,
and that he had a driver’s license issued by that state.
This shows domicile, so subject-matter jurisdiction
has been established. Heinen has moved to remand the
case, asserting (for the first time) that federal courts
lack jurisdiction, but his motion does not contain any
information pertinent to domicile; the motion to remand
is denied.
  Jurisdiction should be ascertained before filing suit
in federal court (or, as here, removing a suit to federal
court). Counsel have wasted the court’s time, and their
clients’ money, by postponing essential inquiries until
after the case reached the court of appeals. That strategy
often leads to a jurisdictional dismissal and the need to
start over in state court. Why take that risk? Lawyers
have a professional obligation to analyze subject-
matter jurisdiction before judges need to question the
allegations.
  On to the merits. Heinen accepted an offer of employ-
ment that was contingent on his agreement to Northrop’s
“Dispute Resolution Process.” He signed a document
accepting that process. He also apparently signed an
employment contract, which is not in the record. There
was a third contract, captioned “Supplementary Em-
ployee Relocation Agreement.” The “Dispute Resolution
Process” provides for arbitration of employment-
related disputes; the employment and relocation agree-
ments do not contain separate arbitration clauses. The
district court concluded that the “Dispute Resolution
4                                               No. 10-3408

Process” covers disputes about relocation benefits. It
ordered Heinen to arbitrate and dismissed the com-
plaint. That is a “final decision” appealable under 9 U.S.C.
§16 and 28 U.S.C. §1291. See Green Tree Financial Corp.
v. Randolph, 531 U.S. 79 (2000).
  The “Dispute Resolution Process” requires arbitration
of “[a]ny employment-related claim against the com-
pany”, with some irrelevant exclusions (such as disputes
about workers’ compensation, pensions, and taxes). The
district court held that Heinen’s demand for additional
relocation benefits is an “employment-related claim”.
Heinen’s appellate brief asserts that the relocation agree-
ment is “collateral to and separate from” the employ-
ment contract, which is true but irrelevant.
  Heinen does not come to terms with the language
of the arbitration clause. Relocation benefits are “em-
ployment-related”. One relation is obvious: the benefits
are payable only on account of employment. Here’s
another relation: the relocation agreement provides that
a recipient must repay all benefits “should I resign or be
discharged for cause within twelve (12) months after
my arrival at the new location”. Heinen did resign within
a year after his arrival in Illinois.
  He wants us to treat the arbitration clause as if it
covered only “all disputes under the employment con-
tract”, but that’s not what it says. The breadth of
“employment-related” is why the clause had to exclude
disputes about taxes and pensions, which are as “collat-
eral” as relocation benefits. Indeed, since the arbitration
clause is not in the employment contract any more than
No. 10-3408                                                  5

it is in the relocation agreement, it is hard to fathom
why Heinen thinks that it applies to the former but not
the latter.
   Northrop contends that the appeal is frivolous—which
it is—and asks for sanctions. The request is in Northrop’s
appellate brief. But Fed. R. App. P. 38 provides that a
litigant seeking sanctions must request them in a “sepa-
rately filed motion”. And this court is not inclined to
award sanctions in favor of a party that cannot be
bothered to follow the rules itself. Morgan, Lewis &
Bockius, LLP, which represents Northrop, should be
able to tell the difference between residence and
domicile, and should not have any difficulty complying
with Rule 38.
   Two weeks after oral argument, on the same day it
filed its amended notice of removal, Northrop filed a
separate motion for sanctions. This comes too late. If we
were seriously considering sanctions, we could have
initiated the process ourselves promptly after oral argu-
ment (if not before). There is little point to requesting
sanctions twice, once in a brief and again by motion,
and the duplication can cause both confusion and extra
work for everyone. Rule 38 permits a court of appeals
to award sanctions, after giving notice and an oppor-
tunity to respond, whether or not a litigant files a
separate motion. Our Practitioner’s Handbook for Appeals 45
(2003 ed.) tells counsel that the court may elect to
issue such a notice if a brief requests sanctions. See also
Greviskies v. Universities Research Association, Inc., 417 F.3d
752, 760–61 (7th Cir. 2005); In re Bero, 110 F.3d 462 (7th
6                                            No. 10-3408

Cir. 1997). Unless the court gives notice, however, an
adverse litigant is free to ignore a request made in
a brief. Likewise an adverse litigant can safely ignore a
post-argument motion for sanctions, unless the court
calls for a response.
              A FFIRMED; M OTION FOR S ANCTIONS D ENIED

                          2-7-12