Court Opinion

ID: 8947261
Source: CourtListenerOpinion
Date Created: 2022-11-27 08:32:36.110957+00
Date Added: 2024-06-11T17:09:53.465653
License: Public Domain

STAPLETON, Circuit Judge,
dissenting, with whom Judges SEITZ and MANS-MANN join.
I agree with the majority that a United States district court has ancillary jurisdiction to execute on its judgments.1 I further agree that Federal Rule of Civil Procedure 69 governs how that ancillary jurisdiction is to be exercised, namely “in accordance with the practice and procedure of the state in which the district court is held.” The “practice and procedure” in New Jersey, however, does not authorize what transpired in this case. Nor does Rule 13(g). Accordingly, I respectfully dissent.
A.
New Jersey courts are authorized by statute to execute on judgments. The judgment debtor’s real estate, chattels, rights, and credits may be seized and sold to satisfy the judgment. More relevant for present purposes, an obligation of a third party to the judgment debtor may be garnished. When this occurs, however, the court has jurisdiction to order the garnishee to pay the judgment creditor only “if the garnishee admits the debt.”2 The *391New Jersey “practice and procedure” on this point is tersely summarized by Professor Jennings in his New Jersey practice guide as follows:
The garnishee must admit the debt, or the Court has no jurisdiction to order him to pay it over. Beninati v. Hinchliffe, 1256 NJL 587, 20 A.2d 64 (E & A 1941).3 If the garnishee denies the debt, the proper practice is for the sheriff or a receiver to sue the garnishee. N. Drake, Inc. v. Donovan, 8 [N.J.] Misc. 869, 152 A 337 (Sup Ct 1930); Barrett Co. v. United Bldg. & Constr. Co., 5 [N.J.] Misc. 87,135 A 477 (Sup Ct 1926)4; Sebr-ing v. Patt, 91 NJL 393, 103 A 999 (Sup Ct 1918).
E.J. Jennings, Practice-Law Division, published as Volume 3A, Seltzer, New Jersey Law With Forms, § 14.02 at 14-502 (1982) (footnote added); see also 4 M.B. Blackner and D.W. Hansen, New Jersey Practice, § 1930 (1980).
Thus, where, as here, the third party who allegedly owes the judgment debtor denies the debt, New Jersey “practice and procedure” calls for the institution of an independent action by appropriate pre-judgment process. This is apparent on the face of N.J.Stat.Ann. §§ 2A:27-61 and -62, the statutes relied upon by the majority. Unlike the garnishment statute, § 2A:17-63, these statutes authorize the initiation of litigation, not post-judgment process in aid of execution. The majority chooses to gloss over this distinction presumably because it wishes to facilitate the collection of federal judgments in New Jersey. While this objective may be a desirable one, I believe the United States District Court for the District of New Jersey should be able to point to some specific authority before it asserts the right to resolve a state law claim against a third party5 who could not be forced to litigate in a federal court but for the fortuity that his creditor has suffered a federal judgment.
The distinction between post-judgment process in aid of execution and pre-judgment process initiating independent litigation was recognized in Berry v. McLemore, *392795 F.2d 452 (5th Cir.1986), a case virtually on all fours with the one now before us. McLemore, the Chief of Police of Maben, Mississippi, was found liable in a civil rights action for having violated Berry’s constitutional rights in the course of an arrest. When McLemore failed to pay the judgment, Berry filed a “suggestion of garnishment” in the district court seeking to collect his judgment from the town. Berry alleged that the town was liable to McLe-more because it had promised to pay any judgment obtained by Berry and asserted that the district court had ancillary jurisdiction to adjudicate this claim of McLemore’s against the town. The Court of Appeals for the Fifth Circuit rejected Berry’s argument:
Berry [asserts] that this court has ancillary jurisdiction over the present action as necessary to enforce the judgment rendered in [Berry’s favor]____ This post-judgment jurisdiction, however, is limited to those actions that a court may take in that same action____
The writ of garnishment, under the clear precedent of this court, is an action separate and independent from the action giving rise to the judgment debt. Butler [v. Polk], 592 F.2d 1293 [5th Cir.1979], Berry must have known this, as he did not file the suggestion of garnishment as a post-judgment motion to, or writ of execution to the judgment in, Berry I [Berry v. McLemore, 670 F.2d 30 (5th Cir. 1982)], but rather instituted new proceedings. Moreover, the basis of the garnishment proceedings and the basis of the claim against McLemore are different. In Berry I, Berry’s claim arose out of an alleged violation of his constitutional rights; in the instant garnishment proceedings, Berry’s claims allegedly arise out of contract, that is the alleged oral agreement between the Town and McLemore____ In other words, the alleged obligations of the Town ... are completely independent of the primary judgment against McLemore. We can find no case where a court held that it had ancillary jurisdiction to consider claims in a new and independent action merely because the second action sought to satisfy or give additional meaning to an earlier judgment. In any event, we are bound by our own precedent, and conclude that this court’s ancillary jurisdiction to enforce its judgment does not extend to these garnishment actions____
Thus, since any jurisdiction that this court had in Berry I is not available to this court in the instant actions, we must find an independent basis for federal jurisdiction over these garnishment actions or else dismiss the suggestions of garnishment.
795 F.2d at 455-6.
The proposition that an independent suit to collect a federal judgment requires an independent basis of federal jurisdiction also finds support in H.C. Cook Company v. Beecher, 217 U.S. 497, 30 S.Ct. 601, 54 L.Ed. 855 (1910) (Holmes, J.). In Beecher, the plaintiff secured a money judgment against a Connecticut corporation in a patent infringement suit. It thereafter brought suit against the directors of that corporation, asserting that they were answerable for the federal judgment already obtained. The district court rejected the argument that, because of the federal judgment, it had ancillary jurisdiction to entertain the plaintiff’s claim. The Supreme Court affirmed and explained that “if the directors are under obligation by Connecticut law to pay a judgment against their corporation, that is not a matter that can be litigated between citizens of the same State in ... [the courts] of the United States.” 217 U.S. at 499, 30 S.Ct. at 602.
While Justice Holmes’ “pronouncement” in Beecher may be “delphic” as the majority suggests and while it is true that Beecher was decided before Rule 69 was adopted, this does not deprive it of precedential value in the current context. In Beecher, as in Berry, the court held that a federal district court does not have ancillary jurisdiction to entertain an independent action to collect a state law debt simply because that independent action is a part of an effort to collect a federal judgment. As in Beecher and Berry, the parties to this suit, *393in accordance with well-settled New Jersey practice, looked first to an independent action to resolve the issues concerning the collective bargaining agreement claim. It was only at the insistence of the district judge that they applied in this case for a rule to show cause why the Township should not be ordered to pay the judgment. While this application distinguishes Beecher and Berry factually, the distinction is not legally relevant. The plaintiffs cannot, by the simple expedient of filing their application in this proceeding rather than in a new one, create ancillary jurisdiction where none would otherwise exist.
I read Rule 69 as incorporating into federal practice only New Jersey’s post-judgment execution process. Accordingly, for me, N.J.Stat.Ann. §§ 2A:17-61 and 62 are irrelevant. However, if Rule 69, as the majority suggests, incorporates these sections and thereby authorizes the marshal or a, receiver to initiate a new proceeding against the garnishee in the district court, the holdings of Beecher and Berry are equally pertinent here. A federal district court has no jurisdiction to entertain an independent proceeding on a state claim between non-diverse parties even if it is brought as part of an effort to collect a federal judgment.
B.
In order to understand why Rule 13(g) does not aid the plaintiffs, a more detailed review of the procedural history of the case is required. In October, 1977, there was a barroom fight between several off-duty members of the Township police department and appellees Marcos Skevofilax and Michael Michaels. This ultimately gave rise to a civil rights action which resulted in jury verdicts and substantial judgments in favor of Mr. and Mrs. Skevofilax and Michaels and against the Township and three individual police officers, Quigley, Fekete, and Semenza.
After the entry of the judgment against them, the individual police officers brought suit against the Township in the Superior Court of New Jersey, Middlesex County, seeking an order requiring it to pay the judgments entered against them. They relied upon a provision in their collective bargaining agreement with the Township that provided for indemnification by the Township of any liabilities incurred by a police officer “arising out of or incidental to the performance of his duty.” The Township denied liability contending, inter alia, that the liability of these police officers had not arisen out of and was not incidental to the performance of their police duties.
Approximately a year after the entry of the federal judgments and while the state case remained pending, the federal plaintiffs, on the suggestion of the trial judge, moved in the district court for an order requiring the Township to -pay the judgment against the individual police officers. Their argument was predicated on the same clause of the collective bargaining agreement that was the basis for the state case brought by the police officers. The individual police officers joined in this motion and secured a stay of their state action.
In response to a rule to show cause why such an order should not be entered, the Township insisted that the district court lacked jurisdiction to adjudicate the police officers’ indemnity claim.6 It also advised the court that it denied liability on this claim not only because the officers’ liability did not arise out of the performance of their duty,7 but also because the indemnifi*394cation clause, if construed to be applicable, would violate New Jersey law.
The district court, one day before cross motions for summary judgment were to have been heard in the state court, decided that it had jurisdiction to resolve the controversy between the police officers and the Township. It then held that the officers were entitled to indemnification under the collective bargaining agreement based in part on a finding “as a matter of law that they [the police officers] were operating under color of state law.”8 Purporting to act under Rule 69 of the Federal Rules of Civil Procedure, the district court ordered the Township to pay the judgments against the police officers.
The majority’s alternative rationalization for these post-judgment actions of the district court begins with the proposition that a district court exercising its ancillary jurisdiction may adjudicate Rule 13 cross-claims that assert that the claimant is entitled to be indemnified if he or she is found liable to the plaintiff. I agree that this proposition is accurate as applied to cross-claims and third-party claims that are litigated as a part of the original case. See, e.g., Pennsylvania Railroad Co. v. Erie Avenue Warehouse Co., 302 F.2d 843 (3d Cir.1962). I know of no authority, however, that would sanction an exercise of ancillary jurisdiction in the circumstances currently before us.
The majority’s analysis oversimplifies the issues presented by this case. It suggests that the police officers, when they joined plaintiffs’ post-judgment motion, “in effect made a Rule 13(g) cross-claim against the Township.” P. 386. Had the police officers sought to pursue this course of action, they would have been required to amend their pleadings pursuant to Rule 15(a)9 to assert such a cross-claim. Because of the policies favoring certainty in the conclusion of litigation, however, a court may not authorize amendments under Rule 15(a) after a final judgment is entered unless and until that judgment has been vacated. Kelly v. Delaware River Joint Commission, 187 F.2d 93, 94-95 (3d Cir.), cert. denied 342 U.S. 812, 72 S.Ct. 25, 96 L.Ed. 614 (1951); 3 J. Moore, Moore’s Federal Practice, §§ 15.-07[2] and 15.10 (2d Ed. 1985 Supp.); 6 C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure Civil, § 1489 at 445 (1971 and 1985 Supp.).10 Accordingly, the district court could not properly have granted the majority’s hypothetical post-judgment motion with the final judgments still in place.
It is true that where the requirements of Rules 59(a) or 60(b) are met, a judgment may be opened and an amendment permitted. See Kelly; C. Wright, A. Miller, & M. *395Kane, supra, at § 1489.11 However, neither provision of the Rules is applicable here. A Rule 59(a) motion must be filed within ten days, of the entry of judgment and is inapplicable for that reason alone. Of the six grounds for relief from judgment specified in Rule 60(b), only the catchall sixth ground is even arguably applicable to this case and its very wording demonstrates that Rule 60(b) does not address situations like this one. To obtain relief under Rule 60(b)(6), one must show a compelling reason “justifying relief from the operation of the judgment.” Here no one attacks the outstanding final judgments. They are valid and no one claims to be entitled to relief from their operation.
Moreover, even if Rule 60(b)(6) were applicable, relief is unavailable under that section absent a showing that extraordinary circumstances justify the reopening of the judgment and that the movant’s delay in seeking an amendment is not unreasonable. Federal Deposit Insurance Corp. v. Alker, 234 F.2d 113 (3d Cir.1956); see McDonald v. Oliver, 642 F.2d 169 (5th Cir. 1981); Fed.R.Civ.P. 60; C. Wright, A. Miller, & M. Kane, supra, § 1489 at 446-47.
The police officers made no showing of extraordinary circumstances. Nor could they have made such a showing. The officers voluntarily elected not to assert a known claim during five years of litigation, made the Township litigate that claim in New Jersey’s courts for a substantial period, and did not even ask the district court to consider it until almost a year after final judgment had been rendered. While this is an extraordinary situation in the sense that it is unprecedented, it is clear that the police officers could have shown neither diligence nor extraordinary equities favoring their position.
It follows that the district court’s order directing the Township to pay the judgment against the individual police officers could not stand even if it had been premised on some independent basis of subject matter jurisdiction. Because there is no such independent jurisdictional basis here, however, there is another important consideration that the majority fails to take into account. “[Pjractical needs are the basis of the doctrine of ancillary jurisdiction.” Owen Equipment, 437 U.S. at 377, 98 S.Ct. at 2404. Where “considerations of judicial economy, convenience, and fairness to litigants ... are not present a federal court should hesitate to exercise jurisdiction over state claims____ Needless decisions of state law should be avoided both as a matter of comity and to promote justice be*396tween the parties, by procuring for them a surer-footed reading of applicable law.” United Mine Workers of America v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 1139, 16 L.Ed.2d 218 (1966) (footnote omitted). Where, as here, the primary litigation allegedly giving rise to the ancillary jurisdiction has been concluded before the ancillary claim is even raised, and proper resolution of the ancillary claims will require significant further proceedings in federal court, practical concerns will rarely suffice to override this interest in comity. See id. at 726-27, 86 S.Ct. at 1139-40.12
At the time the federal plaintiffs and the police officers first asserted their contract indemnity claim, the considerations of efficiency and conservation of judicial resources that would have justified an exercise of ancillary jurisdiction had that claim been timely raised were no longer applicable. Neither the plaintiffs nor the police officers have shown that there was any appropriate saving of judicial resources when the district court diverted the contract indemnity claim from the state courts.
While it is true that the district court resolved the newly-raised indemnity claim without extensive additional proceedings, the issues presented therein were not susceptible of such summary resolution. The issue of whether the officers’ conduct came within the scope of the indemnity provision of the collective bargaining agreement could not appropriately be resolved by a finding that the officers were “acting under color of state law.” I agree with the district judge and the plaintiffs that the original jury’s verdicts necessarily determined that the individual police officers were acting “under color of state law.” However, whether one so acts for the purposes of Section 1983 is determined by reference to whether one purports to act under the authority conferred by state law. See, e.g., Monroe v. Pape, 365 U.S. 167, 187, 81 S.Ct. 473, 484, 5 L.Ed.2d 492 (1961), overruled on other grounds, Monell v. New York City Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978). That issue is therefore determined without regard to whether the civil rights defendant was performing acts which he and the State contemplated would be performed as part of his employment. See Monroe, 365 U.S. at 184, 81 S.Ct. at 482; Screws v. United States, 325 U.S. 91, 111, 65 S.Ct. 1031, 1040, 89 L.Ed. 1495 (1945); Lopez v. Vanderwater, 620 F.2d 1229 (7th Cir.), cert. dismissed 449 U.S. 1028, 101 S.Ct. 601, 66 L.Ed.2d 491 (1980). While I express no opinion with respect to the proper construction of the indemnity provision under New Jersey law, there is no reason to conclude that that provision was intended to be coterminous with Section 1983’s requirement of state action.
The majority relies on equitable considerations and on presumed facts not in the record concerning the parties’ insurance coverage and the conduct of the insurer in arguing that the district court should be permitted to see that its judgment is fully satisfied. However, we have no authority to disregard the interest in comity inherent in our federal system and laws of jurisdiction, or to ignore the need for finality in judgments reflected in the federal rules discussed above, simply to reach what may be a preferred result.

. As the Supreme Court declared in 1868,
Process subsequent to judgment is as essential to jurisdiction as process antecedent to judgment, else the judicial power would be incomplete and entirely inadequate to the purposes for which it was confered by the Constitution. Riggs v. Johnson County, 73 U.S. (6 Wall.) 166, 187, 18 L.Ed. 768 (1868).

. N.J.Stat.Ann. § 2A:17-63 provides:
After a levy upon a debt due or accruing to the judgment debtor from a third person, *391herein called the garnishee, the court may upon notice to the garnishee and the judgment debtor, and if the garnishee admits the debt, direct the debt, to an amount not exceeding the sum sufficient to satisfy the execution, to be paid to the officer holding the execution or to the receiver appointed by the court, either in 1 payment or in installments as the court may deem just. (Emphasis supplied.)

. The Court of Errors and Appeals put it this way in the Beninati case:
Where there is a levy on rights and credits under the statute here involved, R.S. 2:32-178, N.J.S.A. 2:32-178, a section of the district court act, or under the executions act, R.S. 2:26-179 and 180, NJ.S.A. 2:26-179, 2:26-180, and a rule is issued against the garnishee and the judgment debtor, an order directing the garnishee to pay the money over may be made only when the garnishee admits the debt is due the judgment debtor. "Upon the return of the rule to show cause, an order may be made requiring the garnishee to pay said debt, 'if he admits it.’ ” First Mechanics’, etc., Bank v. New Jersey Brick & Supply Co., 112 N.J.L. 218, 171 A. 176, 177 [Sup.Ct.1934]. "The words ‘an order may be made requiring the garnishee to pay said debt, if he admits it, to the officer,’ make the admitting of the debt a jurisdictional sine qua non." N. Drake, Inc. v. Donovan, 152 A. 337, 339, 8 N.J.Misc. 869; Barrett Co. v. United Building Construction Co., 135 A. 477, 5 N.J.Misc. 87.
20 A.2d at 66.

. In the Barrett Co. case, relied upon by the majority, the Supreme Court of New Jersey refused to approve an order directing the garnishee to pay the judgment creditor where the garnishee did not admit the debt. It explained the relevant New Jersey practice as follows:
[T]he rights and credits levied on (in this case the claim to a retained percentage) must be liquidated to use the language of the statute, by a suit, either in the name of the sheriff or of a receiver. This was the course pursued in Sebring v. Pratt, 92 N.J.Law, 393, 103 A. 999, and seems to be the only way of judicially settling the question whether the borough is liable to those claiming under the contractor, and, if so, to what extent.
135 A. at 478.

. While the Township was a party to the original litigation, I view it as a third party with respect to the claim based upon the collective bargaining agreement, which was not asserted in that litigation. In any event, the rationale of the majority would apply to claims of the judgment debtor against parties who had nothing to do with the original litigation whether or not those claims were related in any way to the subject matter of the original litigation.

. The Labor Management Relations Act, 29 U.S.C. § 141, et seq. and, of course, § 301 thereof, 29 U.S.C. § 185, does not provide an independent basis for federal subject matter jurisdiction. Even though a collective bargaining right is involved, the Act does not apply to political subdivisions such as the Township.

. The Township asserts that the police officers’ liability "arose not from the performance of a police officer’s duty, but from the malicious excesses of a brawl.”

. The majority opinion asserts that there were no "issues of material fact concerning the construction of the indemnification clause,” P. 380, and that the district judge correctly understood the Township only to be making two legal arguments, one addressed to the court’s jurisdiction and the other addressed to the public policy of New Jersey. This view of the record fails to explain the fact that there would have been no reason for the district court to have ruled at the post-judgment hearing that Quigley, Fekete, and Semenza "were operating under color of state law” unless she understood the Township and its insurer to be arguing that the conduct of their officers did not come within the terms of the collective bargaining agreement. There was no other pending issue that the district judge could have thought she was resolving by making that finding. While I believe her legal analysis was faulty when she concluded that no material issues of fact remained to be litigated, see infra, p. 396, clearly she understood that the Township had three arguments, not two.

. Rule 15(a) states in relevant part:
... [A] party may amend his pleadings only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires____

. In contrast to Rule 15(a), Rule 15(b) expressly authorizes post-judgment amendments when necessary to conform the pleadings to the issues "tried by express or implied consent of the parties." Rule 15(b) is inapplicable here because the police officers’ right to be indemnified was not tried in the original proceedings. The district judge, shortly before entering the final judgments, observed in an opinion:
[Wjhether the Township may have contractual obligations to other defendants are issues between the Township and those defendants that this court has not been called upon to decide.

. Rule 59(a) and (b) provide:
(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States; and (2) in an action tried without a jury, for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States. On a motion for a new trial in an action tried without a jury, the court may open the judgment if one has been entered, take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment.
(b) Time for Motion. A motion for a new trial shall be served not later than 10 days after the entry of the judgment.
Rule 60(b) provides in part:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, etc. On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation____

. This case closely resembles a number of others in which Courts of Appeal have found inappropriate an exercise of ancillary jurisdiction after the original litigation has been terminated. See, e.g., Joiner v. Diamond M. Drilling Co., 677 F.2d 1035, 1043 (5th Cir.1982) (claim against third-party defendant for contribution brought before settlement of primary claim dismissed after settlement); McDonald v. Oliver, 642 F.2d 169, 172 (5th Cir.1981) (motion to apportion liability made after judgment); Rosario v. American-Export Isbrandtsen Lines, Inc., 531 F.2d 1227, 1233 n. 17 (3d Cir.) (dictum, claim against third-party defendant where main claim settled before trial), cert. denied sub nom. Rosario v. United States, 429 U.S. 857, 97 S.Ct. 156, 50 L.Ed.2d 135 (1976). This case is unlike Black-bum Truck Lines, Inc. v. Francis, 723 F.2d 730 (9th Cir. 1984), because in Blackburn the court found that there was an independent basis for federal jurisdiction under the Interstate Commerce Act and 28 U.S.C. § 1337.