Court Opinion

ID: 9460171
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:43:54.838783+00
Date Added: 2024-06-11T17:36:30.906355
License: Public Domain

*110CELEBREZZE, Circuit Judge
(dissenting).
I agree with my brethren that if Appellant can sustain its allegations, it deserves a forum in which to vindicate its interests. I disagree with the majority over its means of accomplishing this. Because I believe that Appellant raises neither a substantial federal question nor a properly pendent state claim, I would allow it to amend its complaint to provide diversity jurisdiction, by striking the non-diverse party, or would remit Appellant to its remedies in Ohio state courts.
The majority seeks to avoid the basic issue raised on this appeal by remitting the case to the District Court as a pendent state law claim. The issue of pendent jurisdiction was not considered by the District Court, nor did Appellant request such action, nor have Appellees had an opportunity to argue against its application. The only issue raised before this Court on appeal is whether an abuse of the 28 U.S.C. § 1963 process for registering foreign federal court judgments gives rise to an independent federal private remedy. If it does, the District Court should apply federal common law to decide the issue under federal question jurisdiction. If it does not and if the District Court has diversity or pendent jurisdiction over the tort claim, the District Court must apply Ohio law. Thus, not only has the majority reached an improper result, in my opinion, but it has given the least possible aid to the District Court in deciding what law should apply.
The majority asserts that the Ohio District Court which registered the California judgment “has authority, necessarily implied from § 1963 and as a matter of inherent jurisdiction” to annul the registered judgment, vacate executions issued on the judgment, and restore assets seized under the judgment to aggrieved parties. I read no such implication from § 1963. The remedy for an improperly obtained judgment is provided under Rule 60(b) of the Federal Rules of Civil Procedure. Rule 60(b) authorizes a court to vacate a judgment obtained by fraud or misrepresentation “upon such terms as are just.”
The District Court promptly vacated the improperly registered judgment on Appellant’s oral motion. Appellant now seeks a damage award, since Appellees “have caused Plaintiff Corporation to be damaged by disruption of its normal business, and specially damaged by loss of business reputation in the community, loss of customers, credit standing, profit and income, and the rendering ineffective the nationwide advertising and sales effort of a sensitive product, to its actual damages in the sum of $1,000,000.-00.” Amended Complaint, filed May 16, 1972, para. X. Appellants consistently informed the District Court, as they now tell us, that they do not seek a mere vacation of the judgment, with collateral matters restored as proper. They want relief under a specific tort claim, with damages set at $2,000,000, when punitive damages are included.
The majority remands to the District Court by arguing that “[S]ince it necessarily has implied federal authority [to vacate the judgment, etc.], the registering court also would have pendent jurisdiction of a non-federal claim for abuse of process where the aggrieved party has suffered damage or loss as a result of the wrongful registration.” It then proceeds to hold that “[T]he case is remanded for disposition of appellant’s claim on its merits.” It arrives at this conclusion without consideration of the factors which are significant in deciding whether pendent jurisdiction should be exercised.
Its conclusion is unwarranted for four reasons. First, the majority mandates the exercise of pendent jurisdiction in disregard of the rule that district courts have discretion over whether to hear pendent claims. Second, the holding flies in the face of the Supreme Court’s teachings on federal-state relations. Third, it has no basis in the raison d’etre of pendent jurisdiction — judicial economy. Fourth, the holding is contrary to the spirit of 28 U.S.C. § 1963, *111which is the sole basis for the federal court’s initial involvement in these proceedings.
It is a basic rule of judicial administration that a District Court must have broad discretion to decide whether to entertain state law claims that parties seek to attach to federal causes of action. United Mine Workers v. Gibbs, 383 U.S. 715, 726, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966); A. H. Emery Co. v. Marcan Products Corp., 389 F.2d 11, 20 (2d Cir. 1968), cert, denied, 393 U.S. 835, 89 S. Ct. 109, 21 L.Ed.2d 106; Patrum v. Martin, 292 F.Supp. 370, 371 (W.D.Ky. 1968); Edward J. Moriarty & Co. v. General Tire & Rubber Co., 289 F.Supp. 381, 386 (S.D.Ohio 1967). The existence of pendent jurisdiction does not require its exercise.1 District courts must have an opportunity to consider the competing interests in deciding whether to exercise their pendent jurisdiction.2 Yet, the majority deprives the District Court of its discretion, without itself considering the factors the Supreme Court has instructed courts to ponder carefully before entertaining a pendent state claim.
In reviewing whether the District Court in this case should exercise its discretion to entertain Appellant’s tort claim, I am convinced that it should not. The second reason for my disagreement with the majority thus stems from the consideration of federal-state relations that the Supreme Court expressed in Gibbs:
Needless decisions of state law should be avoided both as a matter of comity and to promote justice between the parties, by procuring for them a surer-footed reading of applicable law. [I]f it appears that the state issues substantially predominate, whether in terms of proof, of the scope of the issues raised, or of the comprehensiveness of the remedy sought, the state claims may be dismissed without prejudice and left for resolution to state tribunals. 383 U.S. at 726-727, 86 S.Ct. at 1139.
Unless the majority considers Appellant’s tort claim to be a matter of federal law, it is obvious that the state claim predominates in this case. In terms of proof, the state abuse of process claim will require volumes of evidence as to Appellees’ scienter (unless a negligence claim is also brought), the extent of Appellant’s injury, specific items of alleged damage, and other matters. The proof required to vacate the registered judgment on the other hand, was a mere showing that the California Court had stayed its judgment before Appellees registered it in Ohio. State law predominates also as to “the scope of the issues raised.” The state tort claim involves issues of state law which may be novel and complex, whereas the vacation of the Ohio judgment depended simply on the proof that it had been obtained after the California judgment had been stayed. The “comprehensiveness of the remedy sought,” furthermore, is clearly greater as to the state tort claim than the federal claim that the Ohio judgment should be vacated.
Considering these factors, I fail to comprehend how the majority comes to its result. “Once it appears that a state claim constitutes the real body of a case, to which the federal claim is only an appendage, the state claim may fairly be dismissed.” Gibbs, 383 U.S. at 727, 86 S.Ct. at 1140.3
*112As a third reason for dissenting, I conclude that the interest in judicial economy, which provides the basic justification for the exercise of pendent jurisdiction,4 would not be served by directing the District Court to entertain the state tort claim. As the Gibbs Court stated:
Certainly, if the federal claims are dismissed before trial, even though not insubstantial in a jurisdictional sense, the state claims should be dismissed as well. 383 U.S. at 726, 86 S.Ct. at 1139.
Here the federal claim was disposed of long ago, so that the state claim would require a wholly independent proceeding. Thus, there is absolutely no interest in consolidating federal and state claims at this point, since only a state claim remains.5
Fourth, in attaching a state tort claim to a motion to vacate a 28 U.S.C. § 1963 registration, the majority expands the workload of the federal courts, whereas congressional intent in enacting § 1963 was to do precisely the opposite. The § 1963 procedure was deliberately designed to allow a simplified registration process for foreign judgments, so as to end the litigation of questions as to whether the original federal court foreign judgment was proper in various respects. Directing the appendage of a state tort claim to the simple procedure in § 1963 and its vacation under Rule 60(b) is contrary to the spirit of that section.
For these four reasons I conclude that it is improper to divest the District Court of its discretion to decide whether to exercise its pendent jurisdiction over Appellant’s state claim in that it is highly doubtful that the District Court would exercise such discretion in Appellant’s favor. The majority’s sympathies for Appellant’s allegations and condemnation of Appellees’ misuse of the federal courts ignore the need for district court discretion over the exercise of pendent jurisdiction. I too am sympathetic to Appellant’s allegations. But I am also mindful of the other demands on the federal district courts.6 Thus, Appellant should bring his abuse of process claim against the named Appellees in an Ohio state court — unless § 1963 itself authorizes a federal private cause of action on Appellant’s behalf. This is the question which Appellant asked us to decide. Because of my conclusion against the mandatory exercise of pendent jurisdiction, I cannot forestall this issue if Appellant is to be remitted to state courts.
Appellant urges that a federal private remedy should be inferred from § 1963 on behalf of persons aggrieved by the misuse of its registration procedures. Appellant argues that § 1963 protects the class of foreign judgment debtors and that from this we should infer that Congress intended the federal courts to entertain tort claims to protect debtors aggrieved by the misuse of § 1963. This argument is at odds with the case law on the implication of federal causes of action from facially silent statutes.
Only when a statute imposes a duty or prohibition and when the violation of that command injures a person in the enjoyment of a right Congress sought to protect in passing the statute will the federal courts draw the inference that Congress intended the federal courts to afford a private remedy to the aggrieved person. J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); Allen v. State Board of Elections, 393 U.S. 544, 557, 89 S.Ct. 817, 22 L.Ed.2d 1 (1969); Fullerton v. Monon*113gahela Connecting R. Co., 242 F.Supp. 622, 624 (W.D.Pa.1965).
I can find no congressional command or prohibition expressly stated in § 1963, which distinguishes this case from those which have implied private remedies from federal statutes. Section 1963 permits a judgment creditor to register a foreign judgment simply and efficiently in a federal court. While a registering creditor must follow the § 1963 procedures to make the registered judgment valid in a second state, I fail to see from the language of the section or from any legislative history that Congress thereby intended to protect judgment debtors in the enjoyment of the right to be free from personal injury caused by a misuse of its procedures as a matter of federal law. What Appellant is really arguing is that a federal court should provide an abuse of process remedy for persons aggrieved when other parties misuse the federal courts. Congress has not seen fit to federalize the tort of abuse of the federal judicial process. The federal courts, of course, have inherent power to vindicate their own interests through their contempt powers. But they have no right to afford private parties a remedy for the misuse of their processes, in the absence of congressional authorization. The lower federal courts have only such jurisdiction as Congress has granted. I find no federal cause of action exists for the abuse of § 1963 procedures. In the absence of a federal remedy, Appellants are remitted to the state courts for vindication of their rights, as is the constitutional custom under our system of government.
Having found no justification for returning the case to the District Court on the basis of pendent or federal question jurisdiction, I turn finally to Appellant’s alternative request. Appellant asks that it be permitted to amend its complaint to show diversity jurisdiction, by striking Appellee Lombardi, a non-diverse party. Under 28 U.S.C. § 1653, this Court has discretion, in proper cases, to allow a party to amend its complaint so as to establish federal jurisdiction. By striking Appellee Lombardi from its complaint, Appellant could accomplish this. “An application under § 1653 is to be construed liberally to permit the action to be maintained if at all possible to determine from the record that jurisdiction does in fact exist.” John Birch Society v. National Broadcasting Company, 377 F.2d 194, 199 (2d Cir. 1967). Although Appellants have been allowed to amend their pleadings twice already by the District Court, their failure to sustain jurisdiction under their present complaint is due to their attempt to imply a federal cause of action from 28 U.S.C. § 1963 in order to sustain federal question jurisdiction against all three Appellees. Thus, cases refusing permission to amend are not on point, since they center on a party’s refusal or failure to amend its complaint after a district court has given it the opportunity to do so. See Sharp v. Barnhart, 117 F.2d 604 (7th Cir. 1941), cert, denied, 313 U.S. 576, 61 S.Ct. 1099, 85 L.Ed. 1533 (where “good faith on the part of the moving parties is lacking,” 117 F.2d at 607); Joy v. Hague, 175 F. 2d 395 (1st Cir. 1949) (where the parties “refused to amend as the District Court invited them to do,” 175 F.2d at 396); and Harris v. American Legion, 261 F.2d 594 (7th Cir. 1958) (where the parties “fail[ed] to submit evidence establishing such diversity at the separate trial on that issue, although given ample opportunity to do so,” 162 F.Supp. 700, 712 (S.D.Ind.1958).) Under § 1653, I would allow Appellants to strike Appel-lee Lombardi and return the case to the District Court under diversity of citizenship jurisdiction. See Fry v. Layne-Western Company, 282 F.2d 97, 99 (8th Cir. 1960); Keene Lumber Co. v. Leven-thal, 165 F.2d 815, 818, n. 1 (1st Cir. 1948).

. “It has consistently been recognized that pendent jurisdiction is a doctrine of discretion, not of plaintiff’s right.” Gibbs, 383 U. S. at 726, 86 S.Ct. at 1139. See C. Wright & A. Miller, Federal Practice and Procedure, § 1588, Vol. 5, 813 (1971).

. See Baker, “Toward a Relaxed View of Federal Ancillary and Pendent Jurisdiction,” 33 U.Pitt.L.Rev. 759 (1972) ; Wright & Miller, § 1588, 810-11, 813.

. See Hart and Wechsler’s The Federal Courts and the Federal System, 925 (2d ed. 1973). Concerning the dangers of a loose and unthinking exercise of pendent jurisdiction by the federal courts, see Shakman, “The New Pendent Jurisdiction of the Federal Courts,” 20 Stan.L.Rev. 262 (1968).

. “[P]endent jurisdiction's] . . . justification lies in considerations of judicial economy, convenience and fairness to litigants.” 383 U.S. at 726, 86 S.Ct. at 1139.

. “[C]ourts will refuse to adjudicate the pendent claim when the federal claim is dismissed prior to trial ... or when it is mooted or abandoned or whenever retention of the state claim does not substantially increase the probability of a speedier and fairer adjudication of the controversy.” Wright and Miller, § 1588, 814-15.

. See Justice Black’s dissent in Bivens v. Six Unknown Named Agents on Federal Bureau of Narcotics, 403 U.S. 388, 429, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971).