Court Opinion

ID: 9496472
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:27:34.523842+00
Date Added: 2024-06-11T17:57:36.079952
License: Public Domain

MOORE, Circuit Judge,
dissenting.
I respectfully dissent from the majority’s conclusion that the district court lacks *147subject matter jurisdiction over Plaintiff-Appellant, Margo Hudson’s (“Hudson”), garnishment action against Defendant-Ap-pellee, the City of Flint (“City”). Contrary to the majority, I conclude that Hudson’s garnishment action is merely a post-judgment proceeding following her prior § 1983 action against Defendants-Appel-lees, Bryan Coleman and Eric Rodgers (collectively “police officers”), and that the garnishment action will not inject so many new issues as to become a functionally separate lawsuit. I further conclude that Hudson is merely seeking to collect her judgment, rather than to impose liability upon someone not otherwise liable for the judgment. Therefore, the doctrine of ancillary jurisdiction gives the district court subject matter jurisdiction over the garnishment action. For the following reasons, I would REVERSE the district court’s order granting the City’s motion to quash Hudson’s garnishment action and REMAND for further proceedings.
As discussed in the majority opinion, Hudson brought §§ 1983, 1985, and state law claims against the police officers arising from the police officers’ theft of Hudson’s dog.1 On February 29, 2000, Hudson and the police officers entered into a consent judgment, whereby the police officers agreed to pay $300,000 in settlement of Hudson’s claims. Then, on June 30, 2000, Hudson, seeking to collect the consent judgment, filed writs of garnishment on the City pursuant to Federal Rule of Civil Procedure 69(a) (“Rule 69(a)”) and Mich. Comp. Laws § 600.4011(1).2 The district court found that it lacked subject matter jurisdiction over the garnishment action because the garnishment action seeks “to hold the City, a third party, liable for payment of a judgment on an independent legal theory, the indemnity agreement, which would require separate analysis and possible discovery concerning the City’s defenses to liability.” Majority Op. at 141. The majority affirms the district court’s order quashing Hudson’s garnishment action based upon the same reasoning employed by the district court.
*148Contrary to the majority, I would hold that the doctrine of ancillary jurisdiction gives the district court subject matter jurisdiction over the garnishment action. Unlike the majority, I conclude that the Supreme Court’s holding in Peacock v. Thomas, 516 U.S. 349, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996), does not prohibit this use of ancillary jurisdiction. Instead, I conclude that the Seventh Circuit’s reasoning in Yang v. City of Chicago, 137 F.3d 522 (7th Cir.1998), cert. denied, 525 U.S. 1140, 119 S.Ct. 1031, 143 L.Ed.2d 40 (1999), and the Eastern District of Michigan’s reasoning in Childress v. Williams, 121 F.Supp.2d 1094 (E.D.Mich.2000), correctly analyze Peacock’s effect on the doctrine of ancillary jurisdiction in Rule 69 proceedings.
In Peacock, Thomas had been awarded a judgment of $187,628.93 by the district court in his ERISA class action against Tru-Tech, his former employer. Peacock, 516 U.S. at 351, 116 S.Ct. 862. The district court had found that Tru-Tech breached its fiduciary duties in administering the corporation’s pension benefits plan, but the district court had also explicitly ruled that Peacock, an officer and shareholder of Tru-Tech, was not a fiduciary. Id. Unable to obtain the money from Tru-Tech, Thomas sued Peacock in federal court alleging various theories, including a veil-piercing claim under ERISA. Id. at 352, 116 S.Ct. 862.
The Supreme Court held that ERISA does not authorize veil-piercing claims; therefore, ERISA did not provide a basis for federal jurisdiction over Thomas’s veil-piercing claim. Id. at 353, 116 S.Ct. 862. The Court further held that the doctrine of ancillary jurisdiction did not apply to Thomas’s veil-piercing claim, and as a result, the district court lacked subject matter jurisdiction over Thomas’s action against Peacock. Id. at 355-59, 116 S.Ct. 862. In so holding, the Court stated that “a federal court may exercise ancillary jurisdiction ‘(1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees.’ ” Id. at 354, 116 S.Ct. 862 (quoting Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 379-80, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994)). The Court held that Thomas’s veil-piercing claim did not involve the first accepted usage of ancillary jurisdiction, as Thomas brought his veil-piercing claim in a subsequent lawsuit, and thus “the ability to resolve simultaneously factually intertwined issues vanished.” Id. at 355, 116 S.Ct. 862. The Court further held that Thomas’s veil-piercing claim did not involve the second accepted usage of ancillary jurisdiction because, although ancillary jurisdiction may be used to enforce judgments, the Court has “never authorized the exercise of ancillary jurisdiction in a subsequent lawsuit to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment.” Id. at 357, 116 S.Ct. 862.
In Yang, a gost-Peacock decision, the Seventh Circuit held that the doctrine of ancillary jurisdiction gave the district court subject matter jurisdiction over Yang’s Rule 69 garnishment action. Yang, 137 F.3d at 526. Yang had been awarded a substantial monetary judgment in his §§ 1983 and 1985 actions against two police officers. Id. at 522-23. Approximately three months later, ‘Tang filed a petition for indemnification and writ of execution, seeking indemnification of [his judgments against the officers] from the City of Chicago pursuant to 745 ILCS 10*9-102. Section 9-102 directs a municipality to indemnify a tort judgment entered against an employee if the employ*149ee’s misconduct was within the scope of his employment.” Id. at 524. The court held that “a Rule 69 garnishment proceeding to collect a judgment from a third person not party to the original suit is within a court’s ancillary jurisdiction, providing ‘the additional proceeding does not inject so many new issues that it is functionally a separate case.’ ” Id. at 526 (quotations omitted).3 The court concluded that Yang’s garnishment action fell within the district court’s ancillary jurisdiction because the only new issue raised in the action was whether the officers were acting within the scope of their employment when they violated Yang’s constitutional rights. See id. The Yang court further distinguished Peacock by noting that the plaintiff in Yang was not trying to impose liability for a money judgment on a person not otherwise liable for the judgment, because if the officers were acting within the scope of their employment, the city would be liable for their judgment. Id. at 525 n. 1. Similarly, in Childress, the Eastern District of Michigan held that the doctrine of ancillary jurisdiction gave it subject matter jurisdiction over Childress’s Rule 69 garnishment proceeding because the only new issue raised in the proceeding was whether the officer was acting within the scope of his employment when he violated Childress’s constitutional rights. Childress, 121 F.Supp.2d at 1096.
The courts in both Yang and Childress reasoned that the Rule 69 garnishment actions were not separate lawsuits because they were post-judgment proceedings, and because the factual issues in the garnishment actions would overlap substantially with the factual issues in the underlying claims. See Yang, 137 F.3d at 526; Childress, 121 F.Supp.2d at 1096. Thus, the garnishment actions involved the first accepted use of ancillary jurisdiction — resolving factually interdependent claims in a single proceeding. The courts in both Yang and Childress also reasoned that the district court’s exercise of ancillary jurisdiction over the Rule 69 garnishment proceeding was necessary to effectuate the district court’s prior judgment. Yang, 137 F.3d at 526; Childress, 121 F.Supp.2d at 1096-97. Thus, the garnishment actions involved the second accepted usage of ancillary jurisdiction — protecting judgments.4 In fact, the courts in both Yang and Childress relied upon the following passage from Peacock to support their holdings: “we have approved the exercise of ancillary jurisdiction over a broad range of supplementary proceedings involving third parties to assist in the protection and enforcement of federal judgments — including attachment, mandamus, garnishment, and the prejudgment avoidance of fraudulent conveyances.” Peacock, 516 U.S. at 356, 116 S.Ct. 862 (cited in Yang, 137 F.3d at 525; Childress, 121 F.Supp.2d at 1096).5
*150I find the reasoning of the courts in Yang and Childress both convincing and applicable to the present case. Here, Hudson entered into a consent judgment with the police officers for $300,000. Hudson then brought a garnishment proceeding against the City pursuant to Rule 69 seeking to collect from the City in accordance with City’s indemnification agreement with the police officers. Hudson’s Rule 69 proceeding was a post-judgment proceeding, not a separate lawsuit. The factual issues in the garnishment proceedings will overlap substantially with those in Hudson’s underlying §§ 1983, 1985, and state-law claims; therefore, the Rule 69 proceeding will not inject so many new issues as to become a functionally separate lawsuit. Unlike the plaintiff in Peacock, Hudson is not seeking to impose liability on the City for post-judgment conduct; rather, the City’s potential liability arose when the police officers committed the conduct underlying Hudson’s initial § 1983 action.6 The only new factual issue involved in the Rule 69 garnishment proceeding will be whether the police officers were acting within the scope of their employment.7 This is the exact same factual issue that both the Seventh Circuit and the Eastern District of Michigan found insufficient to render the Rule 69 garnishment proceedings separate, subsequent lawsuits. Additionally, the Rule 69 garnishment proceeding is necessary to enable the district court to effectuate its prior judgment against the police officers. Requiring a separate state-court lawsuit to enforce a federal-court judgment would compromise the federal interests that were resolved in the initial federal-court proceedings and would impose an unnecessary burden on state courts. Childress, 121 F.Supp.2d at 1097. I respectfully dissent.

. Hudson named the City as a defendant in her complaint, but the district court granted summary judgment in favor of the City on September 30, 1998.

. Rule 69 directs district courts to employ the procedures for executing judgments of the state in which the district court sits. See Fed.R.Civ.P. 69(a). Rule 69(a) provides:
The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought, except that any statute of the United States governs to the extent that it is applicable.

Id.

The Michigan garnishment statute allows a prevailing plaintiff to seek a writ of garnishment against an obligation owed to the defendant, if the obligor is subject to personal jurisdiction in Michigan. See Mich. Comp. Laws § 600.4011(1). Section 600.4011(1) provides:
[T]he court has power by garnishment to apply the following property or obligation, or both, to the satisfaction of a claim evidenced by contract, judgment of this state, or foreign judgment, whether or not the state has jurisdiction over the person against whom the claim is asserted:
(a) Personal property belonging to the person against whom the claim is asserted but which is in the possession or control of a third person if the third person is subject to the judicial jurisdiction of the state and the personal property to be applied is within the boundaries of this state.
(b) An obligation owed to the person against whom the claim is asserted if the obligor is subject to the judicial jurisdiction of the state.

Id.

. This holding is not inconsistent with the Tenth Circuit's view in Sandlin v. Corporate Interiors, Inc., 972 F.2d 1212, 1217 (10th Cir.1992), a pre-Peacock decision, in which the court held that the district court lacked subject matter jurisdiction over the plaintiff's subsequent veil-piercing claim because the claim involved new parties, new issues, and new theories of liability. The Tenth Circuit explicitly noted that the plaintiff was not bringing a traditional indemnity claim. Id.

. Federal courts have exercised ancillary jurisdiction in supplemental proceedings to effectuate judgments for over one hundred years. See Root v. Woolworth, 150 U.S. 401, 410-11, 14 S.Ct. 136, 37 L.Ed. 1123 (1893). Peacock did not strip federal courts of subject matter jurisdiction over proceedings to effectuate judgments. Peacock v. Thomas, 516 U.S. 349, 356, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996).

.Furthermore, in a footnote in Peacock, the Supreme Court explicitly stated that a Rule 69(a) proceeding was an effective mechanism for a district court to use in effectuating its *150judgment. Peacock, 516 U.S. at 359 n. 7, 116 S.Ct. 862.

. For the same reason, the City cannot be considered a party that is not otherwise liable, because if the police officers were acting within the scope of their employment, the City would be liable for the police officers’ conduct.

. The indemnification agreement between the City and the Flint Police Officers Association provides, in pertinent part:
Whenever any judgment for damages, excluding punitive damages, is awarded against an Employee as the result of any civil action for personal injuries or property damage caused by the Employee while in the course of his employment, and while acting within the scope of his authority, the Employer will indemnify the employee or will pay, settle, or compromise the judgment.
Joint Appendix at 512 (Pls.' Br. in Opp’n to the City of Flint's Mot. to Quash Garnishment, Ex. A).