Court Opinion

ID: 68704
Source: CourtListenerOpinion
Date Created: 2010-04-26 06:36:21+00
Date Added: 2024-06-11T14:59:00.320821
License: Public Domain

REVISED October 6, 2009

      IN THE UNITED STATES COURT OF APPEALS
               FOR THE FIFTH CIRCUIT
                                                  United States Court of Appeals
                                                           Fifth Circuit

                                                       FILED
                                                     August 4, 2009
                         No. 08-30492
                                                Charles R. Fulbruge III
IN RE: KATRINA CANAL BREACHES LITIGATION                Clerk

ELIZABETH H DEPASS; WILLIAM KEITH DEPASS, IV; MARSHALL L
HARRIS; MANUEL C TRELLES; WILLIAM B COLEMAN, III; CAROL C
GAMBEL; WILLIAM C GAMBEL; RONALD LANDRY

                                  Plaintiffs-Appellants

CLEVELAND COBB, SR; RENATE B COLEMAN; WILLIAM B COLEMAN,
JR; CAROL C DE LA HOUSSAYE; CLYDE DE LA HOUSSAYE; WAYNE DE
LA HOUSSAYE; PAULINE DIXON; LANIER DIXON; MARTHA W ELLIS;
COURTNEY FREEMAN; LOUIS MCDANIEL FREEMAN, JR; SHIRLEEN
JEFFERSON; IRENE B LUTKEWITTE; THOMAS LUTKEWITTE;
CHARLES MARSHALL, JR

                                  Appellants

v.

PARISH OF JEFFERSON

                                  Defendant-Appellee

                       Consolidated with
                       Case No. 08-30493

IN RE: KATRINA CANAL BREACHES LITIGATION

LESLIE SIMS, JR; ROSA MARQUEZ; FLOYD S AARON, III; HASSAR
SLEEM; MADELINE BERTUCCI; ET AL
                                       No. 08-30492

                                                  Plaintiffs-Appellants

v.

PARISH OF JEFFERSON

                                                  Defendant-Appellee

                  Appeals from the United States District Court
                      for the Eastern District of Louisiana
                    USDC Nos. 2:06-CV-5127, 2:05-CV-4182

Before JOLLY, SMITH, and BENAVIDES, Circuit Judges.
PER CURIAM:*
       This is a consolidated appeal of the district court’s dismissal of claims
against Jefferson Parish, Louisiana in two cases concerning property damage
from flooding that occurred as a result of the levee breaches in New Orleans
during Hurricane Katrina.           The plaintiffs-appellants, property owners in
Jefferson Parish and Orleans Parish, allege that the property damage resulted
from deficiencies in the New Orleans flood protection system. In their original
complaints, filed on August 28, 2006, the plaintiffs-appellants named as
defendants the Board of Commissioners of the Orleans Levee District, the Board
of Commissioners of the Port of New Orleans, the Sewerage & Water Board of
New Orleans, the East Jefferson Levee District, Jefferson Parish, and the
Louisiana Department of Transportation and Development. In their second
amended complaints, filed on April 11, 2007, the plaintiffs-appellants added the
United States as a defendant. On October 12, 2007, the district court dismissed

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.

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                                       No. 08-30492

the claims against Jefferson Parish in both actions. On March 27, 2008, the
district court entered final judgments under Federal Rule of Civil Procedure
54(b) with regard to those claims, and the plaintiffs-appellants appealed. This
appeal solely concerns the plaintiffs-appellants’ claims against Jefferson Parish.
The plaintiffs-appellants’ claims against other defendants, including the United
States, are still pending in the district court.
       The district court recognized two distinct categories of claims asserted by
the plaintiffs-appellants against Jefferson Parish: (1) claims based on actions
taken by the Parish during Hurricane Katrina; and (2) claims based on the
Parish’s alleged general failure to maintain certain levees and drainage features.
The district court dismissed the first category of claims because it found that La.
Rev. Stat. § 29:735 granted immunity to the Parish for all actions taken at the
time of Hurricane Katrina. The district court dismissed the second category of
claims for two reasons. First, the district court held that La. Rev. Stat. § 9:2800
retroactively immunized public bodies from all damages arising from Hurricane
Katrina. Second, the district court held that the Parish was not under a duty to
maintain the levees under Louisiana state law. Both parties agree in their
briefing that the district court erred in holding that La. Rev. Stat. § 9:2800
insulated Jefferson Parish from liability, as the Louisiana Supreme Court has
held this statute unconstitutional as applied to claims accruing prior to the law’s
passage. See Burmaster v. Plaquemines Parish Gov’t, 982 So. 2d 795 (La. 2008).
Additionally, at oral argument, the plaintiffs-appellants conceded that La. Rev.
Stat. § 29:735 immunized Jefferson Parish against any claims relating to its
actions taken during Hurricane Katrina.1 Thus, the parties’ only remaining

       1
          The plaintiffs-appellants conceded this point due to the Louisiana Court of Appeal’s
recent unpublished opinion interpreting La. Rev. Stat. § 29:735, Chicago Property Interests,
L.L.C. v. Broussard, No. 08-C-1210 (La. Ct. App. March 6, 2009), which was decided after the
district court entered final judgment and briefs were filed in this appeal.

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                                       No. 08-30492

substantive dispute is over whether Jefferson Parish was under a general duty
to maintain the levees under Louisiana law.
       However, we decline to reach the merits of this dispute because the district
court exercised subject matter jurisdiction over this case on improper grounds.
Although Jefferson Parish did not appeal the district court’s ruling on
jurisdiction, this panel must nonetheless consider whether federal subject
matter jurisdiction exists. See E.E.O.C. v. Agro Distrib., LLC, 555 F.3d 462, 467
(5th Cir. 2009) (“Although neither party raises the issue of subject matter
jurisdiction, this court must consider jurisdiction sua sponte.”).
       The district court exercised jurisdiction over the plaintiffs-appellants’
claims against Jefferson Parish on the basis of supplemental jurisdiction.
Specifically, the district court held that it had original jurisdiction over the
plaintiffs-appellants’ federal tort claims act claims against the United States
that were added in the second amended complaint, and that those claims and the
claims against Jefferson Parish arose out of a common nucleus of operative fact,
thus warranting the exercise of supplemental jurisdiction over the claims
against the Parish. However, the new claims against the United States added
in the second amended complaint cannot be relied upon to establish subject
matter jurisdiction because while a plaintiff may amend a complaint to cure
inadequate jurisdictional allegations, amendment may not create subject matter
jurisdiction when none exists. See 3 James Wm. Moore et al., Moore’s Federal
Practice § 15.14[3], at 15–34 (3d ed. 1999) (“Essentially, a plaintiff may correct
the complaint to show that jurisdiction does in fact exist; however, if there is no
federal jurisdiction, it may not be created by amendment.”).                    That is, an
amendment may remedy jurisdictional problems of the “technical” or “formal”
variety,2 but it may not “create an entirely new jurisdictional basis to provide

       2
        Dropping a dispensable party to perfect diversity jurisdiction is considered to be such
a “technical” or “formal” correction. See 3 James Wm. Moore et al., Moore’s Federal Practice

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                                        No. 08-30492

competence in a court which lacked authority over the case ab initio.” Falise v.
Am. Tobacco Co., 241 B.R. 63, 67 (E.D.N.Y. 1999) (Weinstein, J.). This court has
specifically held that an amendment may not remedy a jurisdictional defect by
asserting a cause of action to serve as a statutory basis for federal question
jurisdiction. See Whitmire v. Victus Ltd., 212 F.3d 885, 888 (5th Cir. 2000)
(citing Boelens v. Redman Homes, Inc., 759 F.2d 504, 512 (5th Cir. 1985) (holding
that because “the plaintiffs’ motion to amend seeks not to remedy technically
inadequate jurisdictional allegations, but rather to substitute new causes of
action over which there would be jurisdiction,” the motion must be denied
“[b]ecause § 1653 is limited to curing technical defects only”)); see also United
States v. U.S. Fid. & Guar. Co., 959 F. Supp. 345, 347 (E.D. La. 1996) (“[W]hen
a federal court lacks jurisdiction over the original complaint, as is the instant
situation, the Federal Rules of Procedure do not allow the addition of a new
party to create jurisdiction.”). Thus, supplemental jurisdiction based on the
plaintiffs-appellants’ federal tort claims act claims against the United States
does not provide a valid basis for subject matter jurisdiction over the plaintiffs-
appellants’ claims against the Parish. Although Jefferson Parish did not object
to the plaintiffs-appellants amending the complaint to add the federal tort
claims act claims, “[s]ubject matter jurisdiction can neither be conferred nor
destroyed by the parties’ agreement or waiver.” Buchner v. FDIC, 981 F.2d 816,
821 (5th Cir. 1993).
       The plaintiffs-appellants asserted another basis for supplemental
jurisdiction over their claims against the Parish in the district court: a common
nucleus of operative fact with third-party beneficiary claims in the original

§ 15.14[3], at 15–36 (3d ed. 1999) (“A plaintiff may not amend the complaint to substitute a
new plaintiff in order to cure a lack of jurisdiction, because a plaintiff may not create
jurisdiction when none exists. A plaintiff may, however, drop dispensable parties, those parties
not needed to establish subject matter jurisdiction, in order to perfect diversity jurisdiction.”
(footnotes omitted)).

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                                        No. 08-30492

complaint based on Acts of Assurance that several defendants signed in favor of
the United States.3 Those third-party beneficiary claims as pleaded arise under
Louisiana state law, but the plaintiffs-appellants argued that they trigger
original subject matter jurisdiction because federal law controls the
interpretation of the underlying Acts of Assurance, specifically the hold harmless
provisions contained therein that were executed for the benefit of the United
States and which the plaintiffs-appellants argued should be interpreted to create
a duty to third parties. Federal law arguably does control the interpretation of
the Acts of Assurance because the federal government entered into them
pursuant to authority conferred by federal statute.                  See United States v.
Seckinger, 397 U.S. 203, 210 (1970) (“[F]ederal law controls the interpretation
of the contract. This conclusion results from the fact that the contract was
entered into pursuant to authority conferred by federal statute and, ultimately,
by the Constitution.” (citations omitted)). However, the mere presence of a
federal issue in a state cause of action is not sufficient to permit federal
jurisdiction; this court has held that the presence of such a federal issue is
sufficient to create federal jurisdiction only where: (1) resolving the federal issue
is necessary to resolution of the state-law claim; (2) the federal issue is actually
disputed; (3) the federal issue is substantial; and (4) federal jurisdiction will not
disturb the balance of federal and state judicial responsibilities. See Singh v.
Duane Morris LLP, 538 F.3d 334, 337–38 (5th Cir. 2008). Although the parties
did not raise the issue of whether the third-party beneficiary claims give rise to
federal jurisdiction on appeal, it was briefed in the district court, and we fail to
see any substantial federal question implicated in the third-party beneficiary
claims based on the hold harmless provisions in the Acts of Assurance. Further,
the plaintiffs-appellants failed to meet their burden of demonstrating a common

      3
          It appears that the district court has since dismissed those claims.

                                               6
                                       No. 08-30492

nucleus of operative fact between the third-party beneficiary claims and the
claims against Jefferson Parish, making only conclusory and unsupported
assertions to that effect. See New Orleans & Gulf Coast Ry. Co. v. Barrois, 533
F.3d 321, 327 (5th Cir. 2008) (“The party seeking to assert federal jurisdiction
. . . has the burden of proving by a preponderance of the evidence that subject
matter jurisdiction exists.”).
      Accordingly, we VACATE the judgment of the district court and DISMISS
this suit for lack of jurisdiction.4

      4
          The plaintiffs-appellants’ motion to supplement the record is denied as moot.

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