16 Front St., L.L.C. v. Miss. Silicon, L.L.C. , 886 F.3d 549 ( 2018 )

Case: 16-60050 Document: 00514409235 Page: 1 Date Filed: 03/30/2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 16-60050
Fifth Circuit
FILED
March 30, 2018
16 FRONT STREET, L.L.C.; C. RICHARD COTTON, Lyle W. Cayce
Clerk
Plaintiffs–Appellants,
v.
MISSISSIPPI SILICON, L.L.C.; GARY C. RIKARD, Executive Director,
Mississippi Department of Environmental Quality, In His Official Capacity
and As Executive Director of the Mississippi Environmental Quality Permit
Board,
Defendants–Appellees.
Appeal from the United States District Court
for the Northern District of Mississippi
Before CLEMENT, PRADO, and OWEN, Circuit Judges.
PRISCILLA OWEN, Circuit Judge:
16 Front Street, LLC and Richard Cotton (collectively, Front Street) filed
a citizen suit under the Clean Air Act (CAA), 42 U.S.C. § 7604, to enjoin
Mississippi Silicon from constructing a silicon plant. They later amended their
complaint to include Gary C. Rikard, in his official capacity as Executive
Director of the Mississippi Department of Environmental Quality and the
Mississippi Environmental Quality Permit Board (collectively, MDEQ). The
district court dismissed the claim against Mississippi Silicon for lack of subject
matter jurisdiction. The court then dismissed the claim against MDEQ,
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determining that the time-of-filing rule barred amending a complaint over
which the court lacked jurisdiction. We affirm in part, reverse in part, and
remand for further proceedings.
I
The CAA prohibits construction of any “major emitting facility” unless
the requirements of the Prevention of Significant Deterioration (PSD) Program
are met. 1 The PSD program requires that “a permit has been issued for such
proposed facility in accordance with this part setting forth emission limitations
for such facility which conform to the requirements of this part.” 2 The PSD
program also includes other substantive and procedural requirements, such as
a demonstration that the facility will meet emissions standards and a public
hearing on the permit. 3
This court has previously described the history and intent of the CAA’s
PSD program. 4 Importantly, the CAA makes “the States and the Federal
Government partners in the struggle against air pollution.” 5 Though “‘[s]tates
have the primary role in administering and enforcing the various components
of the PSD program[,]’ . . . Congress has set forth explicit substantive and
procedural requirements that must be met prior to the construction of any
major emitting facility.” 6 States must design a plan for the enforcement and
implementation of the CAA and submit it to the Environmental Protection
Agency (EPA) for approval. 7 The EPA “interprets existing law and regulations
to require an opportunity for state judicial review of PSD permit actions . . . by
1 42 U.S.C. § 7475(a).
2 Id. § 7475(a)(1).
3 Id. § 7475(a)(2)-(8).
4 CleanCOALition v. TXU Power, 536 F.3d 469, 471-73 (5th Cir. 2008).
5 Id. at 471 (quoting Gen. Motors Corp. v. United States, 496 U.S. 530, 532 (1990)).
6 Id. at 472 (quoting Alaska Dep’t of Envtl. Conservation v. EPA, 540 U.S. 461, 491
(2004)).
7 Id. at 471-72.
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permit applicants and affected members of the public in order to ensure an
adequate and meaningful opportunity for public review and comment on all
issues within the scope of the permitting decision, including environmental
justice concerns and alternatives to the proposed source.” 8 The EPA approved
Mississippi’s CAA state implementation plan. 9
In August 2013, Mississippi Silicon applied to MDEQ for a PSD permit
to construct a silicon metal manufacturing plant in Burnsville, Mississippi.
MDEQ issued a draft permit, making it available for public notice and
comment by posting it on the MDEQ website on October 23, 2013. The
following day, it published a notice of the comment period in a local paper,
soliciting public comments through November 22, 2013. This notice advised
that a public hearing would “be held if the Permit Board finds a significant
degree of public interest.” MDEQ also made certain materials relating to the
permit available at the Burnsville Public Library. Only the EPA and United
States Department of Agriculture commented on the draft permit. After the
comment period ended, MDEQ issued a final permit for the Burnsville Plant,
which the Mississippi Permit Board voted to accept in December of 2013.
Front Street filed this suit on September 29, 2014 under the citizen suit
section of the CAA, 42 U.S.C. § 7604(a)(3). This section states that “any person
may commence a civil action on his own behalf . . . against any person who
proposes to construct or constructs any new or modified major emitting facility
without a permit required under [the PSD program].” 10 Front Street argued
that the permit was not “issued in accordance with PSD,” because Mississippi
Silicon and MDEQ did not “meet all applicable procedural requirements” and
8 Id. at 473 (quoting Approval and Promulgation of Air Quality Implementation Plans;
Commonwealth of Virginia—Prevention of Significant Deterioration Program, 61 Fed. Reg.
1880 (Jan. 24, 1996) (to be codified at 40 C.F.R. pt. 52)).
9 See 40 C.F.R. § 52.1272 (2016).
10 42 U.S.C. § 7604(a)(3).
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that, consequently, Mississippi Silicon was constructing a new major emitting
facility without the required PSD permit. Front Street alleged various
procedural deficiencies, including: (1) a public comment period of only 29 days
(instead of 30); (2) inadequate materials available for public review;
(3) insufficient time to review the materials; and (4) the lack of a public
hearing.
Front Street moved for a temporary restraining order and preliminary
injunction. The district court denied the restraining order due to uncertainty
about subject matter jurisdiction. The court called for additional briefing on
subject matter jurisdiction, and pointed out that MDEQ was “noticeably
absent” from the proceedings and that it was unclear what relief could be
obtained if MDEQ were not a party.
Four months after filing, Front Street amended the complaint joining
Gary C. Rikard, in his official capacity as Executive Director of MDEQ and its
Permit Board, as an additional defendant. The amended complaint asserted
that there was jurisdiction over the claim against MDEQ under 42 U.S.C.
§ 7604(a)(1), which allows an action against any “governmental
instrumentality or agency . . . who is alleged to have violated . . . or to be in
violation of [ ] an emission standard or limitation under [the CAA].” 11 The CAA
requires plaintiffs to give states 60 days’ notice prior to commencing an action
under § 7604(a)(1). 12 Front Street sent the required notice to MDEQ on
November 14, 2014, and filed the amended complaint on January 23, 2015.
The district court dismissed Front Street’s claim against Mississippi
Silicon for lack of subject matter jurisdiction after determining that the claim
did not meet the requirements of the CAA’s citizen suit section. The court later
11 42 U.S.C. § 7604(a)(1).
12 Id. § 7604(b)(1)(A).
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dismissed without prejudice the claim against MDEQ for lack of subject matter
jurisdiction. The district court concluded that “[b]ecause this Court lacked
jurisdiction at the time the original complaint was filed, the time-of-filing rule
compels the conclusion that this Court lacks jurisdiction over the amended
complaint.”
II
We first consider Front Street’s claim against Mississippi Silicon under
§ 7604(a)(3). We review de novo the district court’s dismissal of Mississippi
Silicon’s claim for lack of subject matter jurisdiction. 13
This court previously analyzed the language of § 7604(a)(3) in
CleanCOALition v. TXU Power. 14 In that case, environmental interest groups
filed a citizen suit alleging that the defendant’s permit application did not
comply with the requirements of the PSD program. 15 The defendant had not
only applied for a permit, but had since successfully obtained one. 16 We agreed
with the district court’s interpretation of § 7604(a)(3) “as authorizing citizen
suits when an entity proposes to construct or constructs a facility without a
permit whatsoever.” 17 We rejected the argument that “without a permit”
meant “without a permit that complies with the CAA” because we “decline[d]
to rewrite the plain language of the statute.” 18 We held that “§ 7604(a)(3) does
not authorize preconstruction citizen suits against facilities that have either
obtained a permit or are in the process of doing so.” 19
13 Meredith v. La. Fed’n of Teachers, 209 F.3d 398, 402 (5th Cir. 2000).
14 536 F.3d 469 (5th Cir. 2008).
15 Id. at 470.
16 Id. at 479.
17 Id. at 478-79.
18 Id. at 479.
19 Id.
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Front Street contends that Mississippi Silicon is “without a permit”
because a “purported PSD permit issued in violation of the [PSD program]
requirements” is not a PSD permit. Front Street argues that the violations of
the permitting process render Mississippi Silicon’s permit not a PSD permit,
citing language from CleanCOALition labeling PSD permit requirements
“preconditions for granting a preconstruction permit.” 20 However, in
CleanCOALition, we rejected the argument that “without a permit” meant
“without a permit that complies with the CAA.” 21 We are bound by that
decision and therefore reject the argument that “without a permit” means
“without a permit that complies with procedural requirements.”
Mississippi Silicon obtained a PSD permit and has since completed
construction of the plant. Because § 7604(a)(3) does not authorize suits
“against facilities that have either obtained a permit or are in the process of
doing so,” 22 it does not apply here. Accordingly, we affirm the district court’s
dismissal of the claim against Mississippi Silicon.
III
We turn to the dismissal of the claims against MDEQ for lack of subject
matter jurisdiction, which turns only on the time-of-filing rule. We emphasize
that no party contends that the district court had jurisdiction over claims
against Mississippi Silicon by virtue of the amended complaint that added
MDEQ as a defendant. The only question is whether the district court had
subject matter jurisdiction over the claims against MDEQ simply because it
was not included as a defendant in the initial complaint, and the district court
had no subject matter jurisdiction over the claims against Mississippi Silicon,
the sole defendant in the initial complaint.
20 Id. at 477.
21 Id. at 479.
22 Id. at 478.
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Front Street’s original complaint named Mississippi Silicon as the sole
defendant, asserting a claim under a federal statute. After the district court
questioned why MDEQ had not also been made a defendant, Front Street
amended its complaint to include MDEQ as a defendant and asserted federal
question jurisdiction under § 7604(a)(1). The district court subsequently
dismissed the claims against Mississippi Silicon, correctly, for the reasons
considered above, because the federal statute under which Front Street sued
did not provide a cause of action. The district court then dismissed the claims
against MDEQ for lack of subject matter jurisdiction. The district court
reasoned that because it had no jurisdiction over the claims in the initial
complaint, when only Mississippi Silicon was a defendant, it was barred by the
“time-of-filing rule” from considering claims in an amended complaint that had
added MDEQ as a defendant, even if it would otherwise have federal question
jurisdiction.
The statute granting jurisdiction to federal courts when a federal
question is asserted is 28 U.S.C. § 1331, which provides, “[t]he district courts
shall have original jurisdiction of all civil actions arising under the
Constitution, laws, or treaties of the United States.” 23 It is undisputed that
Front Street’s claims against MDEQ arise under the laws of the United States
and that if they had been brought in a separate suit, the federal district court
would have subject matter jurisdiction. MDEQ contends, however, and the
district court held, that the “time-of-filing” rule considers only whether the
district court had subject matter jurisdiction when the initial complaint was
filed. MDEQ points out that at the time the initial suit was filed, the 60-day
notice required under the federal statute had not been given by Front Street,
and, therefore, Front Street could not have sued MDEQ when it first sued
23 28 U.S.C. § 1331.
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Mississippi Silicon. MDEQ also contends—and the district court reasoned—
that because MDEQ was not a party to the suit when it was initially filed, and
because there was no subject matter jurisdiction over any of the claims against
Mississippi Silicon, the district court could not assert jurisdiction over the
claims against MDEQ in the amended complaint.
As an initial matter, nothing in the text of § 1331 forecloses jurisdiction
over the claims, grounded in federal law, against MDEQ. The time-of-filing
rule is not based on the text of § 1331. The time-of-filing rule was initially
expressed in 1824 by Justice Marshall in Mollan v. Torrance, a case involving
diversity jurisdiction, which was and is governed under a statute other than
§ 1331. 24 The time-of-filing rule in Mollan dealt with ouster of diversity
jurisdiction. 25
More recently, the Supreme Court has indicated that the time-of-filing
rule pertains to diversity of citizenship cases. 26 Writing for the Court in Grupo
Dataflux, Justice Scalia recounted that “[i]t has long been the case that ‘the
jurisdiction of the court depends upon the state of things at the time of the
action brought.’” 27 He recognized the rule’s familiarity: “This time-of-filing
rule is hornbook law (quite literally) taught to first-year law students in any
basic course on federal civil procedure.” 28 But he described the rule as one used
in diversity jurisdiction cases: “It measures all challenges to subject-matter
jurisdiction premised upon diversity of citizenship against the state of facts
24 22 U.S. 537 (1824).
25 Id. at 539 (concluding that “[i]t is quite clear, that the jurisdiction of the Court
depends upon the state of things at the time of the action brought, and that after vesting, it
cannot be ousted by subsequent events”).
26 Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 570 (2004).
27 Id. (quoting Mollan, 22 U.S. at 539).
28 Id. at 570-71 (footnote omitted).
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that existed at the time of filing—whether the challenge be brought shortly
after filing, after the trial, or even for the first time on appeal.” 29
The Court’s decision in Grupo Dataflux recognized, however, that there
has “long been an exception to the time-of-filing rule,” 30 citing its decision in
Caterpillar, Inc. v. Lewis. 31 We begin our analysis of the issue in the present
case with Caterpillar because, although it involved jurisdiction based on
diversity of citizenship in the context of a removed action, its rationale is
instructive.
It was undisputed in Caterpillar that at the time the suit was removed
from state court to federal court, complete diversity of citizenship did not exist,
and the district court had clearly erred in denying the motion to remand. 32
But, as the suit progressed in federal court, the non-diverse party was
dismissed after a settlement was reached between that party and the
plaintiff. 33 By the time of trial and judgment, it was undisputed that “there
was . . . complete diversity.” 34 The Supreme Court held that the federal
district court had subject matter jurisdiction to try the case and render
judgment. The Court first recognized that “[d]espite a federal trial court’s
threshold denial of a motion to remand, if, at the end of the day and case, a
jurisdictional defect remains uncured, the judgment must be vacated.” 35 But
that was not the case in Caterpillar because “no jurisdictional defect lingered
through judgment in the District Court.” 36
29 Id. at 571.
30 Id. at 572.
31 519 U.S. 61 (1996).
32 Id. at 64.
33 Id. at 66.
34 Id. at 73.
35 Id. at 76-77.
36 Id. at 77.
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The Court’s decision in Caterpillar stands for the proposition that even
in a diversity jurisdiction case, the lack of jurisdiction can be cured when the
reason for the lack of diversity was the existence of a non-diverse party at the
time the case first reached the district court. The lack of jurisdiction can be
cured when the non-diverse party is dismissed in federal court. Assuming,
without deciding, that the time-of-filing rule applies when a federal question
is asserted as the basis of jurisdiction, the rationale of Caterpillar leads us to
conclude that there would be a similar exception that permits a “cure” after
the time of filing. Though the district court did not have subject matter
jurisdiction over the claims against Mississippi Silicon in the initial complaint,
it unquestionably had federal question jurisdiction over the claims asserted in
the amended complaint against MDEQ. Any defect as to jurisdiction was
“cured” as to MDEQ because the amended complaint asserted a basis for
federal question jurisdiction, though the initial complaint had not included
MDEQ as a party.
The Supreme Court’s decision in Grupo Dataflux reinforces this
conclusion, though it did not directly address the issue with which we are
confronted today. The Court explained in Grupo Dataflux that “Caterpillar
broke no new ground, because the jurisdictional defect it addressed had been
cured by the dismissal of the party that had destroyed diversity.” 37 The Court
explained: “[t]hat method of curing a jurisdictional defect had long been an
exception to the time-of-filing rule.” 38 In Grupo Dataflux, the Court
emphasized that in Caterpillar, “[the] Court unanimously held that the lack of
complete diversity at the time of removal did not require dismissal of the
case.” 39
37 Grupo Dataflux v. Atlas Glob. Grp., L.P., 541 U.S. 567, 572 (2004).
38 Id.
39 Id. at 573.
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The distinction the Court drew between the facts presented in Grupo
Dataflux and those in Caterpillar also strongly supports our conclusion that
because the district court had federal question jurisdiction over the claims
against MDEQ, it is irrelevant that it did not have jurisdiction over the claims
asserted only against Mississippi Silicon in the initial complaint. In Grupo
Dataflux, “[t]here was from the beginning of [the] action a single
plaintiff . . . which . . . was not diverse from the sole defendant.” 40 The
question that the Supreme Court decided was “whether a party’s post-filing
change in citizenship can cure a lack of subject-matter jurisdiction that existed
at the time of filing in an action premised upon diversity of citizenship.” 41 The
Court recognized that because the plaintiff, Atlas, “had two partners who were
Mexican citizens at the time of filing, the partnership was a Mexican citizen,”
and that because “the defendant, Dataflux, was a Mexican corporation, aliens
were on both sides of the case, and the requisite diversity was therefore
absent.” 42 One month before trial began in Grupo Dataflux, the Mexican
partners in Atlas left the partnership. 43 The case proceeded to trial and a
verdict. The Supreme Court held that there was no jurisdiction under these
circumstances.
The Court distinguished the situation in Caterpillar, where, at the time
of trial, there had been a change in parties. The Court explained that in
Caterpillar, “[t]he postsettlement dismissal of the diversity-destroying
defendant cured the jurisdictional defect,” and “the less-than-complete
diversity which had subsisted throughout the action had been converted to
complete diversity between the remaining parties to the final judgment.” 44 The
40 Id. at 579.
41 Id. at 568.
42 Id. at 569.
43 Id.
44 Id. at 573.
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“crux of the analysis in Caterpillar,” the Court explained, “related not to cure
of the jurisdictional defect, but to cure of a statutory defect, namely, failure to
comply with the requirement of the removal statute . . . that there be complete
diversity at the time of removal.” 45 The Court emphasized in Grupo Dataflux
that “‘[w]here there is no change of party, a jurisdiction depending on the
condition of the party is governed by that condition, as it was at the
commencement of the suit.’” 46 In Grupo Dataflux, there was no change in
parties to the action, but here, the amended complaint did change the parties
to the action. As the decision in Grupo Dataflux emphasizes, “[t]he purported
cure arose not from a change in the parties to the action, but from a change in
the citizenship of a continuing party. Withdrawal of the Mexican partners
from Atlas did not change the fact that Atlas, the single artificial entity created
under Texas law, remained a party to the action.” 47 The Court recognized that
“[t]rue, the composition of the partnership, and consequently its citizenship,
changed. But allowing a citizenship change to cure the jurisdictional defect
that existed at the time of filing would contravene the principle articulated by
Chief Justice Marshall in Conolly.” 48
In the present case, there was a change in parties after the initial
complaint was filed. MDEQ was added as a new party, and a claim arising
under federal law was alleged against it. Allowing a suit against a new party
to proceed is not an attempt to cure the jurisdictional defect that existed at the
time of filing as to the initial defendant. Had the initial complaint included
claims against both MDEQ and Mississippi Silicon, the fact that there was no
jurisdiction over the claims against Mississippi Silicon would not have
45 Id. at 574.
46 Id. (quoting Conolly v. Taylor, 27 U.S. 556, 565 (1829))
47 Id. at 575.
48 Id.
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precluded federal question jurisdiction over the claims against MDEQ,
assuming the requisite notice had been given. The jurisdictional bases of the
claims are independent of one another.
Front Street has cited no decision in which the Supreme Court or a
Circuit Court has held that the time-of-filing rule applies to facts like those in
the present case. To the contrary, the First Circuit in ConnectU LLC v.
Zuckerberg held that the time-of-filing rule does not apply when a plaintiff
“switch[es] jurisdictional horses before any jurisdictional issue has been
raised” from a defective allegation of diversity jurisdiction in an initial
complaint to an allegation of federal question jurisdiction in an amended
complaint. 49 That court reasoned that “concerns about forum-shopping and
strategic behavior” in diversity cases “offer special justifications for” the rule,
but that such “concerns are not present in the mine-run of federal question
cases.” 50 The ConnectU decision further interpreted the Supreme Court’s
decision in Grupo Dataflux as “explicitly restrict[ing] the time-of-filing rule to
diversity cases.” 51
We do not hold that that the Supreme Court’s decision in Grupo Dataflux
restricts the time-of-filing rule to diversity cases. The time-of-filing rule is
most frequently employed in the removal context, to prevent a plaintiff from
re-pleading after removal to deprive the federal court of jurisdiction. The fact
that a case was removed based on a federal question rather than diversity
should not affect whether a plaintiff may re-plead in order to obtain a remand
to state court. Our court explored this in Boelens v. Redman Homes, Inc.,
although the plaintiffs in that case had filed suit in federal court and
49 522 F.3d 82, 92 (1st Cir. 2008).
50 Id.
51 Id. at 93.
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established federal question jurisdiction in their initial complaint. 52 They
amended their complaint, however, and it failed to establish jurisdiction in
federal court. 53 The case nevertheless proceeded to trial, but this court held
that when the plaintiffs voluntarily amended their complaint, the amended
complaint governed whether the court continued to have jurisdiction and that
the judgment in their favor obtained at trial must be reversed. 54 In so doing,
we contrasted cases that had been removed to federal court, rather than
initially filed in federal court. 55 We reasoned that the time-of-filing rule
applies when a case has been removed on the basis of a federal question
because “[t]he rule that a plaintiff cannot oust removal jurisdiction by
voluntarily amending the complaint to drop all federal questions serves the
salutary purpose of preventing the plaintiff from being able to destroy the
jurisdictional choice that Congress intended to afford a defendant in the
removal statute.” 56 We explained that, “[t]he same considerations are not
present, however, in a case of original federal question jurisdiction in which
the plaintiff, rather than the defendant, is invoking the jurisdiction of the
federal court.” 57 “In that case, because the burden is on the plaintiff to
establish jurisdiction in the first instance, we conclude that the plaintiff must
be held to the jurisdictional consequences of a voluntary abandonment of
claims that would otherwise provide federal jurisdiction.” 58 We looked to the
52 759 F.2d 504, 506 (5th Cir. 1985).
53 Id.
54 Id. at 512.
55 Id. at 507.
56 Id.; see also id. (“Although there is older authority to the contrary, the majority view
is that a plaintiff's voluntary amendment to a complaint after removal to eliminate the
federal claim upon which removal was based will not defeat federal jurisdiction.”).
57 Id. at 507-08.
58 Id. at 508.
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amended complaint, not the initial complaint, in Boelens to determine if the
federal court had jurisdiction.
Our decision in Boelens teaches that the time-of-filing rule should apply
in the context of cases raising a federal question that have been removed, but
that in cases initially brought by a plaintiff in federal court, the time-of-filing
rule is not dispositive. 59 Jurisdiction in federal court may be lost if the
amended pleading fails to state a claim arising under the laws of the United
States.
Our decision in Spear Marketing is entirely consistent with Boelens. 60 In
Spear Marketing, the defendants removed the case to federal court on the
ground that the plaintiff’s claims were completely preempted by the Copyright
Act. 61 In an amended complaint following removal, the plaintiffs no longer
asserted claims that were preempted and then moved to remand the case to
state court. 62 Unsurprisingly, this court held that “once a case is properly
removed, the district court retains jurisdiction even if the federal claims are
later dropped.” 63 We explained in Spear Marketing that the plaintiff had
“conflated the question whether the initial removal was proper—which follows
the time-of-filing rule—with the question whether the district court should, in
its discretion, remand the case when the federal claims disappear as the case
progresses.” 64 We rejected a number of the plaintiff’s arguments regarding
jurisdiction, including its assertion that the time-of-filing rule was limited by
Grupo Dataflux to diversity cases. 65 But that statement must be considered in
59 Id. at 507-08.
60 Spear Mktg., Inc. v. BancorpSouth Bank, 791 F.3d 586, 591-92 (5th Cir. 2015).
61 Id. at 591.
62 Id.
63 Id. at 592.
64 Id. at 593.
65 Id.
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the context of the issue presented, which was whether, after a defendant had
properly removed a case, the plaintiff could replead to divest the federal court
of jurisdiction and therefore require remand to state court. The law is clear
that a plaintiff cannot do so after removal, and our conclusion that Grupo
Dataflux did not change the law in this regard is correct and entirely consistent
with the Supreme Court’s jurisprudence regarding removal cases. 66 Our
decision in Spear Marketing did not address, and did not purport to address,
the factual pattern presented here.
With regard to federal question jurisdiction, this court has said, in
certain contexts, that “[a] complaint that is defective because it does not allege
a claim within the subject matter jurisdiction of a federal court may be
amended to state a different claim over which the federal court has
jurisdiction” if the claim “arises out of the conduct or occurrence set forth in
the original complaint.” 67 Using this rationale, we have allowed amendments
that change the cause of action from § 1981 to Title VII to relate back to the
original complaint for the purposes of tolling, even though the court had no
jurisdiction over § 1981 claims, so long as the “amendment ar[ose] out of the
conduct or occurrence set forth in the original complaint.” 68
In Whitmire v. Victus Ltd., the plaintiff filed suit in federal court
asserting causes of action under a federal statute and contended that the
district court had supplemental jurisdiction over state-law claims. 69 The
66 See, e.g., Rockwell Int’l Corp. v. United States, 549 U.S. 457, 474 n.6 (2007) (“[W]hen
a defendant removes a case to federal court based on the presence of a federal claim, an
amendment eliminating the original basis for federal jurisdiction generally does not defeat
jurisdiction.”).
67 Johnson v. Crown Enters., Inc., 398 F.3d 339, 342-43 n.3 (5th Cir. 2005) (quoting
Sessions v. Rusk State Hosp., 648 F.2d 1066, 1070 (5th Cir. Unit A Jun. 1981)).
68 Watkins v. Lujan, 922 F.2d 261, 265 (5th Cir. 1991) (quoting Sessions, 648 F.2d at
1070); see also Johnson, 398 F.3d at 342 n.3 (allowing a § 1981 claim first made in an
amendment to cure the possible jurisdictional defect over the original Title VII claim).
69 212 F.3d 885, 886-87 (5th Cir. 2000).
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district court granted summary judgment against the plaintiff on the federal
claims, and dismissed the state-law claims without prejudice. 70 The plaintiff
sought leave to amend to assert that there had been diversity jurisdiction from
the inception of the case. 71 This court held that she could so amend, and that
the district court abused its discretion in denying the motion to amend. 72
By contrast, in United States ex rel. Jamison v. McKesson Corp., we
rejected attempts by plaintiffs to rest jurisdiction on “substantive jurisdictional
fact[s]” that first appear in amended complaints, noting that § 1653 does not
allow curing “substantive defects in jurisdiction.” 73 But a later decision from
our court, Arena v. Graybar Electric Co., held that in a case initially filed in
federal district court, that court may have had pendant jurisdiction to
adjudicate state-law claims, even though federal question jurisdiction was
lacking, and we remanded for a factual determination of whether the plaintiff
could establish that there had been diversity jurisdiction from the outset of the
suit. 74
70 Id.
71 Id.
72 Id. at 890.
73 649 F.3d 322, 328 n.8 (5th Cir. 2011); see id. at 328 (discussing, in a False Claims
Act case, the Supreme Court’s decision in Rockwell, and holding that “‘[t]he term “allegations”
is not limited to the allegations of the original complaint.’ The [Supreme] Court did not hold,
however, that the original complaint is irrelevant to jurisdiction or that a relator need not
establish jurisdiction from the moment he first files his action. Indeed, Rockwell did not
speak to the question whether a relator can use an amended complaint to establish
jurisdiction when the original complaint is lacking. Consequently, we fall back on the
longstanding rule that the amendment process cannot ‘be used to create jurisdiction
retroactively where it did not previously exist.’ If Jamison's complaint did not establish
jurisdiction, it should have been dismissed; his amendments cannot save it.” (quoting
Rockwell Intern. Corp. v. United States, 549 U.S. 457, 473 (2007))); see also In re Katrina
Canal Breaches Litig., 342 F. App'x 928, 930-31 (5th Cir. 2009) (per curiam) (rejecting the
exercise of supplemental jurisdiction over state-law claims in an original complaint based
solely on claims in an amended complaint when the amended complaint added a new
defendant, new allegations, and a new cause of action).
74 669 F.3d 214, 224-25 (5th Cir. 2012).
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To the extent that there is a conflict between Jamison, on one hand, and
one of our decisions such as Whitmire, Watkins, Sessions, Johnson, or Arena
on the other, the earlier-in-time decision controls. But in any event, none of
these cases considers whether, in a suit initially filed in federal court, the
addition of a new party in an amended complaint can confer jurisdiction over
the new party even though the initial complaint failed to establish federal
question jurisdiction as to a different defendant.
The addition of MDEQ as a party is not being used to create jurisdiction
over the claim against Mississippi Silicon. Nor could it. As described above,
the district court did not have subject matter jurisdiction over the federal
question claim in the original complaint, which only named Mississippi Silicon
as a defendant. 75 We have found no decision that holds that if an original
complaint—arising via federal question, not diversity or removal—asserts a
claim against a party over which the court has no subject matter jurisdiction,
the district court cannot assert federal question jurisdiction over a claim
asserted against a new party in an amendment adding the new defendant. It
is undisputed that had 16 Front Street sued MDEQ alone, after giving the
required 60 days’ notice, the district court would have had jurisdiction. We can
discern no basis in the Supreme Court’s jurisprudence for concluding that the
district court lacked subject matter jurisdiction over the federal-law claims
against MDEQ. Accordingly, the district court should not have dismissed the
claims against MDEQ based on the time-of-filing rule.
IV
MS Silicon briefly argues that Front Street lacks standing to appeal the
dismissal of the claims against MDEQ because Front Street may refile against
MDEQ and therefore suffered no injury as a result of the district court’s
75 Supra, Section II.
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dismissal without prejudice. This argument runs counter to both the Supreme
Court’s and our precedents. As the Supreme Court held in United States v.
Wallace & Tiernan Co., “[t]hat the dismissal was without prejudice to filing
another suit does not make the cause unappealable, for denial of relief and
dismissal of the case ended this suit so far as the District Court was
concerned.” 76 We have consistently echoed this position 77 and accordingly
reject the argument that Appellants lack standing to appeal their claim
against MDEQ.
V
Finally, Mississippi Silicon moves for attorneys’ fees pursuant to Rule 38
of the Federal Rules of Appellate Procedure, which allows the court to award
damages if an appeal is “frivolous.” 78 Mississippi Silicon makes three
arguments: (1) Appellants’ interpretation of § 7604(a)(3) is frivolous as it was
“identical to that rejected in CleanCOALition”; (2) Appellants’ appeal of the
dismissal without prejudice of their claim against MDEQ is “unnecessary and
a waste,” and thus frivolous; and (3) attorneys’ fees are also warranted because
Appellants have abused litigation.
As to the first argument, “[a]n appeal is frivolous if the result is obvious
or the arguments of error are wholly without merit.” 79 Bad faith and
harassment are not necessary for sanctions, but “[b]ad faith may aggravate the
76 336 U.S. 793, 794 n.1 (1949).
77 See, e.g., Linn v. Chivatero, 714 F.2d 1278, 1280 (5th Cir. 1983) (“To say that
[appellant] may bring a different action in the future is not to say that this action was not
fully and finally disposed of below.”); see also Prewitt v. City of Greenville, 1999 WL 1131957,
at *1 (5th Cir. Nov. 16, 1999) (per curiam) (unpublished) (“A dismissal without prejudice may
constitute a final judgment for purposes of appeal.”).
78 FED. R. APP. P. 38 (“If a court of appeals determines that an appeal is frivolous, it
may, after a separately filed motion or notice from the court and reasonable opportunity to
respond, award just damages and single or double costs to the appellee.”).
79 Coghlan v. Starkey, 852 F.2d 806, 811 (5th Cir. 1988) (per curiam) (citation omitted).
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circumstances justifying sanctions.” 80 Attempting to distinguish precedent
and offering independent legal analysis are factors that can weigh against
sanctions. 81 Front Street faced long odds in overcoming two legal hurdles as
to its claims against Mississippi Silicon: the plain text of the statute and the
Fifth Circuit precedent in CleanCOALition. Nevertheless, Front Street made
legitimate arguments and attempts to distinguish CleanCOALition. Though
ultimately unsuccessful, the arguments were not “wholly without merit” and
do not warrant sanctions.
As to the second argument, Mississippi Silicon argues that this appeal is
frivolous because Front Street lacks standing to bring it. Mississippi Silicon
offers no binding precedent for this proposition and, as discussed above, it is
without merit. Sanctions are also not warranted here.
As to its final argument, Mississippi Silicon requests that this court
consider Appellants’ “[r]elentless [l]itigation [c]ampaign” of filing “meritless
suits” to damage Mississippi Silicon’s business interests. While “[b]ad faith
may aggravate the circumstances justifying sanctions,” 82 Front Street’s appeal
of the claim against Mississippi Silicon is not wholly without merit. We
therefore deny sanctions.
* * *
For the foregoing reasons, we AFFIRM the district court’s judgment that
it lacks jurisdiction over Mississippi Silicon, L.L.C., but we REVERSE the
district court’s judgment regarding MDEQ and REMAND for further
proceedings, as warranted. Mississippi Silicon’s motion for attorneys’ fees is
also DENIED.
80 Id. at 814.
81 See id. at 809.
82 Id. at 814.
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