Port of Corpus v. Port of Corpus ( 2023 )

Case: 22-40124 Document: 00516600426 Page: 1 Date Filed: 01/06/2023
United States Court of Appeals
for the Fifth Circuit
United States Court of Appeals
Fifth Circuit
FILED
January 6, 2023
No. 22-40124 Lyle W. Cayce
Clerk
Port of Corpus Christi Authority of Nueces County,
Texas,
Plaintiff—Appellee,
versus
The Port of Corpus Christi L.P.; Kenneth Berry,
Defendants—Appellants.
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 2:22-CV-30
Before Higginbotham, Southwick, and Higginson, Circuit
Judges.
Leslie H. Southwick, Circuit Judge:
The Port of Corpus Christi Authority of Nueces County, Texas (a
governmental entity), sued The Port of Corpus Christi, L.P. (a private entity)
and Kenneth Berry in state court. The claims were for trespass and
encroachment on its submerged land that resulted from dredge operations
occurring in a ship channel. The defendants removed the case, but the
district court remanded, holding there was no basis for removal either under
the federal officer removal statute or due to a federal question. We AFFIRM.
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FACTUAL AND PROCEDURAL BACKGROUND
Kenneth Berry owns Berry Island, which lies in the La Quinta Ship
Channel near Corpus Christi, Texas. He also owns a company named The
Port of Corpus Christi, L.P. When there is no reason to distinguish them, we
refer to Kenneth Berry and his company collectively as the “Berry Parties.”
Berry’s The Port of Corpus Christi, L.P., was sued in state court by the Port
of Corpus Christi Authority of Nueces County, Texas (“Port Authority”),
for service mark dilution and infringement in April 2018. The Port Authority
is a creature of Texas statute. See Texas Special District Local Laws Code
Ch. 5016. 1 In February 2022, the Port Authority filed its Second Amended
Petition, added Kenneth Berry as a party, and asserted claims for trespass
under Texas common law. We do not address the merits of either claim.
In this case, much of the discussion concerns a permit issued by the
United States Army Corps of Engineers (“Corps”). Neither of the Berry
Parties is the permittee. Instead, the permit was issued to Moda Ingleside
Oil Terminal, LLC, which is also known as Enbridge Ingleside Oil Terminal,
LLC (“Moda/Enbridge”). The permit authorized improvements to the
company’s facilities, including construction of what appears to be five new
barge docks for the oil terminal. The permit allowed Moda/Enbridge to
“conduct maintenance dredging operations” pursuant to specified terms and
1
The Port Authority was formerly known as the Nueces County Navigation
District No. 1; the legislature adopted the current name in 1981. See Texas Special District
Local Laws Code § 5016.0002. It is a centenarian “governmental agency and body politic
incorporated with governmental powers and existing under the laws of the State of Texas .
. . . After an election on October 31, 1922, it was created under Article 3, Section 52 of the
Constitution and the General Laws of the State of Texas. . . . [In 1931, it] was duly converted
to a Navigation District operating under Article 16, Section 59, of the Constitution of the
State of Texas (Conservation and Reclamation) and the laws applicable thereto.” Meaney
v. Nueces Cnty. Nav. Dist. No. 1, 222 S.W.2d 402, 404 (Tex. Civ. App. — San Antonio,
1949, writ ref’d) (quotation marks omitted).
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conditions for compliance with federal regulations. Dredging involves the
removal of sea bottom from a subsurface location to a Dredge Material
Placement Area (“DMPA”). The Corps’ permit required Moda/Enbridge
to deposit the dredged spoil on Berry Island, an approved DMPA. After the
spoil is deposited, the solid particles settle, and the liquid decants through a
piping system back into Corpus Christi Bay.
Under the permit, Moda/Enbridge was required to enter into “a land
use agreement with the Port of Corpus Christi as outlined in Attachment A.”
The district court found it unclear what “Port of Corpus Christi” referenced
— Berry’s company or the governmental entity. See find some clarity is
provided by Attachment A, labeled “Mitigation Plan.” The lengthy
attachment describes the planned improvements to the Moda/Enbridge
terminal. Primarily, though, it outlines mitigation objectives and tasks. It
refers several times to the “PCCA,” which it identifies as the “Port of
Corpus Christi Authority.” It also has this reference: “The permittee
[Moda/Enbridge] is negotiating a land use agreement with PCCA, owners of
the submerged land.” The district court found only one land use agreement
in the record, an easement between Moda/Enbridge and the Berry Parties,
and it allowed the dredged spoil to be placed on Berry Island. For purposes
of our analysis, we accept that the permit and its attachments are referring to
the Berry company as a party to the land use agreement.
The permit granted to Moda/Enbridge expresses these limitations:
a. This permit does not obviate the need to obtain other
Federal, state, or local authorizations required by law.
b. This permit does not grant any property rights or
exclusive privileges.
c. This permit does not authorize any injury to the
property or rights of others.
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The permit also states the federal government in no way “assume[s]
any liability for . . . [d]amages to persons, property, or to other permitted or
unpermitted activities or structures caused by the activity authorized by this
permit.”
In its Second Amended Petition, the Port Authority alleged the
dredging operations on Berry Island resulted in physical trespasses and
encroachments on its submerged land. Specifically, the petition added one
count for Texas common law trespass, sought a temporary restraining order,
and sought a temporary and permanent injunction. The Port Authority
claimed “the dredge placement activities on Berry Island have in the past
resulted, and in the future are practically certain to result, in suspended solids
and other materials encroaching upon Plaintiff’s submerged land,” which
adjoins Berry Island in the La Quinta Ship Channel. The Port Authority
complained of sand, clay, and large, loose concrete or stones — called “rip
rap” — that the defendants placed onto the Port Authority’s submerged
land, as well as a dredge pipe affixed over their land. These “obstructions”
create “sandbars and islands that can be viewed above the low tide water
line,” which interfere with their “use of the submerged area in conjunction
with the Corpus Christi Ship Channel and the La Quinta Ship Channel.”
On February 14, 2022, after the Port Authority filed its Second
Amended Petition raising the DMPA issues, the Berry Parties removed the
case to the United States District Court for the Southern District of Texas.
The Port Authority’s complaint expressly disclaimed any issue regarding
permit compliance, and it stated its claim exclusively in terms of Texas
common law trespass. Nonetheless, in an amended Notice of Removal filed
on February 23, 2022, the Berry Parties asserted federal jurisdiction on these
grounds: (1) Federal Officer Removal Jurisdiction under 28 U.S.C. §
1442(a); (2) Federal Question Jurisdiction under 28 U.S.C. § 1331; and (3)
Admiralty/Maritime Jurisdiction under 28 U.S.C. § 1333(1).
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The district court granted the Port Authority’s motion to remand. It
held federal-officer jurisdiction does not exist because the Berry Parties do
not hold any federal permits, are not operating “under” the direction of any
federal officer, and are not acting in the interest of the federal government.
As to federal-question jurisdiction, the court held that the presence of federal
dredging permits does not displace or preempt state tort law. Further, the
Port Authority’s requested remedy of money damages to pay for remediation
does not require federal oversight. Finally, as to admiralty or maritime
jurisdiction, the court concluded that “[w]ithout a separate basis for
jurisdiction, an admiralty or maritime claim is not removable,” and the cases
to the contrary on which the Berry Parties relied are “no longer
authoritative.”
The Berry Parties appealed, and the district court denied their motion
to stay the remand during the appeal. On the same day as the Berry Parties’
notice of appeal, Moda/Enbridge filed a notice of intervention in the Texas
state court proceeding. The parties disagree about whether the case has been
remanded.
DISCUSSION
The Berry Parties raise three issues on appeal. First, they seek
reversal of the district court’s order denying removal for their failure to
demonstrate they are entitled to remove under the federal officer removal
statute. Second, and in the alternative, they seek reversal of the district
court’s order denying removal for failure to demonstrate that the Port
Authority’s claims raise a federal question. Third, they argue this case arises
under maritime and admiralty jurisdiction, which the district court
determined they abandoned for failure to address the argument in a response
at the district court level.
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An order to remand a case to state court is generally nonreviewable.
28 U.S.C. § 1447(d). Even so, when removal is sought under Section 1442
or 1443, the remand “shall be reviewable by appeal or otherwise.” Id. The
district court’s remand order is reviewed de novo, “without a thumb on the
remand side of the scale.” Latiolais v. Huntington Ingalls, Inc., 951 F.3d 286,
290 (5th Cir. 2020) (en banc) (quotation marks and citation omitted).
Federal officer removal differs from other removal doctrines because “it is
not narrow or limited.” Texas v. Kleinert, 855 F.3d 305, 311 (5th Cir. 2017)
(quotation marks and citations omitted). Because part of the district court’s
order granting remand turned on federal officer removal under Section 1442,
we review the district court’s order in its entirety. See BP P.L.C. v. Mayor &
City Council of Balt., 141 S. Ct. 1532, 1542–43 (2021).
I. Federal officer removal
We begin with the federal officer removal statute. We recently
reexamined our caselaw regarding the statute. See Latiolais, 951 F.3d 286. In
Latiolais, we declared that in order to remove under Section 1442(a), the
defendant must show “(1) it has asserted a colorable federal defense, (2) it is
a ‘person’ within the meaning of the statute, (3) that has acted pursuant to a
federal officer’s directions, and (4) the charged conduct is connected or
associated with an act pursuant to a federal officer’s directions.” Id. at 296.
The district court applied that test and focused primarily on the third
element. The district court found the defendants were not acting pursuant
to any federal authority. The district court stated the Berry Parties
“appear[ed] to assume that they have demonstrated the first three elements
by simply referencing the [Corps’] DMPA permit.” The Port Authority, in
response to the notice of removal, argued the defendants did not meet their
burden to establish the third element and disputed their assumptions under
the first and fourth elements.
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The Port Authority and the district court relied heavily on Watson v.
Philip Morris Cos. Inc., 551 U.S. 142 (2007). The Watson Court concentrated
on the language of the second and third elements in holding that a party does
not come within the scope of the federal officer removal statute by mere
compliance with federal regulations. Id. at 151–52. Specifically, the Court
stated that
precedent and statutory purpose make clear that the private
person’s “acting under” must involve an effort to assist, or to
help carry out, the duties or tasks of the federal superior. In
our view, the help or assistance necessary to bring a private
person within the scope of the statute does not include simply
complying with the law.
Id. at 152 (emphasis omitted) (citations omitted). Further, the Court
considered a similar, though distinguishable, situation as the one here:
The question before us is whether the fact that a federal
regulatory agency directs, supervises, and monitors a
company’s activities in considerable detail brings that
company within the scope of the italicized language (“acting
under” an “officer” of the United States) and thereby permits
removal. We hold that it does not.
Id. at 145 (emphasis in original).
The district court determined that “[d]elegation of federal
governmental authority is what triggers the statute, not the status of being
regulated and therefore subject to federal authority wielded by others.”
Relying on Watson, the district court found that “[n]othing in the materials
of record demonstrates that either Defendant has acted to help or assist any
federal officer or agency.” The district court also found the Berry Parties
had not demonstrated they are federal permittees. The only permittee of
record was Moda/Enbridge. In reaching its decision, the district court did
not consider the other three elements in Latiolais.
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On appeal, the Berry Parties rely on one of our decisions that
considered the third element in some detail. See St. Charles Surgical Hosp.,
L.L.C. v. Louisiana Health Serv. & Indem. Co., 990 F.3d 447 (5th Cir. 2021).
There, we examined “the relationship between the removing party and the
relevant federal officer,” which requires “courts to determine whether the
federal officer exert[s] a sufficient level of subjection, guidance, or control
over the private actor.” Id. at 455 (emphasis in original) (quotation marks
and citation omitted).
The Berry Parties assert that Moda/Enbridge’s permit with the Corps
establishes this causal “relationship” between the Berry Parties and the
Corps. Further, they contend they are not merely complying with the law
but, instead, are carrying out the duties or tasks of the federal authority. The
problem here is there is no federal endeavor involved with this permit, i.e.,
there is no task or duty of a federal officer or agency the Berry Parties are
carrying out. It is true the Corps authorized Moda/Enbridge to dredge and
dump spoil on Berry Island. The permit, though, is allowing a private
company to improve its berths for barges in a manner consistent with federal
law.
The Berry Parties argue that “more attenuated relations” than theirs
with the federal government have allowed appeal under Section 1442. They
cite a series of cases demonstrating the difference between a private party
acting under federal authority and one merely being regulated. The Port
Authority, though, correctly summarizes that these opinions “dealt with a
private party performing a government task delegated to it by the
government, typically through a contract.” The cases the Berry Parties cite
are readily distinguishable:
• Latiolais involved a federal contractor hired by the U.S. Navy to build
and refurbish the Navy’s own vessels. 951 F.3d at 289. Because the
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alleged negligence occurred “during the refurbishment of the USS
Tappahannock” pursuant to a federal contract, the private entity was
acting “pursuant to directions of the U.S. Navy” and the “civil action
relate[d] to an act under color of federal office.” Id. at 296.
• St. Charles vacated a remand order where “the Office of Personnel
Management . . . contracted with BCBS for administration of claims
under federal health insurance plans,” one of the Office’s own
governmental obligations. 990 F.3d at 451, 455.
• Zeringue held that “Crane’s provision of parts in an effort to assist the
Navy’s construction of [Navy] vessels satisfies the ‘acting under’
requirement.” Zeringue v. Crane Co., 846 F.3d 785, 792 (5th Cir.
2017). There, “the Navy directed Crane to build parts, and, had
Crane not done so, the Navy would have had to build those parts
instead.” Id.• Humphries dealt with a private party that “constructed and operated
[a] federal facility” and thus asserted the “government contractor
defense.” Humphries v. Elliott Co., 760 F.3d 414, 415 (5th Cir. 2014)
(quotation marks and citation omitted).
• Thornburg held a bankruptcy trustee was “acting under” a federal
officer because he was “appointed pursuant to federal law by the U.S.
Trustee for the purpose of assisting the U.S. Trustee with especially
heavy Chapter 13 bankruptcy caseloads” and was “tasked with
carrying out the provisions of the Bankruptcy Code.” Bell v.
Thornburg, 743 F.3d 84, 89 (5th Cir. 2014).
The Berry Parties must show their activities “involve an effort to
assist, or to help carry out, the duties or tasks of the federal superior.”
Watson, 551 U.S. at 152 (emphasis omitted). Acting consistently with a
federal permit that authorized and set conditions for making improvements
to the berths for barges at a private oil terminal is not carrying out a federal
officer’s tasks or duties. Because they do not satisfy the requirement of
assisting or carrying out the duties of a federal officer, we need not consider
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the other elements for federal officer removal. The district court did not err
in denying removal on the basis of the federal officer removal statute.
II. Federal question jurisdiction
In the alternative, the Berry Parties contend this case arises under
federal law because “any challenge to their operations constitutes a collateral
attack on the [Corps’] authority pursuant to federal statutes — the Rivers
and Harbors Act and Clean Water Act — and associated federal
regulations.”
The district courts have “original jurisdiction of all civil actions
arising under the Constitution, laws, or treaties of the United States.” 28
U.S.C. § 1331. Removal based on federal-question jurisdiction is permitted
by 28 U.S.C. § 1441(a). Unlike federal officer removal under Section 1442,
removal based on federal question is “strictly construed against removal,”
with doubts resolved in favor of remand in recognition of the interests of
comity with state court jurisdiction. Leffall v. Dallas Indep. Sch. Dist., 28 F.3d
521, 524 (5th Cir. 1994); see also Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.
100, 108–09 (1941). “‘[T]he mere presence of a federal issue in a state cause
of action does not automatically confer federal-question jurisdiction.’”
Singh v. Duane Morris LLP, 538 F.3d 334, 338 (5th Cir. 2008) (quoting Merrell
Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 813 (1986)).
In addition, “[a] plaintiff is the master of his complaint and may allege
only state law causes of action, even when federal remedies might also exist.”
Hood ex rel. Miss. v. JP Morgan Chase & Co., 737 F.3d 78, 89 (5th Cir. 2013)
(quotation marks and citation omitted). “[A] defendant cannot, merely by
injecting a federal question into an action that asserts what is plainly a state-
law claim, transform the action into one arising under federal law, thereby
selecting the forum in which the claim shall be litigated.” Id. (emphasis in
original) (quotation marks and citation omitted). Moreover, “it is the
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character of the action and not the defense which determines whether there
is federal question jurisdiction.” Thurston Motor Lines, Inc. v. Jordan K.
Rand, Ltd., 460 U.S. 533, 535 (1983).
The Port Authority’s complaint alleges state-law trespass claims that
do not implicate any federal law. When the claim is based on state law, a
federal issue can be a basis for federal jurisdiction, but the federal issue is not
automatically a sufficient basis:
Only in a special and small category of cases will federal
jurisdiction exist when state law creates the cause of action.
That limited category of federal jurisdiction only exists where
(1) resolving a 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.
Board of Comm’rs v. Tennessee Gas Pipeline Co., 850 F.3d 714, 721–22 (5th Cir.
2017) (“Tennessee Gas”) (quotation marks and footnotes omitted). In
Tennessee Gas, we held the plaintiffs’ state-law claims for negligence and
nuisance properly relied on standards and duties of care that arose from
federal law, and those federal standards created the necessary federal-
question jurisdiction. Id. at 722-23.
The district court here determined the defendants’ arguments “for
finding a federal question embedded in the Port Authority’s trespass claim
[were] based on the premise that Defendants’ actions were authorized,
prescribed, and [were] perpetually regulated by the [Corps] pursuant to
federal statutes and regulations.” The defendants relied on the Rivers and
Harbors Act, the Clean Water Act, “a host of federal regulations,” and the
Corps’ Navigation Servitude. The district court rejected the argument,
holding the Corps “has not exercised any right of condemnation or otherwise
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assumed jurisdiction over the Port Authority’s property rights” or their
interests.
To resolve the claims here, the Texas law of trespass needs to be
applied to these facts because the relevant duties and standards are not
created by federal law. As defined in Texas law, a trespass is an “(1) entry
(2) onto the property of another (3) without the property owner’s consent or
authorization.” See Environmental Processing Sys., L.C. v. FPL Farming Ltd.,
457 S.W.3d 414, 419 (Tex. 2015). The Rivers and Harbors Act, the Clean
Water Act, and other referenced federal statutes and regulations are
irrelevant to the Port Authority’s complaint.
We agree with the district court that the Port Authority’s complaint
“disclaims any issue regarding permit compliance, stating its claim
exclusively in terms of Texas state law: common law trespass.” The Port
Authority did not allege a violation of either the Clean Water Act or the
Rivers and Harbors Act. These laws do not “create[] the cause of action”
and are not necessary to the Port Authority’s “right to relief.” See Empire
Healthchoice Assur., Inc. v. McVeigh, 547 U.S. 677, 690 (2006). Also
important, the Clean Water Act’s federal permit program does not preempt
all state common law causes of action. See International Paper Co. v. Ouellette,
479 U.S. 481, 497–98 (1987).
Finally, the Berry Parties argue the remedies sought by the Port
Authority implicate federal law because they seek to impose injunctive
remedies against the Corps. Actually, such relief is not requested.
There is no federal issue raised by the Port Authority under any of the
theories suggested by the Berry Parties.
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III. Admiralty/maritime jurisdiction
The Berry Parties also argue this case arises under maritime and
admiralty jurisdiction. The district court determined the defendants
abandoned this basis for removal because they did not address it in their
response or sur-reply to the Port Authority’s motion to remand. The Berry
Parties contend this basis for removal is not waived because these arguments
were “incorporated by reference from the Removal” pursuant to Rule 10(c)
of the Federal Rules of Civil Procedure. Even so, the Berry Parties failed to
address the Port Authority’s citations to cases holding that maritime cases
filed in state court cannot be removed to federal court, unless an independent
basis for federal jurisdiction exists. See Barker v. Hercules Offshore, Inc., 713
F.3d 208, 220 (5th Cir. 2013).
We agree there was insufficient briefing on this issue in district court.
The arguments presented on appeal are also thin. Essentially, the argument
rests on the fact that Berry Island is in “navigable water.” That is it. That is
not nearly enough.
AFFIRMED.
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