Great Lakes Gas Transmission v. Essar Steel Minnesota LLC , 843 F.3d 325 ( 2016 )


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  •                   United States Court of Appeals
    For the Eighth Circuit
    ___________________________
    No. 16-1101
    ___________________________
    Great Lakes Gas Transmission Limited Partnership
    lllllllllllllllllllll Plaintiff - Appellee
    v.
    Essar Steel Minnesota LLC; Essar Steel Limited, formerly known as Essar Steel
    Holdings, Ltd.; Essar Steel India Limited, formerly known as Essar Steel Limited;
    Essar Global Fund Ltd., formerly known as Essar Global Limited
    lllllllllllllllllllll Defendants - Appellants
    ____________
    Appeal from United States District Court
    for the District of Minnesota - Minneapolis
    ____________
    Submitted: October 20, 2016
    Filed: December 5, 2016
    ____________
    Before MURPHY, GRUENDER, and SHEPHERD, Circuit Judges.
    ____________
    GRUENDER, Circuit Judge.
    Great Lakes Gas Transmission Limited Partnership (“Great Lakes”) brought
    suit against Essar Steel Minnesota, LLC and related entities (“ESML”) for breach of
    contract in federal court, asserting diversity jurisdiction. The parties later discovered
    that diversity jurisdiction did not exist, and ESML filed a motion to dismiss for lack
    of subject matter jurisdiction. The district court held that it had federal question
    jurisdiction and denied the motion. The case proceeded to trial, and judgment was
    entered for Great Lakes. For the reasons discussed below, we conclude that the
    district court lacked subject matter jurisdiction. Therefore, we vacate the judgment
    and remand with instructions to dismiss for lack of jurisdiction.
    I.
    Great Lakes operates a pipeline that transports natural gas from Canada to
    locations in Minnesota. ESML’s predecessor, Minnesota Steel Industries (“MSI”),
    sought to obtain gas for use at a steel production facility it planned to build in
    Nashwauk, Minnesota. Thus, on September 6, 2006, MSI and Great Lakes entered
    into a Transportation Service Agreement (“TSA”) for the transportation of gas to
    Nashwauk.
    The TSA provided that Great Lakes would transport up to 55,000 dekatherms
    of gas per day from July 1, 2009 to March 31, 2024. In exchange for the
    transportation of natural gas, the TSA required MSI to pay Great Lakes its maximum
    reservation rates and charges on a monthly basis under the applicable rate schedule
    reflected in Great Lakes’s gas tariff (“Tariff”) on file with the Federal Energy
    Regulatory Commission (“FERC”). The TSA also incorporated by reference the
    terms of the Tariff, which included provisions such as a force majeure clause and a
    limitation of liability clause. Additionally, the TSA stated that any controversy
    arising under the agreement “shall be determined in accordance with the laws of the
    State of Michigan.”
    On October 22, 2007, Essar Steel Holdings Ltd. acquired MSI, and MSI
    subsequently changed its name to ESML. According to ESML, it was still in the
    process of obtaining financing to construct the planned Nashwauk facility when the
    2008 financial crisis delayed construction of the facility. Thus, in early 2009, ESML
    -2-
    communicated to Great Lakes that performance under the existing terms of the TSA
    was impractical and that it wished to modify the terms, including the commencement
    date. As of October 2009, the parties had not reached an agreement, and ESML had
    not made any of the monthly payments due beginning in August 2009. As a result,
    on October 29, 2009, Great Lakes brought suit against ESML in federal court.
    Great Lakes’s first amended complaint (“FAC”) pleaded a claim for breach of
    contract under a theory of anticipatory repudiation, and it requested relief in the form
    of all future payments that would have been due under the TSA until its expiration
    in March 2024. The FAC did not mention a cause of action based on federal law, and
    it included only a passing reference to the Tariff in the factual background section,
    stating that “MSI agreed to pay the rates indicated in the Contract, which include the
    maximum reservation rate for the Contract’s transportation path as reflected in Great
    Lakes’ FERC Gas Tariff, Second Revised Volume No. 1 (‘Tariff’).” The FAC
    identified diversity jurisdiction as the only basis for subject matter jurisdiction.
    Thus, the case proceeded under the assumption that diversity jurisdiction
    existed. On May 15, 2012, when ruling on a counterclaim by ESML, the district
    court applied Michigan law to determine that the force majeure clause did not apply
    to the unforeseen financial crisis. On March 19, 2013, the court again applied
    Michigan law to hold that ESML had committed an anticipatory repudiation of the
    TSA and to deny ESML’s affirmative defense based on the Tariff’s limitation of
    liability clause. As a result, the court granted Great Lakes’s motion for partial
    summary judgment and held that Great Lakes was entitled to recover the entire
    payment stream due under the TSA. Because the parties agreed that damages needed
    to be reduced to net present value and that determining the particular discount rate to
    apply was a question of fact, a trial was scheduled to calculate damages.
    Meanwhile, ESML filed a complaint with FERC on November 27, 2012,
    asking FERC to order Great Lakes “to negotiate in good faith to resolve this dispute
    -3-
    with ESML.” FERC found that it lacked exclusive jurisdiction because ESML was
    not challenging the reasonableness of the Tariff’s rate, and FERC declined to exercise
    its primary jurisdiction. Thus, FERC dismissed the complaint.
    On the eve of trial, ESML alerted the court that one of Great Lakes’s limited
    partners, TC PipeLines, LP, had hundreds or thousands of public unitholders whose
    citizenship destroyed diversity jurisdiction. Great Lakes had not previously disclosed
    their existence, and ESML noticed the inaccuracy in Great Lakes’s citizenship
    disclosure while preparing a trial brief. ESML moved to dismiss the case for lack of
    subject matter jurisdiction.
    On May 4, 2015, the district court denied the motion to dismiss. The court
    agreed with ESML that diversity jurisdiction was not present. Nevertheless, the court
    held that federal question jurisdiction existed. The court did not base its decision on
    the proposition that federal law created the cause of action. In fact, it rejected the
    argument that the Natural Gas Act (“NGA”) creates an express cause of action for
    recovering payments due under a federal tariff, and it declined to rule on whether the
    NGA creates an implied cause of action. Rather, the court held that it had federal
    question jurisdiction “given the disputed and substantial federal issues at play.”
    Great Lakes Gas Transmission Ltd. P’ship v. Essar Steel Minn., LLC, 
    103 F. Supp. 3d
    1000, 1017-18 (D. Minn. 2015). The court also held that its jurisdiction over the
    claim was exclusive because of the NGA’s exclusive jurisdiction provision.
    The case proceeded to trial, and Great Lakes received a judgment in the amount
    of $32,902,183. On appeal, ESML raises four arguments: (1) the district court lacked
    subject matter jurisdiction; (2) the district court erred in granting summary judgment
    on the anticipatory repudiation claim; (3) the district court erred in dismissing
    ESML’s affirmative defense based on the Tariff’s limitation of liability provision; and
    (4) the district court abused its discretion in excluding ESML’s expert witness on
    damages and in limiting ESML’s cross-examination of Great Lakes’s expert witness.
    -4-
    We agree with ESML that the district court lacked subject matter jurisdiction, and
    thus we do not address ESML’s remaining arguments.
    II.
    “Federal courts are courts of limited jurisdiction, possessing only that power
    authorized by Constitution and statute.” Gunn v. Minton, 
    133 S. Ct. 1059
    , 1064
    (2013) (citation and quotation marks omitted). “The existence of subject matter
    jurisdiction in federal court is a question of law subject to de novo review.” Keene
    Corp. v. Cass, 
    908 F.2d 293
    , 296 (8th Cir. 1990). The parties agree that the only
    possible basis for subject matter jurisdiction is federal question jurisdiction, which
    grants federal district courts “original jurisdiction of all civil actions arising under the
    Constitution, laws, or treaties of the United States.” See 28 U.S.C. § 1331.
    “[T]he question whether a claim ‘arises under’ federal law must be determined
    by reference to the ‘well-pleaded complaint.’” Merrell Dow Pharm. Inc. v.
    Thompson, 
    478 U.S. 804
    , 808 (1986) (quoting Franchise Tax Bd. v. Constr. Laborers
    Vacation Trust, 
    463 U.S. 1
    , 9-10 (1983)). The well-pleaded complaint rule “provides
    that federal jurisdiction exists only when a federal question is presented on the face
    of the plaintiff’s properly pleaded complaint.” Caterpillar Inc. v. Williams, 
    482 U.S. 386
    , 392 (1987). “Federal question jurisdiction exists if the well-pleaded complaint
    establishes either that federal law creates the cause of action or that the plaintiff’s
    right to relief necessarily depends on resolution of a substantial question of federal
    law.” Williams v. Ragnone, 
    147 F.3d 700
    , 702 (8th Cir. 1998) (citation and quotation
    marks omitted). Thus, we first address whether federal law creates the cause of action
    in this case, and we next address whether Great Lakes’s right to relief necessarily
    depends on resolution of a substantial question of federal law.
    -5-
    III.
    “[T]he vast majority of cases brought under the general federal-question
    jurisdiction of the federal courts are those in which federal law creates the cause of
    action.” Merrell 
    Dow, 478 U.S. at 808
    . Federal law may create a cause of action
    “either expressly or by implication.” Transamerica Mortg. Advisors, Inc. v. Lewis,
    
    444 U.S. 11
    , 15 (1979). The cause of action identified in the FAC is a breach of
    contract claim. For the reasons that follow, we conclude that federal law neither
    expressly nor implicitly created this cause of action.
    A.
    We agree with the district court that federal law does not create an express
    cause of action under which Great Lakes may sue for breach of contract. The Tariff
    was filed pursuant to the NGA, and nothing in the NGA expressly creates a cause of
    action for breach of contract. Although Section 717u of the NGA provides that
    district courts have “exclusive jurisdiction of violations of [the NGA] or the rules,
    regulations, and orders thereunder,” 15 U.S.C. § 717u, the district court correctly
    ruled that this provision “does not create a cause of action, but merely states that
    federal district courts have exclusive jurisdiction over cases that otherwise arise under
    federal law or involve a substantial question of federal law.” Great Lakes, 103 F.
    Supp. 3d at 1013. Indeed, “[e]xclusiveness is a consequence of having jurisdiction,
    not the generator of jurisdiction.” Pan Am. Petroleum Corp. v. Super. Ct. of Del., 
    366 U.S. 656
    , 664 (1961); see also Columbia Gas Transmission, LLC v. Singh, 
    707 F.3d 583
    , 591 (6th Cir. 2013) (“Section 717u provides for federal jurisdiction, but it does
    not create an action.”). Thus, the NGA does not create an express federal cause of
    action.
    -6-
    B.
    The NGA also does not create an implied cause of action. In limited
    circumstances, courts may determine that “a private remedy is implicit in a statute not
    expressly providing one.” Cort v. Ash, 
    422 U.S. 66
    , 78 (1975). Before the district
    court, Great Lakes contended that Section 717c of the NGA creates an implied cause
    of action. Great Lakes argued that because Section 717c prohibits “undue preference
    or advantage,” Great Lakes must be able to sue to collect unpaid tariff payments from
    all of its shippers in order to avoid giving undue preference to shippers from whom
    it does not collect. See 15 U.S.C. § 717c(b). The district court declined to rule on
    whether the NGA creates an implied cause of action because it noted that the two
    relevant Supreme Court cases were “not particularly instructive.” Great Lakes, 
    103 F. Supp. 3d
    at 1015, 1018. On appeal, Great Lakes contends that our recent decision
    in City of Osceola v. Entergy Arkansas, Inc., 
    791 F.3d 904
    (8th Cir. 2015) establishes
    that “a suit to enforce an agreement incorporating a FERC-approved tariff arises
    under federal law.” However, Osceola and the two Supreme Court cases identified
    by the district court are distinguishable from the present case.
    In Louisville & N. R. Co. v. Rice, a railroad sued a consignee to recover money
    “claimed to be due under tariffs approved and published as required by Interstate
    Commerce Act.” 
    247 U.S. 201
    , 201 (1918). The Supreme Court recognized that the
    Interstate Commerce Act (“ICA”) expressly “requires carrier to collect and consignee
    to pay all lawful charges duly prescribed by the tariff in respect of every shipment.”
    
    Id. at 202.
    Thus, the Court held that federal jurisdiction existed because the “result
    of the action necessarily depended upon construction and effect of [the ICA].” 
    Id. at 203.
    Likewise, in Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., the Court held
    that federal jurisdiction existed over a claim seeking “pay[ment] for transport services
    as required by petitioner’s tariff” because the complaint specifically “alleged that the
    action arose under the Interstate Commerce Act.” 
    460 U.S. 533
    , 533 (1983).
    -7-
    This case involves the NGA, not the ICA. Unlike the ICA, the NGA does not
    expressly require transporters to collect and shippers to pay all lawful charges from
    their shippers. Thus, the result of this action did not “necessarily depend[] upon
    construction” of the NGA. See 
    Rice, 247 U.S. at 203
    . Moreover, the FAC did not
    “allege[] that the action arose under” the NGA. See 
    Thurston, 460 U.S. at 533
    .
    Indeed, aside from one brief reference to the Tariff, the FAC did not mention any
    federal law at all. Therefore, both Rice and Thurston are inapposite.
    In Osceola, we addressed a claim brought to enforce a tariff filed under the
    Federal Power Act 
    (“FPA”). 791 F.3d at 907
    . There, FERC required certain
    companies, including the defendant, Entergy, to make “bandwidth payments” to other
    companies. 
    Id. at 906.
    After making these bandwidth payments, Entergy passed the
    costs on to its customers as “purchased energy.” 
    Id. In a
    FERC compliance action,
    FERC determined that Entergy’s contract with one of its customers, Union Electric,
    did not permit Entergy to charge these payments to Union Electric as purchased
    energy. See 
    id. Subsequently, another
    customer, the City of Osceola, sued Entergy
    in state court, seeking recovery of $4 million in bandwidth payments charged to
    Osceola. See 
    id. at 907.
    Osceola’s complaint cited FERC decisions, asserted that
    those decisions governed the interpretation of Osceola’s contract with Entergy, and
    stated that Osceola “sought damages permissible under the Federal Power Act and
    FERC decisions.” 
    Id. On appeal
    after removal to federal court, we observed that this
    dispute centered on the interpretation of a “rate formula” contained within the
    agreement and approved by FERC. 
    Id. at 908.
    Based on these facts, we concluded
    that removal was proper, noting that Osceola sought to enforce the tariff contained
    in the agreement and approved by FERC and that “a suit to enforce [filed tariffs]
    arises under federal law.” 
    Id. at 907-08.
    Unlike in Osceola, this claim was not brought to enforce the terms of a tariff
    as previously interpreted by FERC. This dispute did not “center[] on” an
    interpretation of a “FERC approved rate formula,” nor did the FAC seek “damages
    -8-
    permissible under” the NGA or FERC decisions. See 
    id. Rather, the
    FAC alleged a
    simple breach of contract claim. There was no indication that federal law created this
    cause of action or played any role in Great Lakes’s right to relief. Therefore, Osceola
    does not suggest that federal law necessarily creates an implied cause of action for
    breach of contract.
    To determine whether the NGA creates such a cause of action, “the central
    inquiry remains whether Congress intended to create, either expressly or by
    implication, a private cause of action.” Touche Ross & Co. v. Redington, 
    442 U.S. 560
    , 575 (1979). Several factors are relevant to this inquiry, including whether there
    is “any indication of legislative intent, explicit or implicit, either to create such a
    remedy or to deny one” and whether the cause of action is “one traditionally relegated
    to state law, in an area basically the concern of the States, so that it would be
    inappropriate to infer a cause of action based solely on federal law.” 
    Cort, 422 U.S. at 78
    . Other than the inferences that Great Lakes seeks to draw from Section 717c,
    there is no indication of legislative intent to create a federal cause of action displacing
    traditional state law breach of contract causes of action. Indeed, “all pronouncements
    by the Supreme Court have indicated that regulation of the natural gas industry was
    intended to be a cooperative operation between the state and federal governments.”
    City of New Orleans v. United Gas Pipe Line Co., 
    390 F. Supp. 861
    , 866 (E.D. La.
    1974). Therefore, we find no implied federal cause of action for breach of contract
    in the NGA. Because federal law does not create the cause of action identified in the
    FAC, federal question jurisdiction may not rest on this basis.
    IV.
    Even though federal law does not create the cause of action, federal question
    jurisdiction may exist if Great Lakes’s “state-law claim necessarily raise[s] a stated
    federal issue, actually disputed and substantial, which a federal forum may entertain
    without disturbing any congressionally approved balance of federal and state judicial
    -9-
    responsibilities.” Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 
    545 U.S. 308
    , 314 (2005). This rule applies only to a “special and small category” of cases that
    present “a nearly pure issue of law, one that could be settled once and for all and
    thereafter would govern numerous . . . cases.” Empire Healthchoice Assur., Inc. v.
    McVeigh, 
    547 U.S. 677
    , 699-700 (2006) (citation and quotation marks omitted).
    For example, in Grable & Sons Metal Products, Inc. v. Darue Engineering &
    Manufacturing, the plaintiff brought a state law claim to quiet title in real property,
    claiming that the IRS failed to provide the plaintiff with the notice required by a
    federal 
    statute. 545 U.S. at 310-11
    . The Supreme Court noted that “the meaning of
    the federal statute is thus an essential element of [the] quiet title claim” and it
    “appears to be the only legal or factual issue contested in the case.” 
    Id. at 315.
    Thus,
    the Court held that “the meaning of the federal tax provision is an important issue of
    federal law that sensibly belongs in federal court.” 
    Id. The Court
    emphasized the
    narrowness of its holding, stating that the exercise of federal jurisdiction would have
    only a “microscopic effect on the federal-state division of labor” because “it will be
    the rare state title case that raises a contested matter of federal law.” 
    Id. In contrast,
    in Empire Healthchoice Assurance, Inc. v. McVeigh, the Court found that a dispute
    over the meaning of terms in a federal health insurance contract was “fact-bound and
    situation-specific” and could not “be squeezed into the slim category Grable
    
    exemplifies.” 547 U.S. at 701
    .
    Here, the district court held that it had federal question jurisdiction under the
    Grable rule. The court first recognized that “federal tariffs carry the same legal force
    as federal regulations, and are thus considered federal law.” Great Lakes, 103 F.
    Supp. 3d at 1018 (citations omitted); see also MCI Telecomms. Corp. v. Garden State
    Inv. Corp., 
    981 F.2d 385
    , 387 (8th Cir. 1992) (explaining that “federal tariffs are the
    law, not mere contracts”). The court then held that the construction and application
    of this federal law was both “necessarily raised” and “actually disputed.” The court
    reasoned that, even if ESML had not raised the force majeure and limitation of
    -10-
    liability clauses as affirmative defenses, the court would have needed to interpret
    those clauses when determining the merits of Great Lakes’s affirmative case for
    damages. Great Lakes, 
    103 F. Supp. 3d
    at 1021-24.
    Assuming that the district court correctly held that federal issues were
    “necessarily raised” and “actually disputed,” we do not agree with the district court
    that the third and fourth requirements of Grable are satisfied. See 
    Grable, 545 U.S. at 314
    . Specifically, we do not agree that the federal issues in this case are
    “substantial,” nor do we agree that federal courts can exercise federal question
    jurisdiction “without disturbing any congressionally approved balance of federal and
    state judicial responsibilities.” See 
    id. A. The
    third requirement of Grable is not met because the federal issues in this
    case are not substantial in the relevant sense. The district court held that the
    interpretation of these Tariff provisions was “significant to the federal system as a
    whole” based on the following logic:
    Likely, many tariffs contain limited liability provisions that are similar,
    if not identical, to the provisions at issue in this case. Therefore, in
    future NGA tariff violation cases, courts may look to the way in which
    this Court interpreted the Tariff provisions here, and applied those
    provisions to the particular facts of this case, in order to determine
    whether a defendant is liable for damages in a similar case.
    Great Lakes, 
    103 F. Supp. 3d
    at 1024-25 (citation omitted).
    However, the district court did not interpret the force majeure or limitation of
    liability clauses in accordance with federal law. Rather, as required by the TSA, it
    interpreted the Tariff provisions in accordance with Michigan law. As another court
    -11-
    has recognized, there is little national interest in having a federal court interpret tariff
    provisions if it will merely apply state law:
    Any interpretation by a federal court of the language of the tariffs will
    only speak to how those tariffs should be construed in this state.
    Accordingly, the reach of any such adjudication will not have federal
    reverberation. In addition, to the extent federal interests are implicated,
    the state court is quite competent to apply the language of the tariffs and
    is certainly well positioned to do so where, as here, the tariff language
    is to be construed in accord with state law.
    Pacific Gas & Elec. Co. v. Ariz. Elec. Power Coop., Inc., 
    479 F. Supp. 2d 1113
    , 1123
    (E.D. Cal. 2007). Thus, because the district court interpreted the force majeure and
    limitation of liability clauses in accordance with Michigan law, its interpretation of
    these provisions could not promote national uniformity.
    In addition, FERC’s reasoning for declining primary jurisdiction in this case
    further suggests that any federal interest in national uniformity is not substantial:
    [T]he Commission (1) has no special expertise in straight-forward
    contractual matters, (2) there is no need for uniformity of interpretation
    when dealing with a contract dispute over damages resulting from
    termination of an agreement, and (3) the issue of whether there has been
    an anticipatory repudiation of the TSA is not important in relation to the
    Commission’s regulatory responsibilities.
    Essar Steel Minn., LLC v. Great Lakes Gas Transmission Ltd. P’ship, 
    2013 WL 1177519
    , at *4 (F.E.R.C. Mar. 21, 2013). FERC has expressed similar reasoning in
    other cases involving contracts filed with FERC and governed by state law. See
    Portland Gen. Elec. Co., 
    1995 WL 394547
    , at *4 (F.E.R.C. July 5, 1995) (“An
    interpretation of this language by Oregon courts, under Oregon law, even if different
    from that of other state courts’ interpretations of other contract default provisions,
    -12-
    will not impinge significantly on the operations of public utilities across the
    Nation.”).
    Certainly, whether FERC exercises its primary jurisdiction should not be
    conflated with whether federal question jurisdiction exists. However, we find
    FERC’s reasoning persuasive for finding that the federal interests here are not
    “substantial” within the meaning of Grable. This case presents no “serious federal
    interest in claiming the advantages thought to be inherent in a federal forum.”
    
    Grable, 545 U.S. at 313
    . Indeed, this case is far more similar to the “fact-bound and
    situation-specific” dispute over the application of contract terms in Empire
    Healthchoice than it is to the interpretation of a federal statute posed in Grable. See
    Empire 
    Healthchoice, 547 U.S. at 701
    . Therefore, we conclude that the substantiality
    requirement of Grable is not satisfied here.
    B.
    Furthermore, we conclude that Grable’s fourth requirement also is not
    satisfied. Specifically, allowing federal courts to exercise exclusive jurisdiction over
    this type of claim would disturb a “congressionally approved balance of federal and
    state judicial responsibilities.” See 
    Grable, 545 U.S. at 314
    .
    As the district court correctly determined, once a federal court determines that
    a claim “arises under” the NGA or any regulation thereunder—either because the
    NGA creates the cause of action or because the Grable test is satisfied—the exclusive
    jurisdiction clause of the NGA requires that the federal court retain exclusive
    jurisdiction of the claim. See Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning,
    
    136 S. Ct. 1562
    , 1572 (2016) (“[A]n action ‘brought to enforce’ a duty or liability
    created by a federal statute is nothing more (and nothing less) than an action ‘arising
    under’ that law.”); 15 U.S.C. § 717u (granting federal courts exclusive jurisdiction
    over all claims “brought to enforce any liability or duty created by, or to enjoin any
    -13-
    violation of, [the NGA] or any rule, regulation, or order thereunder”). Despite the
    fact that exercising federal question jurisdiction would inevitably result in exclusive
    jurisdiction, the district court concluded that resolving this issue in federal court
    would not disrupt the federal-state balance approved by Congress because “the
    language of the NGA does not evidence Congress’s intent to keep these types of cases
    out of federal court.” Great Lakes, 
    103 F. Supp. 3d
    at 1025. Rather, the district court
    held that the presence of the exclusive jurisdiction clause was “evidence of the fact
    that Congress affirmatively sought to provide a federal forum for certain cases, such
    as this one.” 
    Id. On the
    contrary, the mere presence of the exclusive jurisdiction clause does not
    indicate that Congress intended to provide a federal forum for breach of contract
    cases. First, “the combination of no federal cause of action and no preemption of
    state remedies” serves as an “important clue” suggesting a congressionally approved
    balance disfavoring federal involvement. 
    Grable, 545 U.S. at 318
    . Second, the
    presence of the exclusive jurisdiction provision indicates that Congress did not intend
    this particular type of case to end up in federal court, because exclusive jurisdiction
    over breach of contract cases would result in the very disturbance that Grable warned
    against. Specifically, exclusive federal jurisdiction over these cases would preclude
    state courts from adjudicating contract disputes governed by their own state law. As
    the Supreme Court has emphasized, “when a statute mandates, rather than permits,
    federal jurisdiction—thus depriving state courts of all ability to adjudicate certain
    claims—our reluctance to endorse broad readings, if anything, grows stronger.”
    
    Manning, 136 S. Ct. at 1573
    (citation and quotation marks omitted). Our reluctance
    is especially heightened in this case because “the interpretation of a contract is
    ordinarily a matter of state law to which we defer.” DIRECTV, Inc. v. Imburgia, 
    136 S. Ct. 463
    , 468 (2015) (citation omitted). Therefore, we decline to read broadly the
    NGA’s exclusive jurisdiction provision to evidence a congressional intent to provide
    an exclusively federal forum for traditional state law breach of contract claims.
    -14-
    Because the federal issues in this case are not substantial to the federal system
    as a whole and because the district court could not exercise federal question
    jurisdiction without disrupting the balance of state and federal responsibilities, we
    conclude that the district court lacked subject matter jurisdiction. Accordingly, we
    do not reach the remaining issues.
    V.
    We recognize that the district court and the parties expended significant time,
    effort, and expense before the issue of subject matter jurisdiction was raised.
    However, we have a duty to determine the existence of subject matter jurisdiction at
    any time, even on appeal. See Arnold v. Wood, 
    238 F.3d 992
    , 994 (8th Cir. 2001).
    For the foregoing reasons, the judgment of the district court is vacated, and we
    remand with instructions to dismiss for lack of jurisdiction.
    ______________________________
    -15-
    

Document Info

Docket Number: 16-1101

Citation Numbers: 843 F.3d 325

Filed Date: 12/5/2016

Precedential Status: Precedential

Modified Date: 1/12/2023

Authorities (19)

Richard T. Arnold v. Gael D. Wood, Drema L. Grant, Daniel M.... , 238 F.3d 992 ( 2001 )

MCI Telecommunications Corporation v. Garden State ... , 981 F.2d 385 ( 1992 )

randy-williams-v-peter-ray-ragnone-in-his-individualand-official-capacity , 147 F.3d 700 ( 1998 )

keene-corporation-a-corporation-v-judge-je-cass-not-individually-but , 908 F.2d 293 ( 1990 )

City of New Orleans, St. of La. v. United Gas PL Co. , 390 F. Supp. 861 ( 1974 )

Pacific Gas & Electric Co. v. Arizona Electric Power ... , 479 F. Supp. 2d 1113 ( 2007 )

Louisville & Nashville Railroad v. Rice , 38 S. Ct. 429 ( 1918 )

Touche Ross & Co. v. Redington , 99 S. Ct. 2479 ( 1979 )

Transamerica Mortgage Advisors, Inc. v. Lewis , 100 S. Ct. 242 ( 1979 )

Cort v. Ash , 95 S. Ct. 2080 ( 1975 )

Pan American Petroleum Corp. v. Superior Court of Del. for ... , 81 S. Ct. 1303 ( 1961 )

Merrell Dow Pharmaceuticals Inc. v. Thompson Ex Rel. ... , 106 S. Ct. 3229 ( 1986 )

Caterpillar Inc. v. Williams , 107 S. Ct. 2425 ( 1987 )

Franchise Tax Bd. of Cal. v. Construction Laborers Vacation ... , 103 S. Ct. 2841 ( 1983 )

Grable & Sons Metal Products, Inc. v. Darue Engineering & ... , 125 S. Ct. 2363 ( 2005 )

Empire Healthchoice Assurance, Inc. v. McVeigh , 126 S. Ct. 2121 ( 2006 )

Gunn v. Minton , 133 S. Ct. 1059 ( 2013 )

Merrill Lynch, Pierce, Fenner & Smith Inc. v. Manning , 136 S. Ct. 1562 ( 2016 )

Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd. , 103 S. Ct. 1343 ( 1983 )

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