United States v. Certain Land

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 United States v. Certain Land, et al. No. 02-1591
ELECTRONIC CITATION: 2004 FED App. 0073P (6th Cir.)
File Name: 04a0073p.06 Appeal from the United States District Court for the
Eastern District of Michigan at Detroit.
Nos. 79-73934; 96-75494; 96-75495; 01-70391—Gerald E.
UNITED STATES COURT OF APPEALS Rosen, District Judge.
FOR THE SIXTH CIRCUIT Argued: October 29, 2003
_________________
Decided and Filed: March 9, 2004
UNITED STATES OF AMERICA , X
Plaintiff-Appellee, - Before: NORRIS, BATCHELDER, and COLE, Circuit
- Judges.
- No. 02-1591
v. - _________________
>
, COUNSEL
CERTAIN LAND SITUATED IN -
THE CITY OF DETROIT , - ARGUED: Craig L. John, DYKEMA GOSSETT,
WAYNE COUNTY, MICHIGAN ; - Bloomfield Hills, Michigan, for Appellant. Stephanie Tai,
0.74 ACRE OF LAND , MORE - UNITED STATES DEPARTMENT OF JUSTICE,
OR LESS , SITUATED IN THE - Washington, D.C., Walter H. Lubienski, Dearborn, Michigan,
- for Appellees. ON BRIEF: Mark H. Sutton, DYKEMA
CITY OF DETROIT , WAYNE
- GOSSETT, Bloomfield Hills, Michigan, for Appellant.
COUNTY MICHIGAN , et al., - Stephanie Tai, Lisa E. Jones, UNITED STATES
Defendants, - DEPARTMENT OF JUSTICE, Washington, D.C., Walter H.
- Lubienski, Dearborn, Michigan, for Appellees.
DETROIT INTERNATIONAL -
BRIDGE CO ., - NORRIS, J. delivered the opinion of the court, in which
- BATCHELDER, J., joined. COLE, J. (pp. 8-13), delivered a
Proposed -
separate concurring opinion.
Intervenor-Appellant, -
- _________________
COMMODITIES EXPORT -
COMPANY ; WALTER H. - OPINION
LUBIENSKI, - _________________
-
Defendants-Appellees. - ALAN E. NORRIS, Circuit Judge. Proposed intervenor
- Detroit International Bridge Co. (“DIBCO”) appeals from the
N denial of its motion to intervene of right. It sought to
intervene as a defendant in a condemnation action in which
1
No. 02-1591 United States v. Certain Land, et al. 3 4 United States v. Certain Land, et al. No. 02-1591
the condemned land was owned by a third party. The district Commodities’ property. DIBCO again failed to intervene.
court denied DIBCO’s motion for failure to meet the DIBCO contends that it had no reason to intervene until
requirements of intervention of right under Fed. R. Civ. P. November of 2001, when it learned that the United States and
24(a). We conclude that intervention was improper because Commodities had entered a settlement under which the
the district court lacked jurisdiction to hear DIBCO’s United States would compensate Commodities in the amount
underlying claim. of $14.9 million, far in excess of the $366,000 at which its
land had been appraised, and after the United States indicated
In 1979, the United States determined to expand a Detroit that it may seek to enforce the MOA against DIBCO. On
customs facility and commenced a condemnation action December 28, 2001, DIBCO brought this motion to intervene
against DIBCO’s land. DIBCO challenged the in this condemnation proceeding, seeking declaratory and
condemnation. In 1991, the United States and DIBCO agreed injunctive relief from enforcement of the MOA, and seeking
to settle the condemnation proceeding. They agreed to a to challenge the grant of a motion to vacate an opinion that
memorandum of agreement (“MOA”) under which the United allowed Commodities’ valuation testimony.
States agreed to enlarge the scope of its expansion and
condemn third party property, including the totality of a lot The district court denied DIBCO’s motion to intervene of
owned by Commodities Export Co. and Walter H. Lubienski right for failure to meet the requirements of Fed. R. Civ. P.
(“Commodities”). DIBCO agreed to compensate the United 24(a). DIBCO appeals that finding. We affirm the district
States for the costs of condemnation. DIBCO claims that the court’s denial because the district court lacked jurisdiction to
MOA gave it the right to be consulted regarding the costs of hear DIBCO’s underlying claim.
condemnation, and that it only required DIBCO to pay
condemnation costs that were reasonable in light of federal This court is under an “independent obligation to police its
regulations. own jurisdiction,” regardless of whether the parties
challenged jurisdiction. SEC v. Basic Energy & Affiliated
In 1996, the United States brought a condemnation action Res., Inc., 273 F.3d 657, 665 (6th Cir. 2001). We lack
against Commodities. DIBCO’s counsel was in attendance at appellate jurisdiction where the district court lacked subject
conferences in that action at which the United States indicated matter jurisdiction. We review the district court’s exercise of
that it would not seek to condemn the entirety of subject matter jurisdiction de novo. Care Choices HMO v.
Commodities’ land. DIBCO regarded the failure to condemn Engstrom, 330 F.3d 786, 788 (6th Cir. 2003).
all of Commodities’ land as a breach of the MOA, but it did
not seek to intervene in this condemnation proceeding. The district court could not permit intervention under Rule
Instead, DIBCO sought to reopen the 1979 condemnation 24(a) because it lacked subject matter jurisdiction over
action on the grounds that the MOA had been breached. The DIBCO’s underlying claim. DIBCO sought declaratory and
1979 action went to trial, and on February 21, 2002, a jury injunctive relief against the United States, and the United
awarded DIBCO nearly $4.1 million in compensation for its States had not waived its sovereign immunity to such a claim.
land. No statute waives the United States’ sovereign immunity
from contract claims for declaratory or injunctive relief in
In the meantime, the United States changed its position district court. DIBCO argues that the district court had
regarding Commodities’ land and in 2001 commenced a new subject matter jurisdiction to hear its claim under 28 U.S.C.
condemnation proceeding against the entirety of § 1367. That statute provides in part as follows:
No. 02-1591 United States v. Certain Land, et al. 5 6 United States v. Certain Land, et al. No. 02-1591
Except as provided in subsections (b) and (c) or as objection or defense to the taking of the property, the
expressly provided otherwise by Federal statute, in any defendant shall serve an answer within 20 days after the
civil action of which the district courts have original service of notice upon the defendant. The answer shall
jurisdiction, the district courts shall have supplemental identify the property in which the defendant claims to
jurisdiction over all other claims that are so related to have an interest, state the nature and extent of the interest
claims in the action within such original jurisdiction that claimed, and state all the defendant’s objections and
they form part of the same case or controversy under defenses to the taking of the property. A defendant
Article III of the United States Constitution. Such waives all the defenses and objections not so presented,
supplemental jurisdiction shall include claims that but at the trial of the issue of just compensation, whether
involve the joinder or intervention of additional parties. or not the defendant has previously appeared or
answered, the defendant may present evidence as to the
28 U.S.C. § 1367(a). This provision does not constitute a amount of the compensation to be paid for the property,
waiver of sovereign immunity. “A waiver of sovereign and the defendant may share in the distribution of the
immunity must be unequivocally expressed in the statutory award. No other pleading or motion asserting any
text . . . and will not be implied.” Lane v. Pena, 518 U.S. additional defense or objection shall be allowed.
187, 192 (1996) (citations omitted). “Moreover, a waiver of
the Government’s sovereign immunity will be strictly The Rule evidences that district courts only have jurisdiction
construed, in terms of scope, in favor of the sovereign.” Id. to hear defenses and objections from defendants in
(citing United States v. Williams, 514 U.S. 527, 531 (1995)). condemnation cases. A district court lacks jurisdiction to hear
The statute that DIBCO cites does not “unequivocally counterclaims against the United States in condemnation
express” an intent to waive sovereign immunity, and therefore cases. United States v. Banisadr Bldg. Joint Venture, 65 F.3d
cannot constitute a grant of subject matter jurisdiction over 374, 380 (4th Cir. 1995).
DIBCO’s claim.
In addition, case law indicates that even a party that holds
The district court also lacked subject matter jurisdiction a property interest in the taken land could not present a
over DIBCO’s underlying claim because it was presented as contract claim in a condemnation proceeding against its own
grounds for a motion to intervene in a condemnation property. Id. at 380. Therefore, DIBCO, which lacks any
proceeding. Because DIBCO seeks to intervene to assert a property interest in Commodities’ land, is also barred from
claim against the United States, it seeks to intervene as a asserting a contract claim in a condemnation proceeding, and
defendant in the condemnation proceeding. Federal Rule of the district court had no subject matter jurisdiction to hear
Civil Procedure 71A(e) describes the types of defense DIBCO’s claim.
pleadings permitted in a condemnation proceeding:
Even if DIBCO asserts that it seeks to intervene solely to
Appearance or Answer. If a defendant has no objection challenge the reasonableness of the settlement amount, a basis
or defense to the taking of the defendant’s property, the for intervention which could be classified as a defense or
defendant may serve a notice of appearance designating objection, it would still not fall within the class of pleadings
the property in which the defendant claims to be that a district court has jurisdiction to hear in a condemnation
interested. Thereafter, the defendant shall receive notice proceeding. Rule 71A(e) requires that the defendant “identify
of all proceedings affecting it. If a defendant has any the property in which the defendant claims to have an
No. 02-1591 United States v. Certain Land, et al. 7 8 United States v. Certain Land, et al. No. 02-1591
interest[.]” Fed. R. Civ. P. 71A(e). The Rule thus evidences _________________
that a district court only has jurisdiction to entertain defenses
and objections from parties who could assert property CONCURRENCE
interests in the condemned land. DIBCO holds no property _________________
interest in Commodities’ land, and the district court lacked
subject matter jurisdiction to hear its purported defense or R. GUY COLE, JR., Circuit Judge, concurring. I concur
objection. only in the judgment of the majority’s opinion affirming the
district court’s denial of DIBCO’s motion to intervene as of
For the foregoing reasons, the judgment of the district court right pursuant to Fed. R. Civ. P. 24(a)(2). I would affirm the
is AFFIRMED. denial of DIBCO’s motion to intervene on the ground that the
district court did not abuse its discretion in finding that
DIBCO’s motion pursuant to Fed. R. Civ. P. 24(a)(2) was
untimely.
The majority opinion fails to reach the Rule 24(a)(2) factors
and instead concludes that DIBCO’s motion to intervene as of
right was properly denied because the district court lacked
jurisdiction to hear DIBCO’s “underlying claim.” The
majority opinion, however, fails to take into account the fact
that DIBCO asserted two grounds for intervention, the first
concerning (and seeking a declaratory judgment concerning)
its duty to reimburse the Government for the settlement of the
Commodities condemnation pursuant to the MOA, and the
second concerning the reasonableness of the settlement
amount agreed to between the Government and the
Commodities defendants. In other words, because DIBCO
faces being the de facto remunerator for the properties, it
sought to intervene in order for the district court to adjudge
(1) whether or not it was liable as such a remunerator
pursuant to the MOA and (2) whether the $14.9 million
settlement agreed upon between the Government and the
defendants was reasonable.
In grounding its decision concerning a motion to intervene
as of right in questions of independent jurisdiction, the
majority turns a blind eye to the longstanding principle that
intervention as of right pursuant to Rule 24(a)(2) requires no
independent ground of jurisdiction to support the applicant’s
claim. 32A AM . JUR. 2d Federal Courts § 700 (2003); James
No. 02-1591 United States v. Certain Land, et al. 9 10 United States v. Certain Land, et al. No. 02-1591
Wm. Moore et al., 6 MOORE ’S FEDERAL PRACTICE § 24.22 Not only does the majority opinion erroneously conclude
(3rd ed. 1998); Charles Alan Wright et al., FEDERAL that DIBCO was required to demonstrate an independent
PRACTICE AND PROCEDURE § 1917 (2nd ed. 1986); see also basis for jurisdiction in order to intervene pursuant to Rule
International Paper Co. v. Inhabitants of Town Jay, Me., 887 24(a)(2), but it also grounds that conclusion in a theory of
F.2d 338, 346 (1st Cir. 1989) (parties entitled to intervention sovereign immunity that runs contrary to legal authority. The
as of right fall within a federal court’s ancillary jurisdiction; majority concludes that “[n]o statute waives the United
no independent basis of jurisdiction is necessary); Curtis v. States’ sovereign immunity from contract claims for
Sears, Roebuck & Co., 754 F.2d 781 (8th Cir. 1985) (same). declaratory or injunctive relief in district court.” Yet as a
Only where intervention is permissive, pursuant to Rule general proposition, irrespective of a statutory provision
24(b), must independent jurisdictional grounds be shown. waiving sovereign immunity, the “government consents to be
MOORE ’S FEDERAL PRACTICE § 24.22 (3rd ed. 1998). But sued . . . by those with whom it has privity of contract.” First
intervenors as of right – the category in which DIBCO claims Hartford Corp. Pension Plan & Trust v. United States, 194
to belong – need not show independent jurisdictional grounds F.3d 1279, 1289 (Fed. Cir. 1999) (quoting Erickson Air
because the court has supplemental jurisdiction over their Crane Co. of Wash. v. U.S. Dep’t of the Air Force, 731 F.2d
claims. Owen Equipment & Erection Co. v. Kroger, 437 U.S. 810, 813 (Fed. Cir. 1984). DIBCO was in privity of contract
365, 376 n. 18 (1978). It is unclear why the majority forgoes with the Government by virtue of the MOA and, as such, our
an analysis under Rule 24(a)(2). Moreover, our circuit has circuit recognizes that a district court would have jurisdiction
never dismissed a case pursuant to Rule 24(a)(2) for lack of over such an action for equitable or injunctive relief. See
an independent basis for jurisdiction – indeed, it seems that Veda, Inc. v. United States, 111 F.3d 37 (6th Cir. 1997). At
no federal court of appeals has ever done so. the very least, the privity-of-contract question follows, rather
than precedes, the Rule 24(a)(2) determination.
Jurisdiction to hear claims by intervenors of right depends
only upon the court’s jurisdiction to hear the primary, Even if the Government had not waived its sovereign
underlying action and the terms of supplemental jurisdiction immunity, DIBCO would still be permitted to intervene
set forth in 28 U.S.C. § 1367. DIBCO easily satisfies that because DIBCO’s attempt to have its voice heard with respect
standard here: as the potential remunerator for the property at to the settlement amount is not a counterclaim at all. The
issue, its claims are “so related to claims in the action within district court would have jurisdiction to entertain DIBCO’s
such original jurisdiction that they form part of the same case concerns relating to the reasonableness of the settlement
or controversy.” 28 U.S.C. § 1367. There is no dispute that amount in the same way that it would have jurisdiction to
the district court had jurisdiction to hear the action between entertain objections by the Commodities defendants
the United States and the Commodities defendants. concerning the reasonableness of the settlement amount.
Accordingly, the “inquiry into the substantiality of the
claimed interest” by DIBCO “is necessarily fact specific” and The majority opinion also errs in its Rule 71(A) analysis.
tied only to the factors enumerated in Rule 24(a)(2), that is, The majority concludes that DIBCO has failed to assert an
the extent of DIBCO’s interest in the subject of the action and “objection” to the amount of the settlement. However,
the extent to which not intervening may impair or impede DIBCO’s objection to the settlement amount and its attempt
DIBCO’s ability to protect that interest. Id. to have a voice in the settlement’s ultimate value is the
explicit basis for its motion to intervene. Furthermore, the
majority opinion’s conclusion that district courts lack
No. 02-1591 United States v. Certain Land, et al. 11 12 United States v. Certain Land, et al. No. 02-1591
jurisdiction to determine anything other than the condemnor DIBCO seeks no compensation, it could appropriately
and condemnee’s interests in a condemnation action has no intervene as a defendant to challenge the settlement amount
support in the law of our circuit or in the plain language of for which it might be responsible, so long as it satisfies the
Rule 71(A)(e). To the contrary, it is recognized that Rule requirements for intervention set forth in Rule 24(a)(2). A
71A(e)is not exhaustive of all parties who might become case such as this one, however rare it may be, is paradigmatic
defendants in a condemnation proceeding: “Since there is no of an appropriate instance in which to permit a party to
provision in Rule 71A for intervention, Rule 24's standard intervene as a defendant in a condemnation proceeding where
governs.” 13 MOORE ’S FEDERAL PRACTICE § 71A.04[2][b] that party is not a condemnee.
(3rd ed. 1998). Moreover, Rule 71(A)(e) is not a
jurisdictional bar to the district court’s consideration of the Having determined that independent jurisdiction is
intervention motion and the majority opinion fails to present immaterial to our consideration of DIBCO’s motion to
any binding authority or legal reasoning otherwise. Although intervene as of right, I turn now to the relevant analysis
case law may support the proposition that only condemnees pursuant to Fed. R. Civ. P. 24(a)(2). In order to intervene as
may be compensated pursuant to a condemnation action, there of right pursuant to Rule 24(a)(2), DIBCO had to establish:
is no legal authority barring a party’s intervention as a (1) the timeliness of its application to intervene; (2) a
defendant where, as is the case here, a proposed defendant- substantial legal interest in the Commodities/Lubienski
intervenor has a legitimate basis for objecting to the condemnation cases; (3) impairment of its ability to protect
settlement amount. that interest in the absence of intervention; and (4) inadequate
representation of that interest by parties already before the
Indeed, the only authority the majority cites for its court. Michigan State AFL-CIO v. Miller, 103 F.3d 1240,
proposition that only condemnors or condemnees may 1245 (6th Cir. 1997) (citations omitted). The condemnation
intervene as defendants in condemnation proceedings is actions at issue were filed in 1996; DIBCO did not move to
United States v. Banisadr Bldg. Joint Venture, 65 F.3d 374, intervene until 2001. The district court found that DIBCO’s
380 (4th Cir. 1995). Not only is Banisadr not binding upon motion to intervene was untimely and denied its motion to
this Court, but the Fourth Circuit itself conceded (in the very intervene as of right on that basis. The district court’s
passage referred to by the majority) that the case law on timeliness decision is reviewed for an abuse of discretion.
which it relied was “sparse” and only “suggest[ed]” that a Grubbs v. Norris, 870 F.2d 343, 345 (6th Cir. 1989).
contract claim could not be asserted in a motion to intervene
in a condemnation proceeding. Id. Indeed, the case law upon The timeliness prong of Rule 24(a)(2) requires the movant
which the Fourth Circuit itself relied was a lone district court to file its motion to intervene promptly after discovery of its
opinion from 1977. Finally, it is worthwhile to note that no interest in the litigation. United States v. Tennessee, 260 F.3d
subsequent Fourth Circuit panel, district court, or other 587, 594 (6th Cir. 2001). DIBCO contends that its
federal court of appeals has ever cited Banisadr for the responsibility to timely intervene arose on November 15,
proposition for which the majority now invokes it as decisive 2001, when it learned the amount of the Commodities
legal support for its novel conclusions. defendants’ recent settlement with the Government – that is,
when DIBCO learned the amount of its potential liability
Here, the Government and the Commodities defendants pursuant to the MOA. The district court, however, properly
intend to settle for $14.9 million – an amount for which the concluded that DIBCO should have moved to intervene
Government may seek to hold DIBCO liable. Even though within a reasonable period after December 12, 1996, which is
No. 02-1591 United States v. Certain Land, et al. 13
when DIBCO received notice that the first two condemnation
suits had been filed. In short, 1996 was when DIBCO learned
of the fact of its potential liability under the MOA. It should
have intervened then, and not waited until it learned the
amount of that potential liability in 2001. See Stotts v.
Memphis Fire Dep’t, 679 F.2d 579, 584 & n.3 (6th Cir. 1982)
(applicants for intervention “should have attempted to
intervene when they first became aware of the action, rather
than adopting a ‘wait-and-see’ approach.”).
Accordingly, the district court did not abuse its discretion
in finding DIBCO’s motion to intervene untimely. Although
I would find that DIBCO – as the potential remunerator for
the hefty $14.9 settlement reached between the Government
and the Commodities defendants – easily satisfies the
remaining requirements for intervention, the untimeliness of
its motion is fatal. I would therefore affirm the district court’s
denial of DIBCO’s motion to intervene on that basis alone.