Baker v. Minnesota Mining & Manufacturing Co.

99 F. App'x 718
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 27, 2004
DocketNos. 02-5385, 02-5415, 02-5455
StatusPublished
Cited by8 cases

This text of 99 F. App'x 718 (Baker v. Minnesota Mining & Manufacturing Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. Minnesota Mining & Manufacturing Co., 99 F. App'x 718 (6th Cir. 2004).

Opinions

COOK, Circuit Judge.

Plaintiffs brought this products liability action in Kentucky state court against the manufacturers of allegedly defective respiratory masks. After defendants removed the action to federal court on the basis of diversity jurisdiction, the district court granted the motion to intervene of the Kentucky Special Fund, a state agency charged with administering health benefits to coal miners who develop pneumoconiosis, a progressive lung disease. Deciding that the Special Fund is an arm of the Commonwealth of Kentucky and that the Special Fund’s intervention therefore destroyed diversity jurisdiction, the district court remanded the action to the Kentucky state court. We conclude that the district court correctly found the Special Fund to be an arm of the Commonwealth, but erred in allowing the Special Fund to intervene and in remanding the suit to state court.

I

Plaintiffs, nineteen former coal miners, filed this suit in Kentucky state court, alleging that defendants’ respiratory masks failed to protect them from developing pneumoconiosis. The Director of Kentucky’s Special Fund moved to intervene as a plaintiff, claiming that the Special Fund has paid, or presently owes, workers’ compensation benefits to two plaintiffs, Mitchell Dean Asher and Dean Adams— benefits the Special Fund believes it could recover if Asher and Adams receive damages from defendants.

Before the Kentucky state court ruled on the Special Fund’s motion to intervene, defendants removed the suit to federal court on the basis of diversity jurisdiction. Plaintiffs then moved to remand, arguing that diversity jurisdiction did not exist because the Special Fund, as an arm of the Commonwealth of Kentucky, was not a “citizen” of any state and thus the action was not between “citizens of different States.” See 28 U.S.C. § 1332(a) (providing that diversity jurisdiction exists in civil actions between “citizens of different States”). Defendants opposed the motion to remand, arguing that because the Kentucky court had not ruled on the Special Fund’s motion to intervene before removal, the Special Fund was not a party and complete diversity did exist. The district court granted both the Special Fund’s motion to intervene and plaintiffs’ motion to remand.

Defendants now appeal, presenting three arguments: (1) that the Special Fund is not an arm of the Commonwealth [721]*721of Kentucky and thus its intervention does not defeat diversity jurisdiction; (2) that if the Special Fund is an arm of the Commonwealth, then under 28 U.S.C. § 1367(a), the district court should have denied its motion to intervene; and (3) that plaintiffs do not have standing to raise an Eleventh Amendment immunity defense on behalf of the Special Fund. Plaintiffs counter that (1) the Special Fund had already intervened in the state court because defendants did not object in state court to the Special Fund’s motion to intervene; (2) the Special Fund is an indispensable party, and thus if it cannot intervene, the district court must dismiss (or remand) the case; and (3) the Eleventh Amendment bars continuing the suit in federal court with the Special Fund as a party.

II

A. Jurisdiction

As a preliminary matter. Plaintiffs argue that this court lacks jurisdiction to review the district court’s remand order because, according to 28 U.S.C. § 1447(d), “[a]n order remanding a case to the State court from which it was removed is not renewable on appeal or otherwise.” Read in conjunction with § 1447(c), however, this prohibition applies only when a district court remands for lack of subject matter jurisdiction at the time of removal. Because the district court here had subject matter jurisdiction at the time of removal, this court has jurisdiction to review the district court’s order allowing the Special Fund to intervene and remanding the action to state court. See Letherer v. Alger Group, L.L.C., 328 F.3d 262, 265 (6th Cir. 2003) (noting that under 28 U.S.C. §§ 1447(c) and (d), “[i]f a district court has jurisdiction at the time of removal, but jurisdiction is subsequently destroyed by later events, a remand order is renewable.”).

B. Standard of Review

We review de novo the district court’s ruling granting intervention as a matter of right and remanding for lack of jurisdiction. See, e.g., Ammex. Inc. v. Cox, 351 F.3d 697, 702 (6th Cir.2003) (‘We review the existence of subject matter jurisdiction de novo.”); United States v. Tennessee, 260 F.3d 587, 582 (6th Cir.2001) (“A district court’s denial of intervention as of right is reviewed de novo, except for the timeliness element, which is reviewed for an abuse of discretion.”).

Ill

A. Arm of the State

For purposes of diversity jurisdiction under 28 U.S.C. § 1332, a state is not a citizen. Postal Tel. Cable Co. v. Alabama, 155 U.S. 482, 487, 15 S.Ct. 192, 39 L.Ed. 231 (1894). Political subdivisions of a state, however, unless simply “the arm or alter ego of the state,” are citizens of the state for diversity purposes. Moor v. County of Alameda, 411 U.S. 693, 717, 93 S.Ct. 1785, 36 L.Ed.2d 596 (1973). Whether a state-created agency is the alter ego of the state depends upon how much autonomy or independence from the state the agency possesses. See Moor, 411 U.S. at 717 (finding that county had “a sufficiently independent corporate character” to be a “citizen” of the state of California for diversity purposes); Univ. of R.I. v. A.W. Chesterton Co., 2 F.3d 1200, 1203 n. 4 (1st Cir.1993) (noting that “the analysis must center on the State-related party’s enduring legal identity as a juridical entity separate from the State”). For the following reasons, we uphold the district court’s determination that the Special Fund lacks sufficient independence from the Commonwealth of Kentucky to be a “citizen” of [722]*722Kentucky for purposes of diversity jurisdiction.

The Kentucky Legislature created the Special Fund to relieve employers of “liability for the proportion of employee disability which is attributable to a preexisting dormant non-disabling disease or condition.” A & K Coal Co. v. Blankenship, 708 S.W.2d 638, 639 (Ky.1986). This decreased liability that a subsequent employer faces for an employee’s illness caused by conditions of a previous employment — especially previous employment in the coal mines — promotes employment of disabled and potentially disabled workers. Beale v.

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99 F. App'x 718, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-minnesota-mining-manufacturing-co-ca6-2004.