RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 Hudson v. Coleman et al. No. 01-1653 ELECTRONIC CITATION: 2003 FED App. 0367P (6th Cir.) File Name: 03a0367p.06 _________________ COUNSEL UNITED STATES COURT OF APPEALS ARGUED: David J. Nickola, NICKOLA & NICKOLA, FOR THE SIXTH CIRCUIT Flint, Michigan, for Appellant. Patrick L. Rose, Lansing, _________________ Michigan, for Appellees. ON BRIEF: David J. Nickola, NICKOLA & NICKOLA, Flint, Michigan, for Appellant. MARGO HUDSON, X Patrick L. Rose, Lansing, Michigan, for Appellees. Plaintiff-Appellant, - - FORESTER, D. J., delivered the opinion of the court, in - No. 01-1653 which BATCHELDER, J., joined. MOORE, J. (pp. 15-21), v. - delivered a separate dissenting opinion. > , _________________ BRYAN COLEMAN; ERIC - RODGERS , - OPINION Defendants-Appellees, - _________________ - CITY OF FLINT , - FORESTER, District Judge. Plaintiff appeals the district Garnishee-Appellee. - court’s order granting the City of Flint’s (“City”) motion to - quash Plaintiff’s garnishment action against the City. For the N following reasons, we AFFIRM the judgment of the district Appeal from the United States District Court court. for the Eastern District of Michigan at Detroit. I. FACTUAL AND PROCEDURAL BACKGROUND No. 97-71145—Denise Page Hood, District Judge. Plaintiff filed an action in state court asserting state and Argued: December 12, 2002 federal causes of action against Officers Bryan Coleman, Eric Rodgers, and the City of Flint arising from the Officers’ theft Decided and Filed: October 14, 2003 of Hudson’s Cocker Spaniel, “Brandy.” The City removed the action to the Eastern District of Michigan based on Before: BATCHELDER and MOORE, Circuit Judges; Plaintiff’s 42 U.S.C. §§ 1983 and 1985 claims. FORESTER, Chief District Judge.* The facts giving rise to this dispute are undisputed and merit only a brief discussion before turning to the determinative legal issue of subject matter jurisdiction. Hudson reported that her car had been stolen with her dog * The Honorable Karl S. Forester, Chief United States District Judge inside the car. Officers Coleman and Rodgers responded to for the Eastern District of Kentucky, sitting by designation. a radio call to investigate Hudson’s missing vehicle and dog.
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The Officers located the stolen vehicle and proceeded to take claim and to appear for and represent the Employee in the dog from the car and ultimately to Officer Coleman’s the action. house. The Officers then lied by reporting that they did not The Employer may compromise, settle and pay such find a dog inside the car. The truth concerning the theft of the claim before or after the commencement of any civil would-be “$300,000 Cocker Spaniel1” finally surfaced five action. Whenever any judgment for damages, excluding months later during an internal police department punitive damages, is awarded against an Employee as the investigation in which the Officers admitted to stealing the result of any civil action for personal injuries or property dog. The Cocker Spaniel was returned to Hudson and the damage caused by the Employee while in the course of Officers faced discipline by the Police Department. his employment, and while acting within the scope of his authority, the Employer will indemnify the employee or After the district court granted the City’s motion for will pay, settle, or compromise the judgment. The Chief summary judgment dismissing it from the case, Hudson and Legal Officer will make the selection of the attorney or the Officers entered into a consent judgment whereby attorneys to represent the Employee in any particular Coleman would pay $200,000 and Rodgers would pay case, and allow the Employee to object to the selection if $100,000 in settlement of Hudson’s claims. In an effort to he has cause to do so. collect upon the consent judgment against Coleman and Rodgers, Hudson filed writs of garnishment against the City. Pursuant to the above indemnity agreement, the City Hudson asserted that the City would be liable to pay the provided the Officers with legal counsel during the course of consent judgment because of an indemnity agreement the proceedings. There is no evidence in the record indicating between the City and the Police Officers Union. that the City’s liability under the indemnification agreement has been established, or, more specifically, whether the The indemnification agreement under which Hudson Officers were acting within the scope of their employment attempts to collect the consent judgment from the City and authority when they stole the dog. By the time Hudson provides: instituted the garnishment proceeding against the City, the Officers each had paid $12,500 to Hudson in partial Whenever any claim is made or any civil action is satisfaction of their debts. commenced against an Employee for injuries to persons or property caused by negligence or other acts of the The City filed a motion to quash the garnishment on the Employee while in the course of his employment, and basis of several theories, including lack of subject matter while acting within the scope of his authority, the jurisdiction. After the Magistrate Judge2 filed a report and Employer will pay for or engage in or furnish the recommendation concluding that the court lacked jurisdiction, services of an Attorney to advise the Employee as to the the district court adopted the report and recommendation and granted the City’s motion to quash. Hudson timely filed a notice of appeal. 1 Officers Colem an and R odgers agreed to p ay $300,0 00 to settle Plaintiff’s claims arising from th e Officers’ theft of the dog. As will be 2 discussed, the legal issue presented is whether the federal courts have W e commend Magistrate Judge Paul J. Komives for a thorough and jurisdiction to determine whether the City is liable for this de bt in well-reasoned repo rt and recommendation, m uch of which has been Plaintiff’s garnishment actio n against the City. ado pted in this opinion. No. 01-1653 Hudson v. Coleman et al. 5 6 Hudson v. Coleman et al. No. 01-1653
II. ANALYSIS degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, We review de novo a district court’s determination of vindicate its authority, and effectuate its decrees.’” Peacock, subject matter jurisdiction. See, e.g., Greater Detroit 516 U.S. at 354 (quoting Kokkomen v. Guardian Life Ins. Co., Resource Recovery Authority v. EPA, 916 F.2d 317, 319 (6th 511 U.S. 375, 379-80 (1994) (citations omitted)). The first Cir. 1990). As an initial observation, it is well established category of ancillary jurisdiction identified above has largely that federal courts are courts of limited jurisdiction, been codified in the supplemental jurisdiction statute, 28 possessing only that power authorized by the Constitution and U.S.C. § 1367. The second category of ancillary jurisdiction statute, see Willy v. Coastal Corp., 503 U.S. 131 (1992); is generally referred to as “ancillary enforcement Bender v. Williamsport Area School Dist., 475 U.S. 534, 541 jurisdiction.” (1986), which is not to be expanded by judicial decree, American Fire & Casualty Co. v. Finn, 341 U.S. 6 (1951). In Peacock, the plaintiff obtained a federal court judgment Accordingly, “[i]t is to be presumed that a cause lies outside against a corporation pursuant to the Employee Retirement this limited jurisdiction, and the burden of establishing the Income Security Act of 1974 (ERISA), 88 Stat. 832, as contrary rests upon the party asserting jurisdiction.” Id (citing amended, 29 U.S.C. § 1001 et seq. After efforts to collect on Turner v. Bank of N. Am., 4 U.S. (4 Dall.) 8, 11 (1799); the judgment failed, the plaintiff filed a second suit seeking to McNutt v. General Motors Acceptance Corp., 298 U.S. 178, hold Peacock, an officer and shareholder of the corporation, 182-183 (1936)). personally liable under a piercing of the corporate veil theory. The Supreme Court determined that it was without an The district court found that it lacked jurisdiction over the independent jurisdictional basis for the suit because ERISA garnishment, primarily because the action attempts to hold the does not authorize a veil-piercing action. In addition, the City, a third party, liable for payment of a judgment on an Court rejected the plaintiff’s argument that the federal courts independent legal theory, the indemnity agreement, which had ancillary enforcement jurisdiction over the second suit. would require separate analysis and possible discovery concerning the City’s defenses to liability. As set forth The Court began its analysis by emphasizing that it has above, the City was dismissed from the action on September “reserved the use of ancillary jurisdiction in subsequent 30, 1998. The Officers then settled with the Plaintiff and a proceedings for the exercise of a federal court’s inherent consent judgment was entered on February 29, 2000. It was power to enforce its judgments.” Peacock, 516 U.S. at 356. not until June 30, 2000, that the Plaintiff served writs of The Court further explained that, “[i]n defining that power, garnishment on the City relying upon Fed. R. Civ. P. 69. we have approved the exercise of ancillary jurisdiction over a broad range of supplementary proceedings involving third The jurisdictional analysis in this garnishment action begins parties to assist in the protection and enforcement of federal with a consideration of Peacock v. Thomas, 516 U.S. 349 judgments–including attachment, mandamus, garnishment, (1996), and its discussion of ancillary subject matter and the prejudgment avoidance of fraudulent conveyances.” jurisdiction. As a starting point, it is necessary to understand Id. (citations omitted). that there are two situations in which a court may exercise ancillary jurisdiction over a claim otherwise not within the Nevertheless, Peacock concluded that it was without jurisdiction of the court: “‘(1) to permit disposition by a ancillary jurisdiction to entertain plaintiff’s second suit. The single court of claims that are, in varying respects and Court cautioned that the recognition of ancillary No. 01-1653 Hudson v. Coleman et al. 7 8 Hudson v. Coleman et al. No. 01-1653
supplementary proceedings has not extended beyond attempts ancillary jurisdiction over [plaintiff’s] claims in this to execute, or guarantee the eventual executability of a federal subsequent proceeding. judgment. More specifically, the Court has “never authorized the exercise of ancillary jurisdiction in a subsequent lawsuit Peacock, 516 U.S. at 255.3 to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment.” Id. at 357. Just as in Peacock, there is no rationale to support The Court further explained that exercising ancillary jurisdiction over Plaintiff’s state law indemnity claim against the City. The indemnity claim was [i]n determining the reach of the federal courts’ ancillary not asserted until after the City was dismissed and the case jurisdiction, we have cautioned against the exercise of against the individual defendants was settled. Accordingly, jurisdiction over proceedings that are “‘entirely new and there are no factually intertwined issues to resolve and neither original,”’ or where “the relief [sought is] of a different the convenience of the litigants nor considerations of judicial kind or on a different principle” than that of the prior economy justify the exercise of ancillary jurisdiction over decree. Plaintiff’s state law indemnity claim.
Id. at 358 (citations omitted). Turning to the purported ancillary “enforcement” grounds for jurisdiction, we find that a proper reading of Peacock Peacock concluded that the federal courts were without dictates that the federal courts are without jurisdiction to ancillary enforcement jurisdiction because plaintiff’s action entertain this garnishment action. The precise issue presented was “founded not only upon different facts than the ERISA by the Plaintiff in actuality is whether the fact that the suit, but also upon entirely new theories of liability.” Id. garnishment action is proceeding under the same case number as the original action, rather than in a second lawsuit, Here, it is undisputed that Plaintiff’s indemnity claim does sufficiently distinguishes the case from Peacock. not raise a federal question and that the parties are not diverse. Accordingly, the Court is without independent Peacock explained that ancillary jurisdiction is subject matter jurisdiction over the “writs of garnishment.” inappropriate in two distinct proceedings, only one of which Peacock’s analysis controls regarding exercise of the first involves a subsequent lawsuit. First, the Court indicated that category of ancillary jurisdiction, i.e., “ordinary” ancillary ancillary jurisdiction is inappropriate in “proceedings that are jurisdiction. According to Peacock: entirely new and original.” Peacock, 516 U.S. at 358 (internal quotation and citation omitted). Assuming without The basis of the doctrine of ancillary jurisdiction is the practical need “to protect legal rights or effectively to resolve an entire, logically entwined lawsuit. [Owen 3 Equipment & Erection Co. v.] Kroger, [437 U.S. 365, The Plaintiff attempts to distinguish Peacock on the basis that it 377 (1978)]. But once judgment was entered in the involved a separate suit and the case at bar involves writs of garnishment against the non-party City proceeding under the same case number as the original suit, the ability to resolve simultaneously original suit. This distinction has no bearing on “ordinary” ancillary factually intertwined issues vanished. As in Kroger, jurisdiction analysis, as such jurisdiction is discretionary with the Court “neither the convenience of litigants nor considerations and contemplates proceedings under the same ca se numb er in any e vent. of judicial economy” can justify the extension of See 28 U.S.C. § 1367. The “separate suit” issue and its bearing on ancillary enforcement jurisdiction is discussed infra at pp. 7-13. No. 01-1653 Hudson v. Coleman et al. 9 10 Hudson v. Coleman et al. No. 01-1653
deciding that the garnishment action falls outside this first range of supplementary proceedings involving third parties to precept, the action is squarely prohibited by the second assist in the protection and enforcement of federal category identified in Peacock “where ‘the relief [sought is] judgments–including attachment, mandamus, garnishment, of a different kind or on a different principle’ than that of the and the prejudgment avoidance of fraudulent conveyances.” prior decree.” Id. (quoting Dugas v. American Surety Co., Peacock, 516 U.S. at 356 (emphasis added) (citations 300 U.S 414, 428 (1937)) (alteration in original). omitted). The Supreme Court’s acknowledgment of the fact that garnishment sometimes falls within ancillary jurisdiction Plaintiff’s garnishment claim seeks to impose liability on is obviously not imprimatur for all garnishment actions the City, a third party not a party to the consent judgment, on arising from previous factually similar underlying federal the basis of the indemnity agreement, a legal theory entirely claims to proceed in federal court.4 The type of garnishment independent from that in the original action. As stated above, proceeding referred to in Peacock does not contemplate there is no evidence in the record indicating that the City’s making the garnishee personally liable on the judgment based liability under the indemnification agreement has been on some independent legal theory as Hudson seeks to do in established, or, more specifically, whether the Officers were this case. Instead, the typical garnishment proceeding acting within the scope of their employment or authority referenced in Peacock contemplates the garnishee’s paying when they stole the dog. In fact, the City was not served with the judgment creditor/garnishing party directly for funds, such the writs of garnishment until one year and nine months after as a salary, owed by the garnishee to the defendant in the being dismissed from the lawsuit. At this stage, there has underlying action. Cf. Sandlin v. Corporate Interiors, Inc., simply been no interpretation of the indemnity clause in the 972 F.2d 1212, 1216-17 (10th Cir. 1992) (applying H.C. labor agreement between the City and the Police Officer’s Cook Co. v. Beecher, 217 U.S. 497 (1910), a case with union. The City has not been adjudged liable to indemnify renewed vitality post-Peacock); Merrell v. Miller, No. 91- the Officers’ settlement with the Plaintiff, in that there remain 493-A, 1998 WL 329264, at *2 (E.D. Va. June 8, 1998) substantial questions regarding the interpretation of the labor (noting that Peacock prohibits “efforts, unsupported by an agreement, e.g., whether each Officer was acting “while in the independent basis for federal jurisdiction, to establish a new course of his employment” and “within the scope of his defendant’s personal liability for an existing judgment.”). authority.” The interpretation of the indemnity provision presents unresolved issues such as whether each Officers’ Michigan law apparently acknowledges the above conduct giving rise to the suit constituted a frolic or a mere distinction in the forms of garnishment by labeling the typical detour from duty. form of garnishment as “periodic” and the type garnishment sought by Hudson as “non-periodic.” To be sure, Hudson is In sum, the relief sought by the Plaintiff is based upon a not requesting that any wages owed by the City to the vastly different principle than that of the prior consent decree. Officers be paid by the City to Hudson. Instead, Hudson We find Hudson’s reading of Peacock far too narrow and conclude that she has not carried her burden of demonstrating that this suit falls within either category of ancillary 4 jurisdiction. Likewise, Fed. R. Civ. P. 69(a), providing supplementary proceedings in aid of executing a judgment, does not purport to confer Hudson relies upon the statement in Peacock that “we have ancillary subject matter jurisdiction for all garnishment proceedings approved the exercise of ancillary jurisdiction over a broad arising out of a common nucleus of fact to the original federal proceeding. Instead , Peacock explains the limits of federal ancillary jurisdiction. No. 01-1653 Hudson v. Coleman et al. 11 12 Hudson v. Coleman et al. No. 01-1653
seeks to hold the City individually liable under the indemnity Fed. R. Civ. P. 69 for an indemnification action against the clause for the full amount of the Officers’ settlement. The City of Chicago after the City was dismissed from the original state form used by Hudson is labeled “non-periodic” request lawsuit. Yang involved police officer defendants who, after and writ for garnishment and Hudson’s attorney has mailed a responding to a break-in at Yang’s store, proceeded to letter to the City on July 10, 2000, indicating the belief that continue the looting started by the original thieves. After the City is responsible for payment of the entire judgment Yang objected to the officers’ looting, the officers drove for under the indemnity clause. As stated above, the type two blocks with Yang hanging on to the car door. One officer garnishment sought by Hudson contemplates making the third eventually pulled his gun and punched Yang before fleeing party City, a non-party to the consent judgment, personally the scene. liable on the consent judgment entered into by the Officers based on the independent legal theory of the indemnification The Yang district court entered judgment against the agreement. The City’s liability under the newly presented officers and dismissed the action against the City. Yang then indemnity principle is far from established; thus, the issues to sought indemnification from the City on the basis of Illinois’ be litigated under the indemnity agreement deprive the Court indemnification statute, 745 ILCS 10/9-102, providing in of ancillary jurisdiction. See Peacock, 516 U.S. at 358; see pertinent part that a local public entity must pay any tort also, Travelers Indemnity Co. of Ill. v. Hash Management, judgment against an employee “while acting within the scope Inc., 173 F.R.D. 150, 153 (M.D.N.C. 1997) (“However, if the of his employment.” The district court dismissed the proceedings are entirely new and original or seek relief indemnification petition on the basis of the Peacock decision. different in kind, on a different principle, or to impose liability on persons not already bound by the previous action The Seventh Circuit held that the federal courts had and judgment, the moving party must be able to assert an jurisdiction over the indemnification petition because the independent basis for federal jurisdiction over the controversy petition was not a separate lawsuit and involved the same core with the third party.”). of operative facts as the original action. According to Yang, “a Rule 69 garnishment proceeding to collect a judgment Hudson also relies on Yang v. City of Chicago5, 137 F.3d from a third person not party to the original suit is within a 522 (7th Cir. 1998), permitting ancillary jurisdiction under court’s ancillary jurisdiction, providing the additional proceeding does not inject so many new issues that it is functionally a separate case.” Yang, 137 F.3d at 526. (internal 5 Yang relies on the pre vious S eventh Circuit decision of Argento v. quotation omitted). Yang concluded that interpreting the Village of Melrose Park, 838 F.2d 1483 (7th Cir. 1988). The Supreme scope of employment issue in order to resolve the indemnity Court in Peacock implied that Arg ento and its progeny were on the wrong question did not inject so many new issues into the action as side of a circuit split. See Peacock, 516 U.S. at 532 n.2; see also Yang, to make it functionally a separate case. The Seventh Circuit 137 F.3d at 526. Arg ento, predating Peacock, permits ancillary then proceeded to resolve the scope of employment issue by jurisdiction “when the plaintiff is proceeding in his original suit rather than by means of a new suit.” Yang, 137 F.3d at 526 (citations omitted). concluding that under Illinois law the officer was acting This jurisdictional analysis based upon “original suit” versus “new suit” within the scope of his employment when he pulled the gun labeling is irreconcilable with Peacock’s more sub stantive analysis on Yang. Id. at 525. prohibiting jurisdiction “where ‘the relief [sought is] of a different kind or on a d ifferent principle’ than that of the prior decree.” Peacock, 516 As an initial matter, Yang acknowledges that whether the U.S. at 358 (quoting Du gas v. American Surety Co., 300 U.S. 414, 428 garnishment arises by way of a separate action or under the (1937)) (alteration in original). No. 01-1653 Hudson v. Coleman et al. 13 14 Hudson v. Coleman et al. No. 01-1653
same case number as the original action is far from ancillary jurisdiction. It is inappropriate for a Court to decide determinative of ancillary jurisdiction. Instead, Yang focuses legitimate scope of employment and/or scope of authority on whether the garnishment injects sufficient new issues as to questions without the benefit of fact-finding and briefing. make the garnishment functionally separate, thus destroying ancillary jurisdiction. Yang’s “functionally separate” Our determination in this action overrules Childress v. subjective framework is fact-specific and can be interpreted Williams, 121 F. Supp.2d 1094 (E.D. Mich. 2000). Childress as facially consistent with the Supreme Court’s attempts to distinguish the disputed application of the pronouncement that ancillary jurisdiction is inappropriate in indemnity agreement from Peacock’s ambit by stating: “proceedings that are entirely new and original” and in proceedings “where ‘the relief [sought is] of a different kind [I]f all the prerequisites of the indemnification agreement or on a different principle’ than that of the prior decree.” were met, the City would be liable for indemnification at Peacock, 516 U.S. at 358 (internal quotation omitted) the time the judgment was rendered against the defendant (quoting Dugas v. American Surety Co., 300 U.S 414, 428 Williams . . . . Because Defendant Williams may have a (1937)) (alteration in original). right to collect from the City, so too may plaintiff.
We disagree with Yang’s application of the “functionally Childress, 121 F. Supp.2d at 1096 (emphasis added). separate” framework6 in deciding the indemnification issue and hold that legitimate, unresolved disputes concerning Instead, as we have set forth above, the very contingencies whether conduct occurs within the scope of employment or identified in Childress (“if,” “would be,” and “may”) require authority deprives a federal court of ancillary jurisdiction in sufficient fact-finding and legal analysis to distinguish the a garnishment action pursuant to Peacock. As stated, the City garnishment proceeding from the original action, rendering of Flint’s liability under the newly presented indemnity the federal courts without ancillary jurisdiction. principle is far from established; thus, the issues to be litigated under the indemnity agreement deprive the Court of III. CONCLUSION Based upon the above, we AFFIRM the district court’s order granting the City of Flint’s motion to quash Plaintiff 6 Hudson’s garnishment action. W e acknowledge that the Peacock framework for denying ancillary jurisdiction “where ‘the relief [sought is] of a different kind or on a different principle’ than that of the prior decree” permits a certain degree of subjectivity in decision mak ing. Perhap s Yang can be explained on this basis in that the litigation resulted in a more than six year saga due in part to delays by the City, including multiple reviews by the Seventh Circuit. Yang involved a remand with directions that the case be reassigned to a different district judge due to inordinate delays. See Yang, 137 F.3d at 527. In addition, the Court expressed, “Yang has waited long enough for this lawsuit to come to an end.” Id. at 527. We regret the inconvenience and delay that may be associated with a separate state court garnishment proceeding; howe ver, as stated ea rlier, it is well-established that we must presume that a cause of action lies outside the limited federal jurisdiction when prese nted with a subjective choice or close call concerning the existence of jurisdiction. No. 01-1653 Hudson v. Coleman et al. 15 16 Hudson v. Coleman et al. No. 01-1653
_______________ Federal Rule of Civil Procedure 69(a) (“Rule 69(a)") and Mich. Comp. Laws § 600.4011(1).2 The district court found DISSENT that it lacked subject matter jurisdiction over the garnishment _______________ action because the garnishment action seeks “to hold the City, a third party, liable for payment of a judgment on an KAREN NELSON MOORE, Circuit Judge, dissenting. I independent legal theory, the indemnity agreement, which respectfully dissent from the majority’s conclusion that the would require separate analysis and possible discovery district court lacks subject matter jurisdiction over Plaintiff- concerning the City’s defenses to liability.” Majority Op. at Appellant, Margo Hudson’s (“Hudson”), garnishment action 5. The majority affirms the district court’s order quashing against Defendant-Appellee, the City of Flint (“City”). Hudson’s garnishment action based upon the same reasoning Contrary to the majority, I conclude that Hudson’s employed by the district court. garnishment action is merely a post-judgment proceeding following her prior § 1983 action against Defendants- Appellees, Bryan Coleman and Eric Rodgers (collectively “police officers”), and that the garnishment action will not 2 inject so many new issues as to become a functionally Rule 69 directs district courts to emp loy the procedures for separate lawsuit. I further conclude that Hudson is merely executing judgments of the state in which the district court sits. See Fed. R. Civ. P. 69(a). Rule 6 9(a) pro vides: seeking to collect her judgment, rather than to impose liability The procedure on execution, in p roceedings supp lementary to upon someone not otherwise liable for the judgment. and in aid of a judgment, and in proceedings on and in aid of Therefore, the doctrine of ancillary jurisdiction gives the execution shall be in accordance with the practice and procedure district court subject matter jurisdiction over the garnishment of the state in which the district court is held, existing at the time action. For the following reasons, I would REVERSE the the remedy is sought, except that any statute of the United States governs to the extent that it is applicable. district court’s order granting the City’s motion to quash Id. Hudson’s garnishment action and REMAND for further The Michigan garnishment statute allows a prevailing plaintiff to proceedings. seek a writ of ga rnishment against an obligation owe d to the de fendant, if the ob ligor is sub ject to p erson al jurisdiction in M ichigan. See Mich. As discussed in the majority opinion, Hudson brought Com p. Laws § 600.4011 (1). Section 6 00.40 11(1 ) provide s: §§ 1983, 1985, and state law claims against the police officers [T]he court has po wer by garnishment to app ly the follow ing property or obligation, or both, to the satisfaction of a claim arising from the police officers’ theft of Hudson’s dog.1 On evidenced by contract, judgment of this state, or foreign February 29, 2000, Hudson and the police officers entered judgment, whether or no t the state has jurisdiction over the into a consent judgment, whereby the police officers agreed person against whom the claim is asserted: to pay $300,000 in settlement of Hudson’s claims. Then, on (a) Personal property belonging to the person against June 30, 2000, Hudson, seeking to collect the consent whom the claim is asserted but which is in the possession or control of a third person if the third judgment, filed writs of garnishment on the City pursuant to perso n is subject to the judicial jurisdiction of the state and the pe rsona l prop erty to be app lied is within the boundaries of this state. 1 (b) An obligation owed to the perso n against whom Hudson named the City as a d efendant in her com plaint, but the the claim is asserted if the obligor is subject to the district court granted summary judgment in favor of the City on judicial jurisdiction of the state. September 30, 1998. Id. No. 01-1653 Hudson v. Coleman et al. 17 18 Hudson v. Coleman et al. No. 01-1653
Contrary to the majority, I would hold that the doctrine of 379-80 (1994)). The Court held that Thomas’s veil-piercing ancillary jurisdiction gives the district court subject matter claim did not involve the first accepted usage of ancillary jurisdiction over the garnishment action. Unlike the majority, jurisdiction, as Thomas brought his veil-piercing claim in a I conclude that the Supreme Court’s holding in Peacock v. subsequent lawsuit, and thus “the ability to resolve Thomas, 516 U.S. 349 (1996), does not prohibit this use of simultaneously factually intertwined issues vanished.” Id. at ancillary jurisdiction. Instead, I conclude that the Seventh 355. The Court further held that Thomas’s veil-piercing Circuit’s reasoning in Yang v. City of Chicago, 137 F.3d 522 claim did not involve the second accepted usage of ancillary (7th Cir. 1998), cert. denied, 525 U.S. 1140 (1999), and the jurisdiction because, although ancillary jurisdiction may be Eastern District of Michigan’s reasoning in Childress v. used to enforce judgments, the Court has “never authorized Williams, 121 F. Supp. 2d 1094 (E.D. Mich. 2000), correctly the exercise of ancillary jurisdiction in a subsequent lawsuit analyze Peacock’s effect on the doctrine of ancillary to impose an obligation to pay an existing federal judgment jurisdiction in Rule 69 proceedings. on a person not already liable for that judgment.” Id. at 357. In Peacock, Thomas had been awarded a judgment of In Yang, a post-Peacock decision, the Seventh Circuit held $187,628.93 by the district court in his ERISA class action that the doctrine of ancillary jurisdiction gave the district against Tru-Tech, his former employer. Peacock, 516 U.S. at court subject matter jurisdiction over Yang’s Rule 69 351. The district court had found that Tru-Tech breached its garnishment action. Yang, 137 F.3d at 526. Yang had been fiduciary duties in administering the corporation’s pension awarded a substantial monetary judgment in his §§ 1983 and benefits plan, but the district court had also explicitly ruled 1985 actions against two police officers. Id. at 522-23. that Peacock, an officer and shareholder of Tru-Tech, was not Approximately three months later, “Yang filed a petition for a fiduciary. Id. Unable to obtain the money from Tru-Tech, indemnification and writ of execution, seeking Thomas sued Peacock in federal court alleging various indemnification of [his judgments against the officers] from theories, including a veil-piercing claim under ERISA. Id. at the City of Chicago pursuant to 745 ILCS 10*9-102. Section 352. 9-102 directs a municipality to indemnify a tort judgment entered against an employee if the employee’s misconduct The Supreme Court held that ERISA does not authorize was within the scope of his employment.” Id. at 524. The veil-piercing claims; therefore, ERISA did not provide a basis court held that “a Rule 69 garnishment proceeding to collect for federal jurisdiction over Thomas’s veil-piercing claim. Id. a judgment from a third person not party to the original suit at 353. The Court further held that the doctrine of ancillary is within a court’s ancillary jurisdiction, providing ‘the jurisdiction did not apply to Thomas’s veil-piercing claim, additional proceeding does not inject so many new issues that and as a result, the district court lacked subject matter it is functionally a separate case.’” Id. at 526 (quotations jurisdiction over Thomas’s action against Peacock. Id. at omitted).3 The court concluded that Yang’s garnishment 355-59. In so holding, the Court stated that “a federal court may exercise ancillary jurisdiction ‘(1) to permit disposition by a single court of claims that are, in varying respects and 3 This holding is not inconsistent with the T enth C ircuit’s view in degrees, factually interdependent; and (2) to enable a court to San dlin v. Corporate Interiors, Inc., 972 F.2d 12 12, 1217 (10th Cir. function successfully, that is, to manage its proceedings, 1992), a pre-Peacock decision, in which the court he ld that the district vindicate its authority, and effectuate its decrees.’” Id. at 354 court lacked subject matter jurisdiction over the plaintiff’s subsequent veil-piercing claim because the claim involved new parties, new issues, (quoting Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, and new theories o f liability. The Tenth Circuit explicitly noted that the No. 01-1653 Hudson v. Coleman et al. 19 20 Hudson v. Coleman et al. No. 01-1653
action fell within the district court’s ancillary jurisdiction jurisdiction—protecting judgments.4 In fact, the courts in because the only new issue raised in the action was whether both Yang and Childress relied upon the following passage the officers were acting within the scope of their employment from Peacock to support their holdings: “we have approved when they violated Yang’s constitutional rights. See id. The the exercise of ancillary jurisdiction over a broad range of Yang court further distinguished Peacock by noting that the supplementary proceedings involving third parties to assist in plaintiff in Yang was not trying to impose liability for a the protection and enforcement of federal judgments — money judgment on a person not otherwise liable for the including attachment, mandamus, garnishment, and the judgment, because if the officers were acting within the scope prejudgment avoidance of fraudulent conveyances.” Peacock, of their employment, the city would be liable for their 516 U.S. at 356 (cited in Yang, 137 F.3d at 525; Childress, judgment. Id. at 525 n.1. Similarly, in Childress, the Eastern 121 F. Supp. 2d at 1096).5 District of Michigan held that the doctrine of ancillary jurisdiction gave it subject matter jurisdiction over I find the reasoning of the courts in Yang and Childress Childress’s Rule 69 garnishment proceeding because the only both convincing and applicable to the present case. Here, new issue raised in the proceeding was whether the officer Hudson entered into a consent judgment with the police was acting within the scope of his employment when he officers for $300,000. Hudson then brought a garnishment violated Childress’s constitutional rights. Childress, 121 F. proceeding against the City pursuant to Rule 69 seeking to Supp. 2d at 1096. collect from the City in accordance with City’s indemnification agreement with the police officers. Hudson’s The courts in both Yang and Childress reasoned that the Rule 69 proceeding was a post-judgment proceeding, not a Rule 69 garnishment actions were not separate lawsuits separate lawsuit. The factual issues in the garnishment because they were post-judgment proceedings, and because proceedings will overlap substantially with those in Hudson’s the factual issues in the garnishment actions would overlap underlying §§ 1983, 1985, and state-law claims; therefore, the substantially with the factual issues in the underlying claims. Rule 69 proceeding will not inject so many new issues as to See Yang, 137 F.3d at 526; Childress, 121 F. Supp. 2d at become a functionally separate lawsuit. Unlike the plaintiff 1096. Thus, the garnishment actions involved the first in Peacock, Hudson is not seeking to impose liability on the accepted use of ancillary jurisdiction—resolving factually City for post-judgment conduct; rather, the City’s potential interdependent claims in a single proceeding. The courts in liability arose when the police officers committed the conduct both Yang and Childress also reasoned that the district court’s exercise of ancillary jurisdiction over the Rule 69 garnishment proceeding was necessary to effectuate the district court’s prior judgment. Yang, 137 F.3d at 526; 4 Federal courts have exercised ancillary jurisdiction in supplemental Childress, 121 F. Supp. 2d at 1096-97. Thus, the garnishment proceedings to effectuate jud gments for over one hundred years. See Root actions involved the second accepted usage of ancillary v. Woolwo rth, 150 U.S. 401, 410-11 (1893). Peacock did no t strip federal courts of subject matter jurisdiction over proceedings to effectuate judgments. Peacock v. Thomas, 516 U.S. 349 , 356 (1996 ).
5 Furthermore, in a footnote in Peacock, the Supreme Court explicitly stated that a Rule 69 (a) proceeding was an effective me chan ism for a district court to use in effectuating its judgment. Pea cock, 516 U.S. at plaintiff was not bringing a tradition al indemnity claim. Id. 359 n.7. No. 01-1653 Hudson v. Coleman et al. 21
underlying Hudson’s initial § 1983 action.6 The only new factual issue involved in the Rule 69 garnishment proceeding will be whether the police officers were acting within the scope of their employment.7 This is the exact same factual issue that both the Seventh Circuit and the Eastern District of Michigan found insufficient to render the Rule 69 garnishment proceedings separate, subsequent lawsuits. Additionally, the Rule 69 garnishment proceeding is necessary to enable the district court to effectuate its prior judgment against the police officers. Requiring a separate state-court lawsuit to enforce a federal-court judgment would compromise the federal interests that were resolved in the initial federal-court proceedings and would impose an unnecessary burden on state courts. Childress, 121 F. Supp. 2d at 1097. I respectfully dissent.
6 For the sam e reason, the City canno t be con sidered a party that is not otherwise liable, because if the police officers were acting within the scope of their employment, the City would be liable for the police officers’ cond uct.
7 The indemnification agreement between the City and the Flint Police Officers Association provides, in pertinent part: W henever any judgment for damages, excluding punitive dama ges, is awarded against an Employee as the result of any civil action for personal injuries or property damage caused by the Employee while in the course of his emp loyment, and while acting within the scope of his authority, the E mplo yer will indem nify the employee or will pay, settle, or comprom ise the judgment. Joint App endix at 512 (P ls.’ Br. in O pp’n to the C ity of Flint’s M ot. to Quash Ga rnishment, Ex. A).