Skymont Farms v. North

862 F. Supp. 2d 755, 2012 U.S. Dist. LEXIS 39258, 2012 WL 996619
CourtDistrict Court, E.D. Tennessee
DecidedMarch 22, 2012
DocketNo. 4:09-cv-77
StatusPublished
Cited by4 cases

This text of 862 F. Supp. 2d 755 (Skymont Farms v. North) is published on Counsel Stack Legal Research, covering District Court, E.D. Tennessee primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Skymont Farms v. North, 862 F. Supp. 2d 755, 2012 U.S. Dist. LEXIS 39258, 2012 WL 996619 (E.D. Tenn. 2012).

Opinion

MEMORANDUM AND ORDER

SUSAN K. LEE, United States Magistrate Judge.

The Court ordered the parties to brief the issue of its subject matter jurisdiction over this case [Doc. 56]. The parties filed initial briefs [Docs. 57, 58, & 59], and chose not to file responsive briefs. After considering the parties’ briefs and the applicable law, and for the reasons outlined below, the Court will ORDER this case be REMANDED to the Circuit Court for Grundy County, Tennessee.

I. BACKGROUND AND PROCEDURAL HISTORY

This action, asserting state law contract and tort claims against an insurance agen[757]*757cy located in Tennessee and individual insurance agents residing in Tennessee, was removed to this Court from the Circuit Court for Grundy County, Tennessee on July 29, 2009. Defendants’ Notice of Removal states that removal is proper pursuant to 28 U.S.C. § 1331, as the case arises under federal question jurisdiction by virtue of the Federal Crop Insurance Act (“FCIA”), 7 U.S.C. § 1501 et seq. [Doc. 1 at PagelD#: 2]. Plaintiffs did not file a motion to remand the case to state court.

The claims asserted in this action arise from a crop insurance policy issued to Plaintiff Dusty Wanamaker to cover nursery crops at Skymont Farms [Doc. 1-1 at PagelD#: 6]. The Complaint alleges that the policy was issued by NAU Country Insurance Company (“NAU”) in conjunction with the Federal Crop Insurance Corporation (“FCIC”) and the Risk Management Agency (“RMA”) whereby the insurance company had a reinsurance agreement with the FCIC [id.]. The Defendants named in the Complaint, however, are Summitville Crop Insurance Agency, the insurance agency through which Plaintiffs conducted their crop insurance business, and the individual agents working for the agency — Suzanne North, Cindy Anderson, and Richard Mackie [id].1

Plaintiffs allege in the Complaint that Defendants were aware of the ownership of various nurseries belonging to the Wanamaker family and held themselves out as being able to provide appropriate insurance coverage for the nurseries for the 2006 crop year; however, after a hail storm damaged the crops at Skymont Farms in April 2006, Plaintiff Dusty Wanamaker submitted a claim, and the RMA took over the adjustment of the claim and eventually denied it [id. at PagelD#: 6-7]. Plaintiffs allege Defendants were negligent in failing to properly obtain an insurance policy for Skymont Farms, were negligent in obtaining the proper information from Plaintiffs to secure appropriate coverage, made misrepresentations regarding the procurement of such coverage upon which Plaintiffs relied, and breached their duties and contractual obligations to Plaintiffs [id. at PagelD# : 7-8].

II. ANALYSIS

The Court is under a continuing obligation to ensure it has subject matter jurisdiction over the cases before it and can raise the issue of jurisdiction sua sponte at any time during the pendency of a case. See Answers in Genesis of Ky., Inc. v. Creation Ministries Intern., Ltd., 556 F.3d 459, 465 (6th Cir.2009); see also 28 U.S.C. § 1447 (“[i]f at any time before final judgment it .appears that the district court lacks subject matter jurisdiction, the case shall be remanded.”). The Court became aware of -a line of cases indicating that FCIA did not create federal question jurisdiction over cases asserting strictly state law claims against private reinsurers of crop insurance or insurance agencies. The Court listed those cases for the parties, along with two early cases reaching the opposite conclusion, Owen v. Crop Hail Mgmt., 841 F.Supp. 297 (W.D.Mo.1994) and Brown v. Crop Hail Mgmt., Inc., 813 F.Supp. 519 (S.D.Tex.1993), at the time it required the parties to brief the issue of its subject matter jurisdiction.

In compliance with the Court’s order to address its subject matter jurisdiction, Defendant Mackie argued that Owen and Brown should be followed to find federal question jurisdiction in this case and noted that the case would not exist were it not [758]*758for the existence of the FCIA [Doc. 57]. The remaining Defendants also argued in favor of the conclusion reached in Owen and Brown [Doc. 58]. Plaintiffs asserted that they did not seek remand because of the judicial economy of having all related cases pending before the same Court and argued against any suggestion by Defendants that the FCIA preempted their state law claims against the insurance agency and individual agents [Doc. 59].

As a preliminary matter, judicial economy does not create subject matter jurisdiction, and the parties cannot agree to federal question jurisdiction where it does not exist.2 See Holman v. Laulo-Rowe Agency, 994 F.2d 666, 668 n. 1 (9th Cir.1993) (“The parties cannot ... create federal court subject matter jurisdiction by stipulation”). Instead, it is afforded by diversity jurisdiction, which is not claimed to exist in this case, or by “federal question” jurisdiction. For federal question jurisdiction, 28 U.S.C. § 1331 states “[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.” Removal of cases filed in state court to federal court is governed by 28 U.S.C. § 1441, which dictates that “state-court actions that originally could have been filed in federal court may be removed to federal court by the defendant.” Caterpillar, Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 96 L.Ed.2d 318 (1987). In conjunction with these statutes, the existence of federal question jurisdiction is governed by the “well-pleaded complaint rule,” which focuses on whether federal questions are asserted in the complaint without regard to any federal defenses. City of Warren v. City of Detroit, 495 F.3d 282, 286 (6th Cir.2007).

The United States Court of Appeals for the Sixth Circuit has identified four ways in which a complaint can “arise under” federal law to establish federal question jurisdiction: “it ... (1) states a federal cause of action; (2) includes state-law claims that necessarily depend on a substantial and disputed federal issue; (3) raises state-law claims that are completely preempted by federal law; or (4) artfully pleads state-law claims that amount to federal-law claims in disguise.” Ohio ex rel. Skaggs v. Brunner, 629 F.3d 527, 530 (6th Cir.2010) (citing Mikulski v. Centerior Energy Corp., 501 F.3d 555, 560 (6th Cir. 2007)).

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Bluebook (online)
862 F. Supp. 2d 755, 2012 U.S. Dist. LEXIS 39258, 2012 WL 996619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/skymont-farms-v-north-tned-2012.