Tommy Duane Thomas, Jr. And Marilyn Kay Terrell, His Parent and Guardian, and United States of America v. Gerald Shelton and Barbara Shelton

740 F.2d 478, 1984 U.S. App. LEXIS 20751
CourtCourt of Appeals for the Seventh Circuit
DecidedJuly 6, 1984
Docket83-1666, 83-1951
StatusPublished
Cited by130 cases

This text of 740 F.2d 478 (Tommy Duane Thomas, Jr. And Marilyn Kay Terrell, His Parent and Guardian, and United States of America v. Gerald Shelton and Barbara Shelton) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tommy Duane Thomas, Jr. And Marilyn Kay Terrell, His Parent and Guardian, and United States of America v. Gerald Shelton and Barbara Shelton, 740 F.2d 478, 1984 U.S. App. LEXIS 20751 (7th Cir. 1984).

Opinions

[481]*481POSNER, Circuit Judge.

These consolidated appeals present issues of federal removal jurisdiction and Indiana tort law. The Sheltons own a farm. They leased it, and their lessee in turn sublet a house on the farm to the stepfather of Tommy Thomas, age 11. Tommy was seriously injured when he became entangled in a large silage auger on the farm. Joined by his mother, he brought a tort suit in an Indiana state court against the Sheltons. Because Tommy’s natural father is a member of the armed forces, the United States paid Tommy’s medical expenses and then sued the Sheltons in a federal district court in Indiana to recover those expenses under the Medical Care Recovery Act, 42 U.S.C. § 2651. The Act provides that in any case where the United States is authorized or required by law to provide medical care to a person “who is injured ... under circumstances creating a tort liability upon some third person ... to pay damages therefor, the United States shall have a right to recover from said third person the reasonable value of the care and treatment so furnished ... and shall, as to this right be subrogated to any right or claim that the injured ... person ... has against such third person to the extent of the reasonable value of the care and treatment so furnished ____” Fearing double liability for Tommy’s medical expenses, the Sheltons interpleaded the United States in Tommy’s state-court action. The United States then removed the entire action to the federal district court where its suit against the Sheltons was pending. The district court consolidated the two actions, gave summary judgment for the Sheltons, and dismissed both complaints, holding that the Sheltons were not liable to Tommy and therefore not to the government either. Tommy and the United States have appealed.

Although the logical first question is whether the removal of Tommy’s state court action to federal court was proper, the Sheltons (who believe it was, while the government now says that the district judge erred in allowing it to remove the case) tell us that we need not decide this question. They say that if the district court was right in exonerating them from liability for Tommy’s injury — an issue the court had to decide in the government’s suit because their liability under the Medical Care Recovery Act depends on their being found liable to Tommy under the tort law of the pertinent state, Heusle v. National Mutual Ins. Co., 628 F.2d 833, 837 (3d Cir.1980), which all agree is Indiana — it is academic whether Tommy’s suit was properly removed to federal court. But this is incorrect. If Tommy’s suit was improperly removed, he was not a party to the proceedings in the district court, and is therefore not bound by the judgment in favor of the Sheltons — unless, perchance, he was in privity with the United States, which was a party. In Indiana, however, “A privy is one who, after the commencement of the action [i.e., the government’s action against the Sheltons], has acquired an interest in the subject matter affected by the judgment through or under one of the parties, as by inheritance, succession, or purchase.” Tobin v. McClellan, 225 Ind. 335, 344, 73 N.E.2d 679, 683 (1947) (italics deleted). Tommy's claim against the Sheltons thus would have to be derivative from the government’s claim for him to be bound. See Biggs v. Marsh, 446 N.E.2d 977, 983 (Ind.App.1983). It is not.

Even if the concept of privity were given a purely functional definition, so that parties were deemed in privity whenever “ ‘it is realistic to say that the third party was fully protected in the first trial,’ ” Burtrum v. Wheeler, 440 N.E.2d 1147, 1156 (Ind.App.1982) (dissenting opinion), quoting In re Estate of Nye, 157 Ind.App. 236, 263, 299 N.E.2d 854, 870 (1973); see also Burtrum v. Wheeler, supra, 440 N.E.2d at 1152, Tommy would not be in privity with the government. All the government has at stake in its suit is Tommy’s medical expenses. As they are only a fraction of Tommy’s claim, there can be no assurance that the government would fight as hard to prove its claim as Tommy would [482]*482to prove his. Cf. Restatement (Second) of Judgments § 28, comment j (1982).

Since the district court’s judgment in United States v. Shelton did not extinguish Tommy’s claim, the state court to which his case would have to be remanded if it was improperly removed might conclude, notwithstanding the district court’s decision, that the Sheltons are liable to Tommy in tort. The removal question therefore is not moot. The Sheltons argue that any one of three sections of the Judicial Code authorized the removal of his case: 28 U.S.C. §§ 1441(a), 1444, and 1441(c). We need not linger over the first, section 1441(a), which allows “any civil action brought in a State court of which the district courts of the United States have original jurisdiction” to be “removed by the defendant or the defendants ...,” subject to limitations in section 1441(b) that are not material here. Tommy’s action against the Sheltons was not based on the alleged violation of a federal right (was not even derivative from the government’s claim, as we have seen) and also was not between citizens of different states. It thus was not within the original jurisdiction of any federal district court. To argue that the Medical Care Recovery Act makes a tort claim arise under federal law because the government has an interest in that claim as subrogee is untenable, as held in Becote v. South Carolina State Highway Dept., 308 F.Supp. 1266, 1268 (D.S.C.1970). Federal jurisdiction depends on the allegations of the complaint rather than on issues that come in later. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 103 S.Ct. 2841, 2846-47, 77 L.Ed.2d 420 (1983).

Section 1444 authorizes the United States to remove any action brought against it under 28 U.S.C. § 2410, which authorizes the naming of the United States as a party in state court actions to foreclose, quiet title to, condemn, etc. property in which the United States has or claims a lien. The Sheltons did not cite this statute in interpleading the government in Tommy’s state court action. But the government’s right to remove a state court action seeking to extinguish a federal lien cannot itself be extinguished by the simple expedient of not citing the statute; and the Sheltons’ interpleader petition did make reference to a possible federal lien. But section 2410 (and therefore section 1444) is inapplicable to this case because there is no lien. Cf. Cummings v. United States, 648 F.2d 289, 292 (5th Cir.1981); Haggard v. Lancaster, 320 F.Supp. 1252, 1255 (N.D.Miss.1970). A lien is a claim against property. The Medical Care Recovery Act does not give the government a claim against the tortfeasor’s or anybody else’s property, but just a cause of action against the tortfeasor. A judgment may create a lien, see, e.g., Rhea v. Smith,

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740 F.2d 478, 1984 U.S. App. LEXIS 20751, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tommy-duane-thomas-jr-and-marilyn-kay-terrell-his-parent-and-guardian-ca7-1984.