Tommy L. Hairston v. Earth Satellite Electronic

• Court: Court of Appeals for the Eleventh Circuit
• Decided: November 13, 2000
• Docket: 99-11417
• Status: Published

Opinion

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT FILED U.S. COURT OF APPEALS ________________________ ELEVENTH CIRCUIT NOV 13 2000 No. 99-11417 THOMAS K. KAHN ________________________ CLERK

D. C. Docket No. 98-00313-4-CV-HLM

TOMMY L. HAIRSTON, EARTH SATELLITE ELECTRONIC DISTRIBUTORS, INC., d.b.a. Private Cable Systems,

Plaintiffs-Appellants,

versus

TRAVELERS CASUALTY & SURETY CO., f.k.a. Aetna Casualty and Surety, TRAVELERS PROPERTY CASUALTY,

Defendants-Appellees.

________________________

Appeal from the United States District Court for the Northern District of Georgia _________________________ (November 13, 2000)

Before ANDERSON, Chief Judge, HILL and KRAVITCH, Circuit Judges. ANDERSON, Chief Judge:

Tommy Hairston and Earth Satellite Electronic Distributors, Inc. appeal the

district court’s dismissal of their suit under a flood insurance policy against Travelers

Casualty & Surety Co. and Travelers Property Casualty. Appellants appeal the district

court’s determination that the federal courts have exclusive jurisdiction over claims

brought pursuant to National Flood Insurance Program (“NFIP”) policies and that

filing in state court did not toll the statute of limitations. We affirm.

I. FACTS

Appellants purchased flood insurance in 1993 from Write Your Own

(“WYO”)1 company Aetna Casualty and Surety, which later merged with or was

purchased by the Appellees. Appellants suffered flood damage in 1995 and

received payment for that damage. Almost two years later, Appellants noticed

further damage which they thought was from the 1995 flood and filed again.

This time, the Appellees would not pay. On November 13, 1997, Appellees

notified the Appellants that no further investigation would be conducted and

1 In 1983, the Federal Emergency Management Agency created the WYO program whereby private insurers issue National Flood Insurance policies. For a full explanation of the NFIP history, see Van Holt v. Liberty Mutual Fire Insurance Co., 163 F.3d 161, 167 (3d Cir. 1998).

2 that the claim was denied. On November 11, 1998, Appellants filed suit in

state court. The Appellees answered, alleging that federal courts have

exclusive jurisdiction of actions arising under NFIP policies and filing for

removal. The removal to federal court occurred on December 15, 1998, more

than a year after appellees denied the claim. After the action was removed to

federal court, the Appellees filed a motion to dismiss because the Appellants

had missed the NFIP’s twelve month statute of limitations. The district court

granted the motion, finding that the federal courts have exclusive jurisdiction and

that filing in state court did not toll the statute of limitations.

II. DISCUSSION

A. Federal Courts Have Exclusive Jurisdiction Over Suits Brought Pursuant to Policies Issued Under the National Flood Insurance Program

It is a general principle of law that a state court may assume jurisdiction over

cases arising under federal laws in the absence of “a provision by Congress to the

contrary or disabling incompatibility between the federal claims and state-court

adjudication.” Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 477-478, 101 S.

Ct. 2870, 2875 (1981). Beginning with this presumption that concurrent

jurisdiction exists, courts are to determine whether Congress intended to restrict

3 jurisdiction to the federal court. See id. at 478, 101 S. Ct. at 2875. This

presumption can be rebutted by a showing of any one of the following: “an explicit

statutory directive,” an “unmistakable implication from legislative history” or “a

clear incompatibility between state-court jurisdiction and federal interests.” Id.

1. Explicit Statutory Directive

We begin with an examination of the language in the statute that the parties

agree is the governing statute. In 42 U.S.C. § 4072,2 the claimant is instructed that

2 Section 4072 provides:

In the event the program is carried out as provided in section 4071 of this title, the Director shall be authorized to adjust and make payment of any claims for proved and approved losses covered by flood insurance, and upon the disallowance by the Director of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance by the Director, may institute an action against the Director on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated, and original exclusive jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy.

42 U.S.C. § 4072. Both parties agree that § 4072 is the governing statutory provision. Because it is clear that the district court had subject matter jurisdiction pursuant to 28 U.S.C. § 1331, Newton v. Capital Assur. Co., Inc., 209 F.3d 1302, 1305 (11th Cir. 2000), we again need not address the issue of whether 42 U.S.C. § 4072 provides an additional basis for jurisdiction of a suit against a WYO company, an issue left open in Newton. See Van Holt v. Liberty Mutual Fire Ins. Co., 163 F.3d 161, 166-67 (3d Cir. 1998) (concluding that both 28 U.S.C. § 1331 and 42 U.S.C. § 4072 vest district courts with subject matter jurisdiction of such suits).

4 he “may institute” an action in the district court and that the district courts are

given “original exclusive jurisdiction” to hear the action without regard to the

amount in controversy.

The Appellants argue that Congress’s use in § 4072 of the permissive “may”

instead of obligatory “must” demonstrates an intention to sustain concurrent

jurisdiction. While it is true that some courts have found concurrent jurisdiction

because of the use of the permissive “may,” see, e.g., Lane v. Central Bank of Ala.,

N.A., 756 F.2d 814, 817 (11th Cir. 1985), the statutes at issue in such cases did not

contain the more potent language contained in this statute: “original exclusive

jurisdiction.” That difference makes the analysis in those cases inapplicable. In

Yellow Freight Sys., Inc. v. Donnelly, 494 U.S. 820, 823, 110 S.Ct. 1566, 1568-69,

the Supreme Court held that the presumption of concurrent jurisdiction was not

rebutted by the language of Title VII. That language simply said: “each United

States district court ... shall have jurisdiction of actions brought under this

subchapter.” 42 U.S.C. § 2000e-5(f)(3). In so holding, the Court suggested the

kind of language which would rebut the presumption: “Unlike a number of statutes

in which Congress unequivocally stated that the jurisdiction of the federal court is

exclusive, Title VII contains no language that expressly confines jurisdiction to

federal courts.” Id. (footnote omitted). The statutory language in the instant case

5 expressly provides that the jurisdiction of the district court is exclusive.

While Appellants argue that the words “original exclusive jurisdiction” do

not rebut the concurrent jurisdiction presumption, we have not found any cases that

support this view. In fact, the only cases that we have found that interpret this

language held that the language confined jurisdiction to the federal courts. See,

e.g., Mississippi v. Louisiana, 506 U.S. 73, 77-78, 113 S. Ct. 549, 553 (1992)

(examining the constitutional grant of original exclusive jurisdiction to the

Supreme Court of actions between states); Yellow Freight Sys., Inc. v. Donnelly,

494 U.S. 820, 823, 110 S. Ct. 1566, 1568-69 (1990) (contrasting the jurisdictional

language in Civil Rights Act with the ERISA statute which contains the words

“exclusive jurisdiction” and finding that that language in the latter evidenced a

clear rebuttal of the presumption of concurrent jurisdiction); Hall v. United States

Dept. of Veterans’ Affairs, 85 F.3d 532, 534 (11th Cir. 1996)(discussing exclusive

jurisdiction of the Court of Appeals for the Federal Circuit over certain actions for

veterans’ benefits). Therefore we conclude that the language of the statute rebuts

the presumption of concurrent jurisdiction.3

3 At oral argument, Appellants cited American Dredging Co. v. Miller, 510 U.S. 443, 114 S. Ct. 981 (1994), for its discussion of the language in 28 U.S.C. § 1333(1), the statute that confers jurisdiction in admiralty actions. The statute reads:

The district courts shall have original jurisdiction, exclusive of the courts of the States, of:

6 2. An Unmistakable Implication From Legislative History

Although we need not address the legislative history in light of the explicit

statutory directive and our holding that the “exclusive” language of the statute

rebuts the presumption of concurrent jurisdiction, our review of the legislative

history reinforces our holding. As originally enacted, § 4072 did not contain the

words “original exclusive” before jurisdiction.4 This language was added by

Congress in 1983. See Supplemental Appropriations Act, 1984; Domestic Housing

(1) Any civil case of admiralty or maritime jurisdiction, saving to suitors in all cases all other remedies to which they are otherwise entitled.

28 U.S.C. 1331 (1993). The Court discussed its precedent interpreting this language which held that federal courts had exclusive jurisdiction over in rem suits against vessels but that the “saving to suitors” clause permitted actions in state court that would be cognizable under state law. Unlike § 1331(1), § 4072 does not contain an equivalent “saving to suitors” clause and thus the analysis in American Dredging is not pertinent. 4 The pre-1983 version of § 4072 provided:

In the event the program is carried out as provided in section 4071 of this title, the Secretary shall be authorized to adjust and make payment of any claims for proved and approved losses covered by flood insurance, and upon the disallowance by the Director of any such claim, or upon the refusal of the claimant to accept the amount allowed upon any such claim, the claimant, within one year after the date of mailing of notice of disallowance or partial disallowance by the Director, may institute an action against the Director on such claim in the United States district court for the district in which the insured property or the major part thereof shall have been situated, and jurisdiction is hereby conferred upon such court to hear and determine such action without regard to the amount in controversy.

42 U.S.C. § 4072 (1982) (emphasis added). The 1983 amendment added the words “original exclusive” immediately before the word “jurisdiction” in the last phrase.

7 and International Recovery and Financial Stability Act, Pub. L. 98-181, §

451(d)(5), 97 Stat. 1229 (1983). In the accompanying legislative history, Congress

made clear that the adoption of the language was purposeful:

In the case where the claimant refuses to accept the amount allowed or the claim, the claimant may institute an action on the claim against the company or other insurer within one year after the mailing of the notice of disallowment or partial disallowment in the U.S. district court for the district in which the insured property is situated. Jurisdiction is conferred on the U.S. district court to hear and determine the action regardless of the amount in controversy. This section is amended to specify that the U.S. district court has original exclusive jurisdiction over this action.

See Joint Explanatory Statement of the Committee of Conference, reprinted in

1983 U.S.S.C.A.N. 1768, 1814 (emphasis added). The inclusion of the clear

language restricting jurisdiction to the district court, without any qualifying

statements, demonstrates Congress’s intent to restrict jurisdiction.

The addition of the language in 1983 is especially convincing in light of the

split that had developed in the federal courts about whether jurisdiction over

actions brought pursuant to NFIP policies was confined to federal courts.

Compare Bains v. Hartford Fire Insurance Co., 440 F. Supp. 15 (N.D. Ga.

1977)(holding that concurrent jurisdiction existed); Burrell v. Turner Corp. of

Oklahoma, 431 F. Supp. 1018 (N.D. Okla. 1977)(same) with Schultz v. Director,

Federal Emergency Management Agency, 477 F. Supp. 118 (C.D. Ill. 1979)

8 (holding the same language in the jurisdictional statute for Part A of the NFIP

restricted jurisdiction to the federal courts); Siekman v. Kirk Mortgage Co., 548 F.

Supp. 50 (E.D. Pa. 1982)(same). Thus it would appear that Congress was

responding to the growing split and amended the statute in order to alleviate any

further confusion. Because we conclude that both the language of the statute and

the legislative history dictate the conclusion that the federal courts have exclusive

jurisdiction, we decline to consider the third potential rebuttal factor, the

compatibility of state-court jurisdiction and federal interests.

B. Filing in State Court Will Not Toll the Statute of Limitations

Appellants argue that even if we find that the federal courts have exclusive

jurisdiction, the filing of the suit in state court tolled the statute of limitations. In

support of this argument, they cite Burnett v. New York Central Railroad Co., 380

U.S. 424, 85 S. Ct. 1050 (1965), in which the Court found that a plaintiff who

properly filed in state court, but in the wrong venue, tolled the statute of limitations

on an action arising under the Federal Employers’ Liability Act (“FELA”). In

Burnett, the plaintiff’s initial suit was dismissed for lack of venue, and he later

filed in federal court after the statute of limitations had run on the FELA action.

The district court dismissed the action. The Supreme Court explained that had the

9 state law permitted transfer of the initial suit to a court with proper venue, the

statute would have been tolled. See id. at 426, 85 S. Ct. at 1053. From this case,

the Appellants argue that because Georgia has such a transfer statute,5 they should

be permitted to toll the statute of limitations by filing in state court.

However, unlike here, the state court in Burnett had jurisdiction to hear the

claim. Under 45 U.S.C. § 56, FELA’s jurisdictional statute, concurrent jurisdiction

is specifically reserved. Thus the plaintiff in Burnett filed in a court with

competent jurisdiction over his claim, albeit not the proper court: “Congress did

5 O.C.G.A. § 9-2-61 Renewal of case after dismissal.

(a) When any case has been commenced in either a state or federal court within the applicable statute of limitations and the plaintiff discontinues or dismisses the same, it may be recommenced in a court of this state or in a federal court either within the original applicable period of limitations or within six months after the discontinuance or dismissal, whichever is later, subject to the requirement of payment of costs in the original action as required by subsection (d) of Code Section 9-11-41; provided, however, if the dismissal or discontinuance occurs after the expiration of the applicable period of limitation, this privilege of renewal shall be exercised only once.

...

(c) The provisions of subsection (a) of this Code section granting a privilege of renewal shall apply if an action is discontinued or dismissed without prejudice for lack of subject matter jurisdiction in either a court of this state or a federal court in this state.

Appellants cannot use this statute because they did not dismiss or discontinue the suit. Thus, we do not address the issue of what effect a state statute might have had on our analysis.

10 not intend the statute of limitation to bar a plaintiff who brings a timely FELA

action in a state court of competent jurisdiction ....” Id. at 432, 85 S. Ct. at 1057.

Here, the Appellants filed in a court that could not hear their claim, so the analogy

to Burnett fails.

Additionally, this Court has found that Burnett’s logic did not apply in a

similar situation involving the Death on the High Seas Act, which this court

assumed also grants exclusive federal jurisdiction. See Bailey v. Carnival Cruise

Lines, Inc., 774 F.2d 1577, 1581 (11th Cir. 1985). There, the plaintiff also

erroneously filed in state court and argued that this filing tolled the statute of

limitations under the doctrine enunciated in Burnett. This Court rejected that

argument because the act in question, unlike FELA, did not grant concurrent

jurisdiction. Id.6 Because § 4072 also does not permit concurrent jurisdiction, we

hold that filing in a court without competent jurisdiction did not toll the statute of

limitations.

III. CONCLUSION

We hold that the district court properly held that § 4072 rebuts the

6 The district court in James v. Auto Owners Insurance Co., No. CV498-182, 1998 WL 914241 (S.D. Ga. Dec. 10, 1998), reached the same result for flood insurance cases.

11 presumption of concurrent jurisdiction and thus properly held that the state court

did not have jurisdiction of appellants’ suit. We also hold that the filing in state

court did not toll the statute of limitations.

AFFIRMED.