Opinion
03 C 4889
August 26, 2003
OPINION
One of the co-defendants in this case, Shirley Smalley, seeks remand of the Complaint for Declaratory Judgment. She contests the sufficiency of the Notice of Removal and argues that this Court lacks subject matter jurisdiction. On at least one basis she is correct.
As its basis for federal subject matter jurisdiction, the School District contends that an Offer of Judgment pursuant to Federal Rule of Civil Procedure 68 "provides a unique right created by federal law" and a "substantive property of value." Accordingly, so the District argues, a "determination of the issues surrounding the substantive property rests solely within the province of federal court jurisdiction." Beyond Rule 68, the District offers no other federal statute or regulation to support federal jurisdiction.
In Pineville Real Estate Operation Corp. v. Michael, 32 F.3d 88 (4th Cir. 1994), the Fourth Circuit Court of Appeals noted that the "[Federal] Rules themselves provide that they are not to be construed to limit or extend the jurisdiction of the district courts." Id. at 90 (citing Fed.R.Civ.P. 82). This point is also well stated in the Fifth Circuit case, Port Drum Co. v. Umphrey, 852 F.2d 148 (5th Cir. 1988), that the Rules are not "laws" in the sense intended in 28 U.S.C. § 1331, and that they cannot be the basis for federal question jurisdiction:
The rules, then, only implement the exercise of jurisdiction otherwise conferred by Congress and do not provide an independent basis for parties without any other jurisdictional grant to get into federal court in the first place. . . . A contrary analysis would be circular and would defeat the concept of federal jurisdiction as limited.
Id. at 149-50 (emphasis in original). In sum, "[i]nterpretation of the Federal Rules of Civil Procedure . . . does not present a federal question for purposes of conferring federal subject matter jurisdiction under § 1331." Pineville Real Estate Operation Corp., 32 F.3d at 90. And even though these decisions from the Fourth and Fifth Circuit are technically non-binding authority, a district court should apply precedent from outside the circuit in the absence of binding precedent from within (which is the situation here), see Colby v. J.C. Penney Co. Inc., 811 F.2d 1119, 1123 (7th Cir. 1987), unless the Court is convinced those holdings are erroneous (which is not the situation here), see United States Trustee v. Pettibone Corp., 251 B.R. 335 (N.D.Ill. 2000). Accordingly, because the District asserts no other basis for federal jurisdiction but Rule 68, the Complaint is remanded.
In the event of a remand, Smalley also requests an award of fees and costs. A party who successfully objects to removal and obtains an order remanding the case to state court may be awarded a fee shifting pursuant to 28 U.S.C. § 1447(c) to make that successful litigant whole. Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 410 (7th Cir. 2000). "Fees and costs under section 1447(c) are discretionary, and the court looks to both the complexity of the case and whether the defendant presented a substantial jurisdictional question in evaluating the propriety of removal." Teta v. Packard, 959 F. Supp. 469, 477 (N.D.Ill. 1997). The District argues that even if all or part of this case is remanded (as it is), Smalley is not entitled to fees or costs because the District presented a "reasonable argument and valid jurisdictional questions." Although I do not find bad faith on the part of the District, yet its argument for federal subject matter jurisdiction was not "reasonable" or "valid" in light of Rule 82's clear provision that a federal rule cannot be the basis of federal question jurisdiction and a line of cases consistently holding the like. Accordingly, I award fees and costs to Smalley, and I retain jurisdiction, upon entry of order remanding this case to the Circuit Court of Cook County, for the sole issue of determining the amount of fees and costs to be awarded.
For the reasons above, Smalley's Motion to Remand is GRANTED.