Opinion
CIVIL ACTION No. 99-1400-CM.
November 29, 2000.
MEMORANDUM AND ORDER
The instant lawsuit arises out of a construction accident occurring in Olathe, Kansas. Defendant Crane Construction Company, Inc. (Crane) filed a motion to dismiss (Doc. 27), claiming that the court lacks subject matter jurisdiction over the matter. For reasons discussed more fully below, the court grants defendant's motion.
I. Standard
Federal Rule of Civil Procedure 12(b)(1) empowers a court to dismiss a complaint for "lack of jurisdiction over the subject matter." The presence or absence of federal question jurisdiction is governed by the well-pleaded complaint rule. Thus, when a party moves to dismiss a pleading because the pleading does not establish sufficient grounds for the court's jurisdiction, whether the district court has jurisdiction "must be determined from the allegations of fact in the complaint, without regard to mere conclusory allegations of jurisdiction." Groundhog v. Keeler, 442 F.2d 674, 677 (10th Cir. 1971).
II. Background
Plaintiff's first amended complaint sets forth the following allegations: In August 1997, defendant Home Depot, USA, Inc. (Home Depot) hired Crane as the primary contractor for the construction of a Home Depot Store in Olathe, Kansas. In turn, Crane retained defendant Northwest Arkansas Masonry, Inc. (Northwest) as a subcontractor. Northwest was primarily responsible for the masonry and construction of the brick walls. In September 1997, plaintiff became employed by Northwest as a brick layer. On his first day at the job, plaintiff was involved in an accident involving a scaffold that collapsed.
Following the accident, the Occupational Safety and Health Administration inspected the job site. The investigator found that violations had been committed by Northwest. In 1998, Northwest stipulated to the violations, agreed to pay a fine, and agreed to take appropriate corrective action.
Plaintiff filed the instant action against Home Depot, which was originally based on diversity jurisdiction. Plaintiff later amended his complaint, adding Crane and Northwest as defendants. Plaintiff stated in his amended complaint that the court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332. Pertinent to the motion at issue here, plaintiff's amended complaint also alleged that he is a citizen of Arkansas, that Northwest is a corporation organized and operating under the laws of Arkansas, and that, pursuant to 29 C.F.R. § 1926.16, Crane is jointly liable for the tortious conduct of Northwest.
III. Discussion
Defendant Crane contends that the court lacks subject matter jurisdiction over this case. Defendant points to the fact that plaintiff asserted in his amended complaint that jurisdiction is based on 28 U.S.C. § 1332, which requires that the amount in controversy exceed $75,000 and that the dispute be between citizens of different states. For jurisdictional purposes, diversity of citizenship requires complete diversity, meaning that the citizenship of each plaintiff must be diverse from the citizenship of each defendant. Caterpillar, Inc. v. Lewis, 519 U.S. 61, 67-68 (1996). A corporation is deemed to be a citizen of any state in which it is incorporated. 29 U.S.C. § 1332(c)(1). As such, defendant claims that, because plaintiff and Northwest are both alleged to be citizens of Arkansas, complete diversity is lacking.
Plaintiff counters by arguing that his amended complaint is based upon both diversity and federal question jurisdiction. With respect to his claim that federal question jurisdiction exists, plaintiff contends that a substantive federal question is presented concerning the interpretation of a federal regulation, 29 C.F.R. § 1926.16. Regarding his claim that complete diversity is present, plaintiff asserts that Northwest may never become a party to the lawsuit because of plaintiff's inability to effectuate service of process. Plaintiff further argues that Northwest is not a necessary or indispensable party and that, as a result, complete diversity would exist absent Northwest as a party defendant. Northwest is not necessary or indispensable, plaintiff argues, because 29 C.F.R. § 1926.16 imposes joint liability upon prime contractors and subcontractors and, as such, plaintiff may pursue judgment against Crane without Northwest's presence in the lawsuit.
Plaintiff states that he has been unable to locate the resident agent of Northwest or any of its prior officers to serve process. It is plaintiff's understanding that Northwest has since been dissolved and has ceased to actively conduct business.
A. Federal Question Jurisdiction
A federal court has jurisdiction to hear cases "arising under" the laws of the United States. 28 U.S.C. § 1331. A case arises under federal law when "federal law creates the cause of action or . . . the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law." Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1, 13 (1982); see also Morris v. City of Hobart, 39 F.3d 1105, 1111 (10th Cir. 1994). Thus, even though state law may create a party's cause of action, the case may still arise under the laws of the United States if it "clearly and substantially involves a dispute or controversy respecting the validity, construction or effect of [a federal law] which is determinative of the resulting judgment." Mountain Fuel Supply Co. v. Johnson, 586 F.2d 1375, 1381 (10th Cir. 1978). Plaintiff contends that, to the extent that Crane contends it cannot be held jointly liable, or that it can compare its fault to that of Northwest, or that federal law does not operate to create joint liability, a federal question exists regarding the meaning and interpretation of 29 C.F.R. § 1926.16.
Plaintiff's mere reference to a federal regulation is, in and of itself, insufficient to confer federal jurisdiction. Otherwise, plaintiffs could easily usurp the requirements for federal question jurisdiction by merely inserting a cite to a federal law or federal regulation. To determine whether a case truly arises under the laws of the United States, the court must decide whether the validity, construction, or effect of a federal law is at issue. Moreover, the court may decide whether a federal law does or does not confer jurisdiction without, necessarily, deciding such a dispute sufficient to confer jurisdiction. Donofry v. Nazareth Hosp., 721 F. Supp. 732, 734 (E.D.Pa. 1989).
1. Application of 29 C.F.R. § 1926.16
Section 107 of the Contract Work Hours and Safety Standards Act (CWHSS Act), 40 U.S.C. § 327 et seq., predated the Occupation Safety Health Act of 1970 (OSHA) and applies to federally funded contracts for construction which are described at 29 C.F.R. § 1926.11. When Congress passed OSHA, it included at 29 U.S.C. § 653 (b)(2) as part of OSHA the standards previously promulgated by the Secretary of Labor under the provisions of the CWHSS Act. Also, the Secretary of Labor was authorized to use existing federal standards and incorporate them as they apply to employers encompassed within the scope of OSHA. The difference between the two is that the safety standards promulgated under the CWHSS Act pertain only to federally funded projects, and those promulgated under OSHA apply to all employers "affecting commerce."
Federal regulation 29 C.F.R. § 1926.16, which is the regulation cited by plaintiff, states that, regardless of any contractual agreement between the prime contractor and subcontractors, the prime contractor assumes the obligation for enforcement of pertinent regulations. The Act referenced in § 1926.16(b) refers to the CWHSS Act. See also 29 C.F.R. § 1926.1 ("This part sets forth the safety and health standards promulgated by the Secretary of Labor under section 107 of the Contract Work Hours and Safety Standards Act."). The result is that prime contractors who perform work under § 107 of the CWHSS Act have a nondelegable duty for worker safety pursuant to federal regulations.
The court is unclear at this point whether 29 C.F.R. § 1926.16 applies to this case. The CWHSS Act, under which 29 C.F.R. § 1926.16 was promulgated, applies to public works contracts. 40 U.S.C. § 329(a). The facts as alleged by plaintiff do not appear to bring the contract at issue within the scope of the CWHSS Act. Rather, plaintiff's amended complaint alleges a contract between two private entities for the construction of a private commercial building. Plaintiff's First Amended Complaint, ¶ 7 ("On August 4, 1997, defendant Home Depot contracted with Crane for the construction of a Home Depot store in Olathe, Kansas."). As such, the regulation upon which plaintiff relies to confer federal question jurisdiction may not apply to this case at all.
Notwithstanding, the court finds that, even if 29 C.F.R. § 1926.16 did apply, any decision regarding its validity, construction or effect is not determinative of the resulting judgment and, as such, federal question jurisdiction is lacking. A review of plaintiff's complaint reveals that he has asserted only state law claims, namely, claims for negligence and breach of contract. Plaintiff, however, also included in his complaint a list of OSHA violations committed by Northwest and asserted that Northwest and Crane's violation of "applicable laws, codes and professional standards was willful, reckless, and wanton." Plaintiff's First Amended Complaint, ¶ 31. But it is clear that OSHA does not create a private cause of action on behalf of injured workers. 29 U.S.C. § 653(b)(4) ("Nothing in this Act shall be construed . . . to enlarge or diminish or affect in any other manner the common-law or statutory rights, duties, or liabilities of employers and employees. . . ."); see also Ellis v. Chase Communications, 63 F.3d 473, 478 (6th Cir. 1995); Mason v. Ashland Exploration, Inc., 965 F.2d 1421, 1425 (7th Cir. 1992). Indeed, OSHA standards may not be introduced as evidence for any reason relating to civil liability. McHargue v. Stokes Div. of Pennwalt Corp., 912 F.2d 394, 396 (10th Cir. 1990). Nor does the CWHSS Act provide employees with a private cause of action. Koren v. Martin Marietta Servs., Inc., 997 F. Supp. 196, 211 (D.P.R. 1998). Thus, plaintiff cannot assert a private cause of action based upon Northwest's OSHA violations or upon the CWHSS Act. Indeed, plaintiff does not allege that Northwest violated standards promulgated under the CWHSS Act.
The fact that plaintiff cannot assert a private cause of action is key in determining whether plaintiff's reference to 29 C.F.R. § 1926.16 confers jurisdiction. The regulation provides that the prime contractor and subcontractor are deemed to have joint responsibility "for complying with the standards in this part" and that, where joint responsibility exists, the two "shall be considered subject to the enforcement provisions of the [CWHSS] Act." 29 C.F.R. § 1926.16(c) (d). The regulation does not, on its face, have any bearing on whether a prime contractor and subcontractor share joint liability in civil litigation. Because there is no cause of action under OSHA or the CWHSS Act, the potential joint responsibility for violations does not impact the question of joint liability for an action based on negligence and breach of contract. Indeed, joint liability for such civil actions is a separate determination apart from the issue of who must, for example, pay fines and take corrective actions for violations of OSHA standards.
Plaintiff's right to relief does not necessarily depend on resolution of a substantial question of 29 C.F.R. § 1926.16, which is required to confer federal question jurisdiction in these circumstances. See Gaines-Tabb v. Mid-Kansas Coop. Assoc., 980 F. Supp. 1424, 1428 (D.Kan. 1997) (finding federal question jurisdiction lacking where plaintiff's action did not require resolution of substantial question regarding United States Department of Transportation Hazardous Materials Regulation). The fact that a state law cause of action may require reference to a federal law or federal regulation is simply not enough. Merrell Dow Pharm., Inc. v. Thompson, 478 U.S. 804, 808-12 (1986). In this civil action, because plaintiff's claims cannot be premised on Northwest's OSHA violations, joint responsibility for any such violations is not determinative of the resulting judgment. In other words, plaintiff's rights will not be affected by a determination regarding the validity, construction, or effect of OSHA or regulations promulgated pursuant to the CWHSS Act. To the extent that some construction of 29 C.F.R. § 1926.16 is necessary, a state court can interpret and apply the regulation in this case. The court therefore finds that federal question jurisdiction is lacking.
B. Diversity Jurisdiction
As alleged in plaintiff's first amended complaint, both plaintiff and Northwest are citizens of Arkansas. As such, it appears that complete diversity is lacking. Plaintiff contends that Northwest is technically not a party to the suit because it has not yet been served with process. However, in the absence of actual dismissals, diversity jurisdiction must be determined from the face of the complaint and not from returns of service of process or lack thereof. United States for the Use and Benefit of General Rock Sand Corp. v. Chuska Dev. Corp., 55 F.3d 1491, 1496 (10th Cir. 1995). Thus, in this case, the fact that Northwest has not been served with process is irrelevant to the issue of whether diversity jurisdiction exists. Rather, the court must determine whether Northwest may be dismissed from this suit.
Federal Rule of Civil Procedure 21 states that a party "may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just." This circuit has interpreted Rule 21 rule to mean that a party may be dismissed in order to achieve diversity of citizenship if that party's presence is not essential to a just and meaningful adjudication. Oppenheim v. Sterling, 368 F.2d 516, 518 (10th Cir. 1996). Accordingly, the court cannot dismiss an indispensable party. Fed. Rule Civ. P. 19(b).
In determining whether Northwest is an indispensable party, the court must first decide whether Northwest is a necessary party under Federal Rule of Civil Procedure 19(a). Rule 19(a)(2)(ii) states that a party shall be joined if the party's absence may leave any of the remaining parties subject to a substantial risk of incurring multiple or inconsistent obligations. Since it is the prime negligence of Northwest which gives rise to the potential liability of Crane in this case, the absence of Northwest prevents complete relief from being accorded to the remaining parties.
Plaintiff argues that Northwest is not a necessary party because 29 C.F.R. § 1926.16 imposes joint liability on Northwest and Crane. Indeed, where parties are subject to joint liability, a joint tortfeasor is merely a permissive party. Resolution Trust Corp. v. Stone, 998 F.2d 1534, 1550 (10th Cir. 1993). In this case, however, the court already has determined that, while 29 C.F.R. § 1926.16 imposes joint responsibility for violations of the CWHSS Act, the regulation does not necessarily impose joint liability in civil lawsuits. Thus, plaintiff's argument fails, and the court determines that Northwest is a necessary party.
Having determined that Northwest is a necessary party, the court must now examine whether "in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person thus regarded as indispensable." Fed.R.Civ.P. 19(b). Without Northwest as a party to this action, plaintiff could reap a potential windfall recovery if plaintiff filed a suit against Northwest in another forum. Additionally, Crane and Home Depot could be exposed to liability in excess of their culpability if Northwest is absent from this suit. Finally, the court notes that plaintiff has an adequate remedy if the action is dismissed. Plaintiff could easily bring this action in a Kansas state court. The court finds that Northwest is an indispensable party. Accordingly, because Northwest's presence defeats complete diversity, and because the court already concluded that no federal question jurisdiction exists, the court hereby dismisses the action due to the court's lack of subject matter jurisdiction.
IT IS THEREFORE ORDERED that defendant's motion to dismiss (Doc. 27) is granted, and the case is hereby dismissed.
Dated this 29th day of November ___, 2000, at Kansas City, Kansas.