Opinion
Civil Action No. 02-2376-DJW.
June 30, 2004
MEMORANDUM AND ORDER AND ORDER TO SHOW CAUSE
Pending before the Court is Defendant Tim Reece's Motion to Dismiss for Lack of Subject Matter Jurisdiction (doc. 64). Reece argues that Plaintiff asserts only one claim against him, a state law claim for endorser liability. He contends that the Court lacks jurisdiction over that claim because there is no diversity jurisdiction pursuant to 28 U.S.C. § 1332 and no federal question jurisdiction pursuant to 28 U.S.C. § 1331. Plaintiff counters that he has asserted two claims against Reece, one arising under federal law, i.e., the Packers and Stockyards Act, and one arising under state law for breach of the endorsement contract. He argues that the Court has federal question jurisdiction by virtue of the claim arising under the Packers and Stockyards Act, and more specifically, 7 U.S.C. § 209. He argues that the Court has supplemental jurisdiction over his state law claim pursuant to 28 U.S.C. § 1367.
7 U.S.C. § 181, et seq.
7 U.S.C. § 209 provides that a party may bring an action in United States district court to recover damages against any person subject to the Packers and Stockyards Act who violates any of its provisions.
The Court finds that Plaintiff has not pled any cause of action against Defendant Reece arising under the Packers and Stockyards Act. Nothing in the Pretrial Order (doc. 48) reveals that Plaintiff is asserting a claim under that Act against Reece. In Paragraph 6.a of the Pretrial Order, Plaintiff asserts that he "is entitled to recover against Tim Reece as an endorser of the dishonored Check No. 9146 in the sum of $186,780.39." Similarly, in Paragraph 7.a of the Pretrial Order, Plaintiff describes his "First Theory of Recovery" as "Endorsement Liability of Tim Reece." Plaintiff's "Second Theory of Recovery" is described as recovery under the "Bond of the Hartford and P H Cattle Company," and is asserted against Defendants Hartford Fire Insurance Company ("Hartford") and P H Cattle Company, Inc. ("P H Cattle").
Pretrial Order (doc. 48), ¶ 6.a.1.
Id., ¶ 7.a.i.
Id., ¶ 7.a.ii.
Admittedly, the Pretrial Order does allege that Reece is "a clause three clearee who purchased cattle for which the purchase price has not been paid." Plaintiff contends that this allegation is sufficient to plead a Packers and Stockyards Act claim against Reece. This argument fails for two reasons. First, the mere fact that a party is "a clause three clearee" within the meaning of the Packers and Stockyards Act does not in any way impose liability against that party under the Act. Second, the Pretrial Order never alleges that Reece is liable to Plaintiff under the Act or that Reece himself violated the Act. Rather, the Pretrial Order alleges that Hartford "is liable as surety because P H Cattle Company, Inc. has listed Tim Reece as a clearee on the bond. As such pursuant to the Packers and Stockyards Regulation, Section 201.31(c), it [i.e., Hartford] is responsible for the obligations of clearees to pay the purchase price for all livestock purchased by the clearees. . . ." The Pretrial Order further alleges that "P H Cattle Company, Inc., by placing him [i.e., Reece] on the bond and The Hartford Insurance Company as surety on said bond[,] is responsible, to the extent of the bond, for the purchase price of the cattle." In other words, the Pretrial Order alleges that the only two Defendants liable under the Packers and Stockyards Act are Hartford and P H Cattle.
Id. ¶ 6.a.3.
Id., ¶ 6.a.2 (emphasis added).
Id., ¶ 6.a.3.
It is well settled that the pretrial order controls "the subsequent course of the action." The pretrial order is used to sharpen, clarify, and simplify the issues for trial, and "represents a complete statement of all the contentions of the parties." Consequently, once the triable theories of recovery and issues have been set forth in the pretrial order, any issues, contentions, and claims that are not preserved therein are eliminated from the action, and the Court may reject them and any efforts to modify existing ones.
Koch v. Koch Indus., Inc., 179 F.R.D. 591, 596 (D. Kan. 1998) (quoting Trujillo v. Uniroyal Corp., 608 F.2d 815, 817 (10th Cir. 1979)). See also D. Kan. Rule 16.2(c) ("The pretrial order, when approved by the court and filed with the clerk, together with any memorandum entered by the court at the conclusion of the final pretrial conference, will control the subsequent course of the action unless modified by consent of the parties and court, or by an order of the court to prevent manifest injustice.").
Koch, 179 F.R.D. at 596 (quoting Trujillo, 608 F.2d at 817).
Hullman v. Bd. of Tr. of Pratt Cmty. Coll., 950 F.2d 665, 668 (10th Cir. 1991); Century Ref. Co. v. Hall, 316 F.2d 15, 19 (10th Cir. 1963); Koch, 179 F.R.D. at 596.
No claim under the Packers and Stockyards Act has been asserted against Reece in the Pretrial Order. As no such claim has been preserved in the Pretrial Order, the Court can find no basis to assert federal question jurisdiction over Reece.
The Court will now consider whether jurisdiction exists over Reece pursuant to 28 U.S.C. § 1367. Subsection (a) of that statute states as follows:
Except as provided in subsections (b) and (c) or as expressly provided otherwise by Federal statute, in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties.
Plaintiff argues that because the Court has original, i.e., federal question, jurisdiction over Defendants Hartford and P H Cattle pursuant to the Packers and Stockyards Act, the Court should exercise supplemental jurisdiction over the state law claim asserted against Reece. This argument must be addressed in light of the recent change in status of this case. Plaintiff recently notified the Court that Plaintiff has settled its claims against Hartford and P H Cattle. Hartford and P H Cattle will therefore be dismissed from the action. Pursuant to 18 U.S.C. § 1367(c)(3), the court may decline to exercise supplemental jurisdiction over a claim if "the district court has dismissed all claims over which it has original jurisdiction." And in fact, "the most common response to a pretrial disposition of federal claims has been to dismiss the state law claim or claims without prejudice," as advocated by United Mine Workers v. Gibbs, confirmed in Carnegie-Mellon University v. Cohill, and repeated in a number of Tenth Circuit cases such as Ball v. Renner and Sawyer v. County of Creek.
Ball v. Renner, 54 F.3d 664, 669 (10th Cir 1995).
908 F.2d 663, 668 (10th Cir. 1990).
As the federal claims against Hartford and P H Cattle are no longer a part of this lawsuit, Plaintiff's state law claim against Reece, and Reece's state law counterclaim against Plaintiff, are no longer "supplemental" to any federal question claims. The Court therefore directs Plaintiff to show cause in a pleading filed by July 7, 2004, why the Court should not dismiss without prejudice Plaintiff's action against Defendant Reece and Reece's state law counterclaim against Plaintiff, pursuant to 28 U.S.C. § 1367(c)(3). The Court will defer ruling on Reece's pending Motion to Dismiss for Lack of Subject Matter Jurisdiction (doc. 64) until such time as Plaintiff has responded to this Show Cause Order.
See Pretrial Order (doc. 48), ¶¶ 6.c, 7.c.
Reece apparently has no objections to such a dismissal of his counterclaim, as Reece was the party to file the pending Motion to Dismiss for Lack of Subject Matter Jurisdiction.
In addition, as this matter is set for trial on July 14, 2004, the Court needs to determine whether the three days scheduled for the trial need to be kept available on the Court's calendar. In that regard, and as a result of the settlement of Plaintiff's claims against Hartford and P H Cattle, the Court directs Plaintiff, Hartford, and P H Cattle to file any stipulation of dismissal of the claims against Hartford and P H Cattle on or before July 7, 2004. IT IS THEREFORE ORDERED that Plaintiff shall show cause in a pleading filed by July 7, 2004, why the Court should not dismiss without prejudice Plaintiff's action against Defendant Tim Reece and Tim Reece's state law counterclaim against Plaintiff, pursuant to 28 U.S.C. § 1367(c)(3).
IT IS FURTHER ORDERED that Plaintiff, Defendant Hartford Fire Insurance Company, and Defendant P H Cattle Company, Inc. shall file any stipulation of dismissal of the claims against said Defendants on or before July 7, 2004.