A Procedural Rollercoaster: A Case For Amendment of Section 1442 to Abrogate the Doctrine of Derivative Jurisdiction.
Shelby Mohr*
* J.D. Candidate 2025, Indiana University Robert H. McKinney School of Law; B.A. 2022, Butler University. Shelby is the current Editor-in-Chief of Indiana Law Review.
Thank you to Professor Cooper and Professor Wright for their wonderful advisement during the note-writing process.
Introduction
On September 19, 2019, a United States Postal Service (“USPS”) vehicle struck Mr. and Mrs. Yonts.[i] Following the accident, Mrs. Yonts filed a complaint in the Hancock Circuit Court, against the driver, Mr. Goodin.[ii][iii] She alleged a state-law negligence claim, seeking damages for “personal injury, medical expenses, and physical pain and suffering.”[iv] However, because the United States Attorney certified that Goodin was acting within the scope of his employment when the accident occurred, the United States was substituted as the defendant under the Federal Employees Liability Reform Act.[v] The United States then filed for removal under 28 U.S.C. § 1442(a)(1), the federal officer removal statute.[vi]
After removal, the United States moved to dismiss the case, arguing that under the doctrine of derivative jurisdiction, the federal court lacked subject matter jurisdiction over the claim.[vii] The district court granted the dismissal, finding that although the issue involved a federal question, the court lacked subject matter jurisdiction because the state court never had proper jurisdiction to hear the case.[viii] Thus, this strange procedural bar resulted in the dismissal of Mrs. Yonts’ claim due to lack of subject matter jurisdiction, even though a district court usually could properly exercise subject matter jurisdiction over a federal question. If Mrs. Yonts continued to seek claims for relief arising out of the incident, she could have re-filed those same claims in the same district court that dismissed the prior action.[ix] But Mrs. Yonts did not re-file her suit. Consequently, the FTCA’s two-year statute of limitations forever bars her claims arising from the incident.[x]
The strange procedural route and outcome in Yonts exemplifies a current loophole-esque issue in some removal cases: the doctrine of derivative jurisdiction.[xi] The doctrine states that when a party removes a case to a federal court, the federal court derives its subject matter jurisdiction from the state court.[xii] Thus, the federal court only has proper jurisdiction if the state court does.[xiii] This strange procedural concept is mostly a relic of past common law, as Congress has abrogated the application of derivative jurisdiction in cases removed under the general removal statute, 28 U.S.C. § 1441.[xiv]
However, for unknown reasons, Congress failed to abrogate the application of derivative jurisdiction in cases removed under the federal officer removal statute, 28 U.S.C. § 1442.[xv] The failure to entirely abrogate the use of derivative jurisdiction has since caused individuals such as Mrs. Yonts to face years of litigation to receive damages against federal officers, only to see their cases dismissed for lack of subject matter jurisdiction in a federal court, which exercises exclusive jurisdiction over the cases. This process is nothing short of a loophole, leading to significant issues of judicial inefficiency and economy.
This post discusses the issues derivative jurisdiction creates and possible solutions. First, Part I summarizes relevant jurisdictional terms, code sections, and Congressional Acts relating to derivative jurisdiction. Second, Part II delves into recent case law from the Seventh Circuit to illustrate the application of derivative jurisdiction in suits. Third, Part III discusses how the doctrine of derivative jurisdiction damages the judicial economy. Finally, Part IV presents two possible solutions. First, for Congress to abrogate the doctrine of derivative jurisdiction through the amendment of 28 U.S.C. § 1442, allowing federal courts to hear cases removed over which they would otherwise have proper jurisdiction. Alternatively, a solution for courts to allow an amendment to parties’ complaints under Rule 15 of the Federal Rules of Civil Procedure (“FRCP”) to name the federal court as the court of proper jurisdiction to avoid dismissing the case.
I. Overview of Relevant Jurisdictional Terms
A. Subject Matter Jurisdiction
For a court to properly adjudicate a claim, it must have jurisdiction over the case.[xvi] Proper jurisdiction occurs when “a court [has] the power and authority to do a particular act; one recognized by law as possessing the right to adjudicate a controversy.”[xvii] A federal court possesses the right to adjudicate a controversy if the court has both proper subject matter jurisdiction and personal jurisdiction over the case.[xviii] Derivative jurisdiction does not pertain to personal jurisdiction. Therefore, this discussion focuses on subject matter jurisdiction.
Subject matter jurisdiction “‘defines the court’s authority to hear a given type of case,’ . . . it represents ‘the extent to which a court can rule on the conduct of persons and the statutes of things.’”[xix] In other words, subject matter jurisdiction relates to the case’s legal issues. Subject matter jurisdictional requirements may be satisfied by either general or limited subject matter jurisdiction.[xx] State courts exercise general jurisdiction, permitting them to hear cases arising under state and federal law.[xxi] Because state courts exercise general subject matter jurisdiction, they can adjudicate all claims unless Congress has passed a provision granting exclusive jurisdiction to the federal courts or a “disabling incompatibility between the federal court and state-court adjudication” exists.[xxii]
However, federal courts are “courts of limited jurisdiction.”[xxiii] Congress codified in 28 U.S.C. § 1331 that “[t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”[xxiv] Congress supplemented this jurisdiction in 28 U.S.C. § 1332, which granted district courts “original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000 . . . and is between (1) citizens of different states.”[xxv] Thus, state courts have much broader jurisdictional powers, while federal courts are limited to hearing cases that contain a federal question or meet federal diversity requirements.
B. The Federal Torts Claim Act
Congress can limit state court’s general jurisdiction.[xxvi] Congress limited state courts’ general jurisdiction in the Federal Tort Claims Act (“FTCA”).[xxvii] The FTCA is a systematic legal approach to resolving monetary claims for “personal injury, property damage, and death” that occur because of the negligence of a government officer performing their official duties.[xxviii]
Because FTCA claims concern incidents involving a government officer acting within the scope of their official duties, Congress granted exclusive jurisdiction to federal courts because they were specifically equipped to adjudicate these claims.[xxix] 28 U.S.C. § 1346 codifies the jurisdictional rules for when the United States is a defendant.[xxx]Under Section 1346, “ the district courts shall have original jurisdiction . . . (2) for any other civil action or claim against the United States, not exceeding $10,000 in amount, founded on either upon the Constitution or any Act of Congress.”[xxxi] Therefore, because Congress has given federal district courts original jurisdiction over FTCA claims, state courts do not have the proper jurisdiction to adjudicate FTCA claims.
C. Removal
Issues concerning proper subject matter jurisdiction may arise when a defendant attempts to remove a case from a state court to a federal court. Removal, codified in 28 U.S.C. § 1441, is “the power of defendants in some state civil suits to move the case to federal court” that could have been brought in federal court.[xxxii]
Section 1441 is the general removal statute.[xxxiii] However, 28 U.S.C. § 1442 is a specific removal statute that puts forth the requirements for removal when a case involves federal officers of agencies either being sued or prosecuted.[xxxiv] Section 1442 allows for removal from a state court to a proper federal district court when a federal officer is sued for actions that occurred while performing their official duties[xxxv]
D. Intervention
When a suit arises against a federal officer for events occurring during official duty performance, the United States often intervenes.[xxxvi] Intervention, as governed by FRCP 24, allows for “the entry into a lawsuit by a third party into an existing civil case who was not named as an original party but had a personal stake in the outcome.”[xxxvii] FRCP 24, therefore, allows parties not named as defendants to intervene in a case if it would directly affect them.[xxxviii]
FRCP 24(b)(2) specifically addresses intervention by a government officer or agency.[xxxix] According to FRCP 24(b)(2), when a federal officer is sued for an incident arising out of conduct while the federal officer was performing their official duties, the United States Government may intervene in the suit and replace the officer as the defendant.[xl]
E. Derivative Jurisdiction
When a defendant properly removes a case from state court to federal court, an issue that may arise is the doctrine of derivative jurisdiction.[xli] The common law doctrine of derivative jurisdiction purports that when a case is removed, the federal courts do not gain jurisdiction over subject matters upon the removal.[xlii] Under the doctrine, “if [a] state court lacks jurisdiction of the subject matter or the parties, the federal court acquires none, although it might in a like suit originally brought there have had jurisdiction.”[xliii] In other words, the federal court derives its jurisdiction from the state court the case was brought in, and the federal court only has the same jurisdiction as the state court.
The doctrine of derivative jurisdiction may arise in a defendant’s motion for dismissal for lack of subject matter jurisdiction if the state court did not have proper jurisdiction over the action.[xliv] The district court must then grant this motion for lack of subject matter jurisdiction, even if the federal court has proper jurisdiction over the subject matter because the state court did not initially exercise proper jurisdiction.[xlv]
F. The Judicial Improvements Act of 1985
The doctrine changed greatly after the enactment of The Judicial Improvements Act of 1985.[xlvi] The Act amended the general removal statute, Section 1441.[xlvii] The amendment specifically abrogated the doctrine of derivative jurisdiction and, instead, created a system in which the federal courts statutorily derive their jurisdiction.[xlviii]The amendment to Section 1441 is found in Section 3. Removal Jurisdiction and states:
(a) Section 1441 Amendment – Section 1441 of title 28, United States Code, is amended by adding at the end the following new subsection:
(e) The court to which such civil action is removed is not precluded from hearing and determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.[xlix]
Thus, this amendment successfully abrogated the use of derivative jurisdiction in cases removed to the federal courts under Section 1441. Therefore, federal district courts would not derive their jurisdiction from the state court. Instead, they could hear any case where the federal court has proper subject matter jurisdiction as prescribed by the statutory code Sections 1331 and 1332.[l]
However, in The Act, Congress only abrogated derivative jurisdiction in claims removed under Section 1441.[li]Congress did not address Section 1442, the federal officer removal statute. It is unknown why Congress abrogated derivative jurisdiction in cases removed under Section 1441 but not Section 1442. The omission of reference to Section 1442 was likely an “unintentional drafting gap” as neither the legislative notes of the Amendment nor any other source explains the exclusion.[lii] When addressing the gap, courts have commented that “for whatever reasons––Congress intended to keep the doctrine in place with regard to other removal provisions.”[liii] Therefore, because the doctrine of derivative jurisdiction still applies to cases removed under Section 1442, federal courts derive subject matter jurisdiction from state courts.[liv]
II. The Seventh Circuit’s Current Derivative Jurisdiction Jurisprudence
Although amending Section 1441 abrogated derivative jurisdiction’s application in most removal cases, removal still occurs under Section 1442 when federal officers are involved. Therefore, the issues and dismissals required by the derivative jurisdiction doctrine are still commonplace in cases removed under Section 1442. When cases are dismissed because of derivative jurisdiction, the doctrine acts more as a loophole for the government. Courts have offered disfavoring notions towards the doctrine, yet precedent mandates its application.[lv] The next section will explore recent cases arising in the Seventh Circuit that involved the doctrine. These cases exemplify the strange procedural loophole and the Seventh Circuit’s current outlook toward the doctrine.
A. The Southern District of Indiana’s Approach to Derivative Suits under U.S.C. § 1442
(1) The Yonts Case
In the aforementioned Yonts case, the District Court favored dismissing the case because of the doctrine of derivative jurisdiction and denied Mrs. Yonts’ motion to amend the complaint.[lvi] The court reasoned that when she brought the suit, she did so against only Mr. Goodin for individual negligence.[lvii] However, under the FTCA, a federal employee is immune from tort claims if they arise during their official duties.[lviii] Thus, because Goodin acted within his official duties, the case is against the United States under the FTCA.[lix] Once the FTCA governs the claim, the suit must be removed from state court to federal court because, under the FTCA, the federal courts have exclusive jurisdiction.[lx]
The court reasoned that the substitution and removal were done correctly under the FTCA.[lxi] However, the federal court did not have proper jurisdiction, even though federal courts have exclusive jurisdiction over FTCA claims.[lxii] The court reasoned that upon removal, the federal court derived its jurisdiction from the state court because the case was removed under Section 1442, in which the doctrine of derivative jurisdiction still applies.[lxiii] The Hancock Circuit Court did not have subject matter jurisdiction over the case once it became a case under the FTCA.[lxiv] Thus, the court held that because the state court did not have proper jurisdiction upon removal, the federal court derived that improper jurisdiction and must dismiss the case.[lxv]
Lastly, the court held that Mrs. Yonts may not amend her complaint to give the District Court proper jurisdiction because derivative jurisdiction is a mandatory bar that cannot be circumvented through amendment.[lxvi]
If Mrs. Yonts wanted to receive damages for the accident caused by the federal employee, the court instructed her to re-file her claim in the district court.[lxvii] If she re-filed her claim, it would be in the same court that dismissed the claim for lack of jurisdiction. However, she did not re-file, and the FTCA’s two-year statute of limitations has run.[lxviii]Thus, Mrs. Yonts will never have her case heard on the merits or receive damages for the accident.[lxix]
(2) The Marcum Case
The strange procedural history that led to dismissal in Yonts is not unique, as multiple other cases have been dismissed in recent years in the Southern District of Indiana. Another plaintiff whose claims faced the same fate was Mr. Marcum. Marcum, a disabled veteran, worked for the Department of Veterans Affairs.[lxx] After receiving derogatory comments about his health, Marcum suspected that his medical records were impermissibly accessed from his medical provider, Roudebusch Veterans Affairs Medical Center.[lxxi] After these comments, Marcum filed an Equal Employment Opportunity complaint with the Veteran’s Affairs Office of Employment Discrimination Complaint Adjudication (“OEDCA”).[lxxii] The OEDCA issued a report that found two per se violations of the Rehabilitation Act and instructed Mr. Marcum to file in the “United States District Court.”[lxxiii] However, Marcum sued in the Marion County Superior Court against the two treating physicians.[lxxiv] The United States then intervened and removed the case to federal court under Sections 1442, 1445, and 2679(d).[lxxv] Upon removal, the United States moved to dismiss for lack of subject matter jurisdiction, invoking the doctrine of derivative jurisdiction.[lxxvi]
The District Court for the Southern District of Indiana decided this case, applying the same reasoning as the Yontscase.[lxxvii] The court granted the dismissal, reasoning that the FTCA governed Marcum’s claims, which the state court did not have jurisdiction over.[lxxviii] Thus, when the case was removed, the federal court derived the improper jurisdiction because of derivative jurisdiction.[lxxix] Marcum has not re-filed his claim in the District Court, missing his opportunity as the two-year statute of limitations under the FTCA has run.
Although this opinion signified an adherence to the application of the doctrine, the court offered statements doubting the doctrine. The court began its discussion by stating, “[t]his case raises a rare jurisdictional oddity . . . described by courts in this circuit as ‘[b]ewildering’ and has been ‘criticized a great deal over the course of many years.’”[lxxx] Further, the court ends its discussion by stating, “‘[t]he justification for the rule is hardly obvious’––it is nevertheless ‘binding on us.’”[lxxxi] These sentiments, often appearing in some form within district court opinions involving derivative jurisdiction, reveal the underpinnings of the district courts’ attitudes towards the doctrine.
These cases illuminate the consistent approach that the Southern District of Indiana takes for cases removed under Section 1442. The doctrine of derivative jurisdiction applies, and if the state court does not have proper jurisdiction, neither does the federal court.
B. The Seventh Circuit’s Precedence and Shift Against Derivative Jurisdiction in Ricci and Rodas
(1) The Seventh Circuit’s Reliance on the Supreme Court’s Decisions in Grubbs and Caterpillar
The jurisprudence of the Seventh Circuit Court of Appeals regarding derivative jurisdiction to cases removed under Section 1442 shows an ideological shift against its application. In the recent cases of Ricci and Rodas, the Seventh Circuit has applied the doctrine. Yet, it did so while offering tonally disfavoring commentary.[lxxxii]
The Seventh Circuit relied on two Supreme Court cases, Grubbs and Caterpillar, in the Ricci and Rodas decisions. In Grubbs and Caterpillar, the Supreme Court addressed the effects of procedural defects on the finality of judgments and created a process for determining whether the procedure is an essential portion of subject matter jurisdiction or, rather, a procedural defect.[lxxxiii] The framework created by these two cases is that if a process is an essential element of subject matter jurisdiction, it is “a latent and persistent defect in the subject matter jurisdiction of the federal courts, and then the issue can be raised at any time by anyone.” [lxxxiv] However, if, at its crux, the procedure does not create a defect in the proper subject matter jurisdiction of the courts and “constitutes a mere defect in the process by which a case reaches the federal court,” then the process is merely procedural, and not a persisting issue in the subject matter jurisdiction of the federal courts.[lxxxv]
Beyond creating a framework for determining whether a process is a subject matter jurisdiction issue or a procedural defect, Grubbs and Caterpillar created a framework for when the Appellate Courts may still preside over a case.[lxxxvi] The Supreme Court in Grubbs created the foundation, holding that on appeal, if “a case is tried on the merits without objection and the federal court enters judgment, the issue in subsequent proceedings on appeal is not whether the case was properly removed, but whether the federal district court would have had original jurisdiction of the case had it been filed in that court.”[lxxxvii] The Grubbs foundation is vital to understanding how the Supreme Court viewed procedural defects. Grubbs illuminates that if the issue is merely procedural, the Appellate Court looks at whether the district court would have had proper jurisdiction, not whether the district court did have appropriate jurisdiction.[lxxxviii]The Supreme Court expanded this idea in Caterpillar by expressing that “if a procedural defect in removal is cured by the time a judgment is entered, then practical concerns––finality, efficiency, and economy––mitigate in favor of retaining jurisdiction on appeal.”[lxxxix]
Thus, in tandem, Grubbs and Caterpillar create an essential new understanding of jurisdictional defects. The court’s framework emphasizes that jurisdictional issues do not necessarily supersede practical matters when the federal district courts could have had proper jurisdiction over the issues without procedural defects.[xc] The holding in Grubbs and Caterpillar created the understanding that although subject matter jurisdiction is never waivable, a procedural defect in removal is waivable, and the Appellate Courts may still preside over a case.[xci] The Seventh Circuit relies substantially upon the Supreme Court’s Grubbs and Caterpillar framework when shifting away from the doctrine of derivative jurisdiction in Rodas.[xcii]
(2) The Rodas Case
The Seventh Circuit’s first ideological shift away from the application of the doctrine of derivative jurisdiction came in Rodas. In 2001, Gloria Rodas sought care from the Crusaders Central Clinic (“Clinic”), which received federal funding.[xciii] Rodas was pregnant and had a plethora of treating physicians.[xciv] One of the physicians, Dr. Baxter, was employed by the Clinic and was therefore certified as a government employee for purposes of medical malpractice liability.[xcv] However, two treating physicians, Dr. Solenivoc and Dr. Seidlin, were not federal employees because they were contracted University of Illinois College of Medicine employees.[xcvi] During labor, Rodas experienced many complications delivering her child, Andrea.[xcvii] Because of the complications, Andrea Rodas passed away less than two weeks later.[xcviii] Following the death of Andrea, Rodas sued Dr. Baxter, Dr. Solenivoc, Dr. Seidlin, the Clinic, and Swedish American Hospital, alleging that the birth was negligently managed.[xcix]
The United States then intervened and substituted itself as a party for the Clinic and Dr. Baxter under 42 U.S.C. §§ 233(c) and 2679(d)(1).[c] However, because the action could only proceed against the United States under the FTCA, Rodas first had to file with the United States Department of Health and Human Services.[ci] The agency denied her request, finding she failed to establish that the negligent actions of the federal doctors caused the death.[cii] Although the agency stated that Rodas could file an appeal in the appropriate federal court, Rodas amended her state court complaint and named the United States as a party, replacing Baxter and the Clinic.[ciii] The United States then removed the case under Section 1442 to the federal district court.[civ]
The claim was three years old when the case was removed to the federal court.[cv] After removal, the United States moved for dismissal by invoking the doctrine of derivative jurisdiction.[cvi] The District Court denied the motion under FRCP 62.1(a), reasoning that the doctrine did not apply because the government did not remove under Section 1442 but rather improperly removed under 28 U.S.C. § 2679(d)(2).[cvii] The court reasoned that derivative jurisdiction “would not ordinarily sap a court of jurisdiction for removals under those provisions.”[cviii] Following this decision, the United States filed a brief with the Seventh Circuit to cure the jurisdictional defect.[cix]
The Seventh Circuit held for the United States, finding that the trial court improperly found that the doctrine of derivative jurisdiction did not apply.[cx] The court began by explaining why the District Court erred in finding that the removal was improper because the government was not an initially named defendant.[cxi] The court found that the District Court’s reading of Section 1442 was too narrow and unorthodox, as Congress did not intend Section 1442 to be about who was an originally named party upon removal, but rather, Congress was concerned about where the civil action began.[cxii] Further, the Court supports this reasoning with language from the Supreme Court, which has repeatedly stated that “the policy behind the federal removal statute––ensuring that federal defenses raised by federal actors are evaluated in a federal forum–– ‘should not be frustrated by a narrow, grudging interoperation of the provision.’”[cxiii]Thus, the doctrine of derivative jurisdiction should have applied as the federal government was a named party upon removal, and a broader reading of Section 1442 supports the application.[cxiv]
Although the Seventh Circuit found the doctrine of derivative jurisdiction applied in dismissing the claims, the court added additional analysis. The court stated that “[t]he doctrine of derivative jurisdiction . . . is best understood as a procedural bar to the exercise of federal judicial power. That is, the doctrine creates a defect in removal, but is not an essential ingredient to federal subject matter jurisdiction.”[cxv] The court arrived at this characterization of derivative jurisdiction by looking at the limitations of the Supreme Court in Grubbs and Caterpillar. [cxvi] Applying the Supreme Court’s framework, in Rodas, the Seventh Circuit determined that derivative jurisdiction is waivable as it is a mere procedural defect and not an essential portion of subject matter jurisdiction.[cxvii] The Seventh Circuit concluded this by finding that the federal district court would have had proper subject matter jurisdiction over this issue if the procedural defect in removal did not exist.[cxviii] Therefore, the limitations of Grubbs and Caterpillar apply to the doctrine of derivative jurisdiction, and the Court of Appeals may preside over the Rodas case because an essential element of subject matter jurisdiction is not missing.[cxix]
Finally, the Seventh Circuit concluded by stating, “[t]he foregoing analysis demonstrates that the doctrine of derivative jurisdiction . . . is a procedural bar to the exercise of federal judicial power. It is not an essential ingredient for the court’s subject matter jurisdiction.”[cxx] This statement by the Seventh Circuit considerably changed how the doctrine of derivative jurisdiction is viewed during its application. Rather than functioning as an essential portion of subject matter jurisdiction, the Seventh Circuit put forth that practical concerns limit the doctrine of derivative jurisdiction and create a waivable procedural defect in removal.[cxxi]
(3) The Ricci Case
After the Seventh Circuit’s holding in Rodas that derivative jurisdiction is not an issue of subject matter jurisdiction and only a procedural defect in removal, the court further shifted away from the doctrine’s application in Ricci. In Ricci, Randal Ricci brought suit against the Social Security Administration (“SSA”) after the SSA determined that Ricci was not his daughter’s legal guardian, so he could not receive supplemental security income for her.[cxxii]Ricci sought to reinstate his representative payee status.[cxxiii] The SSA employees are federal employees, and the case was removed to the federal court under Section 1442.[cxxiv] Once removed, the SSA employees moved for dismissal, invoking derivative jurisdiction, arguing the federal court did not have subject matter jurisdiction because the state court did not have jurisdiction.[cxxv] Ricci then amended his complaint to properly invoke federal jurisdiction over the claim under 28 U.S.C. § 1361, in which the federal courts are granted exclusive jurisdiction over mandamus actions against federal officers.[cxxvi] The SSA employees then re-filed their motion to dismiss, arguing that Ricci did not properly cure the procedural defect.[cxxvii]
The District Court granted the motion to dismiss, applying the doctrine of derivative jurisdiction.[cxxviii] The court dismissed the claim without prejudice and instructed Ricci to re-file in the federal court.[cxxix] Ricci instead appealed his action, bringing two issues: first, the doctrine of derivative jurisdiction does not bar the case, and second, his amendment to the complaint cured any procedural defect caused by removal.[cxxx]
Upon addressing these issues, the Seventh Circuit did not diverge in applying the doctrine of derivative jurisdiction toward Ricci’s case. The court affirmed the holding, finding Ricci’s amendment did not cure the procedural defect, and the District Court lacked subject matter jurisdiction because of derivative jurisdiction.[cxxxi] Although the Seventh Circuit did not deviate from its derivative jurisdiction jurisprudence, the opinion importantly addressed the curing procedural defects.
To grapple with the issue of whether the amended complaint cured the procedural defect, the Seventh Circuit confronted a statement it made in Rodas. In the Rodas opinion, the court stated, “any defect in removal created by the derivative jurisdiction would be cured if [the plaintiff] simply filed an amended complaint.”[cxxxii] Ricci argued this illustrates that plaintiffs can fix procedural defects through amendment.[cxxxiii]
However, the court explained that this statement in Rodas was included merely to illuminate that the doctrine of derivative jurisdiction is not an issue of subject matter jurisdiction, only a procedural defect.[cxxxiv] Because this statement was simply an example, the court did not include it to suggest that amendment to complaints is allowed and will cure the issue of the doctrine of derivative jurisdiction.[cxxxv]
Although the Seventh Circuit continued the application of derivative jurisdiction and held that amending a complaint to give proper jurisdiction to the federal court does not cure the defect, the court expanded the limitations on the doctrine in Rodas.[cxxxvi] By further highlighting that the doctrine is merely procedural, the court solidified that it does not constitute an issue of subject matter jurisdiction.[cxxxvii]
III. The Judicial Issues Created By Derivative Jurisdiction
The doctrine of derivative jurisdiction may have once been applicable to removal and determining proper jurisdiction. However, in the modern judicial system, it causes far more issues than benefits. This section will delve into the significant issues caused by applying the doctrine of derivative jurisdiction in cases removed under Section 1442, including issues of judicial efficiency and economy.
A. Judicial Efficiency
The most significant issue caused by the doctrine of derivative jurisdiction to cases removed under Section 1442 is the pronounced negative effect on judicial economy by the needless wasting of vital judicial resources. Judicial economy is a principle that supports “the efficient management of litigation in the courts to minimize duplication of effort and avoid wasting the judiciary’s time and resources.”[cxxxviii] The foundational justification for supporting judicial economy is that when the judiciary’s time and resources are not used up needlessly, the courts are better suited to support the public and uphold the principles of justice.[cxxxix]
The current hindrance to judicial economy and efficiency is a significant issue plaguing the federal court system. Often, the federal courts suffer from a lack of judicial resources and funding, which affects how many cases are before the court and how long individuals wait for judgment.[cxl] This judicial strain is seen locally in the Southern District of Indiana.[cxli] On average, each Judge in the district has three times more than the recommended caseload.[cxlii] In 2019, each judge averaged a caseload of 1,100 cases.[cxliii] Judges who carry a considerably higher number of cases than recommended create issues of delay of justice for those seeking a remedy.[cxliv] The caseloads are not lessening, as other courts are feeling the effects of the pandemic closures now, even post-pandemic.[cxlv] In the district courts of California, 1.4 million fewer cases were heard from 2019 to 2020, with an unknown number of cases backlogged in the federal system.[cxlvi]
The backlog of cases in the federal system not only creates longer wait times for litigants seeking remedy, but these wait times increase the monetary burden.[cxlvii] In a survey of 1500 litigation attorneys, 69% of attorneys agreed “that the civil justice system takes too long as a general matter, and 92% agreed that the longer a case goes on, the more it costs.”[cxlviii] The overworked and incredibly backlogged federal courts create significant concerns of expensive litigation and grueling wait times for justice.
While efficiency is not always the goal, the concerns of burdens to judicial efficiency and economy may outweigh the benefits of a legal procedure. The justification of judicial economy and minimizing the wasting of court resources has led to the creation of practices like case consolidation and issue separation.[cxlix] Thus, implementing the new procedure may be warranted to reduce the use of judicial resources.
Applying derivative jurisdiction negatively affects judicial economy without creating benefits that outweigh the tangible hindrance to the judicial system. By using the doctrine of derivative jurisdiction to FTCA claims and other federally exclusive forum cases removed under Section 1442, federal courts must dismiss instances over which they would have had proper jurisdiction if they were brought there originally. Not only are the courts forced to dismiss a case over which they have proper jurisdiction, but the district courts instruct the claimant to re-file the case in the same district court. Thus, this system requires a court to dismiss a case already filed and pleaded just to have the same case re-filed in the court.
In the Rodas and Yonts cases, the application of derivative jurisdiction delayed the cases significantly. In Rodas, it took three years for the Seventh Circuit to decide that derivative jurisdiction applied to the medical malpractice suit for the death of Rodas’s daughter.[cl] A total of eight years would pass before Rodas received any relief for the death of her daughter.[cli] In Yonts, where Mrs. Yonts filed suit for medical injuries after being hit by a USPS driver, four years have passed since the original events, Mr. Yonts has passed away, and the case has just recently been dismissed for lack of jurisdiction because of derivative jurisdiction.[clii] Although litigation is a lengthy process on its own, as “it is . . . routine to have a case set for trial within 12-18 months of filing,”[cliii] derivative jurisdiction issues can add years to the timeline of a case. Litigation is expensive, time-consuming, and delays justice; derivative jurisdiction heightens these issues significantly.
The circular system created by derivative jurisdiction needlessly erodes crucial judicial resources and wastes parties’ time, resources, and money. In the same time that a court takes to decide subject matter jurisdiction, the court may have resolved the case on its merits. Instead, derivative jurisdiction requires the parties to return to square one. Even worse, the reasoning for why federal courts must derive their jurisdiction from state courts is unknown. As the Seventh Circuit stated in Rodas, “[t]he justification for the rule is hardly obvious––it is nevertheless binding on us.”[cliv] Without any apparent or underlying justifications for why federal courts must derive their jurisdiction from the state courts in cases removed under Section 1442, wasting precious judicial resources and access to the courts is hardly justifiable.
Additionally, the doctrine of derivative jurisdiction is not a question of necessary and non-waivable subject matter jurisdiction.[clv] Rather, as the Seventh Circuit Court of Appeals held in Rodas, the derivative jurisdiction is merely a procedural defect in removal.[clvi] This distinction is monumental because a procedural defect can be waived, and the appellate courts still have proper jurisdiction of cases, even with procedural defects.[clvii] In practice, when a case has reached the appellate level, the procedural defect no longer matters, and the case can continue as normal.
Thus, the doctrine of derivative jurisdiction is not essential to a court’s subject matter jurisdiction. Instead, cases that may have a procedural defect caused by the application of derivative jurisdiction may still be heard by the appellate courts if the factors of efficiency, finality, and economy of the judgment outweigh the procedural defect. The doctrine today has no known benefits and justifications; it significantly burdens the judicial system and depletes resources. Therefore, because this needless doctrine is merely a procedural defect and not an issue of subject matter jurisdiction, derivative jurisdiction should no longer have a role in the modern judicial system to conserve vital judicial resources.
IV. Analysis Arguing To Eliminate Derivative Jurisdiction For Removal of Cases Under Section 1442
The significant waste derivative jurisdiction imposes on the judicial system significantly outweighs its non-apparent benefits. Thus, Congress should abrogate derivate jurisdiction by amending Section 1442 to mimic the abrogating language Congress enacted for cases removed under Section 1441. In lieu of amendment, courts should allow plaintiffs to amend their complaints using FRCP 15 to grant proper jurisdiction to the federal courts to prevent needless dismissals and re-filings.
A. Congressional Amendment to 28 U.S.C. § 1442
The first and most expansive remedy to the issues caused by derivative jurisdiction is a proposal for Congress to amend 28 U.S.C. § 1442 to abrogate the application of the doctrine completely.[clviii] The language of this new congressional amendment should reflect the language of the Judicial Improvements Act, which abrogated the use of derivative jurisdiction for cases removed under Section 1441.[clix] Furthermore, the amendment to Section 1442 should state that the federal district courts are not precluded from “determining any claim in such civil action because the State court from which such civil action is removed did not have jurisdiction over that claim.”[clx] This amendment should contain this specific phrasing because it is the current language in Section 1441. Using language like that in Section 1441 would ensure the abrogating intent of Congress was clear, and derivative jurisdiction would no longer apply to Section 1442 claims.
By amending Section 1442 to include the abrogating language from Section 1441, district courts would no longer have to dismiss cases due to a lack of subject matter jurisdiction because of the doctrine of derivative jurisdiction. Rather, the district courts—which would have exercised proper jurisdiction if the case was initially brought there—can hear the cases without dismissing or forcing the parties to re-file. This solution would benefit all parties, streamlining cases and avoiding needless dismissals and re-filings.
Amending Section 1442 would be the most expansive solution. By amending the language, courts would not be bound by precedent, which forces them to apply the doctrine. Although congressional abrogation by the amendment would be the best option, it may be more challenging and time-consuming than other solutions. However, a congressional amendment is the best option, as it would create uniformity across the judicial system by completely preventing the application of derivative jurisdiction.
B. Alternative solution: Allow for Jurisdiction to be Amended under Fed. R. Civ. P. 15
An alternative solution to a congressional amendment is for courts to permit plaintiffs to amend their pleadings to create proper jurisdiction in the federal courts under 28 U.S.C. § 2679(d)(2) for the FTCA.[clxi]
Under the FRCP Rule 15, a plaintiff may amend as a matter of course 21 days after service or if “justice so requires.”[clxii] Therefore, the plaintiff could amend their pleadings to invoke federal exclusive jurisdiction for FTCA claims, and justice would likely require the court to accept this amendment. Thus, this procedure would cure any defect within the original filing. The Seventh Circuit showed interest in these ideas and recognized that an amendment to the pleadings would cure the issue of derivative jurisdiction in Ricci.[clxiii] By allowing for amendment rather than requiring dismissal, the case could continue in the federal court, where jurisdiction is proper without dismissing and re-filing the case.
Although allowing amendments under FRCP 15 would help mitigate the issues caused by derivative jurisdiction; this solution may lead to a lack of uniformity in the judicial system. For example, some courts may not allow parties to amend their complaints to invoke the proper subject matter jurisdiction under the FRCP, while others might. Thus, selective allowance for amendments under FRCP 15 could create a possible circuit split if some circuits allow the amendment while others do not. However, in lieu of the congressional amendment to Section 1442, allowing a plaintiff to amend their complaint to invoke the proper jurisdiction under the FTCA will cure the procedural defect caused by removal before a decision has been made.
Conclusion
Gloria Rodas waited eight years to receive damages for the negligent medical malpractice that caused her daughter’s death.[clxiv] Mrs. Yonts and Mr. Marcum are forever barred from re-filing their cases because of the statute of limitations.[clxv] Without the doctrine of derivative jurisdiction applying to removal cases under Section 1442, Ricci’s case may have been resolved in a fraction of the time. While the others may have had the opportunity to have their cases heard on the merits.
Jurisdiction is necessary in every case, as courts cannot hear cases without proper jurisdiction. However, it is an anomaly and merely a formality to require cases that stand before federal courts––with proper exclusive jurisdiction––to be dismissed merely because the case was originally brought as a tort claim in a state court. The current judicial economy does not support the doctrine of derivative jurisdiction, as it causes cases to drag on years beyond necessary, countless additional motions, unnecessary filings, and limited judicial resources to be wasted.
Thus, a simple and far beyond overdue amendment to 28 U.S.C. § 1442 to abrogate the doctrine of derivate jurisdiction is necessary. Although it is unknown why Congress amended only 28 U.S.C. § 1441 in the Judicial Improvements Act of 1985, it is time for the doctrine of derivative jurisdiction to no longer have a role in the federal judicial system and to become an obsolete idea in our legal system like its counterpart of Section 1441. Individuals like Mrs. Yonts and Ms. Ricci deserved meaningful and timely justice and to have their cases properly heard before a court. Abrogation of Section 1442 is a necessary change to jurisdictional law to provide heightened ease to plaintiffs and a more streamlined and efficient litigation system for all parties involved, including the courts.
[i] Yonts v. United States, No. 1:21-CV-02726, WL 4385824, at *1 (S.D. Ind. Sept. 21, 2022).
[ii] Id.
[iii] Mr. Yonts passed away after the events giving rise to the action, prior to the filing of the suit. Id. at n. 2.
[iv] Id. at *1.
[v] Id.
[vi] Id.
[vii] Id. at *2.
[viii] Id.
[ix] Id.
[x] 28 U.S.C. § 2679 (1988).
[xi] Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377, 383 (1922).
[xii] Id.
[xiii] Id.
[xiv] Pub. L. 99-336 § 3, 100 Stat. 633 (1986).
[xv] Id.
[xvi] Lightfoot v. Cendant Mort. Corp., 580 U.S. 82, 92 (2017) (quoting Black’s Law Dictionary (10th ed. 2014)).
[xvii] Id.
[xviii] Legal Information Institute, Jurisdiction, Cornell Univ. L. Sch., https://www.law.cornell.edu/wex/jurisdiction [https://perma.cc/3RLM-4VX6] (last visited Oct. 24, 2023).
[xix] Carlsbad Technology, Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009) (citing Black’s Law Dictionary (8th ed. 2004)).
[xx] Legal Information Institute, Subject Matter Jurisdiction, Cornell Univ. L. Sch., https://www.law.cornell.edu/wex/subject_matter_jurisdiction %5Bhttps://perma.cc/CW69-ZSMR%5D (last visited Oct. 24, 2023).
[xxi] Id.
[xxii] Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 477–78 (1981).
[xxiii] United State Constitution, Art. III, § 2, cl. 1.
[xxiv] Id.
[xxv] 28 U.S.C. § 1331 (1980).
[xxvi] Subject Matter Jurisdiction, supra note 20.
[xxvii] United States Office of Personnel Management, Federal Tort Claims Act, https://www.opm.gov/about-us/our-people-organization/office-of-the-general-counsel/federal-tort-claims-act/ [https://perma.cc/NR72-U5RQ] (last visited Oct. 24, 2023).
[xxviii] Id.
[xxix] Id.
[xxx] 28 U.S.C. § 1346 (2013).
[xxxi] Id.
[xxxii] Legal Information Institute, Removal, Cornell Univ. L. Sch., https://www.law.cornell.edu/wex/removal [https://perma.cc/PP3L-AD3J] (last visited Oct. 24, 2023).
[xxxiii] Id.
[xxxiv] 28 U.S.C. § 1442 (2013).
[xxxv] Id.
[xxxvi] Arthur F. Greenbaum, Government Participation in Private Litigation, 21 Ariz. St. L.J. 853, 966–67 (1990).
[xxxvii] Fed. R. Civ. P. 24.
[xxxviii] Id.
[xxxix] Id.
[xl] Fed. R. Civ. P. 24(b)(2).
[xli] Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377, 383 (1922).
[xlii] Id.
[xliii] Id.
[xliv] Id.
[xlv] Id.
[xlvi] Judicial Reform Act of 1985, 100 Stat. 633.
[xlvii] Id.
[xlviii] Pub. L. 99-336 § 3, 100 Stat. 633 (1986).
[xlix] Id.
[l] Id.
[li] Judicial Reform Act of 1985, 100 Stat. 633.
[lii] Exxon Mobil Corp. v. Allapattah Services, Inc., 545 U.S. 546, 565 (2005).
[liii] Rodas v. Seidlin, 656 F.3d 610, 619 (7th Cir. 2011).
[liv] Id.
[lv] See Rodas, 656 F.3d at 610; see also Ricci v. Salzman, 976 F.3d 768, 770 (7th Cir. 2020).
[lvi] Yonts v. United States, No. 1:21-CV-02726, WL 4385824, at *2 (S.D. Ind. Sept. 21, 2022).
[lvii] Id.
[lviii] Id.
[lix] Id.
[lx] Id.
[lxi] Id.
[lxii] Id.
[lxiii] Id.
[lxiv] Id.
[lxv] Id.
[lxvi] Id. at *3.
[lxvii] Id. at *1.
[lxviii] 28 U.S.C. § 2679 (1988).
[lxix] Id.
[lxx] Marcum v. McDonough, No. 1:21-CV-00428, 2021 WL 4477815, at *1 (S.D. Ind. 2021).
[lxxi] Id.
[lxxii] Id.
[lxxiii] Id.
[lxxiv] Id. at *2.
[lxxv] Id.
[lxxvi] Id.
[lxxvii] Id. at *6.
[lxxviii] Id.
[lxxix] Id. at *4.
[lxxx] Id.; (citing Pelto v. Off. of Reg’l Chief Couns., 2013 WL 5295678, at *3 (W.D. Wis. 2013)).
[lxxxi] Id. at *6 (citing Rodas v. Seidlin, 656 F.3d 610, 615 (7th Cir. 2011)).
[lxxxii] See Rodas, 656 F.3d at 610; see also Ricci v. Salzman, 976 F.3d 768, 770 (7th Cir. 2020).
[lxxxiii] Rodas, 656 F.3d 620–21.
[lxxxiv] Id.
[lxxxv] See generally Grubbs v. General Elec. Credit Corp., 405 U.S. 699, 702 (1972); Caterpillar Inc. v. Lewis, 519 U.S. 61, 63 (1996).
[lxxxvi] Id.
[lxxxvii] Rodas v. Seidlin, 656 F.3d 610, 623 (7th Cir. 2011) (discussing Caterpillar’s holding).
[lxxxviii] Id.
[lxxxix] Caterpillar Inc., 519 U.S. at 63.
[xc] Rodas v. Seidlin, 656 F.3d at 623.
[xci] Id.
[xcii] See Rodas, 656 F.3d at 610; see also Ricci v. Salzman, 976 F.3d 768, 770 (7th Cir. 2020).
[xciii] Rodas, 656 F.3d at 612.
[xciv] Id.
[xcv] Id.
[xcvi] Id.
[xcvii] Id. at 13.
[xcviii] Id.
[xcix] Id.
[c] Id. at 12.
[ci] Id. at 13.
[cii] Id.
[ciii] Id.
[civ] Id.
[cv] Id. at 14.
[cvi] Id.
[cvii] Id.
[cviii] Id. at 15.
[cix] Id.
[cx] Id. at 16.
[cxi] Id. at 17.
[cxii] Id.
[cxiii] Id. at 617–18; (quoting Willingham v. Morgan, 395 U.S. 402, 407 (1813)).
[cxiv] Rodas v. Seidlin, 656 F.3d 610, 618 (7th Cir. 2011).
[cxv] Id.
[cxvi] Id. at 620–21.
[cxvii] Id. at 623.
[cxviii] Id.
[cxix] Id.
[cxx] Id.
[cxxi] Id.
[cxxii] Ricci v. Salzman, 976 F.3d 768, 770 (7th Cir. 2020).
[cxxiii] Id.
[cxxiv] Id.
[cxxv] Id.
[cxxvi] Id.
[cxxvii] Id.
[cxxviii] Id.
[cxxix] Id.
[cxxx] Id.
[cxxxi] Id.
[cxxxii] Id. at 772 (citing Rodas v. Seidlin, 656 F.3d 610, 616 (7th Cir. 2011)).
[cxxxiii] Ricci v. Salzman, 976 F.3d 768, 770 (7th Cir. 2020).
[cxxxiv] Id. at 773.
[cxxxv] Id.
[cxxxvi] Id. at 773–774.
[cxxxvii] Id.
[cxxxviii] LSD Law, Judicial Economy, https://www.lsd.law/define/judicial-economy [https://perma.cc/XD9K-FYGL] (last visited Oct. 24, 2023).
[cxxxix] Id.
[cxl] Id.
[cxli] Todd Young, Op–ed: Indiana’s Federal Courts, Some of the Most Overworked in the U.S., Need More Judges, IndyStar (Jul. 9, 2020), https://www.indystar.com/story/opinion/2020/07/09/op-ed-indianas-federal-courts-some-most-overworked-u-s-need-more-judges/5389256002/ [https://perma.cc/36GD-G7CC].
[cxlii] Id.
[cxliii] Id.
[cxliv] Id.
[cxlv] Robert Lewis, Justice Delayed: Courts Overwhelmed by Pandemic Backlog, Cal Matters (Mar. 8, 2022), https://calmatters.org/justice/2021/01/justice-courts-overwhelmed-pandemic/ %5Bhttps://perma.cc/DMU8-ACSB%5D.
[cxlvi] Id.
[cxlvii] Institute For the Advancement of the American Legal System, Civil Case Processing in the Federal District Courts (2009).
[cxlviii] Id.
[cxlix] LSD Law, supra note 138.
[cl] Rodas v. Seidlin, 656 F.3d 610, 614 (7th Cir. 2011).
[cli] Id.
[clii] Yonts v. United States, No. 1:21-CV-02726, WL 4385824, at *1 (S.D. Ind. Sept. 21, 2022).
[cliii] The McKinney Law Firm, How Long Will It Take For My Case to Go to Trial?,https://www.themckinneylawfirm.com/how-long-does-it-take-to-get-a-case-to-trial#:~:text=This%20is%20often%20the%20case,vary%20widely%20county%20to%20county [https://perma.cc/3L7F-JTWJ] (last visited Oct. 24, 2023).
[cliv] Marcum v. McDonough, No. 1:21-CV-00428, 2020 WL 4477815, at *6 (S.D. Ind. 2021).at *6 (citing Rodas v. Seidlin, 656 F.3d 610, 615 (7th Cir. 2011)).
[clv] Rodas, 656 F.3d at 620–21.
[clvi] Id.
[clvii] Id.
[clix] Pub. L. 99-336 § 3, 100 Stat. 633.
[clx] Id.
[clxi] 28 U.S.C. § 2679 (1988).
[clxii] Fed. R. Civ. P. 15.
[clxiii] Ricci v. Salzman, 976 F.3d 768, 772 (7th Cir. 2020).
[clxiv] Rodas v. Seidlin, 656 F.3d 610, 614 (7th Cir. 2011).
[clxv] See Yonts v. United States, No. 1:21-CV-02726, WL 4385824, at *1 (S.D. Ind. Sept. 21, 2022).; see also Marcum v. McDonough, No. 1:21-CV-00428, 2020 WL 4477815, at *1 (S.D. Ind. 2021).
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