Opinion
Civil No. 02-3761 (DWF/JSM)
May 29, 2003
Mark Murray Nolan, Esq., Nolan MacGregor Thompson Leighton, 380 St. Peter Street, Suite 710, St. Paul, Minnesota 55102, counsel for Plaintiff.
Ted Edwin Sullivan, Esq., and Sara J. Lathrop, Esq., Lind Jensen Sullivan Peterson, 150 South Fifth Street, Suite 1700, Minneapolis, Minnesota 55402, counsel for Defendant Vopak, Inc.
Robert Edward Salmon, Esq., Meagher Geer, 4200 Multifoods Tower, 33 South Sixth Street, Minneapolis, Minnesota 55402, and Lisa A. Pach, Esq., Sepanik Cortner McNaboe Colliau Elenius, 333 South Wabash, 25th Floor South, Chicago, Illinois 60604, counsel for Defendant Continental Casualty.
Dale M. Wagner, Esq., Bassford Lockhart Truesdell Briggs, 3550 Multifoods Tower, 33 So. Sixth Street, Minneapolis, Minnesota 55402-3787, counsel for Defendant Minnesota Insurance.
MEMORANDUM OPINION AND ORDER
Introduction
The above-entitled matter came on for hearing before the undersigned United States District Judge on May 23, 2003, pursuant to Defendant Minnesota Insurance's Motion to Dismiss for Lack of Subject Matter Jurisdiction. This case involves expenses incurred by Plaintiff Jostens, Inc. in connection with the environmental cleanup of a facility located in Illinois; Jostens, Inc. seeks contribution from Vopak, Inc., as another potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601-9675 ("CERCLA"), and Jostens, Inc. seeks indemnification from Defendants Continental Casualty ("Continental") and Minnesota Insurance ("MIGA"). For the reasons set forth below, Defendant Minnesota Insurance's motion is granted.
Background
Jostens, Inc. ("Jostens"), is a Minnesota Corporation that manufactures and distributes commemorative items, such as class rings. Jostens maintained a production facility in Princeton, Illinois, for a number of years. Pursuant to CERCLA, Jostens was obligated to undertake an environmental clean-up of the Princeton facility.
Vopak, Inc. ("Vopak"), is a successor in interest to McKesson Chemical Company, which delivered trichloroethylene ("TCE") to Jostens's Princeton facility during the early 1980s. Jostens asserts that Vopak spilled TCE and contributed to the contamination of the Princeton facility.
Jostens maintained an excess insurance policy written by Continental in the late 1970s and early 1980s. Subsequently, from April of 1981 to July of 1985, Jostens maintained an excess insurance policy with Mission Insurance Company. Jostens alleges that Mission Insurance Company is now insolvent.
MIGA is a statutorily created, non-profit, unincorporated association of all insurers licensed to transact business in Minnesota. Among other things, MIGA is charged with paying claims by individuals insured by member insurer when the member insurer is unable to pay such claims due to insolvency. Jostens has brought a claim against MIGA alleging that MIGA is obligated to indemnify Jostens for a portion of Jostens's CERCLA liability as a result of Mission Insurance Company's insolvency; Jostens asserts this claim against MIGA pursuant to Minn. Stat. § 60C.01, et seq.
Discussion
1. Subject Matter Jurisdiction
MIGA asserts that this Court lacks subject matter jurisdiction over Jostens's claim against MIGA. Jostens concedes that there is no diversity between itself and MIGA and that the claims asserted against MIGA are based solely upon state law. Jostens asserts, however, that this Court has supplemental jurisdiction over the state law claim against MIGA pursuant to 28 U.S.C. § 1367. The Court disagrees.
According to 28 U.S.C. § 1367(a), "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. . . ." The United States Supreme Court has explained that "a federal court has jurisdiction over an entire action, including state-law claims, whenever the federal-law claims and state-law claims in the case `derive from a common nucleus of operative fact' and are `such that [a plaintiff] would ordinarily be expected to try them all in one judicial proceeding.'" Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 349 (1988) (quoting United Mine Workers of America v. Gibbs, 383 U.S. 715, 725 (1966)).
Despite Jostens's protestations to the contrary, there is no common nucleus of operative fact between the CERCLA contribution claim asserted against Vopak and the Minnesota Statutory claim for indemnification asserted against MIGA. Jostens argues that both claims arise out of the pollution of the Princeton facility and the costs incurred by Jostens as a result. However, the claim against Vopak revolves around whose conduct resulted in the pollution of the Princeton facility. The claim against MIGA, in contrast, assumes liability on the part of Jostens and revolves only around whether Jostens is entitled to indemnification for that liability; the claims against MIGA will require interpretation of the insurance contract between Jostens and Mission Insurance Company and whether Jostens has met certain procedural requirements required by Minn. Stat. § 60C.01, et seq. See, e.g., Johnson Controls, Inc. v. Irving Rubber Metal Co., Inc., 920 F. Supp. 612 (M.D.Pa. 1996) (no supplemental jurisdiction over a third-party claim by CERCLA defendant against the defendant's insurer).
The cases cited by Jostens are inapposite. In Ashland Oil, Inc. v. Sonford Products Corp., 810 F. Supp. 1057 (D.Minn. 1993), the state law claims were asserted against the same defendants as were the CERCLA claims. Both Schlumberger Indus., Inc. v. National Sur. Corp., 36 F.3d 1274 (4th Cir. 1994), and Employers Ins. of Wausau v. Jostens, et al., Civil No. 98-1338 (DSD/JMM), found that the indemnity obligations of various insurers should be resolved in the same suit. None of these cases, however, found that there was a common nucleus of operative fact between a CERCLA contribution claim brought against another potentially responsible party and an indemnification claim brought against an insurer.
It is true that the rationale of Schlumberger and Jostens, supra, dictates that claims against MIGA and Continental should properly be resolved in the same lawsuit. However, the only basis for this Court's jurisdiction over the Continental claims is diversity, and MIGA's presence in the litigation destroys diversity. Just as there is no common nucleus of operative facts between the MIGA and Volpak claims, there is no common nucleus of operative facts between the Continental and Volpak claims. Given that the presence of Continental and Volpak is legally a mere fortuity, the Court cannot premise subject matter over the MIGA claims on the relationship between the Continental and MIGA claims, when MIGA's involvement in the suit actually destroys the independent basis for jurisdiction over the Continental claims.
For the reasons stated, IT IS HEREBY ORDERED:
1. Defendant Minnesota Insurance's Motion to Dismiss for Lack of Subject Matter Jurisdiction (Doc. No. 22) is GRANTED; and
2. The Claims against Defendant Minnesota Insurance are DISMISSED WITHOUT PREJUDICE.