Matthew Mitchell v. Orico Bailey, 982 F.3d 937

Background

Hoopa Valley Tribe (a federally recognized tribe) operated the AmeriCorps Hoopa Tribal Civilian Community Corps under a federal grant; the Tribal CCC deployed to Wimberley, Texas after catastrophic floods.
Matthew Mitchell (Texas resident) was injured while participating in the disaster-relief effort; he sued Orico Bailey (California citizen) and Hoopa Valley in federal district court for state-law negligence and breach of contract.
Bailey (acting as a member of the Tribal CCC) and Hoopa Valley moved to dismiss under Fed. R. Civ. P. 12(b)(1), arguing sovereign immunity and seeking substitution of the United States under the Westfall Act.
The district court dismissed the claims against Bailey (official capacity) and Hoopa Valley with prejudice on sovereign-immunity grounds, deemed the Westfall substitution motion moot, and later entered final judgment after the parties stipulated dismissal of individual-capacity claims.
On appeal the Fifth Circuit held the district court lacked original jurisdiction (on grounds different from sovereign immunity), vacated in part, affirmed in part, reversed in part, and remanded with instructions to dismiss without prejudice.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court had federal-question jurisdiction because defendants sought substitution under the Westfall Act	Mitchell argued the defendants’ Westfall Act motion vested federal-question jurisdiction	Bailey/Hoopa argued Westfall does not itself create federal-question jurisdiction; no AG certification occurred; complaint pleads only state law	No federal-question jurisdiction; an unresolved Westfall motion does not create original federal jurisdiction; court looks to well-pleaded complaint
Whether diversity jurisdiction existed given parties’ citizenships and tribal status	Mitchell relied on diversity (plaintiff TX; Bailey CA) to invoke § 1332	Defendants argued the Hoopa Valley Tribe is a stateless entity and destroys complete diversity	Hoopa Valley is a stateless entity; its joinder destroyed complete diversity; § 1332 jurisdiction lacking
Whether the court could exercise supplemental jurisdiction over state claims despite destroyed diversity	Mitchell argued supplemental jurisdiction could attach	Defendants argued supplemental jurisdiction requires an underlying claim with original federal jurisdiction	Supplemental jurisdiction unavailable because there was no original federal claim; § 1367 cannot cure destroyed diversity
Whether dismissal for lack of subject-matter jurisdiction may be with prejudice	Mitchell did not justify forfeiture of relief by jurisdictional dismissal	Defendants relied on district court’s dismissal with prejudice	Dismissal for lack of jurisdiction must be without prejudice; district court erred in dismissing with prejudice; remand to dismiss without prejudice

Key Cases Cited

Beneficial Nat’l. Bank v. Anderson, 539 U.S. 1 (U.S. 2003) (well-pleaded complaint rule governs federal-question jurisdiction)
Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (U.S. 2005) (when federal issue is sufficiently important it can support federal-question jurisdiction)
Osborn v. Haley, 549 U.S. 225 (U.S. 2007) (Attorney General’s certification is conclusive for purposes of removal)
Gutierrez de Martinez v. Lamagno, 515 U.S. 417 (U.S. 1995) (context for Westfall Act certification disputes and federal jurisdiction)
Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (U.S. 1989) (presence of a stateless party can destroy complete diversity)
Allapattah Servs., Inc. v. Exxon Mobil Corp., 545 U.S. 546 (U.S. 2005) (supplemental jurisdiction cannot bypass complete-diversity requirement)
Ramming v. United States, 281 F.3d 158 (5th Cir. 2001) (plaintiff bears the burden to establish subject-matter jurisdiction)
Am. Vantage Cos., Inc. v. Table Mountain Rancheria, 292 F.3d 1091 (9th Cir. 2002) (tribes are not citizens of any state for diversity purposes)