Case 3:15-cv-00435-DPJ-FKB Document 7 Filed 11/24/15 Page 1 of 5

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF MISSISSIPPI
NORTHERN DIVISION
WEST RANKIN UTILITY AUTHORITY

PLAINTIFF

V.

CIVIL ACTION NO. 3:15cv435-DPJ-FKB

CITY OF JACKSON, MISSISSIPPI

DEFENDANT
ORDER

This contract dispute is before the Court on the Motion to Remand [4] filed by Plaintiff
West Rankin Utility Authority (Authority). Defendant, the City of Jackson, Mississippi
(City), opposes the motion. Having fully considered the premises, the Court finds that it lacks
subject-matter jurisdiction. The case is therefore remanded to the Circuit Court of Rankin
County, Mississippi. The Authoritys request for sanctions is denied.
I.

Background
According to the Complaint, the Authority contracted with the City for treatment of

wastewater in 2002 (the Agreement). See Compl. [1-1] at 5. During the life of that
Agreement, the City faced state and federal regulatory actions related to years of sludge
mismanagement . . . . Id. at 8. Ultimately, the City entered a Consent Decree with the United
States Environmental Protection Agency in another civil action filed in this district before a
different United States District Court Judge. Under the Consent Decree, the City agreed to take a
number of steps to remove and dispose of excess, accumulated sludge/solids . . . . Id. at
10(b).
Compliance with the Consent Decree created certain expenses for the City, and the core
dispute in this case is whether the City may use those expenses as a basis for increasing the price
the Authority pays for wastewater treatment. Id. at 11. The Authority claims that passing these

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expenses on to the Authority breaches the parties Agreement. It therefore seeks declaratory
judgment along with monetary damages for breach of contract. Id. at 1422. The case is now
before the Court on the Authoritys Motion to Remand [4].
II.

Analysis
Federal courts are courts of limited jurisdiction, possessing only that power authorized

by Constitution and statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377
(1994). It is to be presumed that a cause lies outside this limited jurisdiction, and the burden of
establishing the contrary rests upon the party asserting jurisdiction. Id. The present case
focuses on the existence, vel non, of federal-question jurisdiction, which applies to all civil
actions arising under the Constitution, laws, or treaties of the United States. 28 U.S.C. 1331.
For statutory purposes, a case can aris[e] under federal law in two ways. Most directly,
a case arises under federal law when federal law creates the cause of action asserted. Gunn v.
Minton, 133 S. Ct. 1059, 1064 (2013). This path is unavailable to the City because there are no
federal claims on the face of the Authoritys well-pleaded Complaint. The second, less direct,
path to federal jurisdiction exists where the right to relief under state law requires resolution of a
substantial question of federal law in dispute between the parties. Franchise Tax Bd. v. Constr.
Laborers Vacation Trust, 463 U.S. 1, 13 (1983).
The United States Supreme Court recently summarized the requirements for this second
path to federal-question jurisdiction as follows:
[F]ederal jurisdiction over a state law claim will lie if a federal issue is: (1)
necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of
resolution in federal court without disrupting the federal-state balance approved
by Congress. Where all four of these requirements are met . . . jurisdiction is
proper because there is a serious federal interest in claiming the advantages
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thought to be inherent in a federal forum, which can be vindicated without

disrupting Congresss intended division of labor between state and federal courts.
Gunn, 133 S. Ct. at 1065 (quoting Grable & Sons Metal Prods., Inc. v. Darue Engg & Mfg., 545
U.S. 308, 31314 (2005)).1 The party asserting jurisdiction has the burden to prove all of these
elements. NiGen Biotech, L.L.C., 804 F.3d at 395.
It is important to note that the mere presence of a federal issue in a state cause of action
does not automatically confer federal-question jurisdiction. Merrell Dow Pharm. Inc. v.
Thompson, 478 U.S. 804, 813 (1986). [F]ederal jurisdiction demands not only a contested
federal issue, but a substantial one, indicating a serious federal interest in claiming the
advantages thought to be inherent in a federal forum. Grable, 545 U.S. at 313. And it is not
enough that the federal issue be significant to the particular parties in the immediate suit; that
will always be true when the state claim necessarily raise[s] a disputed federal issue, as Grable
separately requires. Gunn, 133 S. Ct. at 1066. The Grable substantiality inquiry looks instead
to the importance of the issue to the federal system as a whole. Id.
The present case fails to meet these standards. First, the case does not raise a federal
issue. The dispute is whether the Agreement allows the City to pass certain expenses to the
Authority. See Compl. [1-1] 11. The Consent Decree merely offers evidence related to the
genesis of those expenses. Thus, the City has not shown how resolving any federal issues related
to the Consent Decree would be necessary to the resolution of the state-law claim. NiGen

The Fifth Circuit has articulated the elements as follows: (1) resolving a federal issue is
necessary to the resolution of the state-law claim; (2) the federal issue is actually disputed; (3) the
federal issue is substantial; and (4) federal jurisdiction will not disturb the balance of federal and
state judicial responsibilities. NiGen Biotech, L.L.C. v. Paxton, 804 F.3d 389, 395 (5th Cir.
2015) (citing Singh v. Duane Morris LLP, 538 F.3d 334, 338 (5th Cir. 2008)).
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Biotech, L.L.C., 804 F.3d at 395. Second, the City falls short of showing how the Consent
Decree is actually disputed and raises a substantial issue. Gunn, 133 S. Ct. at 1065.
Significantly, the City fails to identify a single provision from the Consent Decree that the
Authority disputes. Finally, the City has not explained how any issues related to the Consent
Decree are capable of resolution . . . without disrupting the federal-state balance[,] id., because
contract disputes have traditionally been the domain of state law . . . . Singh v. Duane Morris
LLP, 538 F.3d 334, 339 (5th Cir. 2008) (finding no substantial question in legal-malpractice case
related to federal claims in underlying suit). The City has not met its burden of establishing these
elements.
The Citys other arguments are likewise unavailing. First, the City suggests that a
district court retains jurisdiction to police its consent decrees. Def.s Resp. [5] at 5. But this is
a contract dispute, not a matter of policing the Consent Decree. And, in any event, the Consent
Decree was entered by another judge in a separate legal action. Second, the City seeks
supplemental jurisdiction under 28 U.S.C. 1367(a). That statute allows 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. 28
U.S.C. 1367(a) (emphasis added). The City has not met its burden of showing original
jurisdiction as to any other claims in this action. See Energy Mgmt. Servs., LLC v. City of
Alexandria, 739 F.3d 255, 259 (5th Cir. 2014) (reversing denial of remand and holding that
original jurisdiction in related but separate federal action is insufficient to trigger supplemental
jurisdiction). The Motion to Remand is therefore granted.

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III.

Conclusion
The Court has considered all arguments. Those not specifically addressed would not

change the results. For the foregoing reasons, the Court finds that this case should be remanded
to the Circuit Court of Rankin County, Mississippi. Plaintiffs request for sanctions is denied.
SO ORDERED AND ADJUDGED this the 24th day of November, 2015.
s/ Daniel P. Jordan III
UNITED STATES DISTRICT JUDGE