In Re: v. Wallis, Etc. ( 1993 )


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    UNITED STATES COURT OF APPEALS
    FOR THE FIRST CIRCUIT
    _________________________

    No. 93-1174

    KAY DOUGHTY,
    MASSACHUSETTS COMMISSIONER OF INSURANCE, ETC.,
    Plaintiff, Appellee,

    v.

    UNDERWRITERS AT LLOYD'S, LONDON, ET AL.,
    Defendants, Appellants.

    _________________________

    APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE DISTRICT OF MASSACHUSETTS
    _________________________

    No. 93-1214
    IN RE:
    DEREK RICHARD WALLIS, ETC., ET AL.,
    Petitioners.

    _________________________

    ON PETITION FOR WRIT OF MANDAMUS
    _________________________

    [Hon. Joseph L. Tauro, U.S. District Judge]
    ___________________

    _________________________

    Before

    Selya, Cyr and Boudin, Circuit Judges.
    ______________

    ___________________________

    Mark A. Kreger, with whom Andrew Kochanowski, Robert A.
    _______________ ___________________ __________
    Badgley, Lord, Bissell & Brook, Kenneth W. Erickson, Matthew M.
    _______ _____________________ ___________________ __________
    Burke, and Ropes & Gray were on brief, for appellants-
    _____ _______________
    petitioners.
    Raymond J. Brassard, with whom Scott Harshbarger, Attorney
    ___________________ __________________
    General, Thomas A. Barnico, Assistant Attorney General, J. David
    _________________ ________
    Leslie, Stephen M. Voltz, and Rackemann, Sawyer & Brewster, P.C.
    ______ ________________ __________________________________
    were on brief, for respondent-appellee.

    _________________________
    October 18, 1993
    _________________________















    SELYA, Circuit Judge. In this proceeding, we conclude
    SELYA, Circuit Judge.
    _____________

    that the district court's abstention-based remand order is not

    immediately appealable and that mandamus is not an appropriate

    alternative. Because this jurisdictional determination involves

    an issue on which the circuits are somewhat less than uniform, we

    take some pains to elucidate our rationale. We do not, however,

    reach the merits and, accordingly, leave a veritable hothouse of

    efflorescent questions to be plucked at another time and in

    another forum.

    I. BACKGROUND
    I. BACKGROUND

    The controversy that is before us finds its genesis in

    a beguilingly simple question: "Who insures the insurers?" The

    question arises in connection with American Mutual Liability

    Insurance Company (AMLICO), a Massachusetts-based firm, which

    entered into a series of reinsurance contracts over a period of

    more than three decades. When AMLICO began paying out huge sums

    to satisfy asbestos-related claims at the tail end of this

    period, its efforts to secure reimbursement from reinsurers bore

    no fruit. Unassisted, AMLICO could not stanch the financial

    hemorrhaging and sought protection under state insolvency laws.

    The Massachusetts Supreme Judicial Court ordered the firm

    liquidated, and, in due course, appointed respondent-appellee Kay

    Doughty, the Commonwealth's Commissioner of Insurance, as

    permanent receiver.

    Doughty filed suit in state court to recover an

    estimated $15,000,000 in overdue reinsurance indemnities, as well


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    as treble damages under the Massachusetts trade practices

    statute. See Mass. Gen. Laws ch. 93A, 10, 11 (1984). She
    ___

    named as defendants a melange of entities alleged to have entered

    into reinsurance pacts, including the so-called London Market

    Companies and several underwriting syndicates at Lloyd's, London

    (collectively, "the Reinsurers").1

    The Reinsurers did not relish the chance to settle

    accounts in a court of law. Citing agreements contained in some

    (but far from all) of the reinsurance contracts, they formally

    requested that AMLICO submit its claims to arbitration. Doughty

    declined the invitation. She asserted, among other things, that

    the call for arbitration came too late; that the Reinsurers had

    waived the benefit of any agreements to arbitrate; and that, in

    any event, the dispute as a whole did not qualify as arbitrable.





    ____________________

    1In labelling the London Market Companies and the
    Underwriters at Lloyd's, collectively, as "the Reinsurers," we
    exclude for present purposes a number of domestic firms and
    certain other foreign-based insurance providers (e.g., English &
    ____
    American Insurance Co. and St. Helens' Insurance Co.) named as
    defendants in Doughty's action. The appellation "London Market
    Companies" is itself a collective term describing a consortium of
    foreign-based insurance providers, including Excess Insurance
    Co.; General Reinsurance Co. (Amsterdam); General Reinsurance
    Syndicate; Anglo French Insurance Co. (as successor to Federation
    General Insurance Co.); British National Insurance Co.; Sovereign
    Marine & General Insurance Co.; Royal Scottish Insurance Co.;
    Swiss National Insurance Co.; Zurich Reinsurance (U.K.) (as
    successor to Turegum Insurance Co.); and Gan Minster Insurance
    Co. (as successor to Minster Insurance Co.). Finally, we note
    that the Lloyd's underwriting syndicates are identified in the
    notice of appeal and petition for mandamus only as "Derek Richard
    Wallis, for himself and those other Underwriters at Lloyd's,
    London."

    3














    At that point, the Reinsurers invoked 9 U.S.C. 205 (1988)2 and

    removed Doughty's suit to the United States District Court for

    the District of Massachusetts. Next, they filed motions to

    compel arbitration and, as an interim prophylactic, to stay

    proceedings pending the outcome of the arbitral process. Doughty

    objected to these motions and moved on sundry grounds for an

    order remanding the case to state court. The Reinsurers opposed

    this motion.

    Concluding that principles of Burford abstention
    _______

    controlled, see Burford v. Sun Oil Co., 319 U.S. 315 (1943); see
    ___ _______ ___________ ___

    also Fragoso v. Lopez, 991 F.2d 878, 882-83 (1st Cir. 1993)
    ____ _______ _____

    (explicating scope, reach, and current status of Burford
    _______

    abstention), the district court overruled appellants' objection

    and granted the motion to remand. The court did not speak to the

    other reasons advanced in support of the motion. Moreover,

    consistent with its relinquishment of jurisdiction, the court

    left both the question of arbitrability and the related matter of

    a stay to the state tribunal.

    This proceeding ensued. In it, the Reinsurers wear two

    hats, appearing as both appellants and petitioners; they appeal


    ____________________

    2This statute implements the Convention on the Recognition
    of Foreign Arbitral Awards (the "Convention"). It provides that,
    if "the subject matter of an action or proceeding pending in a
    State court relates to an arbitration agreement or award falling
    under the Convention, the defendant or the defendants may, at any
    time before the trial thereof, remove such action or proceeding."
    Under 9 U.S.C. 202, the arbitration agreements here at issue
    arguably come within the Convention's grasp because, if the
    agreements exist and remain in effect, at least one party to each
    such agreement is a foreign entity.

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    from the remand order while simultaneously seeking a writ of

    mandamus aimed at recalling it. We consolidated these two

    initiatives for briefing, oral argument, and decision.



    II. THE APPEAL
    II. THE APPEAL

    We begin our inquiry into the appeal by addressing the

    question of appellate jurisdiction for, if no jurisdiction

    attaches, the appeal founders. See In re Recticel Foam Corp.,
    ___ __________________________

    859 F.2d 1000, 1002 (1st Cir. 1988). Here, two hurdles block the

    jurisdictional path: the statutory bar to appellate review of

    remand orders, see 28 U.S.C. 1447(d) (1988), and the bedrock
    ___

    requirement that jurisdiction can never be assumed but must be

    premised on some affirmative source. See, e.g., Massachusetts v.
    ___ ____ _____________

    V & M Management, Inc., 929 F.2d 830, 833 (1st Cir. 1991) (per
    _______________________

    curiam). We trace the dimensions of each hurdle and, in the

    process, consider appellants' hurdle-clearing capability.

    A. The Statutory Bar.
    A. The Statutory Bar.
    _________________

    28 U.S.C. 1447(d) provides that "[a]n order remanding

    a case to the State court from which it was removed is not

    reviewable on appeal or otherwise." Although this statute

    prohibits appellate review of remand orders "whether erroneous or

    not and whether review is sought by appeal or by extraordinary

    writ," Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343
    ______________________ _____________

    (1976), the proscription is deeper than it is wide. Because

    courts must read section 1447(d) in pari materia with its
    ____ _______

    statutory neighbor, 28 U.S.C. 1447(c), see Thermtron, 423 U.S.
    ___ _________


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    at 353, only remand orders issued under the authority of section

    1447(c) are rendered unreviewable by the operation of section

    1447(d), see Garcia v. Island Program Designer, Inc., ___ F.2d
    ___ ______ ______________________________

    ___, ___ (1st Cir. 1993) [No. 92-1853, slip op. at 5]; V & M
    ______

    Management, 929 F.2d at 832-33. And, since section 1447(c), by
    __________

    its terms, is concerned exclusively with remands stemming from

    "defect[s] in removal procedure" such that "the district court

    lacks subject matter jurisdiction," it follows that section

    1447(d) leaves open the possibility of appellate review in all

    cases that are remanded for reasons not covered by section

    1447(c).

    This is such an instance. Despite the fact that

    Doughty articulated several reasons for remanding the case, many

    of which implicated section 1447(c), the district court shunted

    these asseverations to one side and instead remanded exclusively

    on the basis of Burford abstention. Because abstention, by
    _______

    definition, assumes the existence of subject matter jurisdiction

    in the abstaining court after all, one must have (or, at least,

    presume the presence of) subject matter jurisdiction in order to

    decline the exercise of it section 1447(c) does not apply to an

    abstention driven remand. See Corcoran v. Ardra Ins. Co., 842
    ___ ________ _______________

    F.2d 31, 34 (2d Cir. 1988). Hence, the statutory bar does not

    preclude us from reviewing the lower court's remand order.

    B. Possible Sources of Appellate Jurisdiction.
    B. Possible Sources of Appellate Jurisdiction.
    __________________________________________

    Our determination that 28 U.S.C. 1447(d) does not

    operate to bar appellate review merely removes the first hurdle


    6














    blocking the jurisdictional path. To pass the next hurdle, the

    Reinsurers must demonstrate the existence and applicability of

    some affirmative authority conferring jurisdiction on the courts

    of appeals to review remand orders of the sort at issue here.

    The Reinsurers try to clear this hurdle from three different

    angles. They urge that the remand order is appealable under 28

    U.S.C. 1291 (1988)(conferring jurisdiction on the courts of

    appeals to review "final decisions of the district courts"), or,

    alternatively, as a collateral order, see Cohen v. Beneficial
    ___ _____ __________

    Industrial Loan Corp., 337 U.S. 541, 546 (1949), or, if all else
    _____________________

    fails, on the basis that the district court's rulings, taken in

    their totality, constitute a set of orders appealable under the

    Federal Arbitration Act. We find these exhortations

    unconvincing.

    1. The Final Judgment Rule. In respect to the
    1. The Final Judgment Rule.
    _________________________

    suggestion that the remand order is appealable as a final

    judgment, the sockdolager is that the Supreme Court has said

    exactly the opposite:

    [B]ecause an order remanding a removed action
    does not represent a final judgment
    reviewable by appeal, the remedy in such a
    case is by mandamus to compel action, and not
    by writ of error to review what has been
    done.

    Thermtron, 423 U.S. at 352-53 (citation and internal quotation
    _________

    marks omitted).

    The Reinsurers attempt to deflect the force of this

    blunt statement by suggesting that it should be regarded as

    dictum. They posit that, because the Thermtron Court found the
    _________

    7














    remand order so egregious as to justify mandamus, no need to

    decide the availability of direct appellate review ever arose.

    In advancing this suggestion, the Reinsurers are whistling past

    the graveyard.

    "Dictum" is a term that judges and lawyers use to

    describe comments relevant, but not essential, to the disposition

    of legal questions pending before a court. See Kastigar v.
    ___ ________

    United States, 406 U.S. 441, 454-55 (1972); Dedham Water Co. v.
    _____________ _________________

    Cumberland Farms Dairy, Inc., 972 F.2d 453, 459 (1st Cir. 1992);
    _____________________________

    United States v. Crawley, 837 F.2d 291, 292-93 (7th Cir. 1988).
    _____________ _______

    Given the familiar principle that "whatever may be done without

    the employment of [mandamus], may not be done with it," Ex parte
    _________

    Rowland, 104 U.S. 604, 617 (1882)); see also Helstoski v. Meanor,
    _______ ___ ____ _________ ______

    442 U.S. 500, 505-08 (1979), the Court's statement in Thermtron
    _________

    defies description as mere dictum. To the exact contrary, the

    mandamus remedy employed in Thermtron necessarily betokened, and,
    _________

    indeed, depended on, the Court's antecedent holding anent the

    unavailability of direct appellate review. Because deleting the

    challenged statement would have impaired the analytical

    foundation of the Court's ultimate decision to issue mandamus,

    that statement is properly categorized as part of the court's

    holding, not as dictum.3

    ____________________

    3On this issue, all roads lead to Rome. Were we to assume,
    favorably to appellants, that the challenged statement did not
    comprise part of the Court's holding, we would nevertheless hew
    to it. Carefully considered language of the Supreme Court, even
    if technically dictum, generally must be treated as
    authoritative. See United States v. Santana, ___ F.2d ___, ___
    ___ ______________ _______
    (1st Cir. 1993) [No. 93-1393, slip op. at 19-20]; McCoy v.
    _____

    8














    Still using the final judgment rule as their stepping

    stone, the Reinsurers make a second effort to boost themselves

    over the hurdle an effort hinging on the assumption that

    Thermtron did not survive the Court's later decision in Moses H.
    _________ ________

    Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983).
    ____________________ _____________________

    This argument, too, is easily repelled. The short, dispositive

    answer to the argument is that this court only recently refused

    to follow those cases suggesting that Cone undermines Thermtron,
    ____ _________

    and, instead, continued to apply Thermtron's rule that remand
    _________

    orders are not final. See Garcia, ___ F.2d at ___ [slip op. at
    ___ ______

    6-8]. That ends the matter. It is black-letter law that, in a

    multi-panel circuit, newly constituted panels are, with few

    exceptions (none applicable here), bound by prior panel decisions

    closely in point. See, e.g., United States v. Wogan, 938 F.2d
    ___ ____ _____________ _____

    1446, 1449 (1st Cir.), cert. denied, 112 S. Ct. 441 (1991);
    _____ ______

    Jusino v. Zayas, 875 F.2d 986, 993 (1st Cir. 1989). Thus,
    ______ _____

    principles of stare decisis require our allegiance to the
    _____ _______

    Thermtron rule in this situation.
    _________

    The slightly longer, but equally forceful, rebuttal is


    ____________________

    Massachusetts Inst. of Technology, 950 F.2d 13, 19 (1st Cir.
    ___________________________________
    1991), cert. denied, 112 S. Ct. 1939 (1992). This truism is
    _____ ______
    fortified here inasmuch as the rule that the Court's statement
    enunciates that remand orders are not final judgments has
    been adopted in a long string of circuit-level opinions. See,
    ___
    e.g., Garcia, ___ F.2d at ___ [slip op. at 7-8]; Melahan v.
    ____ ______ _______
    Pennock Ins., Inc., 965 F.2d 1497, 1500 (8th Cir. 1992); V & M
    ___________________ _____
    Management, 929 F.2d at 833-34; Corcoran, 842 F.2d at 34; Nasuti
    __________ ________ ______
    v. Scannell, 792 F.2d 264, 267 (1st Cir. 1986); see also Milk ``N'
    ________ ___ ____ ________
    More, Inc. v. Beavert, 963 F.2d 1342, 1344 (10th Cir. 1992);
    ___________ _______
    McDermott Int'l v. Lloyd's Underwriters, 944 F.2d 1199, 1203 (5th
    _______________ ____________________
    Cir. 1991).

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    that there seem to be other good reasons counselling in favor of

    Thermtron's continued vitality. In Cone, the Court held that a
    _________ ____

    stay, issued in order to permit a related state case to proceed

    prior to the federal case, could be appealed as a final order.

    But, Cone makes no reference to Thermtron's holding vis-a-vis
    ____ _________

    remand orders, a circumstance which strongly suggests that the

    Court viewed the rules pertaining to remands and to stays,

    respectively, as separate and distinct. Moreover, the Supreme

    Court has continued to rely on Thermtron in the post-Cone era.
    _________ ____

    See, e.g., Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 347 &
    ___ ____ _____________________ ______

    n.4 (1988). Such continuing reliance indicates that Thermtron is
    _________

    still alive and well. Then, too, our reluctance to find that

    Cone implicitly overruled Thermtron is sharpened by the fact that
    ____ _________

    Thermtron's "language is rather absolute." Garcia, slip op. at
    _________ ______

    7. Where the Court has expressed a rule so clearly, inferior

    courts are entitled to expect equally blunt guidance should the

    Court wish to retract the rule or declare that it is no longer

    good law. Cone sends no such signal.
    ____

    Lastly, and relatedly, Thermtron and Cone, scrutinized
    _________ ____

    side by side, highlight certain differences between remand orders

    and stay orders. Whereas stay orders ordinarily signal a

    determination that there are federal interests at stake,

    sufficient ultimately to justify a hearing in federal court,

    remands, by definition, embody a determination that the

    cognizable federal interests, if any, when compared to the

    cognizable state interests, are so lacking in weight that the


    10














    federal court either does not have, or should not appropriately

    exercise, jurisdiction. A remanded case's failure to pass a

    threshold test of this sort might possibly explain why a federal

    appeal as of right does not attach and the back-up remedy of

    mandamus is deemed adequate protection. Furthermore, remand

    orders typically involve a single case that a federal court

    returns to the state tribunal whence it emanated. Consequently,

    the litigation continues to progress, albeit in a state rather

    than a federal forum. In that sense, there is neither a

    permanent disposition of the case nor a disruption of its

    progress. A stay, on the other hand, typically involves two

    separate proceedings, say, one in a state court and one in a

    federal court. When the federal tribunal stays the latter

    pending the outcome of the former in state court, res judicata
    ___ ________

    principles make that decision effectively final as to certain

    aspects of the federal case. See Cone, 460 U.S. at 10-13 & n.11.
    ___ ____

    We think this finality helps to explain why the Court has

    permitted appeals to be taken from stay orders in situations

    where remand orders would not be appealable. See In re Amoco
    ___ ____________

    Petroleum Additives Co., 964 F.2d 706, 712 (7th Cir. 1992). And
    _______________________

    we think that this twist affords an added reason why,

    notwithstanding Cone, Thermtron's holding that a remand order is
    ____ _________

    not a final judgment remains intact.

    2. The Collateral Order Doctrine. Next, the
    2. The Collateral Order Doctrine.
    ________________________________

    Reinsurers argue that the remand order, even if not a final

    judgment, may nonetheless be appealable under the collateral


    11














    order doctrine. That doctrine carves out a "narrow exception to

    the normal application of the final judgment rule," Midland
    _______

    Asphalt Corp. v. United States, 489 U.S. 794, 798 (1989), limited
    _____________ _____________

    to orders that (1) conclusively determine (2) important legal

    questions which are (3) completely separate from the merits of

    the underlying action and are (4) effectively unreviewable on

    appeal from a final judgment. See Lauro Lines S.R.L. v. Chasser,
    ___ __________________ _______

    490 U.S. 495, 498 (1989); Cohen, 337 U.S. at 546; In re Insurers
    _____ ______________

    Syndicate, Etc., 864 F.2d 208, 210 (1st Cir. 1988). The
    ________________

    Reinsurers contend that the district court's remand order meets

    these four preconditions.

    Once outside the purview of 28 U.S.C. 1447(d), see
    ___

    supra Part II(A), there is no absolute rule either prohibiting or
    _____

    permitting immediate appellate review of remand-related orders

    under the Cohen rubric. Compare, e.g., Karl Koch Erecting Co. v.
    _____ _______ ____ ______________________

    New York Convention Ctr. Dev. Corp., 838 F.2d 656, 658-59 (2d
    _____________________________________

    Cir. 1988) (permitting review of decision to remand based on

    interpretation of forum selection clause) with, e.g., Corcoran v.
    ____ ____ ________

    Ardra Ins. Co., 842 F.2d at 35 (dismissing appeal of decision to
    ______________

    remand based on Burford abstention). Rather, courts must apply
    _______

    the multi-pronged Cohen test to each remand order (or, at least,
    _____

    to each type of remand order) in an individualized, case-specific
    ____

    manner. See, e.g., Garcia, ___ F.2d at ___ [slip op. at 8-9]
    ___ ____ ______

    (undertaking case-specific analysis). And, in determining

    whether a particular remand order falls within or without Cohen's
    _____

    collateral order exception, courts must look to the general


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    circumstances surrounding the order's issuance, including the

    reasons underlying it. See Travelers Ins. Co. v. Keeling, 996
    ___ __________________ _______

    F.2d 1485, 1488-89 (2d Cir. 1993); Corcoran, 842 F.2d at 35.
    ________

    The remand order here at issue does not pass muster

    under Cohen. The salient legal question that stands separate and
    _____

    apart from the merits in this case that is, the "collateral"

    issue is whether the parties' overall dispute should be

    resolved in arbitration. The district court's ruling did not

    conclusively determine this issue. Instead, the district court's

    order set to rest only the preliminary question of which court

    should resolve the collateral issue. In other words, the

    collateral issue remains an open matter a matter that the state

    court must yet decide. We agree with the Second Circuit that, to

    come within the collateral order rule, a decree must definitively

    resolve the merits of the collateral issue, not merely determine

    which court will thereafter resolve it. See Corcoran, 842 F.2d
    ___ ________

    at 35; see also Bennett v. Liberty Nat'l Fire Ins. Co., 968 F.2d
    ___ ____ _______ ___________________________

    969, 970-71 (9th Cir. 1992). Determining whether a state or

    federal court is to resolve an issue constitutes the definitive

    resolution of a collateral matter only when special circumstances

    exist, such as when the remand is pursuant to judicial

    interpretation of a forum-selection provision. See Corcoran, 842
    ___ ________

    F.2d at 35. That is not the case here. Hence, the order that

    the Reinsurers contest does not satisfy the first precondition to

    appealability under the Cohen doctrine.
    _____

    The Reinsurers attempt to subvert this conclusion by


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    redefining the collateral issue. They suggest that the question

    is not whether the underlying dispute should be resolved in

    arbitration, but, rather, whether a federal or state court is the

    proper forum for determining the dispute's arbitrability. We

    think this argument proves too much. Every remand order

    conclusively determines which court will thereafter determine the

    issues in controversy. Thus, appellants' approach could easily

    expand Cohen beyond the isthmian confines that the Court
    _____

    envisioned, see Cohen, 337 U.S. at 546 (predicting that only a
    ___ _____

    "small class" of cases would be affected by the doctrine), and

    thereby thwart the strong federal interest in precluding

    piecemeal appeals. See Coopers & Lybrand v. Livesay, 437 U.S.
    ___ __________________ _______

    463, 471 (1978); Recticel, 859 F.2d at 1003 & n.3. At any rate,
    ________

    we are skeptical about permitting litigants to avoid Cohen's
    _____

    first prong by the simple expedient of distilling issues to the

    smallest possible unit of measurement. We, therefore, decline to

    accept the Reinsurers' attempted reformulation of the collateral

    issue. See generally Travelers Ins. Co. v. Keeling, 996 F.2d at
    ___ _________ __________________ _______

    1489 (refusing, in nearly identical circumstances, to redefine

    the issue in dispute); Corcoran, 842 F.2d at 35 (similar).
    ________

    In all events, we conclude that, whatever way the

    collateral issue is defined, the remand order is not immediately

    appealable because it fails another element of the test. Cohen
    _____

    requires that the disputed issue represent "an important and

    unsettled question of controlling law, not merely a question of

    the proper exercise of the trial court's discretion." Boreri v.
    ______


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    Fiat S.p.A., 763 F.2d 17, 21 (1st Cir. 1985); accord Insurers
    ___________ ______ ________

    Syndicate, 864 F.2d at 210; United States v. Sorren, 605 F.2d
    _________ _____________ ______

    1211, 1213 (1st Cir. 1979); see also Lauro Lines, 490 U.S. at 504
    ___ ____ ___________

    (Scalia, J., concurring) (explaining that the collateral issue

    must be "sufficiently important to overcome the policies

    militating against interlocutory appeals"). Although the

    question, admittedly, is not free from doubt the Convention,

    after all, contemplates the possibility of removal when a state-

    court proceeding relates to an arbitration agreement and involves

    a foreign reinsurer we believe that the Burford-based decision
    _______

    as to which forum, state or federal, will ultimately determine

    arbitrability lacks the necessary high degree of importance that

    is demanded. This conclusion is scarcely original. Both the

    Court, in Thermtron, and the Congress, in enacting 28 U.S.C.
    _________

    1447, have adumbrated that, absent exceptional circumstances, the

    determination that one particular court, rather than some other

    equally qualified court, will adjudicate an issue is not so vital

    as to outweigh the interests of the parties and of society in the

    swift, efficient administration of justice. Indeed, Thermtron
    _________

    and section 1447 serve as vivid reminders that, when remand is at

    stake, the policies militating against interlocutory appeal

    possess their full vigor. See generally 14A Charles A. Wright,
    ___ _________

    et al., Federal Practice and Procedure 3740 (1985 & Supp.
    _______________________________

    1993).

    We hold, therefore, that an order to remand premised on

    Burford abstention is not immediately appealable under the Cohen
    _______ _____


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    rubric. In reaching this result, we find ourselves in agreement

    with the Second Circuit. See Corcoran, 842 F.2d at 35. We
    ___ ________

    expressly decline to extend the Fifth Circuit's decision in

    McDermott Int'l v. Lloyd's Underwriters, 944 F.2d 1199, 1203 &
    _______________ ____________________

    n.5 (5th Cir. 1991), beyond the facts there presented.4 When

    all is said and done, in this case, as in Garcia, ___ F.2d at ___
    ______

    [slip op. at 9], "we cannot find a ``collateral order' exception

    large enough to fit our case that does not swallow up (and

    thereby simply disregard) the general rule."

    3. The Federal Arbitration Act. The Federal
    3. The Federal Arbitration Act.
    ______________________________

    Arbitration Act is the last source of the Reinsurers' effort to






    ____________________

    4While we are comfortable with the result in McDermott,
    _________
    given its facts, some of the language contained in the opinion is
    potentially mischievous. With respect, we think the court
    overgeneralized by failing to distinguish between cause and
    effect. McDermott properly found the district court's remand
    _________
    order to be appealable under the collateral order doctrine, but
    this outcome is not dictated merely because the remand order had
    the "effect [of] allow[ing] a state court to decide the question
    ______
    of arbitrability." McDermott, 944 F.2d at 1203 (emphasis
    _________
    supplied). Rather, the question of where the parties' dispute
    regarding arbitration was to be resolved constituted a collateral
    issue because the parties had jointly made it a collateral issue,
    i.e., they had included a service-of-suit clause in the contract
    ____
    and the court based the remand on its substantive interpretation
    of that provision. See id. at 1201. The mere fact that a remand
    ___ ___
    order has the effect of deciding that issues are to be resolved
    in a state court does not mean that, in every case, the identity
    of the forum is a collateral issue within the ambit of Cohen.
    _____
    See Corcoran, 842 F.2d at 35. After all, remand orders always
    ___ ________
    cause the disputed issues to be determined in state court; and
    McDermott's reasoning, applied across the board, would make
    _________
    virtually all remand orders (save only those which are subject to
    ___
    the statutory bar, see supra Part II(A)) appealable collateral
    ___ _____
    orders a position to which we cannot subscribe.

    16














    generate an adequate jurisdictional showing.5 The Act provides,

    inter alia, that an appeal may be taken from an order refusing a
    _____ ____

    stay pending arbitration or denying a motion to compel

    arbitration. See 9 U.S.C. 16(a)(1)(A), (C) (Supp. V 1992).
    ___

    Here, the district court, after remanding the case, stated that

    it was denying appellants' motions to compel arbitration and stay

    the litigation, without prejudice. The Reinsurers endeavor to

    appeal from these "denials." We are unimpressed.

    We think it is evident that the district court, having

    indicated its intention to remand the case to state court, added

    the "denied without prejudice" language merely as a way of

    flagging that it intended the arbitrability issue to be decided

    in a state court and that the federal court, in remanding, took

    no view of arbitrability. The district court's remarks, then,

    did not deal with the merits of the arbitration question and were

    not arbitrability denials of the sort that the Federal

    Arbitration Act makes immediately appealable. Compare Asset
    _______ _____

    Allocation & Management Co. v. Western Employers Ins. Co., 892
    ____________________________ ___________________________

    F.2d 566, 574 (7th Cir. 1989) (finding district court's order

    appealable under Federal Arbitration Act) with Jeske v. Brooks,
    ____ _____ ______

    875 F.2d 71, 73 (4th Cir. 1989) (finding district court's order

    inappropriate for appeal). To hold otherwise would be

    ____________________

    5We need not consider whether the Enelow-Ettelson doctrine,
    _______________
    see Enelow v. New York Life Ins. Co., 293 U.S. 379 (1935);
    ___ ______ _________________________
    Ettelson v. Metropolitan Life Ins. Co., 317 U.S. 188 (1942),
    ________ ____________________________
    might make the remand order immediately appealable under 28
    U.S.C. 1292(a)(1). The Court has overruled that line of cases.
    See Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271,
    ___ __________________________ _______________
    279-88 (1988).

    17














    mechanically to elevate form over substance, a practice that we

    have consistently spurned. See, e.g., United States v. Branble,
    ___ ____ _____________ _______

    925 F.2d 532, 534 (1st Cir. 1991); Maine v. Thomas, 874 F.2d 883,
    _____ ______

    886 (1st Cir. 1989).

    The Reinsurers cannot achieve a different result even

    if the district court acted with a more meddlesome intent. Once

    it remanded the case to a state forum, the district court lost

    jurisdiction over the case and, therefore, lacked the authority

    to issue substantive orders of the sort that the Reinsurers

    suggest were issued here. See, e.g., In re La Providencia Dev.
    ___ ____ __________________________

    Corp., 406 F.2d 251, 252-53 (1st Cir. 1969); see also General
    _____ ___ ____ _______

    Elec. Co. v. Byrne, 611 F.2d 670, 672-73 (7th Cir. 1979) (per
    __________ _____

    curiam) (stating that a "transfer order deprives the transferor

    court of jurisdiction until the case is returned to it"); cf.
    ___

    Moore v. Permanente Medical Group, Inc., 981 F.2d 443, 445 (9th
    _____ _______________________________

    Cir. 1992) (holding that a district court possessed the authority

    to award attorneys' fees after remanding only because the award

    of fees was specifically authorized by the remand statute and

    was, therefore, "collateral to the decision to remand"); In re
    ______

    Spillane, 884 F.2d 642, 645-46 (1st Cir. 1989) (similar, but in
    ________

    venue-transfer context). Put another way, absent an emergency or

    some other extraordinary circumstance, the district court could

    only have issued substantive orders necessary to reaching the

    decision to remand.6 See, e.g., Karl Koch, 838 F.2d at 659
    ___ ____ __________


    ____________________

    6The court's power to issue such orders is derivative of,
    and implicit in, its power to remand.

    18














    (remanding because court interpreted a forum-selection provision

    as requiring parties to litigate in state court); Pelleport
    _________

    Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273,
    _______________ _____________________________

    275 (9th Cir. 1984) (similar).

    In the last analysis, whether or not we construe the

    district court's remarks as rulings, the bottom line is

    unaffected: the denials have no legal effect aside from making

    clear the dimensions of the issues that the court proposed to

    leave unadjudicated.

    4. Summary. To recapitulate, under the circumstances
    4. Summary.
    _______

    of this litigation, the district court's remand order is not a

    final judgment; it is not an appealable collateral command; and

    its accouterments are not appealable under the Federal

    Arbitration Act. Because the Reinsurers have been wholly unable

    to demonstrate a cognizable hook on which appellate jurisdiction

    may be hung, their appeal must be dismissed for want of

    jurisdiction.7

    III. THE PETITION FOR MANDAMUS
    III. THE PETITION FOR MANDAMUS

    Anticipating problems in topping the jurisdictional

    hurdles, the Reinsurers also seek to proceed by way of mandamus.

    They ask that we issue a writ requiring the district court to

    vacate the remand order, accept jurisdiction over the case,

    compel arbitration of a portion of the underlying dispute, and


    ____________________

    7Inasmuch as we hold that there is no affirmative source
    conferring jurisdiction over the appeal essayed by the
    Reinsurers, we need not address any of Doughty's other challenges
    to this court's appellate jurisdiction.

    19














    stay proceedings as to the remainder. We see no reason to honor

    the request.

    Although federal appellate courts have power to issue

    prerogative writs that are "necessary or appropriate in aid of

    their . . . jurisdiction[]," 28 U.S.C. 1651(a) (1988), that

    power must be used stintingly and brought to bear only in

    extraordinary situations. See Allied Chem. Corp. v. Daiflon,
    ___ ___________________ ________

    Inc., 449 U.S. 33, 34 (1980) (per curiam); Recticel, 859 F.2d at
    ____ ________

    1005. Thus, prerogative writs, although frequently sought, are

    seldom issued. To succeed in the hunt, a writ-seeker usually

    must demonstrate that the challenged order is palpably erroneous

    and that he faces some special risk of irreparable harm.8 See
    ___

    In re Pearson, 990 F.2d 653, 656 & n.4 (1st Cir. 1989)
    _______________

    (collecting cases). Given the stringency of this standard, it is

    unsurprising that "[i]nterlocutory procedural orders . . . rarely

    will satisfy th[e] precondition for mandamus relief." Recticel,
    ________

    859 F.2d at 1006; accord Pearson, 990 F.2d at 656. We explain
    ______ _______

    briefly why this case is no exception to the rule.

    In the first place, "mandamus [generally] will not

    issue to control exercises of discretion." Recticel, 889 F.2d at
    ________

    1006; accord DeBeers Consolidated Mines, Ltd. v. United States,
    ______ ________________________________ _____________

    325 U.S. 212, 217 (1945); In re Bushkin Assocs., Inc. 864 F.2d
    ____________________________


    ____________________

    8We have, on infrequent occasions, relaxed these
    requirements and exercised our powers of "advisory mandamus" when
    matters of great public import are involved. See In re Justices
    ___ ______________
    of the Supreme Court of Puerto Rico, 695 F.2d 17, 25 (1st Cir.
    _____________________________________
    1982). The Reinsurers have not urged us to use advisory mandamus
    here and, at any rate, this is plainly not a suitable case.

    20














    241, 245 (1st Cir. 1988). Burford-based abstention decisions,
    _______

    while more closely cabined under the current legal regime, see,
    ___

    e.g., Fragoso, 991 F.2d at 883-86, still contain a discretionary
    ____ _______

    element. See, e.g., General Glass Indus. Corp. v. Monsour
    ___ ____ ____________________________ _______

    Medical Found., 973 F.2d 197, 203 (3d Cir. 1992): New Orleans
    ______________ ____________

    Pub. Serv., Inc. v. New Orleans, 798 F.2d 858, 862 (5th Cir.
    _________________ ____________

    1977); Richardson v. City, Etc. of Honolulu, 759 F. Supp. 1477,
    __________ _______________________

    1483 (D.Haw. 1991). It follows that, to the degree the district

    court understood controlling abstention law and exercised its

    discretion within that known law, this case is a poor candidate

    for mandamus relief. See Bushkin, 864 F.2d at 245 (explaining
    ___ _______

    that "mandamus is generally thought an inappropriate prism

    through which to inspect exercises of judicial discretion").

    Even misuses of discretion will not provoke mandamus relief
    _______

    absent a clear usurpation of power or some similarly egregious

    circumstance. See id.
    ___ ___

    In the second place, we cannot say that the district

    court's decision in this case represents a palpably erroneous

    application of Burford abstention law. Although the radius of
    _______

    permissible Burford abstention has shrunk in recent years, see
    _______ ___

    New Orleans Pub. Serv., Inc. v. City Council of New Orleans, 491
    _____________________________ ___________________________

    U.S. 350, 360-64 (1989); Fragoso, 991 F.2d at 882-86, this
    _______

    litigation involves a number of novel questions, including

    whether the complex system Massachusetts has enacted for the

    liquidation of domestic insurance companies is the sort of scheme

    that warrants serious consideration as a basis for abstention.


    21














    After reviewing the record, we can say only that the district

    court's Burford-based decision is possibly erroneous not that
    _______

    it is palpably so. That is not enough to satisfy the customary

    precondition for mandamus relief. See Bushkin, 864 F.2d at 245.
    ___ _______

    And, moreover, mandamus seems an awkward vehicle for resolving

    the doubtful issues that permeate the Burford equation. See
    _______ ___

    Amoco Petroleum, 964 F.2d at 713 (collecting cases); Corcoran,
    _______________ ________

    842 F.2d at 36-37 (declining, in similar circumstances, to issue

    a writ of mandamus).

    We note, too, that the record reveals several potential

    non-Burford-based reasons for remanding this case which, on the
    _______

    surface, appear to possess merit. It is a prerequisite to

    mandamus relief that the ruling below be "palpably improper,"

    LaBuy v. Howes Leather Co., 352 U.S. 249, 256 (1957), and that a
    _____ _________________

    suitor's entitlement to the claimed relief be plain as a matter

    of law, Pearson, 990 F.2d at 657 & n.4. We do not believe these
    _______

    criteria are satisfied if the disputed disposition, albeit

    premised on a doubtful ground, is nevertheless probably

    sustainable on an alternative ground. The case before us

    illustrates the point: whatever may be said of the district

    court's Burford rationale, the outcome of the federal
    _______

    adjudicative process retransmitting the litigation to the state

    court cannot by any stretch be classified as palpably

    erroneous.

    Also, we descry no special risk of irreparable harm.

    The Reinsurers' rhetoric does not change the fact that the remand


    22














    order leaves the issue of arbitrability unresolved. The state

    court will decide that issue, and the Reinsurers will have rights

    to appeal within that system should they so elect. While the

    Reinsurers may prefer that a federal forum determine the result,

    they have offered no reason why the frustration of this

    preference is likely to cause irreparable harm. Cf., e.g.,
    ___ ____

    Garcia, ___ F.2d at ___ [slip op. at 10] (finding mandamus
    ______

    appropriate where a "critical legal determination" would,

    following remand, be insulated from "meaningful review").

    There is an overriding consideration that touches upon

    all the above. A court that is asked to issue a writ of mandamus

    is itself invested with considerable discretion. See Kerr v.
    ___ ____

    United States District Court, 426 U.S. 394, 403 (1975). Given
    _____________________________

    the facts and posture of this dispute, the wise exercise of

    judicial discretion strongly favors continuing to employ mandamus

    sparingly, Recticel, 859 F.2d at 1005; see also Boreri, 763 F.2d
    ________ ___ ____ ______

    at 26 (warning that "the currency [of mandamus] is not

    profligately to be spent"), and allowing this case to proceed in

    state court. The Convention, which is the sole source of

    ostensible federal jurisdiction, applies neither to the numerous

    reinsurance contracts that do not contain arbitration clauses nor

    to those underwritten by the several domestic insurance

    providers. Most of the years in controversy are years in which

    the reinsurance arrangements are not even arguably affected by

    arbitration clauses. The net result is that, should we heed the

    Reinsurers' pleas, the litigation would be split between federal


    23














    and state court.

    Further, the crux of the controversy involves the

    contested interpretation of contract provisions presenting

    chiefly matters of state law. Claims have also been brought

    under Massachusetts unfair trade practice statute. The larger

    context in which the litigation is set concerns the business of

    insurance, which the McCarran-Ferguson Act, 21 U.S.C. 1012

    (1988), unequivocally declares to be a state-law preserve. The

    Commonwealth, through its Insurance Commissioner, is a real party

    in interest. In all, it likely understates the obvious to

    acknowledge that "state issues substantially predominate."

    United Mine Workers of America v. Gibbs, 383 U.S. 715, 726
    _________________________________ _____

    (1966). When these features are coupled with the host of

    significant questions concerning the propriety of the removal

    order, it would be rashly injudicious for us to exercise our

    discretion to sponsor mandamus, thereby wresting the suit from

    its natural habitat and abetting its balkanization.

    We need go no further. It is apodictic that

    "[m]andamus cannot be allowed to become a handy substitute for an

    otherwise unavailable interlocutory appeal." Bushkin, 864 F.2d
    _______

    at 265. Thus, a party seeking the issuance of a prerogative writ

    bears a heavy burden. The Reinsurers have neither carried this

    burden nor persuaded us that we should gratuitously oust the

    state court of jurisdiction over part of the litigation, leaving

    the remainder to linger there. The petition for mandamus must,

    therefore, be denied.


    24














    IV. CONCLUSION
    IV. CONCLUSION

    To summarize, although the statutory bar, 28 U.S.C.

    1447(d), does not pertain, the Reinsurers cannot clear the other

    jurisdictional hurdles that dot the path to federal appellate

    relief. We lack jurisdiction over their appeal and we also lack

    a cognizable basis for issuing a prerogative writ.



    The appeal is dismissed for want of appellate
    _______________________________________________________

    jurisdiction. The petition for issuance of a writ of mandamus is
    ____________ __________________________________________________

    denied. Costs are to be taxed in favor of respondent-appellee.
    ______ _____________________________________________________


































    25







Document Info

Docket Number: 93-1174

Filed Date: 10/18/1993

Precedential Status: Precedential

Modified Date: 9/21/2015

Authorities (42)

Ex Parte Rowland , 26 L. Ed. 861 ( 1882 )

La Buy v. Howes Leather Co. , 77 S. Ct. 309 ( 1957 )

Allied Chemical Corp. v. Daiflon, Inc. , 101 S. Ct. 188 ( 1980 )

Carnegie-Mellon University v. Cohill , 108 S. Ct. 614 ( 1988 )

New Orleans Public Service, Inc. v. Council of City of New ... , 109 S. Ct. 2506 ( 1989 )

mcdermott-international-inc-v-lloyds-underwriters-of-london-john , 944 F.2d 1199 ( 1991 )

karl-koch-erecting-co-inc-v-new-york-convention-center-development , 838 F.2d 656 ( 1988 )

james-p-corcoran-superintendent-of-insurance-of-the-state-of-new-york , 842 F.2d 31 ( 1988 )

herbert-a-jeske-v-george-e-brooks-robinson-humphrey-company-inc , 875 F.2d 71 ( 1989 )

general-glass-industries-corporation-on-behalf-of-itself-and-all-others , 973 F.2d 197 ( 1992 )

In Re La Providencia Development Corporation , 406 F.2d 251 ( 1969 )

In Re Recticel Foam Corporation, in Re San Juan Dupont ... , 859 F.2d 1000 ( 1988 )

Kastigar v. United States , 92 S. Ct. 1653 ( 1972 )

Dedham Water Co., Inc. v. Cumberland Farms Dairy, Inc. , 972 F.2d 453 ( 1992 )

Enelow v. New York Life Insurance , 55 S. Ct. 310 ( 1935 )

andrea-bennett-state-auditor-and-commissioner-of-insurance-for-the-state , 968 F.2d 969 ( 1992 )

In the Matter of Amoco Petroleum Additives Company and Buck ... , 964 F.2d 706 ( 1992 )

General Electric Company, a Corporation v. Hon. William ... , 611 F.2d 670 ( 1979 )

De Beers Consolidated Mines, Ltd. v. United States , 65 S. Ct. 1130 ( 1945 )

United States v. William C. Sorren , 605 F.2d 1211 ( 1979 )

View All Authorities »