Joseph Agostini v. Piper Aircraft Corp , 729 F.3d 350 ( 2013 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 12-2098
_____________
JOSEPH L. AGOSTINI,
Individually and as co-executor of the estate of Jordyn
Agostini, Deceased;
SUELLEN AGOSTINI,
Individually and as co-executor of the estate of Jordyn
Agostini, Deceased;
DOUGLAS J. HENEGAR,
Individually and as natural father of Kyle Henegar, Deceased;
SHARON K. HENEGAR,
Individually and as administratrix of the estate of Kyle
Henegar, Deceased;
DOUGLAS J. HENEGAR,
Individually and as natural father of Kristopher Henegar,
Deceased;
SHARON K. HENEGAR,
Individually and as administratrix of the estate of Kristopher
Henegar, Deceased
v.
PIPER AIRCRAFT CORPORATION; AVSTAR FUEL
SYSTEMS;
LYCOMING, a/k/a Lycoming Engines,
a/k/a Textron Lycoming Reciprocating Engine Division;
AVCO CORPORATION; TEXTRON, INC.; DUKES
AEROSPACE, INC.;
FLORIDA INSTITUTE OF TECHNOLOGY; F.I.T.
AVIATION, LLC
Avco Corporation and Textron, Inc.,
Appellants
_____________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
District Court No. 02-11-cv-07172
District Judge: The Honorable Mary A. McLaughlin
Before: SMITH, CHAGARES, and SCIRICA, Circuit Judges.
(Filed: September 5, 2013)
James E. Robinson, Esq.
Catherine B. Slavin, Esq.
Sara A. Frey, Esq.
Gordon & Rees
2005 Market Street
Suite 2900
Philadelphia, PA 19103
Counsel for Appellants
Bradley J. Stoll, Esq.
The Wolk Law Firm
1710-12 Locust Street
Philadelphia, PA 19103-0000
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J. Denny Shupe, Esq.
Schnader Harrison Segal & Lewis
1600 Market Street
Suite 3600
Philadelphia, PA 19103
Robert J. Williams
Schnader Harrison Segal & Lewis
120 Fifth Avenue
2700 Fifth Avenue Place
Pittsburgh, PA 15222
Counsel for Appellees
________________
OPINION
________________
CHAGARES, Circuit Judge.
This motion to dismiss requires us to consider whether
we have jurisdiction to review a district court’s denial of a
motion for reconsideration when the order to be reconsidered
is a remand to state court for lack of subject-matter
jurisdiction. For the reasons that follow, we hold that
although the District Court had jurisdiction to rule on the
motion to reconsider the remand order in this particular
instance, this Court has no jurisdiction to review the District
Court’s ruling on the motion for reconsideration.
Accordingly, we will grant the motion to dismiss the instant
appeal.
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I.
On November 11, 2010, an airplane crashed in West
Palm Beach, Florida, resulting in the death of the pilot and
three passengers. Personal representatives for the estates of
the deceased pilot and two deceased passengers (collectively,
the “plaintiffs”) filed suit in the Court of Common Pleas of
Philadelphia County in November 2011, asserting state law
claims against Textron, Inc., AVCO Corporation, and other
corporate entities (collectively, the “defendants”). Textron
removed the case to the United States District Court for the
Eastern District of Pennsylvania under 28 U.S.C. § 1441,
asserting diversity of citizenship pursuant to 28 U.S.C.
§ 1332. The plaintiffs moved to remand the matter to state
court, arguing that AVCO is a citizen of Pennsylvania, and
therefore not diverse from all plaintiffs.
Based on the documents submitted by the plaintiffs,
the District Court granted the plaintiffs’ motion on February
29, 2012 and ordered that the case be remanded to
Pennsylvania state court. AVCO moved for reconsideration
of the remand order on March 13, 2012, arguing that the
District Court improperly granted the motion to remand on
the basis of unsubstantiated argument, unauthenticated
documents, and facts outside the record that had not been
established by affidavit or testimony. Citing the standard
governing motions for reconsideration, the District Court
determined that it had not clearly erred in granting the
plaintiffs’ motion to remand and therefore denied AVCO’s
motion for reconsideration on March 15, 2012. A certified
copy of the District Court’s February 29, 2012 remand order
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was mailed to the state court on March 20, 2012. The notice
of appeal was filed on April 16, 2012.
II.
We begin by examining whether we have jurisdiction
to consider this appeal. 28 U.S.C. § 1447(d) provides, in
relevant part: “[a]n order remanding a case to the State court
from which it was removed is not reviewable on appeal or
otherwise . . . .” The plain text of § 1447(d) clearly bars our
review of the District Court’s February 29, 2012 remand
order. Indeed, in Quackenbush v. Allstate Insurance
Company, the United States Supreme Court underscored that
“only remands based on grounds specified in § 1447(c)” —
namely, remand orders based on the lack of subject-matter
jurisdiction, like the remand order here — “are immune from
review under § 1447(d).” 517 U.S. 706, 712 (1996)
(quotation marks omitted); see also 28 U.S.C. § 1447(c).
Textron and AVCO (together, the “Lycoming defendants”)
acknowledge — as they must — that we do not have
jurisdiction to review the District Court’s remand order.
Nevertheless, the Lycoming defendants maintain that we have
appellate jurisdiction over the District Court’s denial of the
motion for reconsideration. They argue that a remand order is
distinct from a motion to reconsider a remand order, and that
our review of the latter is not barred by § 1447(d).
The plaintiffs respond that our review of the denial of
the motion to reconsider the remand order would serve to
circumvent the jurisdiction-stripping function of § 1447(d).
That is, if we do not have jurisdiction to review a remand
order itself, we cannot have jurisdiction to review a motion to
reconsider a remand order. The Lycoming defendants’
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valiant effort to escape this rather self-evident principle relies
upon their observation that “in certain circumstances,” “an
appellate court . . . may reach the merits of an unreviewable
remand order.” Brief of Lycoming Defendants in Opposition
to Motion to Dismiss Appeal (“Defs. Br.”) 8. Culling several
cases wherein a remand order was held subject to appellate
review, the Lycoming defendants maintain that “the existence
of a severable or separable order on the merits of a collateral
issue, as opposed to an order on subject matter jurisdiction, is
appealable notwithstanding 28 U.S.C. § 1447(c), and federal
appellate courts have jurisdiction to review the order despite
the fact that a case has been remanded to state court.” Id. at
9. According to the Lycoming defendants, the motion to
reconsider a remand order is just such a “collateral issue”
over which we retain jurisdiction.
We have indeed held in other contexts that federal
courts may exercise jurisdiction over certain collateral issues
even after a case has been remanded to state court. For
example, in Mints v. Education Testing Services, 99 F.3d
1253 (3d Cir. 1996), we held that a district court had
jurisdiction to grant attorneys’ fees associated with a motion
to remand a matter to state court even after the district court
had remanded the case to state court. In Mints, we cited to
Cooter & Gell v. Hartmarx Corporation, 496 U.S. 384 (1990),
wherein the Supreme Court determined that even after a
plaintiff voluntarily dismissed an action, a district court could
impose sanctions pursuant to Federal Rule of Civil Procedure
11. Mints, 99 F.3d at 1258. Although “recogniz[ing] that
Cooter & Gell is distinguishable because it did not implicate
the special jurisdictional problems presented when a case is
remanded to a state court,” we nevertheless held that the
award of attorneys’ fees — like the imposition of sanctions,
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or the award of costs — “is collateral to the decision to
remand and cannot affect the proceedings in the state court.”
Id.Thus, our precedent establishes that federal courts may
decide “collateral” issues after remand because such issues by
definition “cannot affect” the progress of a case once it has
been returned to state court. This accords with the Cooter &
Gell Court’s characterization of collateral issues as those for
which “determination[s] may be made after the principal suit
has been terminated.” See Cooter & Gell, 496 U.S. at 396(identifying motions for costs or attorneys’ fees and motions
to impose contempt sanctions as “collateral”).
We hold that a motion to reconsider a remand order is
not such a collateral issue. To begin with, we explicitly noted
in Mints that a motion to reconsider a remand order is distinct
from a motion for attorneys’ fees, as far as the application of
§ 1447(d) is concerned:
While there is no doubt that under Hunt v. Acromed
Corp., . . . , the district court should not have
reconsidered the order of remand after the clerk of the
district court sent the certified copy of the order to the
clerk of the Superior Court, the principles underlying
our opinion in that case are not applicable with respect
to the . . . application [for attorneys’ fees].
Mints, 99 F.3d at 1257.
This interpretation of the collateral-issues exception is
reinforced by the Supreme Court’s holding in City of Waco v.
United States Fidelity and Guaranty Co., 293 U.S. 1407
(1934). There, the Supreme Court held that the Court of
Appeals retained jurisdiction to review an order by a district
court to dismiss a party, even though the district court then
remanded the case to state court because the party’s dismissal
resulted in a lack of diversity jurisdiction. Id. at 143. The
Lycoming defendants cite the Waco Court’s ruling as
supportive of their position that this Court may entertain a
post-remand challenge to a district court’s order. However, in
our view, the Supreme Court’s decision in Waco underscores
that once a case has been remanded for lack of subject-matter
jurisdiction, that remand order cannot be undone.
Significantly, the Waco Court explained that the appellate
court’s “reversal [could] not affect the order of remand, but
[would] at least, if the dismissal of the petitioner’s complaint
was erroneous, remit the entire controversy, with the
[dismissed company] still a party, to the state court for such
further proceedings as may be in accordance with law.” Id. at
143-44. The same cannot be said of the case before us now,
as reversal of the District Court’s reconsideration order would
necessarily affect the District Court’s decision to remand the
case to state court. Indeed, returning this matter to federal
court from state court is precisely what the motion for
reconsideration sought to do, and it is what the Lycoming
defendants seek on appeal as well.
The interpretation of Waco by other Courts of Appeals
reinforces the distinction between the limited exception to
§ 1447(d) and the rule the Lycoming defendants ask us to
adopt in the instant case. In particular, the Court of Appeals
for the Fourth Circuit concluded that implementing the so-
called Waco exception requires: (1) that the “purportedly
reviewable order . . . have a conclusive effect upon the
parties’ substantive rights,” including “a preclusive effect
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upon the parties in subsequent proceedings”; and (2) that the
reviewable decision is “able to be disaggregated from the
remand order itself.” Palmer v. City Nat’l Bank of West Va.,
498 F.3d 236, 240-41 (4th Cir. 2007) (quotation marks
omitted). Accordingly, the Palmer court held that it had
jurisdiction to review dismissal of federal defendants who
“were not subject to the remand order,” id. at 243, because
they had ceased to be parties in the case. The Palmer court
noted the critical fact that, “[w]ere we to reverse the dismissal
of the federal defendants, the remand order would not be
subverted.” Id. at 244 (quotation marks omitted).
In the instant case, it is impossible to disaggregate the
order denying reconsideration from the remand order itself,
despite the Lycoming defendants’ insistence that the two
orders are distinct and therefore permit application of the
Waco exception as applied in Palmer. The Lycoming
defendants are correct that the District Court’s denial of the
reconsideration motion “will have the preclusive effect of
being functionally unreviewable in state court.” Defs. Br. 9.
But that is not the standard that this Court or the Palmer court
— or, it appears, any Court of Appeals — applies when
determining whether or not review of an order issued in a
remanded case is permitted. As with the motion for
reconsideration filed before the District Court, the very
purpose of this appeal is to subvert the remand order by
convincing this Court that diversity jurisdiction does, indeed,
exist. Therefore, even if we were to adopt the procedure of
the Fourth Circuit Court of Appeals for applying the Waco
exception, we would find that the instant case fails the Palmer
test because reversing the District Court’s denial of the
motion for reconsideration would subvert the District Court’s
remand order.
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We note that the “functionally unreviewable” standard
proposed by the Lycoming defendants is confounding
because it is the express effect of § 1447(d) to ensure that a
remand order based on lack of subject-matter jurisdiction is
unreviewable — in state court or elsewhere. Our own
jurisprudence on § 1447(d) makes this clear:
The purpose of the rule is to prevent a
party to a state lawsuit from using
federal removal provisions and appeals
as a tool to introduce substantial delay
into a state action. . . . Without §
1447(d), a party to a state action could
remove the action to federal court, await
remand, request reconsideration of the
remand, appeal, request rehearing, and
then file a petition for a writ of certiorari,
all before being forced to return to state
court several years later. . . . To avoid
this delay, Congress has fashioned an
exception to the general rule of review,
and made a district court’s initial
determination that removal was
inappropriate a nonreviewable one.
Hudson United Bank v. LiTenda Mortg. Corp., 142 F.3d 151,
156-57 (3d Cir. 1998). Accordingly, we hold that we do not
have jurisdiction to review an order denying a motion to
reconsider a remand order.
III.
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Whether or not the District Court itself had jurisdiction
to reconsider the remand order depends upon establishing the
moment at which jurisdiction was transferred from federal to
state court. According to our precedent, the mailing of a
certified copy of the remand order to state court is the event
that formally transfers jurisdiction from a district court within
this Circuit to a state court. Trans Penn Wax Corp. v.
McCandless, 50 F.3d 217, 225 (3d Cir. 1995) (“The general
rule is that a district court loses jurisdiction over a case once
it has completed the remand by sending a certified copy of the
remand order to state court.”).1 In our view, the text of 28
U.S.C. § 1447(c) establishes that jurisdiction remains with the
district court until the jurisdiction-transferring event has
occurred: “[a] certified copy of the order of remand shall be
mailed by the clerk to the clerk of the State court. The State
court may thereupon proceed with such case.” 28 U.S.C.
§ 1447(c).2 Thus, in this case, the District Court had
1
This Court decided Trans Penn Wax on a petition for writ of
mandamus, not as an as-of-right appeal, because the remand
order in that case was pursuant to 28 U.S.C. § 1367 — not
§ 1447(c). Trans Penn Wax, 50 F.3d at 227. In Thermtron
Products, Inc. v. Hermansdorfer, the Supreme Court held that
§ 1447(d) does not bar mandamus review of remand orders
grounded in legal authority other than § 1447(c). 423 U.S.
336, 345 (1976); see also James E. Pfander, Collateral
Review of Remand Orders: Reasserting the Supervisory Role
of the Supreme Court, 159 U. Pa. L. Rev. 493, 495-96 (2011)
(discussing the Supreme Court’s expansion of as-of-right
review through the collateral order doctrine).
2
This accords with the rule recognized by the Court of
Appeals for the Second Circuit as well. Shapiro v. Logistec
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jurisdiction to deny the defendants’ motion for
reconsideration because, at the time when the District Court
considered the motion for reconsideration, a certified copy of
the remand order had not yet been mailed from the District
Court Clerk to the state court.
Our holding does not trouble that general rule, which,
in addition to being “premised on . . . the language of §
1447(c) and (d),” is also grounded in “the need to establish a
determinable jurisdictional event after which the state court
can exercise control over the case without fear of further
federal interference.” Trans Penn Wax, 50 F.3d at 225. Here,
that determinable jurisdictional event occurred after the
District Court denied the motion to reconsider its remand
order and before the Lycoming defendants filed their notice
of appeal. Therefore, it was not until the certified copy of the
remand order was mailed to state court that the mandate of
USA, Inc., 412 F.3d 307, 312 (2d Cir. 2005) (“Section
1447(c) . . . is not self-executing. . . . This provision creates
legal significance in the mailing of a certified copy of the
remand order in terms of determining the time at which the
district court is divested of jurisdiction. . . . Thus, section
1447(d) divests the district court of jurisdiction upon mailing
of a remand order based on section 1447(c) grounds to state
court.” (quotation marks omitted)). But see In re Lowe, 102
F.3d 731, 734 (4th Cir. 1996) (“Subsection 1447(d) provides
only that a remand ‘order’ may not be reviewed; it does not
condition reviewability on any other event. Thus, the plain
language of subsection (d) indicates that a court may not
reconsider its decision to remand, as soon as it formalizes that
decision in an ‘order.’”).
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§ 1447(c) was fulfilled, triggering § 1447(d). At the moment
of mailing — the jurisdictional event — the remand order
became unreviewable “on appeal or otherwise.” A district
court that seeks to preserve the ability to reconsider remand
orders issued under § 1447(c), in order to guard against the
occasional error in assessing subject-matter jurisdiction, may
wish to bear in mind that jurisdiction is not transferred until
the Clerk mails a copy of the certified remand order to state
court. Once mailed, the order may not be reconsidered.
IV.
The plaintiffs request, finally, that we award them
costs and counsel fees for responding to what they claim is a
baseless appeal. Because, until now, this Court had not
conclusively settled the question of whether appellate review
of a motion to reconsider a remand order is permissible, we
hold that the appeal was not “utterly without basis in law or in
fact” and, accordingly, an award of damages and costs
pursuant to Federal Rule of Appellate Procedure 38 is
unwarranted. Quiroga v. Hasbro, Inc., 943 F.2d 346, 347 (3d
Cir. 1991). Moreover, Rule 38 permits the award of “just
damages and single or double costs to the appellee” “after a
separately filed motion” has been made. Fed. R. App. P. 38.
The plaintiffs failed to file such a motion. For these reasons,
we will deny the award of fees and any damages to the
plaintiffs under Rule 38. However, we will order that costs
be taxed against the Lycoming defendants, pursuant to
Federal Rule of Appellate Procedure 39(a)(1).
V.
For the foregoing reasons, we will grant the plaintiffs’
motion to dismiss this appeal. We will deny the request for
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attorneys’ fees, costs, and damages pursuant to Rule 38, and
will order that costs be taxed against the Lycoming
defendants pursuant to Rule 39(a)(1).
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