Marshall v. Kansas City Southern Railway Co. , 378 F.3d 495 ( 2004 )

United States Court of Appeals
Fifth Circuit
F I L E D
REVISED AUGUST 23, 2004
August 04, 2004
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 03-61067
(Summary Calendar)
MERLEAN MARSHALL, INDIVIDUALLY AND
ON BEHALF OF ALL WRONGFUL DEATH
BENEFICIARIES OF LUCY R. SHEPARD, DECEASED;
ALPHONZO MARSHALL, INDIVIDUALLY AND
ON BEHALF OF ALL WRONGFUL DEATH
BENEFICIARIES OF LUCY R. SHEPARD, DECEASED;
ERIC SHEPARD, INDIVIDUALLY AND
ON BEHALF OF ALL WRONGFUL DEATH
BENEFICIARIES OF LUCY R. SHEPARD, DECEASED;
Plaintiffs-Appellants,
versus
KANSAS CITY SOUTHERN RAILWAY COMPANY;
ERIC W. ROBINSON; ROBERT E. EVERETT;
C. L. DUETT; JOHN DOES, 1 THRU 10;
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Mississippi
Before JOLLY, WIENER, and PICKERING, Circuit Judges.
PER CURIAM:
On appeal, Plaintiffs-Appellants identified in the caption of
this case (“Plaintiffs”) challenge the district court’s denial of
their motion for remand to state court. The district court had
1
ruled that the non-diverse defendants were fraudulently joined and
refused to certify an interlocutory appeal of that ruling to us.
After one unsuccessful attempt to appeal that decision to our
court, Plaintiffs continued their efforts to gain an expedited
appeal on this issue by attempting to manufacture appellate
jurisdiction by voluntarily seeking dismissal of their claims
against the diverse Defendant-Appellee, Kansas City Southern
Railway Company (“KCS”). In so doing, Plaintiffs have forfeited
their right to appeal —— presumably inadvertently —— because we
must also dismiss this second appeal for lack of appellate
jurisdiction.
I. FACTS & PROCEEDINGS
This case arises out of a fatal railroad crossing accident
that occurred in Scott County, Mississippi. The accident occurred
when a van, driven by Lucy R. Shepard, collided with a KCS train.
Shepard was killed, and her passenger, Phyllis B. McKee, was
injured. Plaintiffs, as representatives of Shepard’s wrongful
death beneficiaries, filed this action in Mississippi state court
asserting, inter alia, claims under that state’s wrongful death
statute. McKee filed a separate negligence action (the “McKee
2
case”).1 In addition to KCS,2 three members of the train crew, C.L.
Duett, Eric Robinson, and Robert Everett (collectively the “train
crew”), were named as defendants in both actions for their
allegedly negligent operation of the train. While this suit was
pending in state court, Defendants propounded requests for
admissions asking Plaintiffs to admit that there was no basis for
joining the train crew defendants in this action. Plaintiffs
failed to respond timely to Defendants’ requests for admissions.
Arguing that Plaintiffs’ failure to respond resulted in the
conclusive admission that no viable cause of action existed against
the train crew,3 Defendants removed the action to federal court on
the assertion that the train crew defendants, who are Mississippi
residents, were fraudulently joined solely to defeat diversity
jurisdiction.
Plaintiffs filed a motion in district court seeking remand to
state court. In support of this motion, Plaintiffs submitted a
sworn statement by Officer Jeff Pitts, a witness to the collision
1
See McKee v. Kansas City S. Ry. Co., 358 F.3d 329 (5th
Cir. 2004). As with this action, the McKee case was also removed
to federal court, where it was presided over by the same district
judge who handled this case.
2
KCS is a Missouri corporation with its home office and
principal place of business in Kansas City.
3
The requests for admissions were issued pursuant to Miss.
R. Civ. P. 36. The parties sharply contest whether the district
court could properly treat Plaintiffs’ failure to respond timely
to the requests as a conclusive admission. That dispute,
however, does not affect our decision today.
3
between KCS’s train and Shepard’s van. The district court ordered
that a remand deposition of Officer Pitts be taken and that the
parties submit a transcript of his deposition to the court.
After reviewing Officer Pitts’ deposition, the district court
denied Plaintiffs’ motion for remand. The court concluded that
Officer Pitts’ deposition “work[ed] against the plaintiffs” and
that they could not establish any cause of action against the train
crew. The district court consequently dismissed the train crew
defendants from the action. Plaintiffs filed a motion for
reconsideration to which they appended additional evidence and
documentation to demonstrate the train crew’s potential liability.
The district court denied this motion, too.
Plaintiffs then appealed the district court’s denial of their
motion for remand and dismissal of the train crew defendants to
this court. As the district court’s remand decision was not
certified for interlocutory appellate review under 28 U.S.C. §
1292(b) or Federal Rule of Civil Procedure 54(b), we dismissed that
effort to obtain an interlocutory review because we lacked
appellate jurisdiction.4
4
Marshall v. Kansas City S. Ry. Co., 45 Fed. Appx. 322 (5th
Cir. 2002) (“Marshall I”). After filing their notice of appeal
in Marshall I, Plaintiffs filed a Rule 54 motion in the district
court to have a final judgment entered in favor of the train crew
defendants. But because Plaintiffs had already filed their
notice of appeal, the district court never ruled on that Rule 54
motion. See Texas Comptroller of Pub. Accounts v. Transtexas Gas
Corp. (In re Transtexas Gas Corp.), 303 F.3d 571, 578-79 (5th
Cir. 2002). In other words, Plaintiffs put the cart before the
horse by filing their notice of appeal before submitting their
4
Next, the district court entered a scheduling order
establishing a discovery completion deadline and setting the case
for trial. Meanwhile, the McKee case had proceeded to trial, and
a jury had rendered a verdict in favor of KCS.5 On learning of
that verdict, Plaintiffs filed a pleading styled Motion for Entry
of Final Judgment in Favor of Defendant (the “Motion for Final
Judgment”). This motion, which professed to rely on Federal Rule
of Civil Procedure 54, stated that this case and the McKee case
involved the same defendant (KCS) and identical issues. In their
motion, Plaintiffs asserted that, “[s]ince the Court and [KCS] have
previously opined that the jury’s verdict in McKee and the final
judgment entered pursuant to that verdict are binding upon the
Plaintiff and [KCS] herein, there is no just reason to delay the
entry of a final judgment in this action.” Plaintiffs, therefore,
asked the district court to “direct the entry of a final judgment
against the Plaintiff and in favor of the Defendant in this
action.” Importantly, the Motion for Final Judgment said nothing
about whether Plaintiffs were seeking dismissal with or without
prejudice.
KCS filed a response in which it stated that Plaintiffs had
miscited Rule 54 as the governing rule. Instead, explained KCS,
Rule 54 motion.
5
In the McKee case, the district court had also dismissed
the train crew defendants after concluding that they had been
fraudulently joined. 358 F.3d at 332.
5
“[t]he proper rule under which the Plaintiff should be proceeding
is Rule 41(a)(2).” KCS made the following representation:
Defendant [KCS] has no objection to Plaintiff’s request
for dismissal of her claims against this Defendant and
for entry of final judgment with prejudice in this
Defendant’s favor. It is apparent from Plaintiffs’
Motion, and from representations by her counsel to this
Defendant and the Court, that Plaintiff wishes to
terminate proceedings before this Court and appeal to the
Fifth Circuit Court of Appeals this Court’s rulings
denying the Plaintiffs’ Motion to Remand and Motion to
Reconsider Order Denying Remand. Defendant would agree
to entry of an order dismissing Plaintiffs’ claims with
prejudice and expressly reserving the Plaintiffs’ right
to challenge this Court’s subject matter jurisdiction
over this action on appeal to the Fifth Circuit.(6)
Before the district court ruled on the Motion for Final Judgment,
though, Plaintiffs filed yet another motion for reconsideration of
the district court’s initial order denying remand. This time they
cited evidence from the McKee trial to demonstrate the viability of
their claims against the train crew defendants.
In ruling on Plaintiffs’ two pending motions, the district
court first acknowledged that Plaintiffs had predicated their
Motion for Final Judgement on Rule 54(b), but agreed with KCS and
construed Plaintiffs’ motion as one for voluntary dismissal under
Rule 41(a)(2). The district court then granted Plaintiffs’ motion,
stating:
There is no counterclaim in the instant case and the
defendants do not object to the plaintiffs’ motion.
Therefore, the above styled and numbered cause is hereby
dismissed in accordance with Rule 41(a)(2). As a special
condition of this dismissal, the plaintiffs’ motion for
6
Emphasis added.
6
this court to enter a final judgment in favor of the
defendants ... is hereby granted. This court hereby
grants final judgment in favor of the defendants.
In the same order, the district court went on to deny Plaintiffs’
renewed motion for reconsideration of the remand issue. Plaintiffs
timely filed their notice of appeal, designating this order as the
decision from which they were appealing.
II. ANALYSIS
Plaintiffs appeal the district court’s denial of their motion
for remand. In support, Plaintiffs advance arguments essentially
identical to those advanced in McKee’s appeal to this court,
contesting the district court’s denial of her motion for remand.7
By attempting to manufacture appellate jurisdiction through the
voluntarily dismissal of the remainder of their action against KCS,
however, Plaintiffs have unwittingly stepped into the so-called
“finality trap,”8 thereby forfeiting altogether their right to
appeal the district court’s remand decision.
A. MANUFACTURING APPELLATE JURISDICTION TO OBTAIN A QUASI-
INTERLOCUTORY APPEAL
The starting point of our analysis is 28 U.S.C. § 1291, the
jurisdictional statute on which Plaintiffs now rely in seeking
appellate relief from us. Generally, all claims and issues in a
case must be adjudicated in the district court, and a final
7
See McKee, 358 F.3d at 333-37.
8
Terry W. Schackmann & Barry L. Pickens, The Finality Trap:
Accidentally Losing Your Right to Appeal, 58 J. MO. B. 78 (2002).
7
judgment or order must be issued, before our jurisdiction can be
invoked under § 1291.9 This “final judgment rule” creates
appellate jurisdiction only after a decision that “ends the
litigation on the merits and leaves nothing for the court to do but
execute the judgment.”10 Here, the district court refused to
certify its denial of Plaintiffs’ motion for remand for an
interlocutory appeal under 28 U.S.C. § 1292(b). Neither did the
court enter a final judgment pursuant to Rule 54(b) in favor of the
dismissed train crew defendants.11
All parties agree that the McKee case and this action involved
the same defendant (KSC), identical operative facts, and
substantially overlapping legal claims. Additionally, both cases
proceeded before the same district judge. Consequently, after the
jury rendered a verdict for KCS in the McKee case, the Plaintiff
(and possibly the district court as well) apparently expected KCS
to raise the defense of res judicata or issue preclusion in this
case. Critically, though, nothing in the record reflects any
9
This provision provides, in pertinent part, that “[t]he
courts of appeals ... shall have jurisdiction of appeals from all
final decisions of the district courts of the United States ...
except where a direct review may be had in the Supreme Court.” 28
U.S.C. § 1291 (emphasis added).
10
Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368,
373, 101 S. Ct. 669, 673 (1981) (quoting Coopers & Lybrand v.
Livesay, 437 U.S. 463, 467, 98 S. Ct. 2454, 2457 (1978)). For
now, we disregard the narrow exception to the final judgment rule
embodied in the collateral order doctrine.
11
See supra note 4.
8
assertion of these defenses by KCS.12 Instead, Plaintiffs
preemptively filed their Motion for Final Judgment, asking the
district court to “direct the entry of a final judgment against the
Plaintiff[s] and in favor of the Defendant in this action.” In
effect, Plaintiffs sought to manufacture a final judgment —— and
through it appellate jurisdiction —— to obtain an immediate
appellate ruling on the question of fraudulent joinder.
The Plaintiffs’ problem with the strategy they employed is
that it runs headlong into the “settled rule in the Fifth Circuit
that appellate jurisdiction over a non-final order cannot be
created by dismissing the remaining claims without prejudice.”13
And, a Rule 41(a) dismissal without prejudice is not deemed to be
a “final decision” for the purposes of § 1291. This rule can be
traced back to our decision in Ryan v. Occidental Petroleum Corp.14
In Ryan, we explained that when a district court grants a party’s
request for a voluntary dismissal, he “gets what he seeks, i.e., a
dismissal without an adjudication on the merits, and he is entitled
12
In their Motion for Final Judgment, Plaintiffs stated
that the district court and KCS had “previously opined that the
jury’s verdict in McKee and the final judgment entered pursuant
to that verdict [were] binding upon the Plaintiff and [KCS]
herein,” but the record is devoid of any ruling, opinion, or
statement by the district judge to this effect. KCS never filed
any supplemental pleading asserting the affirmative defense of
res judicata or issue preclusion. See FED. R. CIV. P. 8(c).
13
Swope v. Columbian Chems. Co., 281 F.3d 185, 192 (5th
Cir. 2002) (emphasis added).
14
577 F.2d 298 (5th Cir. 1978).
9
to bring a later suit on the same cause of action.”15 Therefore,
a party cannot use voluntary dismissal without prejudice as an end-
run around the final judgment rule to convert an otherwise non-
final —— and thus non-appealable —— ruling into a final decision
appealable under § 1291.16
Typically, the Ryan rule operates when a plaintiff has filed
multiple claims against a single party, or against multiple
parties, and the district court has dismissed some but not all of
the claims. Then, in an effort to preserve his remaining claims
while simultaneously appealing the adverse dismissal, the plaintiff
implores the district court to dismiss his remaining claims without
prejudice and enter a final judgment.17 Ryan eschews this practice
of manufacturing § 1291 appellate jurisdiction and disallows the
manipulative plaintiff from having his cake (the ability to refile
the claims voluntarily dismissed) and eating it too (getting an
early appellate bite at reversing the claims dismissed
involuntarily).18 This prohibition of quasi-interlocutory appeals
applies equally to a plaintiff’s attempt to use a Rule 41(a)
15
Id. at 302.
16
See id.
17
See Schackmann & Pickens, supra note 8, at 78-80.
18
See generally Swope, 281 F.3d at 192-94; State Treasurer
of Michigan v. Barry, 168 F.3d 8, 14-16 (11th Cir. 1999). See
also Rebecca A. Cochran, Gaining Appellate Review by
“Manufacturing” A Final Judgment Through Voluntary Dismissal of
Peripheral Claims, 48 MERCER L. REV. 979 (1997).
10
voluntary dismissal to construct the jurisdictional basis for
appealing a district court’s denial of a motion for remand.19
In contrast, when a plaintiff agrees to have his remaining
claims dismissed with prejudice, Ryan’s rule is not implicated
because the plaintiff is precluded from refiling the same action
elsewhere. “[I]f the plaintiff is unsuccessful in challenging the
district court’s action, then the dismissal operates as an
adjudication on the merits and the litigation is terminated.”20
Thus, the policy against permitting interlocutory appeals in all
but those limited circumstances that are specifically prescribed in
the Federal Rules and the Judicial Code is furthered because when
“the appellant voluntarily dismisses his action with prejudice and
loses on appeal, the district court is saved the time and effort of
conducting extended trial proceedings and there is in addition no
possibility of piecemeal appeals.”21
The determinative question for the issue here presented, then,
is whether the district court’s dismissal of this action was with
or without prejudice.
19
See, e.g., Martin v. Franklin Capital Corp., 251 F.3d
1284, 1288-89 (10th Cir. 2001); Concha v. London, 62 F.3d 1493,
1506-08 (9th Cir. 1995).
20
Martin, 251 F.3d at 1289 (quoting Concha, 62 F.3d at
1507).
21
Id. (quoting Concha, 62 F.3d at 1508 n.8). See also
Cochran, supra note 18.
11
B. DISMISSAL WITH OR WITHOUT PREJUDICE?
Because the district court’s order granting Plaintiff’s Motion
for Final Judgment is silent on the question of prejudice, it is
reasonably susceptible to two contradictory readings. On the one
hand, the order states that the court is dismissing the action “in
accordance with Rule 41(a)(2),” which expressly states that
dismissals under that rule are without prejudice “[u]nless
otherwise specified in the order.”22 On the other hand, the
district court’s order purports to engraft a “special condition” on
the dismissal by granting Plaintiffs’ Motion for Final Judgment and
entering “a final judgment in favor of the defendants.” And,
earlier in its order, the district court remarked that Plaintiffs’
Motion for Final Judgment was “mov[ing] for a final judgment with
prejudice pursuant to Rule 54(b).”23 As noted previously, though,
Plaintiffs’ motion does not state whether the dismissal being
sought was to be with or without prejudice.
In their reply brief on appeal, Plaintiffs vigorously assert
that their motion “requested entry of final judgment, but not with
prejudice.” Absent this assertion, we could conceivably interpret
22
FED. R. CIV. P. 41(a)(2). See Plumberman, Inc. v. Urban
Sys. Dev. Corp., 605 F.2d 161, 161 (5th Cir. 1979) (holding that
if a Rule 41(a)(2) dismissal order fails to specify whether the
dismissal is with or without prejudice, the dismissal is treated
as one without prejudice). See also 9 CHARLES ALAN WRIGHT & ARTHUR
R. MILLER, FEDERAL PRACTICE & PROCEDURE § 2367, at 318-19 (2d ed. 1995)
(“If the court’s order is silent on this point, the dismissal is
without prejudice.”).
23
Emphasis added.
12
the district court’s order either way; and if we were to construe
it as a dismissal with prejudice, we would have appellate
jurisdiction and could proceed to resolve Plaintiffs’ challenge to
the district court’s denial of their motion for remand.24 But,
given (1) Plaintiffs’ most recent insistence that the dismissal at
issue was without prejudice and (2) the express language in Rule
41(a)(2) that a dismissal under that rule is without prejudice
“[u]nless otherwise specified in the order” (which it is not), we
are constrained to conclude that the dismissal was, in fact,
without prejudice.25 Therefore, the Ryan rule controls our
decision, and we must dismiss this appeal for lack of appellate
jurisdiction.
III. CONCLUSION
For the foregoing reasons, Plaintiffs’ appeal is dismissed for
lack of jurisdiction.
24
For their part, the Defendants rely on two Eleventh
Circuit decisions that have gone far beyond Ryan’s scope to hold
that appellate jurisdiction is lacking even if the plaintiff has
his underlying action dismissed with prejudice. Druhan v.
American Mut. Life, 166 F.3d 1324, 1325-27 (11th Cir. 1999);
Woodard v. STP Corp., 170 F.3d 1043, 1044 (11th Cir. 1999). The
Eleventh Circuit’s reasoning in these decisions seems to conflict
with the rationale underlying Ryan. See Swope, 281 F.3d at 192-
94; Barry, 168 F.3d at 14-16; Cochran, supra note 18. We need
not wrestle with this question today because Druhan and Woodard
are not binding on us, and they would not affect the ultimate
outcome of this appeal.
25
See Cochran, supra note 18, at 1017 (“Litigants have the
responsibility to obtain dismissal orders of peripheral claims
that state they are dismissed with prejudice and to account for
the resolution of all pieces of the district court litigation.”).
13
DISMISSED.
14