Falcon v. Transportes Aeros De Coahuila ( 1999 )

Revised March 29, 1999
UNITED STATES COURT OF APPEALS
For the Fifth Circuit
___________________________
No. 98-50500
___________________________
Ana Maria Falcon,
Plaintiff-Appellee,
VERSUS
Transportes Aeros de Coahuila, S.A.
a/k/a TACSA, also known as TASKA, ET. AL.,
Defendants,
Transportes Aeros de Coahuila, S.A.
a/k/a TACSA, also known as TASKA,
Defendant-Appellant.
___________________________________________________
Appeal from the United States District Court
for the Western District of Texas
___________________________________________________
March 24, 1999
Before DAVIS, STEWART, and PARKER, Circuit Judges.
W. EUGENE DAVIS, Circuit Judge:
This appeal presents us with a novel question: Whether this
Court has jurisdiction under 28 U.S.C. § 1291 and the collateral
order doctrine to review a district court’s order finding personal
jurisdiction to exist, where that order was issued simultaneously
with another order remanding the case to state court for lack of
subject matter jurisdiction. For reasons set forth below, we find
appellate jurisdiction to be lacking and dismiss the appeal.
I.
On October 31, 1995, a Cessna Caravan 208-B, designated TACSA
Flight 108, crashed in Mexico ten miles shy of its final
destination in Piedras Negras, Mexico, a city approximately one
mile from the Texas border. The plane was owned by defendant Nozaki
and Co., Ltd. ("Nozaki"), a Japanese corporation, and was leased by
defendant Western Aircraft, Inc. ("Western Aircraft"), an Idaho
corporation. Defendant-appellant Transportes Aeros De Coahuila,
S.A. ("TACSA"), a Mexican corporation operating in Mexico as a
domestic commercial air carrier, was the operator and sublessee of
the plane. Eleven people, including the pilot, were on board at the
time of the crash. The pilot and all but two of the passengers were
killed.
The present wrongful death action was brought in November 1996
against TACSA, Western Aircraft, Nozaki, and Nozaki America, Inc.,
an American subsidiary of Nozaki. The action was originally filed
in state court, in the 365th Judicial District of Maverick County,
Texas. The defendants removed the case to federal district court
pursuant to 28 U.S.C. § 1441, claiming federal jurisdiction under
the federal common law of international relations and treaty
interpretation. The plaintiffs filed a motion for remand, and the
defendants filed a motion to dismiss for lack of personal
jurisdiction and for forum non conveniens.
On December 10, 1997, the district court issued an order
("Dismissal Order") granting TACSA’s motion to dismiss for lack of
personal jurisdiction. The plaintiffs filed a motion for
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reconsideration. On February 13, 1998, the district court issued a
second order ("Personal Jurisdiction Order") vacating the Dismissal
Order. The court found that personal jurisdiction existed based on
new evidence that TACSA maintained a bank account in Texas, had
correspondence concerning the bank account sent to a mailing
address within the United States, regularly repaired its aircraft
in Texas, and regularly bought supplies in Texas. The same day, the
district court issued a third order ("Remand Order") remanding the
case to state court for lack of subject matter jurisdiction. TACSA
filed a motion for reconsideration of the Personal Jurisdiction
Order, which the district court denied. This appeal followed.1
II.
TACSA contends that the Personal Jurisdiction Order is
collateral to the Remand Order and is effectively unreviewable
because of the Remand Order. Therefore, TACSA argues, this Court
should assert jurisdiction under 28 U.S.C. § 1291 and the
collateral order doctrine.
The collateral order doctrine was recognized by the Supreme
Court in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541,
546, 69 S. Ct. 1221, 1225-26 (1949), where the Court identified a
"small class" of interlocutory decisions that are immediately
appealable under 28 U.S.C. § 1291. To fall within the collateral
1
TACSA appeals only the Personal Jurisdiction Order, as the
Remand Order falls clearly outside of this Court’s appellate
jurisdiction. See Angelides v. Baylor College of Medicine, 117 F.3d
833, 835-36 (5th Cir. 1997) (holding that a remand order, even if
erroneous, is not appealable).
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order doctrine, however, an order must (among other requirements)
be "separable" from the merits of the underlying action. Id. at
546, 69 S. Ct. at 1225 (a decision is final and appealable for
purposes of § 1291 if it "finally determine[s] claims of right
separable from, and collateral to, rights asserted in the action,
too important to be denied review and too independent of the cause
itself to require that appellate consideration be deferred until
the whole case is adjudicated."). See also Coopers & Lybrand v.
Livesay, 437 U.S. 463, 468, 98 S. Ct. 2454, 2458 (1978) (noting
that an order must "resolve an important issue completely separate
from the merits of the action" to fall within the collateral order
doctrine).
In Angelides v. Baylor College of Medicine, 117 F.3d 833 (5th
Cir. 1997), this Court explained what conditions must be satisfied
for an order to be considered "separable" in the remand context:
An order is "separable" from an order of remand and eligible
for appellate review if two conditions are satisfied. First,
it must precede the order of remand "in logic and in fact," so
as to be made while the district court had control of the
case. City of Waco v. United States Fidelity & Guar. Co., 293
U.S. 140, 143, 55 S. Ct. 6, 7 (1934). Second, the order sought
to be separated must be "conclusive." Id.; Linton v. Airbus
Industrie, 30 F.3d 592, 597 (5th Cir. 1994). An order is
"conclusive" if it will have the "preclusive effect of being
functionally unreviewable in the state court." Linton, 30 F.3d
at 597.
117 F.3d at 837. The principal question here is whether the
Personal Jurisdiction Order was conclusive, and therefore
separable, within the meaning of Angelides.
This Court has not previously addressed the question of
whether an order finding personal jurisdiction to exist, issued
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simultaneously with an order remanding for lack of subject matter
jurisdiction, is conclusive. That is an issue of first impression.
Related Fifth Circuit precedent, however, convincingly shows that
the Personal Jurisdiction Order is not conclusive. In Angelides,
the Court conducted a "careful reading" of precedent and
ascertained that the key determinant of conclusiveness is whether
the order in question is substantive or jurisdictional. Id. The
Court noted that every case in which this Court has granted
collateral appellate review following a remand order by the
district court has involved some denial of a substantive right. Id.
("In those cases . . . the separable portion of the order denied a
substantive right not subject to review by the state court."). In
contrast, the Court observed that every case in which this Court
has denied collateral appellate review following a remand order by
the district court has involved a jurisdictional question that
"could be reconsidered by the state court." Id. Thus, the Court
concluded that the immunity and exhaustion orders before it were
not "conclusive," and therefore were not subject to collateral
order review, because "as jurisdictional decisions, they may be
reviewed in the state court." Id.
The Personal Jurisdiction Order in this case presents an even
more obvious example of a non-conclusive jurisdictional order than
the immunity and exhaustion orders at issue in Angelides. In
finding that there were sufficient contacts for personal
jurisdiction to exist, the district court denied no substantive
right of TACSA. Rather, it made a simple jurisdictional
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determination. As discussed below, the district court’s
determination has no preclusive effect on the state court. Because
the order is reviewable by the state court, it is not conclusive
and therefore may not be reviewed by this Court under the
collateral order doctrine.
TACSA argues that the Personal Jurisdiction Order is
conclusive because it may have a preclusive effect on the state
court. This argument is based on one sentence from a footnote in
this Court’s recent en banc decision in Marathon Oil Company v.
Ruhrgas, 145 F.3d 211 (5th Cir. 1998) (en banc), in which the Court
stated: "It has long been the rule that principles of res judicata
apply to jurisdictional determinations--both subject matter and
personal." 145 F.3d at 218 n. 9. That one-sentence dictum, however,
is insufficient to bring the Personal Jurisdiction Order within the
collateral order doctrine. Although the district court in Marathon
Oil Company was faced with a situation similar to the present case,
the outcome was notably different. In Marathon Oil Company, an oil
company and its affiliates sued a German gas supplier in state
court. The gas supplier removed the action and moved to dismiss for
lack of personal jurisdiction. The oil company and its affiliates
sought remand based on lack of subject matter jurisdiction. In
contrast to the present case, in Marathon Oil Company the district
court chose not to decide the motion to remand, and instead
dismissed for lack of personal jurisdiction. The court never made
any determination regarding subject matter jurisdiction, and did
not remand the case to state court. Here, the court made
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determinations both as to personal jurisdiction and as to subject
matter jurisdiction. It found sufficient contacts for personal
jurisdiction, and remanded for lack of subject matter jurisdiction.
This distinction is critical.
Three requirements must be met for the federal doctrine of
collateral estoppel to apply: 1) the prior federal decision must
have resulted in a "judgment on the merits"; 2) the same fact
issues sought to be concluded must have been "actually litigated"
in the federal court; and 3) the disposition of those issues must
have been "necessary to the outcome" of the prior federal
litigation. Parklane Hosiery Co. V. Shore, 439 U.S. 322, 326 n. 5,
99 S. Ct. 645, 649 n. 5 (1979). In Marathon Oil Company, all three
requirements were met. Here, none have been met. A finding of
sufficient contacts for personal jurisdiction, unlike a finding of
insufficient contacts, falls short of a "judgment on the merits."
When a district court dismisses for lack of personal jurisdiction,
the action ends; but when a district court declines to dismiss for
lack of personal jurisdiction, the action continues to the next
stage. Moreover, given the district court’s simultaneous order
remanding for lack of subject matter jurisdiction, the personal
jurisdiction issue plainly was not "actually litigated" or
"necessary to the outcome" of the litigation. As the Court of
Appeals of Texas, First District noted in Shell Pipeline
Corporation v. Coastal States Trading, Inc., 788 S.W.2d 837, 843
(Tex. Ct. App. 1990), "[w]hen the federal court determined it did
not have subject matter jurisdiction . . ., any finding beyond
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those necessary to make that decision are not ‘actually litigated’
or ‘necessary to the outcome,’ and therefore, do not have
collateral estoppel or res judicata consequences. See Jack Faucett
Assoc., Inc. V. American Tel. & Tel. Co., 744 F.2d 118, 125 (D.C.
Cir. 1984)."
This analysis shows that the Personal Jurisdiction Order has
no preclusive effect. Hence, it is not conclusive and falls outside
of the collateral order doctrine’s requirement of separability. The
appeal is therefore DISMISSED.
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