Robert Carney v. Bic Corp. ( 1996 )

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No. 95-3163
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Robert Carney; Sheila Carney, *
*
Appellees, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri
BIC Corporation, *
*
Appellant. *
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Submitted: April 10, 1996
Filed: July 8, 1996
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Before McMILLIAN, FAGG and BURNS,* District Judge.
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McMILLIAN, Circuit Judge.
BIC Corporation (BIC) appeals from a final order entered in the
United States District Court1 for the Eastern District of Missouri
remanding to Missouri state court for want of federal jurisdiction the
products liability action brought by Robert Carney and Sheila Carney,
husband and wife (collectively plaintiffs) against BIC. Carney v. BIC
Corp., No. 4:95CV417-DJS (E.D. Mo. July 14, 1993) (Order). For reversal,
BIC argues that the district court erred in holding that it lacked removal
jurisdiction to entertain plaintiffs’ action after the stipulated dismissal
of
*The Honorable James M. Burns, United States
District Judge for the District of Oregon, sitting
by designation.
1
The Honorable Donald J. Stohr, United States District Judge
for the Eastern District of Missouri.
defendant Clifford Massie, d/b/a/ Massie One Stop (Massie), pursuant to Mo.
Rev. Stat. § 537.762. For the reasons discussed below, we dismiss the
appeal pursuant to 28 U.S.C. § 1447(d) for lack of jurisdiction.
I. Background
The underlying facts are not in dispute. Plaintiffs’ two-year-old
son died on January 30, 1992, because of injuries sustained while
attempting to use a butane lighter manufactured by BIC. On July 28, 1994,
plaintiffs filed the present wrongful death and personal injury action in
the Circuit Court of the city of St. Louis against BIC and Massie, a
commercial retailer who had sold the lighter to plaintiffs. BIC is
incorporated in New York and has its principal place of business in
Connecticut. At the time the present action was commenced, however,
plaintiffs and Massie were residents of the State of Missouri. Therefore,
diversity of citizenship did not exist between the parties when plaintiffs
filed their complaint against BIC and Massie.
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On January 11, 1995, Massie filed a motion seeking dismissal from
plaintiffs’ complaint pursuant to Mo. Rev. Stat. § 537.762 (1987).2 As
2
Mo. Rev. Stat. § 537.762 provides as follows:
537.762. Motion to dismiss, defendant
whose liability is as seller in stream
of commerce, requirements, procedure -
order of dismissal
1. A defendant whose liability is
based solely on his status as a seller
in the stream of commerce may be
dismissed from a products liability
claim as provided in this section.
2. This section shall apply to any
products liability claim in which
another defendant, including the
manufacturer, is properly before the
court and from whom total recovery may
be had for plaintiffs’ claim.
3. A defendant may move for dismissal
under this section within the time for
filing an answer or other responsive
pleading unless permitted by the court
at later time shown.
4. The parties shall have sixty days
in which to conduct discovery on the
issues raised in the motion and
affidavit. The court for good cause
shown, may extend the time for
discovery, and may enter a protective
order pursuant to the rules of civil
procedure regarding the scope of
discovery on other issues.
5. Any party may move for a hearing
on a motion to dismiss under this
section. If the requirements of
subsections 2 and 3 of this section are
met, and no party comes forward at such
hearing with evidence of facts which
would render the defendant seeking
dismissal under this section liable on
some basis other than his status as a
seller in the stream of commerce, the
court shall dismiss without prejudice
the claim as to that defendant.
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required by § 537.762(3), Massie’s motion to dismiss
6. No order of dismissal under this
section shall operate to divest a court
of venue or jurisdiction otherwise
proper at the time the action was
commenced. A defendant dismissed
pursuant to this section shall be
considered to remain a party to such
action only for such purposes.
7. An order of dismissal under this
section shall be interlocutory until
final disposition of plaintiff’s claim
by settlement or judgment and may be
set aside for good cause shown at
anytime prior to such disposition.
Mo. Rev. Stat. § 537.762 (1987) (emphasis added).
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was accompanied by an affidavit stating that he was aware of no facts or
circumstances supporting his liability other than his status as a seller
in the stream of commerce. On February 23, 1995, plaintiffs and Massie
entered into a stipulation of dismissal, which provided that Massie “shall
remain a party to this action only for the purposes of venue and
jurisdiction as provided in. . . § 537.762(6) (1987).” App. 71.
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On March 3, 1995, BIC removed the present case to the United States
District Court for the Eastern District of Missouri, alleging that the
stipulated dismissal of Massie had created diversity of citizenship between
the parties. Upon motion by plaintiffs, the district court entered an
order remanding the case to the Circuit Court of the City of St. Louis on
July 14, 1995. This appeal followed.3
II. Discussion
The district court determined that a remand order was appropriate in
the present case because the dismissal of Massie did not create removal
jurisdiction based upon the diversity of the parties. In reaching this
conclusion, the district court noted that the stipulation of dismissal
expressly stated that Massie would remain a party to the action for the
purpose of venue and jurisdiction, in accordance with § 537.762(6). The
district court also held that § 537.762 was not, as BIC argued, an
“impermissible attempt by state law to defeat removal jurisdiction.” Slip
op. at 2.
On appeal, BIC contends that the district court erred in remanding
the present action to Missouri state court, because (1) § 537.762 does not
apply where a co-defendant is dismissed by stipulation rather than by order
and (2) § 537.762 was never intended to affect federal diversity
jurisdiction, or alternatively, the statute is invalid to the extent that
it limits diversity jurisdiction. We may not address the merits, however,
unless we determine that we have jurisdiction to review the district
court’s remand order. Title 28 U.S.C. § 1447(d) provides that, with the
exception of civil rights case, “[a]n order
3
BIC also filed a petition for writ of mandamus on August 21,
1995. This court denied the petition on November 2, 1995.
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remanding a case to the State court from which it was removed is not
reviewable on appeal or otherwise.” In Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336, 346 (1976) (Thermtron), the Supreme Court
clarified that “only remand orders issued under § 1447(c)4 and invoking the
grounds specified therein . . . are immune from review under § 1447(d)".
Id. In Thermtron, the district court had remanded an otherwise proper
diversity action solely because of its crowded docket. Concluding that the
district court had exceeded its statutorily defined power by remanding the
case on a basis not specified in § 1447(c), the Supreme Court held that a
writ of mandamus was the appropriate remedy to compel the district court
to entertain the action. Id. at 352-53.
BIC contends that the present case falls within the Thermtron
exception because the district court’s remand order was not based upon a
ground specified in 28 U.S.C. § 1447(c) -- i.e., the lack of subject matter
jurisdiction -- but rather, was premised upon Mo. Rev. Stat. § 537.762(6),
which provides that retailers who have been dismissed from products
liability actions on the basis that their liability stems solely from their
status as sellers in the stream of commerce shall remain defendants for
purposes of venue and jurisdiction. In addition to Thermtron, BIC relies
on Karl Koch Erecting Co. v. New York Convention Center Dev. Corp., 838
F.2d 656, 658-59 (2d Cir. 1988) (Karl Koch). In Karl Koch, the Second
Circuit held that a remand order based on the district court’s
interpretation of a forum selection clause was reviewable because the
district court had gone beyond the jurisdictional determination and made
a decision affecting the merits of the case. See id. (reasoning that the
policy underlying 28 U.S.C. § 1447(d)
4
28 U.S.C. § 1447(c) currently provides in pertinent part: “If
at any time it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” At the time the Supreme
Court decided Thermtron, however, § 1447(c) stated that “[i]f at
any time before final judgment it appears that the case was removed
improvidently and without jurisdiction, the district court shall
remand the case.”
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-- preventing protracted litigation of jurisdictional questions -- was
inapplicable to remand orders based upon interpretation of forum selection
clause); see also Pelleport Investors, Inc. v. Budco Quality Theatres,
Inc., 741 F.2d 273, 277 (9th Cir. 1984) (holding that remand order based
on enforceability of forum selection clause was reviewable).
In response, plaintiffs argue that 28 U.S.C. § 1447(d) forecloses
review of the remand order, because the order was based upon the district
court’s determination that, in light of Mo. Rev. Stat. § 537.762(6), it
lacked removal jurisdiction to entertain plaintiffs’ action. Plaintiffs
also maintain that the present case more closely resembles Hansen v. Blue
Cross, 891 F.2d 1384, 1388 (9th Cir. 1989) (Hansen), than Karl Koch. In
Hansen, the Ninth Circuit held unreviewable a remand order based upon the
district court’s determination that the insurance plan at issue was not
subject to ERISA. Id. The Ninth Circuit reasoned that the remand order
did not fall within the Thermtron exception because “[t]he district court’s
decision that Hansen’s plan was not subject to ERISA, rather than being
apart from the question of subject matter jurisdiction, was necessary to
determine whether such jurisdiction existed.” Id. Plaintiffs argue that
the reasoning of Hansen also applies in the present case. We agree and
hold that the district court’s remand order is not reviewable on appeal.
We are bound by the general rule of non-reviewability of remand
orders set forth in 28 U.S.C. § 1447(d). The remand order in the present
case does not come within the Thermtron exception, because it was based on
a ground specified in 28 U.S.C. § 1447(c) -- the district court’s
determination that it lacked subject matter jurisdiction to hear the
action. After noting that the stipulated dismissal provided that, in
accordance with Mo. Rev. Stat. § 537.762(6), Massie would remain a party
in the action for purposes of venue and jurisdiction, the district court
concluded that the dismissal of Massie did not create removal jurisdiction
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based upon diversity of citizenship and remanded the present case to
Missouri state court. Thus, the remand order was based solely upon the
district court’s conclusion that removal jurisdiction did not exist.
Although the district court applied Mo. Rev. Stat. § 537.762(6) in reaching
this conclusion, its consideration of § 537.762(6) was in no way separate
from the jurisdictional determination. Therefore, the present case is
distinguishable from Karl Koch, in which the remand order at issue was
based upon a matter affecting the merits of the case. By contrast, the
district court in the present case made no determinations concerning the
substantive rights of the parties. Thus, the remand order falls squarely
within 28 U.S.C. § 1447(d) and is foreclosed from appellate review.
III. Conclusion
We hold that the district court’s order remanding the present case
to the Circuit Court of the City of St. Louis is unreviewable on appeal.5
Accordingly, we dismiss the appeal pursuant to 28 U.S.C. § 1447(d) for lack
of jurisdiction.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
5
Thus, we do not reach the merits of BIC’s challenge to the
remand order.
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