Painters Local Union No. 109 Pension Fund v. Smith Barney Inc. ( 1998 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
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No. 97-1832
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PAINTERS LOCAL UNION NO. 109 *
PENSION FUND, AND JAMES KING, *
LARRY CURTICE, AND ROBERT *
BRIGGS, JR. IN THEIR CAPACITIES *
AS TRUSTEES FOR PAINTERS *
LOCAL UNION NO. 109 PENSION *
FUND, * Appeal from the United States
* District Court for the District of
Plaintiff, * Nebraska
*
v. *
*
SMITH BARNEY INC. AND ROBERT *
NIXON, *
*
Defendant. *
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Submitted: November 20, 1997
Filed: January 7, 1998
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Before BOWMAN, MURPHY, Circuit Judges, and CONMY1, District Judge.
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CONMY, District Judge.
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The Honorable Patrick A. Conmy, United States District Judge for the District
of North Dakota, sitting by designation.
Smith Barney, Inc. & Robert Nixon (“Smith Barney”) were involved in the management of the Painter's
Local Union No. 109 Pension Fund (“Fund”). The Fund alleges that the managers breached a fiduciary duty to
the Fund by dealing in certain securities in which Smith Barney had an ownership interest.
Pursuant to the fund management agreement, the Fund demanded arbitration of this claim before an
NASD arbitration panel. Smith Barney refused to arbitrate, stating that the matter was time barred.
On March 18, 1996, Smith Barney sued in the State District Court of Nebraska asking that the Fund be
enjoined from compelling arbitration, on the premise that the matter was time barred. The Fund attempted to
remove the action to federal court claiming that a federal question was involved as the Fund operation was
governed by the provisions of ERISA, which preempted the state court action. The federal district court
remanded to state court, and the Fund appealed from the remand order. That appeal was dismissed by this court.
The state court ruled in favor of Smith Barney and issued an injunction prohibiting the Fund from further
efforts to enforce arbitration. That decision has been appealed to a Nebraska appellate court and is pending.
The Fund then filed the present federal action, again alleging jurisdiction based on ERISA. The new
action was dismissed for lack of subject matter jurisdiction. The Fund's appeal of this dismissal is currently
before the court. However, the analysis must begin with the remand of the first case.
A remand decision is generally not an appealable order. See 28 U.S.C. § 1447(d). “[W]ith the exception
of civil rights cases, ‘an order remanding a case to the State court is not reviewable on appeal or otherwise.’ The
Supreme Court has narrowly construed this restriction, however, and explained that only cases remanded
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under 28 U.S.C. § 1447(c) are subject to this nonreviewability provision.” Transit Casualty Co. v. Certain
Underwriters at Lloyd's of London, 119 F.3d 619, 623 (8th Cir. 1997) (citations omitted). There are two grounds
for remand under § 1447(c), (1) defect in the removal procedure, and (2) lack of subject matter jurisdiction. See
Id.
Both the Magistrate's remand order and the District Judge's affirmance of that order stated that the
original action was remanded for lack of subject matter jurisdiction. They addressed the Fund's concern that
jurisdiction was conferred by ERISA's preemption of state law. A decision on preemption is still a decision that
subject matter jurisdiction is not present. See Hansen v. Blue Cross Blue Shield of California, 891 F.2d 1384,
1388 (9th. Cir. 1989) (decision that ERISA did not preempt claims was within the scope of 28 U.S.C. § 1447(c),
and therefore not reviewable). Since the original action was remanded under § 1447(c), that decision can not
be reviewed.
The present action has the same issues and the same parties as the original action. This makes it a
collateral attack on the original remand order. It is improper for the Fund to do collaterally that which it could
not do directly. See New Orleans Public Service, Inc. v. Majoue, 802 F.2d 166, 168 (5th Cir. 1986) (per curium).
Therefore, this matter is not properly before the court and the appeal is dismissed.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
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