IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 96-31274
KRISTIE A. TRAMONTE,
Plaintiff-Appellee,
versus
CHRYSLER CORPORATION, also known as Chrysler
Motors Corporation, ET AL
Defendants,
CHRYSLER CORPORATION, also known as Chrysler
Motors Corporation Defendant-Appellant.
Appeal from the United States District Court
For the Eastern District of Louisiana
March 10, 1998
Before GARWOOD, JOLLY, and HIGGINBOTHAM, Circuit Judges.
HIGGINBOTHAM, Circuit Judge:
Defendant Chrysler Corporation appeals from an order of the
district court denying its motion to recuse and a later order
remanding the case to state court for want of jurisdiction.
Chrysler contends that the denial was erroneous and invalidates all
post-recusal rulings by the district judge, here the remand of this
case to state court. Concluding that the record is inadequate to
permit review of the recusal decision, we vacate the district
court’s order remanding the case to state court and we remand with
instructions to the district court to supplement the record and
reconsider Chrysler’s recusal motion.
I.
Kristie A. Tramonte filed a “Class Action Petition” in
Louisiana state court on May 17, 1995. The Petition alleged that
Chrysler’s manufacturing process from 1983 through 1994 caused
paint to flake from its vehicles. Tramonte, a Louisiana resident,
sued Chrysler, an out-of-state entity, and Murphy-Graham, Inc., the
Louisiana dealership from whom she purchased her automobile.
Tramonte asserted her claim and the claim of an asserted class,
described as consisting of all those who “have incurred or will
incur damages arising out of the purchase of a defective
[Chrysler].”
Chrysler removed the case to federal court, contending that
Tramonte had fraudulently joined Murphy-Graham to defeat diversity.
Tramonte responded with a motion to remand the case to state court,
arguing that there was no complete diversity of citizenship.
The federal case fell first to Judge Okla Jones, but was
reassigned to Judge Sarah Vance because of Judge Jones’s poor
health. Judge Vance also had before her In re Ford Motor Co.
Vehicle Paint Litig., No. MDL 1063, that includes a class action
alleging that the paint on certain Ford vehicles would peel due to
a defective process of manufacture. The same lawyers represented
the plaintiffs in the Ford and Chrysler litigations. Before the
Ford case had been designated as multidistrict litigation and
transferred to Judge Vance, the district court of the Northern
District of Alabama held that the joinder of a single, non-diverse
2
auto dealership in the Ford class action would not defeat federal
jurisdiction.
Tramonte withdrew her motion to remand, and several months
later the Chrysler class action was reassigned to the newly-
appointed Judge Mary Ann Lemmon. Two days later, Tramonte refiled
her motion to remand. Chrysler then ran what it describes as a
“routine” check of its auto ownership records and discovered that
someone in Judge Lemmon’s family owned a Chrysler, making that
person a potential class member. Then within thirty days of the
reinstituted motion to remand, Chrysler asked Judge Lemmon to
recuse and return the Chrysler litigation to Judge Vance.1
Two months later, on November 8, 1996, by minute order Judge
Lemmon summarily disposed of the then-pending motions. She denied
Chrysler’s motion to recuse, reasoning: “Although members of my
family are present and past owners of Chrysler vehicles, only one
of them is a present owner and he has no interest in joining the
putative class in this case. I have no ‘direct or immediate’
interest in this case which requires my recusal.” Judge Lemmon
then granted Tramonte’s motion to remand the case to state court,
concluding that Chrysler had not demonstrated that Murphy-Graham
had been fraudulently joined to defeat diversity. At the time
remand was ordered, no decision regarding certification of the
1
Chrysler has never alleged, nor have we found, that Judge
Lemmon has demonstrated any bias in this matter. Rather, Chrysler
has contended that the federal recusal statute is absolutist in
nature, and Judge Lemmon’s personal, though attenuated, connection
to the case created at least the potential for an appearance of
impropriety.
3
class had been made and it appeared that the district court had not
devoted substantial judicial time to the case.
On December 4, 1996, Chrysler filed a notice of appeal of the
orders refusing to recuse, refusing to transfer the case, and
remanding to state court. Chrysler also attacked the recusal
decision by a petition for a writ of mandamus. On December 11,
1996, we denied Chrysler’s writ petition by a summary order without
opinion.
II.
We first consider Tramonte’s challenge to our jurisdiction.
Tramonte argues that we cannot reverse the remand order, because
the merits of a district court’s ruling on jurisdiction are beyond
us. As 28 U.S.C. § 1447(d) provides, “[a]n order remanding a case
to the State court from which it was removed is not reviewable on
appeal or otherwise.” See also Thermtron Prods., Inc. v.
Hermansdorfer, 423 U.S. 336, 343 (1976).
Yet the dictates of § 1447(d) are not as absolutist as its
language would imply. Rather, “only remands based on grounds
specified in § 1447(c) are immune from review under § 1447(d). As
long as a district court’s remand is based on a timely raised
defect in removal procedure or on lack of subject-matter
jurisdiction -- the grounds for remand recognized by § 1447(c) --
a court of appeals lacks jurisdiction to entertain an appeal of the
remand order under § 1447(d).” Things Remembered, Inc. v.
Petrarca, 116 S. Ct. 494, 497 (1995); see also Thermtron Prods.,
423 U.S. at 345-52. Thus, the Court has recognized that § 1447(d)
4
intends to insulate from appellate review a district court’s
determinations as to its subject matter jurisdiction and compliance
with remand procedures. By implication therefore, we may reach and
modify a remand order on appeal, so long as we do not engage in the
review prohibited by § 1447(d).
Here, the district court unquestionably based its decision to
remand on a lack of subject matter jurisdiction. Yet Chrysler does
not seek to revisit that jurisdictional determination. Rather, it
contends that Judge Lemmon lacked the authority to enter the remand
order, because she was disqualified from handling the case by the
federal recusal statute. See 28 U.S.C. § 455(b). As we have held,
once a judge recuses herself, that judge should take no further
action in the case, except to transfer the matter to another
federal judge. See United States v. O’Keefe, 128 F.3d 885, 891
(5th Cir. 1997); Doddy v. Oxy USA, Inc., 101 F.3d 448, 458 (5th
Cir. 1996). Thus, if Judge Lemmon should have recused herself, any
orders she entered following disposition of the recusal motion
should be vacated.
Our vacatur of the remand order would therefore not constitute
a review of the merits of that order, prohibited by 28 U.S.C. §
1447(d). Rather, we would be performing an essentially ministerial
task of vacating an order that the district court had no authority
to enter for reasons unrelated to the order of remand itself. We
have previously gone so far as to vacate a remand order after
concluding that a district court did not have the authority to
determine sua sponte that there was a procedural defect in a
5
removal from state court, even though that determination implicated
nonreviewable jurisdictional questions. See In re Allstate Ins.
Co., 8 F.3d 219 (5th Cir. 1993). Surely, therefore, we can vacate
a remand order because of a judge’s preceding failure to recuse
herself, a rationale far removed from the issue of subject matter
jurisdiction, taboo to us under § 1447(d).
Tramonte also contends that our denial of mandamus relief to
Chrysler should prohibit this appeal, which raises the same issues
as the mandamus petition. Yet it is fundamental that mandamus is
only appropriate in extraordinary circumstances, typically where
relief is unavailable via an appeal. See Campanioni v. Barr, 962
F.2d 461, 464 (5th Cir. 1992). Our summary denial of Chrysler’s
petition for a writ of mandamus cannot be considered an
adjudication of these issues on the merits. Cf. Key v. Wise, 629
F.2d 1049, 1054-55 (5th Cir. 1980), cert. denied, 454 U.S. 1103
(1981). Accordingly, no law of the case has been established, and
Chrysler is free to relitigate the recusal issue on appeal. See In
re Chevron U.S.A. Inc., 121 F.3d 163, 167 (5th Cir. 1997).
We conclude that we have jurisdiction over this appeal.2 In
2
Chrysler also suggests that we have jurisdiction pursuant to
City of Waco v. United States Fidelity & Guar. Co., 293 U.S. 140
(1934). In Waco, the Supreme Court held that orders entered before
a remand to state court which are separate from the remand may be
reviewed on appeal, even if the remand itself is nonreviewable.
See id. at 143. As we have explained the Waco doctrine:
Although this court has no jurisdiction to review a district
court’s judgment which remands a cause of action to state
court for lack of subject matter jurisdiction, any aspect of
that judgment which is distinct and separable from the remand
proper may be reviewed on appeal.
John G. & Marie Stella Kenedy Mem’l Found. v. Mauro, 21 F.3d 667,
670 (5th Cir.) (citations omitted), cert. denied, 513 U.S. 1016
6
entertaining this appeal, we do not intrude upon the bar against
reviewing the merits of remand orders.
III.
We now turn to the merits of Judge Lemmon’s recusal decision.
Chrysler argues that Judge Lemmon should have automatically
disqualified herself from the case pursuant to 28 U.S.C. §§
455(b)(4) & (b)(5). Section 455 provides, in relevant part:
(b) [A judge] shall also disqualify himself in the following
circumstances:
. . . .
(4) He knows that he, individually or as a fiduciary,
or his spouse or minor child residing in his
household, has a financial interest in the subject
matter in controversy . . . .
(5) He or his spouse, or a person within the third
degree of relationship to either of them, or the
spouse of such a person:
(i) Is a party to the proceeding . . . .
. . . .
(d) For the purposes of this section . . .
. . . .
(4) “financial interest” means ownership of a legal or
equitable interest, however small . . . .
In ruling on the recusal motion, Judge Lemmon disclosed that
members of her family had owned Chryslers, and she acknowledged
that one member presently owns one. Chrysler thus contends that a
family member of Judge Lemmon’s either has a “financial interest”
in the outcome of the case under § 455(b)(4) or is a “party” to the
action under § 455(b)(5). Judge Lemmon declined to recuse herself,
however, reasoning that her family member who is an owner of a
Chrysler had no interest in joining the class.
(1994). It is unnecessary to utilize Waco in this case, however,
because we find the remand order itself to be reviewable, as it was
entered without authority if the district court should have
recused.
7
Unfortunately, Judge Lemmon’s disclosure and the record
otherwise is not adequate to review the order denying Chrysler’s
motion to recuse. Judge Lemmon’s statement that family members
have in the past owned Chryslers, and one family member presently
possesses one, does not disclose whether those family members
purchased Chryslers manufactured between 1983 and 1994, the
relevant class period, nor does it disclose whether any of those
Chryslers ever exhibited flaking paint. The class petition is
unclear as to the precise parameters of the putative class. We
decline to read it as broadly as Chrysler suggests to include any
purchaser of a Chrysler between 1983 and 1994, even if that
purchaser later resold the vehicle. To establish a claim for that
large a class, the plaintiffs would have to prove that the price of
all Chryslers in the resale market was depressed by the flaking-
paint problem, whether or not those vehicles had yet exhibited
defective paint. Neither the plaintiffs’ attorneys nor the Class
Petition have expressed a willingness to tackle such a daunting
task. On the other hand, an original purchaser of a Chrysler who
sold the vehicle while its paint was flaking or who repainted the
car at his own expense would arguably fall within the class, as
that individual would have incurred quantifiable, rather than
abstract, damages. Judge Lemmon’s statement that her family
members have in the past owned Chryslers is insufficient to
determine her recusal status, because it does not indicate whether
those Chryslers ever exhibited flaking paint.
8
More importantly, Judge Lemmon’s statement does not reflect
the degree of relationship between herself and the family member
who owns a Chrysler and the family members who have owned
Chryslers, if the latter fall within the class definition. This
relationship is critical to the recusal question.
If the unknown family members are a spouse or minor children
residing in Judge Lemmon’s household, then her recusal would be
required under the per se rule of § 455(b)(4). Should the class
action prove successful, Judge Lemmon’s spouse or minor child would
be entitled to recover financially. Although few federal courts
have ever reached the issue squarely, it seems fairly obvious that
where a judge or an immediate family member is a member of a class
seeking monetary relief, § 455(b)(4) requires recusal because of
the judge’s financial interest in the case. Cf. In re City of
Houston, 745 F.2d at 928 n.6 (strongly implying that judges must
recuse themselves if they are class members with a pecuniary
interest in the outcome of the litigation); Christiansen v.
National Sav. & Trust Co., 683 F.2d 520, 526 (D.C. Cir. 1982)
(implying that judges should recuse themselves if they are members
of a class for which individual recovery is sought); In re Cement
Antitrust Litig., 673 F.2d 1020, 1024 (9th Cir. 1982) (implying
that judge’s ownership of stock in a putative class member requires
recusal). A remote, contingent, or speculative interest is not a
disqualifying financial interest under the statute. See In re
Placid Oil Co., 802 F.2d 783, 786-87 (5th Cir. 1986) (holding that
judge’s investment in a non-party bank did not require his recusal
9
from a case with a different bank as a party, even though that case
might have affected the banking industry). For example, owning
stock in a publicly held company that may own a Chrysler vehicle
offers no more than a remote or speculative interest. On the other
hand, of course, where a judge is a class member in an action
seeking monetary relief, her direct financial interest runs afoul
of § 455(b)(4).
Tramonte contends that even if the family members Judge Lemmon
spoke of satisfied the degrees of relatedness specified in §
455(b)(4), because the plaintiff’s class has not yet been
certified, those family members have acquired no “financial
interest” in the case. To support this proposition, Tramonte
relies upon New Orleans Pub. Serv. v. United Gas Pipe Line Co., 719
F.2d 733 (5th Cir. 1983). New Orleans Pub. Serv. is neither a
panel nor an en banc opinion of this court; rather, it is a
published order by Chief Judge Clark explaining why several circuit
judges opted not to recuse themselves from an en banc poll. In the
order, Chief Judge Clark quoted with approval an advisory letter
expressing the opinion of the Advisory Committee on Codes of
Conduct of the Judicial Conference of the United States. The
Committee believed that only judges who are members of certified
classes are parties to class litigation. See id. at 735. Because
the en banc issue did not involve class certification itself, the
four judges who were potential class members concluded that they
could participate in the en banc poll. See id.
10
To the extent that New Orleans Pub. Serv. order has
precedential value, it does not control the § 455(b)(4) issue in
this case. The problem in New Orleans Pub. Serv., as described by
Chief Judge Clark, was whether the four judges in question were
“members of a putative class and therefore potential parties to
[the] action.” Id. at 734. That inquiry is a § 455(b)(5)
question. Chief Judge Clark did not address the separate problem
of those judges’ “financial interest” in the case under §
455(b)(4).
We conclude that where a judge, her spouse, or a minor child
residing in her household is a member of a putative class, there
exists a “financial interest” in the case mandating recusal under
§ 455(b)(4). The statute stresses that any financial interest,
“however small,” requires the recusal of a judge. The fact that a
class has not yet been certified unquestionably diminishes the
expected value of the outcome of the litigation to the interested
judge, as it makes a financial recovery less certain. Yet recovery
in any matter that has not reached a final judgment is uncertain;
otherwise, there would be no case or controversy. Because §
455(b)(4) requires recusal for even paltry financial interests, the
increased uncertainty of recovery in the precertification stage of
a class action affects the size but not the existence of a
disqualifying financial interest. The decision on a request to
certify is itself a critical step, often with large financial
consequences. An assertion that a member of a putative class lacks
11
a financial interest relevant to the trial court’s decision until
after the class is certified blinks at reality.
A different result obtains, however, if Judge Lemmon’s unknown
family members are neither her spouse nor minor children, but are
related to her within the third degree, as specified by §
455(b)(5).3 In such a case, the statute requires recusal if the
family members are a “party” to the class action. But members of
a putative class are not “parties” to a class action for these
purposes. See New Orleans Pub. Serv., 734 F.2d at 735 (reporting
opinion of Advisory Committee on Codes of Conduct of the Judicial
Conference of the United States that judges need not recuse
themselves for being “parties” to a class action if the class had
not yet been certified).4
Of course, even if a judge’s relative is not yet “a party” to
a class action, a judge could advance the interests of that
relative in the pre-certification stage of class litigation. The
way to guard against this danger, however, lies not with §
455(b)(5), but under § 455(a). According to 28 U.S.C. § 455(a), a
3
The difference in the degrees of relationship identified by
§§ 455(b)(4) & (b)(5) make the differing standards of recusal in
the two sections relevant. Cf. In re City of Houston, 745 F.2d at
928 n.6 (“The issue is not before us whether a member of a class is
a party where the interest involved is pecuniary. Yet we doubt
that the question need ever be reached, since where the interest is
pecuniary the judge will be disqualified under the per se rule [of
§ 455(b)(4)], and the matter of whether the judge or a close
relation is a party becomes moot.”).
4
We need not reach the question of whether a class member who
is not the named plaintiff is a party to a class action under §
455(b)(5). See In re Cement Antitrust Litig., 688 F.2d 1297, 1309-
13 (discussing the issue).
12
judge should recuse herself from “any proceeding in which [her]
impartiality might reasonably be questioned.” Thus, if upon remand
Judge Lemmon discloses that the family members in question are
neither her spouse nor minor children residing in her household,
she should consider her recusal status under § 455(a).
In sum, a remand is necessary for Judge Lemmon to clarify the
degree of relationship between herself and the individuals who own
or have owned a Chrysler. If those family members are her spouse
or minor children residing in her household, her recusal would have
been required and her remand to state court would be void. If, on
the other hand, those family members are more distantly related and
Judge Lemmon determines that there is no § 455(a) basis for
disqualification, recusal would be unnecessary and Judge Lemmon
would be free to reinstate the order of remand to state court that
we vacate today.
Tramonte, however, contends that our remand to Judge Lemmon is
inappropriate because the inadequacy of the record demonstrates
that Chrysler has failed to meet its burden of proof for recusal.
Yet Judge Lemmon was under the duty to police her disqualification
status. A judge has a duty to be watchful of such disqualifying
circumstances and decide any requests to recuse with disclosure
necessary to the decision made clear upon the record.
Tramonte advances a further argument that she contends makes
a remand unnecessary. Tramonte asserts that it is irrelevant
whether or not Judge Lemmon’s family members ever had a financial
interest in this case pursuant to § 455(b)(4), because that
13
interest was relinquished by Judge Lemmon’s statement that her
family member “has no interest in joining the putative class in
this case.” As this case would be a class action under Rule
23(b)(3), the argument goes, Judge Lemmon’s family member would
have the right to opt out. See Fed. R. Civ. Pro. 23(b)(3). Thus,
contends Tramonte, Judge Lemmon’s stated intent to opt out of any
certified class ends any disqualifying interest, pointing to Union
Carbide Corp. v. United States Cutting Serv., 782 F.2d 710 (7th
Cir. 1986). In Union Carbide, a trial judge’s husband owned stock
in an unnamed class member. The Seventh Circuit held that the
judge was not required to recuse herself under § 455(b)(4), because
once she learned of her financial interest in the case, she halted
her participation in the matter until her husband sold the stock in
question. See id. at 714-15.
Subsequent statutory developments, however, have substantially
undercut the majority rationale in Union Carbide. The dissent in
Union Carbide argued that the provisions of § 455(b)(4) are
absolutist; as soon as a judge becomes aware that she has a
financial interest in a case, that judge must disqualify herself
immediately. See id. at 717 (Flaum, J., dissenting). The statute
as it existed in 1986 spoke nothing of divestment of a financial
interest. See id. Thus, according to the dissent,
disqualification becomes automatic from the moment a judge
discovers her financial interest in the litigation; relinquishment
of that interest at any point after discovery is no remedy.
Congress partially adopted the Union Carbide dissent’s position in
14
its 1988 amendments to § 455. In that legislation, Congress added
subsection (f) to § 455, permitting judges to divest themselves of
financial interests in a case and retain control over it so long as
they have devoted “substantial judicial time” to the matter. See
28 U.S.C. § 455(f). Logically, therefore, divestment should only
be an effective way to escape recusal if a judge has already
devoted “substantial judicial time” to a case.
Chrysler argues to us that Judge Lemmon’s disavowal of an
interest in participating in the class action was somehow
inadequate, as it was not formal and it was not clear that Judge
Lemmon had the legal authority to speak on behalf of her family
member. Whether this is true or not is immaterial, however,
because § 455 makes the divestment option unavailable to Judge
Lemmon. Judge Lemmon first received this case on July 24, 1996,
and she ruled on the recusal and remand motions summarily on
November 8, 1996. From the record, it appears that Judge Lemmon
did little additional work on the matter in the interim. Thus, it
can hardly be said that Judge Lemmon devoted “substantial judicial
time” to the case.
Consequently, if Judge Lemmon’s spouse or a minor child
residing in her household had a financial interest in the outcome
of the case, she was automatically required to recuse herself; she
did not have the option under § 455(f) to divest herself of that
interest. Furthermore, Judge Lemmon stated only that her family
member who presently owns a Chrysler had no interest in
participating in the class action. She did not also “opt out” any
15
of her family members who had in the past purchased Chryslers but
no longer possessed them, who might be members of the putative
class as well.
Finally, Tramonte advances a policy argument against our
holding today. She contends that requiring recusal in a case like
this one would cause disaster in the federal courts, as scores of
judges would have to recuse themselves in typical consumer class
actions. Thus, Tramonte argues that Judge Lemmon should be allowed
to preside over this case despite her possible financial interest
in it. It is true that the Supreme Court has recognized a “rule of
necessity,” whereby judges can handle cases in which they have a
personal interest if “the case cannot be heard otherwise.” United
States v. Will, 449 U.S. 200, 214 (1980). Yet Tramonte has made an
insufficient showing to entitle herself to invoke the rule. Until
Tramonte demonstrates that every judge available to her is a
potential class member, we must enforce § 455(b) by its strict
terms. The hair trigger of “any financial interest” may be unwise
and may produce results difficult to defend. Its unforgiving bite
was the creation of Congress. And relaxation of the rule of
financial interest must come from that body.
IV.
We VACATE the order remanding this case to state court and
REMAND to the district court for proceedings consistent with this
opinion.
VACATED AND REMANDED.
16