F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
October 11, 2006
TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
R ON N ER AD ,
Plaintiff - Appellee,
No. 05-6128
v. (D.C. No. CIV-04-1674-T)
(W .D. Okla.)
ASTRAZENECA
PHARM ACEUTICALS, IN C.;
TIM OTH Y SYDNES,
Defendants - Appellants.
OR D ER AND JUDGM ENT *
Before KELLY, HOL LOW A Y, and M cCO NNELL, Circuit Judges. **
Defendant AstraZeneca Pharmaceuticals, Inc., appeals from the district
court’s order remanding this case to Oklahoma state court. W e conclude that w e
lack appellate jurisdiction to review the remand order, and we dismiss the appeal.
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
**
After examining the briefs and the appellate record, this three-judge
panel has determined unanimously that oral argument would not be of material
assistance in the determination of this appeal. See Fed. R. App. P. 34(a); 10th
Cir. R. 34.1(G). The cause is therefore ordered submitted without oral argument.
Background
On November 15, 2004, Plaintiff Ron Nerad filed a complaint in Oklahoma
state court alleging products liability, fraud and misrepresentation claims against
Defendant AstraZeneca and its drug sales representative, Defendant Timothy
Sydnes. These claims arose from injuries M r. Nerad allegedly received from
using the drug Crestor.
AstraZeneca removed the matter to federal court. M r. Nerad promptly
moved for remand, asserting without dispute that both he and M r. Sydnes w ere
citizens of Oklahoma. AstraZeneca maintained that M r. Sydnes had been
fraudulently joined, and it opposed the remand on the ground that the only proper
parties to the action–itself and M r. Nerad–were diverse.
On M arch 11, 2005, the district court granted M r. Nerad’s motion for
remand. Aplt. App. at 49-53. In a ruling not contested in this appeal, the district
court held that M r. Sydnes was fraudulently joined to the products liability claim.
However, it also determined that M r. Sydnes was properly joined to the fraud and
misrepresentation claims. AstraZeneca argued that M r. Nerad failed to plead
those claims with sufficient particularity to satisfy Fed. R. Civ. P. 9(b), but the
court concluded that “[e]ven if the court were to determine that the claims are
deficient in this regard, the court would authorize [Nerad] to file an amended
complaint to include sufficient particularity.” A plt. App. at 52. Finally, the court
rejected AstraZeneca’s contention that M r. Nerad could not prevail on his claims
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because he had no evidence that he or his physician ever had direct contact with
M r. Sydnes. Aplt. App. at 52-53.
Based on these rulings, the court concluded that AstraZeneca had failed to
carry its “heavy” burden of demonstrating fraudulent joinder. Thus, the court
held that it lacked subject matter jurisdiction because M r. Nerad and M r. Sydnes
were not diverse, and it remanded the case to state court. This appeal followed.
Discussion
The threshold question we must answ er is whether this court is permitted to
review the district court’s remand order. Under 28 U.S.C. § 1447(d), “[a]n order
remanding a case to the State court from which it was removed is not review able
on appeal or otherwise . . . .” However, this prohibition is not as broad as it
seems: “§ 1447(d) must be read in pari materia w ith § 1447(c), so that only
remands based on grounds specified in § 1447(c) are immune from review under §
1447(d).” Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995).
Therefore, when “a district court’s remand is based on a timely raised defect in
removal procedure or on a lack of subject-matter jurisdiction–the grounds of
remand recognized by § 1447(c)–a court of appeals lacks jurisdiction to entertain
an appeal of the remand order under § 1447(d).” Id. at 127-28. This remains true
for “all remand orders issued pursuant to § 1447(c), whether erroneous or
not . . . .” Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343 (1976).
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Accordingly, this court can review a remand order only if it had a basis
outside of § 1447(c). “In order to evaluate the reviewability of the district court’s
remand order[], we must independently review the record to determine the actual
grounds upon which the district court believed it was empow ered to remand.”
Dalrymple v. Grand River D am Auth., 145 F.3d 1180, 1184 (10th Cir. 1998).
The district court held that regardless of w hether the pleadings were
technically deficient under Fed. R. Civ. P. 9(b), they could easily be amended,
and amendment would be allowed as a matter of course. Thus, the review ability
of the remand order turns on whether the district court concluded that it lacked
jurisdiction at the outset, or whether it determined that it initially had jurisdiction
but would lose jurisdiction once the pleadings were amended. If the former, the
remand order is not reviewable. See Things Remembered, 516 U.S. at 127-28. If
the latter, the remand w as not pursuant to § 1447(c), and review is possible. See,
e.g., Poore v. American-Amicable Life Ins. Co., 218 F.3d 1287, 1291 (11th Cir.
2000) (“[E]vents occurring after removal . . . do not oust the district court’s
jurisdiction.”); Trans Penn W ax Corp. v. M cCandless, 50 F.3d 217, 223 (3rd Cir.
1995) (“[A] remand only falls under § 1447(c) if the removal itself was
jurisdictionally improper, not if the defect arose after removal.”).
The allegations of fraudulent joinder complicate our analysis. W hile a
court normally evaluates the propriety of a removal by determining whether the
allegations on the face of the complaint satisfy the jurisdictional requirements,
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fraudulent joinder claims are assertions that the pleadings are deceptive. Thus, in
cases where fraudulent joinder is claimed, we have directed courts to “pierce the
pleadings, consider the entire record, and determine the basis of joinder by any
means available.” D odd v. Faw cett Publ’ns, Inc., 329 F.2d 82, 85 (10th Cir.
1964) (citations omitted). In so doing, the court must decide whether there is a
reasonable basis to believe the plaintiff might succeed in at least one claim
against the non-diverse defendant. See Badon v. RJR Nabisco, Inc., 224 F.3d
382, 393 (5th Cir. 2000). A “reasonable basis” means just that: the claim need
not be a sure-thing, but it must have a basis in the alleged facts and the applicable
law .
W e have previously indicated that “a fraudulent joinder analysis [is] a
jurisdictional inquiry.” Albert v. Smith’s Food & Drug Ctrs., Inc., 356 F.3d 1242,
1247 (10th Cir. 2004). Although we have not addressed the question in the
context of whether a remand order based on a finding of fraudulent joinder is
reviewable, our sister circuits agree that such orders are not reviewable. As the
Fifth Circuit explained:
The district court ruled on an argument put before it that directly
implicated the subject matter jurisdiction of that court. The court
explicitly held “that the joinder of the tribe is not fraudulent, and that
the stateless status of the tribe therefore destroys complete diversity,
and along with it, this Court’s diversity jurisdiction.” The
accompanying remand falls directly within § 1447(c). Consequently,
pursuant to § 1447(d), we lack jurisdiction to review the order of
remand.
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Victor v. Grand Casino-Coushatta, 359 F.3d 782, 784-85 (5th Cir. 2004) (per
curiam); see also Hernandez v. Seminole County, 334 F.3d 1233 (11th Cir. 2003);
Garbie v. DaimlerCrysler Corp., 211 F.3d 407 (7th Cir. 2000).
This rationale is consistent with Dalrymple, where we considered whether
we could review a remand order premised on a lack of federal question
jurisdiction. The plaintiffs had brought a class-action law suit against a state
agency, which removed the case to federal court based on alleged federal claims
and defenses. In declining review , we reasoned that:
The remand orders at issue clearly do not reflect the typical
nonjurisdictional determination involving a discretionary remand of
supplementary or pendent claims, venue, abstention, comity, or the
waiver of opportunity to challenge a procedurally irregular removal.
Instead, the orders address key issues directly related to whether the
district court could have exercised subject matter jurisdiction over
the cases–the presence of a federal question on the face of the
plaintiffs’ complaints, and/or the presence of a federal question in
the form of a colorable federal immunity defense.
Dalrymple, 145 F.2d at 1185.
Likewise, the order in this case addressed key issues related to whether the
district court had subject-matter jurisdiction. The pleadings on their face
reflected a lack of complete diversity. In the hope of convincing the court that it
had jurisdiction, AstraZeneca invited it to “pierce the pleadings, consider the
entire record, and determine the basis of joinder by any means available.” Dodd,
329 F.2d at 85 (internal citations omitted). Although the court considered
whether future amendments might allow M r. Nerad to state his claims w ith
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sufficient particularity to satisfy Fed. R. Civ. P. 9(b), it did so only in order to
determine whether there was a “possibility that the non-diverse party could be
liable to the plaintiff in state court.” Aplt. App. at 50. This was a jurisdictional
inquiry. As w e read the order, the court determined that success was reasonably
possible at the time of removal because, although the plaintiff might be required
to amend his complaint, that amendment would be allowed as a matter of course.
Therefore, we conclude that the district court remanded based on its
conclusion that it lacked subject-matter jurisdiction at the time of removal. The
remand w as thus ordered pursuant to § 1447(c), and we are precluded from
review ing it by § 1447(d). A ccordingly, the appeal is DISM ISSED.
Entered for the Court
Paul J. Kelly, Jr.
Circuit Judge
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