USCA1 Opinion
March 21, 1995
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
___________________
No. 94-1525
CLYDE ARMISTEAD,
Plaintiff, Appellant,
v.
C & M TRANSPORT, INC., ET AL.,
Defendants, Appellees.
____________________
ERRATA SHEET
The opinion of this Court issued on March 13, 1995, is
amended as follows:
On page 9, line 9, change "chose" to "choose".
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
___________________
No. 94-1525
CLYDE ARMISTEAD,
Plaintiff, Appellant,
v.
C & M TRANSPORT, INC., ET AL.,
Defendants, Appellees.
__________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. Morton A. Brody, U.S. District Judge] ___________________
___________________
Before
Selya, Circuit Judge, _____________
Campbell, Senior Circuit Judge, ____________________
and Boudin, Circuit Judge. _____________
___________________
Clyde Armistead on brief pro se. _______________
John H. Montgomery, Diane S. Lukac, Mary Elizabeth Fougere, __________________ ______________ _______________________
and Bernstein, Shur, Sawyer & Nelson on brief for appellee, The _________________________________
Travelers Insurance Company.
__________________
March 9, 1995
__________________
Selya, Circuit Judge. Defendant-appellee Travelers _____________
Insurance Company ("Travelers") removed this action to the
federal district court despite the provision in 28 U.S.C.
1445(c) forbidding removal of cases arising under state
workers' compensation laws. Plaintiff-appellant Clyde
Armistead unsuccessfully resisted the removal on
jurisdictional grounds, but overlooked the bar of section
1445(c). The district court granted summary judgment in
Travelers' favor. On appeal, Armistead for the first time
invokes section 1445(c). We hold that the district court
lacked subject matter jurisdiction in this case.
Accordingly, we vacate the judgment below and direct that the
case be remanded to state court.
I I
Armistead, a citizen and resident of Maine, worked
as a truck driver for C & M Transport, Inc. ("C & M"), a
Maine corporation. He was injured on May 7, 1987, while
driving a C & M truck in Maryland. Appellee Travelers, a
Connecticut corporation, was at one time C & M's workers'
compensation insurer.
Armistead filed a petition for benefits under the
Maine Workers' Compensation Act, 39 M.R.S.A. 1-195
(repealed),1 in October, 1987. The Workers' Compensation
____________________
1. The legislature retrofitted the Act with neoteric
provisions which took effect on January 1, 1993. See 39-A ___
M.R.S.A. 101-409. The new law alters benefits and
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Commission issued a benefits award in February, 1988 (after C
& M defaulted), but no compensation payments were made. The
Commission's award indicates "no record of insurance," and as
for C & M, it filed for Chapter 7 protection, was adjudicated
bankrupt, and ceased doing business. According to the
record before us, Travelers had notified the Commission that
it had canceled C & M's coverage for nonpayment of premiums,
effective some three weeks before the date of injury.
In July of 1992, Armistead resumed his quest for
benefits by seeking a Commission determination that Travelers
was liable on the award because it had failed to send a prior
notice of the cancellation to C & M, as required by state
law. See 39 M.R.S.A. 23(1) (1987) (repealed); see also 39- ___ ________
A M.R.S.A. 403(1) (1992). After informal proceedings
failed to resolve the claim, Armistead filed a formal motion
for enforcement of the award. Travelers denied liability and
cross-moved for a review of Armistead's alleged disability.
The statute contemplates an evidentiary hearing before a
Commissioner on such motions, subject to appellate review in
____________________
replaces the Workers' Compensation Commission with an
administrative board. See 39-A M.R.S.A. 151, 152. ___
Transitional provisions preserve benefits under the former
law for injuries sustained before January 1, 1993, and
continue the Commission's authority over pending claims for a
limited period. See generally Clark v. International Paper _____________ _____ ___________________
Co., 638 A.2d 65 (Me. 1994). In all procedural respects ___
relevant here, the current law is parallel to the former law.
The transitional provisions and other changes do not affect
our analysis.
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the Commission and a discretionary appeal to Maine's highest
court. See 39 M.R.S A. 94-B, 98-99, 103-A, 103-B, 103-C. ___
While these motions were pending before the
Commission, Armistead also filed a complaint in the state
superior court for enforcement of the Commission's original
award. The complaint alleged a right to relief by virtue of
the superior court's equitable power to enforce Commission
orders under the Workers' Compensation Act, 39 M.R.S.A.
103-E. Count 1 sought enforcement of the award against C &
M; count 2 sought a declaration that Travelers afforded
coverage to C & M under the Act on the date of injury, and
also sought enforcement of the Commission's award against
Travelers and C & M jointly.
Travelers promptly removed the action to federal
district court, claiming diversity of citizenship between
Travelers and Armistead, and describing the action as one for
"breach of contract." Seven months later, Armistead moved
for a remand to the state court, arguing that C & M's Maine
citizenship destroyed complete diversity between the parties.
But there was a rub; C & M had not been served with process,
and its very existence was dubious.2 The district judge
____________________
2. Armistead renews here the claim that C & M retains its
corporate existence under Maine's corporation laws, and is a
"necessary" party to this suit. The argument was not fully
developed below, and we deem it waived. See Ryan v. Royal ___ ____ _____
Ins. Co., 916 F.2d 731, 734 (1st Cir. 1990). At any rate, ________
Armistead still has not explained his failure to serve
process on C & M.
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dismissed the claim against C & M and, applying the holding
of White v. United States Fidelity & Guar. Co., 356 F.2d 746 _____ __________________________________
(1st Cir. 1966), rejected Armistead's alternative argument
that Travelers should be deemed to have the same citizenship
as its insured under 28 U.S.C. 1332(c)(1). The court
thereafter addressed the parties' cross-motions for summary
judgment and decided the merits in favor of Travelers. This
appeal ensued.
On appeal, Armistead adds for the first time the
argument that the removal violated 28 U.S.C. 1445(c).
Travelers urges that section 1445(c) is inapplicable because
Armistead's suit does not "arise under" Maine's workers'
compensation law, and, alternatively, that Armistead waived
the argument.
II II
Section 1445(c) renders nonremovable suits "arising
under" the workers' compensation laws of the state in which
the federal court sits. The statute reflects a congressional
concern for the states' interest in administering their own
workers' compensation schemes, the burdens on injured
claimants of maintaining a federal court suit, and the
incidence of federal court congestion. See generally Horton _____________ ______
v. Liberty Mut. Ins. Co., 367 U.S. 348, 350 (1961) _________________________
(explaining purpose of limitation on removal); 14A Charles A.
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Wright et. al, Federal Practice & Procedure 3729 (2d ed. _____________________________
Supp. 1994) (listing cases).
Travelers does not directly assert a right to
remove the proceedings pending before the Commission, but
focuses solely on the subsequent superior court complaint.
While the complaint was a separate filing, however, it did
not comprise independent litigation based on a separate
common law right to relief. Rather, the complaint sought
statutory compensation under a provision of the workers'
compensation law vesting in the superior court equitable
powers to enforce Commission orders and to issue pro forma ___ _____
decisions enforcing Commission benefit awards.3 As an
integral part of the administrative enforcement scheme, the
superior court action was merely supplementary to the
Commission proceeding, and both proceedings obviously arose
under the workers' compensation law within the meaning of 28
U.S.C. 1445(c). Cf. Spearman v. Exxon Coal USA, 16 F.3d ___ ________ ______________
____________________
3. Commission orders are enforceable only by petition to
the superior court, which may issue "any suitable process" in
aid of Commission proceedings. See 39 M.R.S.A. 93, 103-E. ___
The Commission itself has no general equity powers. See ___
Clark v. International Paper Co., 638 A.2d at 66. Benefit _____ _______________________
awards and Commission decisions become enforceable on
presentation of a certified copy to the superior court, which
"shall render a pro forma decision in accordance therewith."
39 M.R.S.A. 103-E. The Commission's decisions thus acquire
the same force as if rendered by the superior court. See 39 ___
M.R.S.A. 103-E. Moreover, an award may be confirmed by the
superior court even if it remains subject to post-order
administrative proceedings or a pending appeal. See Cilley ___ ______
v. Georgia-Pac. Corp., 519 A.2d 191, 192 (Me. 1986); see also __________________ ________
39 M.R.S.A. 104-A.
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722, 725 (7th Cir.) (holding that a claim did not arise under
a workers' compensation law when it stated a right to relief
in tort and sought common law damages distinct from statutory
compensation scheme), cert. denied, 115 S. Ct. 377 (1994). ____________
Removal of the case thus was doubly barred, once
under section 1445(c), and again because the supplementary
superior court proceeding does not independently qualify as a
removable "civil action" under 28 U.S.C. 1441(a). See ___
Barrow v. Hunton, 99 U.S. 80, 82 (1879) (explaining that a ______ ______
supplementary action so connected with an original action as
to form a mere incident or continuation of it is not
removable as a separate suit); Bank v. Turnbull & Co., 83 ____ _______________
U.S. (16 Wall.) 190, 193 (1873) (same); Federal Savings & __________________
Loan Ins. Corp. v. Quinn, 419 F.2d 1014, 1018 (7th Cir. 1969) _______________ _____
(same, but making claim that federal standards determine
independence of action); Overman v. Overman, 412 F. Supp. _______ _______
411, 412 (E.D. Tenn. 1976) (same, discussing possible Erie ____
concerns). Recent cases in which parties attempt to remove
state supplementary proceedings are scarce, but the federal
bar to entertaining "satellite elements" of pending state
suits and judgments clearly remains intact as the "sensible"
judicial rule. 14A Wright et al., supra, 3721 (Supp. _____
1994); see also 1A James Wm. Moore et al., Moore's Federal ________ _______________
Practice 0.157[4-11] (2d ed. Supp. 1994) (distinguishing ________
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the principle from the "independent" claim concept embodied
in 28 U.S.C. 1441(c)).
III III
Under 28 U.S.C. 1447(c), a motion challenging
subject matter jurisdiction may be made at any time, but
objections based on a "defect in removal procedure" must be
made within thirty days of the removal. Travelers argues
that Armistead waived any objection to the lack of removal
jurisdiction by failing to move for a remand within this
period.
In Williams v. AC Spark Plugs Div. of Gen. Motors ________ ___________________________________
Corp., 985 F.2d 783 (5th Cir. 1993) the Fifth Circuit decided _____
that removal of a Texas workers' compensation case in
violation of section 1445(c) should be treated as the
embodiment of a procedural defect and, thus, subject to
section 1447(c)'s thirty day waiver rule. The court
interpreted section 1447(c) as meaning that any wrongful ___
removal is subject to waiver so long as the district court
would have had original subject matter jurisdiction had the
plaintiff initiated the action in federal court. Id. at 787. ___
Since the plaintiff in Williams could have chosen to bring ________
her Texas claim as an original diversity action, the court
held that she waived her objection to federal court
jurisdiction by waiting more than thirty days to seek a
remand. Id. at 788. ___
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The Eighth Circuit, however, has taken the view
that where Congress expressly restricts removal jurisdiction
over a particular class of cases, wrongful removal should not
be treated as a "mere procedural irregularity" waivable by
the parties, but as a violation of the court's limited
subject matter jurisdiction.
The fact that [plaintiff] could have invoked the
original jurisdiction of the federal court
initially is irrelevant. . . . The jurisdiction of
the lower federal courts, both original and removal
is entirely a creature of statute. . . . If one of
the statutory requirements is not met, the district
court has no jurisdiction.
Hurt v. Dow Chem. Co., 963 F.2d 1142, 1145 (8th Cir. 1992) ____ _____________
(determining that a failure to object to lack of removal
jurisdiction under 1441(b) did not operate as a waiver).
We need not choose between these contradictory views
because in this case there was neither removal jurisdiction
nor original diversity jurisdiction. Unlike the Texas
statute at issue in Williams, Maine's compensation scheme ________
does not permit a de novo state court action for workers' __ ____
compensation benefits. See Dorey v. Forster Mfg. Co., 591 ___ _____ ________________
A.2d 240, 241 (Me. 1991). By reason of the policies
expressed in Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), ______________ ________
the state's rule barring suitors from bringing such an action
de novo in its own courts must be applied to bar an original __ ____
diversity action in the forum's federal courts. See ___
Feinstein v. Massachusetts Gen. Hosp., 643 F.2d 880, 888 (1st _________ ________________________
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Cir. 1981) (stating that Erie policies requiring adherence to ____
state door-closing statutes likewise require a federal court
to apply state-created administrative limitations on rights
to recovery) (citing Woods v. Interstate Realty Co., 337 U.S. _____ _____________________
535 (1949)); Construction Aggregates Corp. v. Rivera de _______________________________ __________
Vicenty, 573 F.2d 86, 96 (1st Cir. 1978) (holding that if _______
Puerto Rico does not give its own courts jurisdiction over a
claim collaterally attacking workers' compensation rates for
locally hired workers, a federal court cannot exercise
diversity jurisdiction over the claim); accord Dial v. ______ ____
Hartford Accident & Indem. Co., 863 F.2d 15 (5th Cir. 1989) _______________________________
(examining Mississippi workers' compensation law); Trapp v. _____
Goetz, 373 F.2d 380 (10th Cir. 1966) (examining state pension _____
law); Shultz v. Lion Oil Co., 106 F. Supp. 119 (D. Ark. 1952) ______ ____________
(examining Arkansas workers' compensation law), appeal ______
dismissed, 202 F.2d 752 (8th Cir. 1953). _________
Moreover, the limited supplementary and appellate
authority exercised by the Maine courts over Commission
proceedings finds no analog in federal diversity
jurisdiction. As courts of original jurisdiction, federal ________
district courts sitting in diversity jurisdiction do not have
appellate power, nor the right to exercise supplementary
equitable control over original proceedings in the state's
administrative tribunals. See Rooker v. Fidelity Trust Co., ___ ______ __________________
263 U.S. 413, 416 (1923) (noting that the jurisdiction
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possessed by federal district courts is "strictly original");
Barrow v. Hunton, 99 U.S. 80, 82 (1879) (explaining that ______ ______
federal courts may not exercise control over state
proceedings by entertaining supplementary actions which are
but incidents of state suits); MacKay v. Pfeil, 827 F.2d ______ _____
540, 545 (9th Cir. 1987) (holding that a request for
declaratory relief that does not state a new case arising
upon new facts, but in reality seeks review and correction of
a state court judgment is not within federal court's original
jurisdiction); cf. 1A Moore's Federal Practice, supra, ___ _________________________ _____
0.167[6] (Supp. 1994) (where state courts have only
appellate, quasi-administrative review over the claim, the
proceeding "is not a civil action within the cognizance of
the original jurisdiction of the federal court").4
We need go no further. In the absence of federal
subject matter jurisdiction, we cannot proceed to the merits
of this appeal, and the case must be remanded to the state
____________________
4. Any claim in this case not covered by the foregoing
principles would be subject to dismissal under the related
doctrine of Burford-type abstention. The state has signalled ____________
its interest in regulatory coherency by concentrating all
claims in an exclusive administrative process, and parallel
federal suits could "in a very real sense . . . disrupt the
regulatory scheme." Allstate Ins. Co. v. Sabbagh, 603 F.2d _________________ _______
228, 233 (1st Cir. 1979); see also Bath Memorial Hosp. v. ________ ____________________
Maine Health Care Fin. Com., 853 F.2d 1007, 1013 (1st Cir. ____________________________
1988) (holding that a court should abstain when an exercise
of jurisdiction might lead to a parallel federal `regulatory
review' mechanism, complicating state administration);
Construction Aggregates Corp., 573 F.2d at 91-93, 96 ________________________________
(applying principles of Burford-type abstention to various ____________
claims relating to workers' compensation law).
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court. See Halleran v. Hoffman, 966 F.2d 45, 47-48 (1st Cir. ___ ________ _______
1992).
Accordingly, the judgment is vacated and this case _______
is remanded to the district court which shall immediately ________
remand the action to the state court. All parties shall bear
their own costs.
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