United States Court of Appeals,
Fifth Circuit.
No. 93-2106.
Gary BOGLE, et al., Plaintiffs-Appellees,
v.
PHILLIPS PETROLEUM CO., et al., Defendants,
Phillips Petroleum Co., Phillips 66 Co., D.W. Price, J. Robert
Benz, Don C. Kuper, John E. Knott, John Van Buskirk, Fish
Engineering & Construction, Inc., and Raymond Alvarez, Defendants-
Appellants.
July 5, 1994.
Appeals from the United States District Court for the Southern
District of Texas.
Before ALDISERT*, REYNALDO G. GARZA and DUHÉ, Circuit Judges.
ALDISERT, Circuit Judge:
This appeal requires us to decide whether the order of the
district court remanding these proceedings to the state court is an
appealable order. If we decide that the order is not appealable,
we need not meet the contentions presented by Appellant Phillips
Petroleum Company.1
*
Circuit Judge of the Third Circuit, sitting by designation.
1
Appellants are Phillips Petroleum Company, Phillips 66
Company, D.W. Price, John E. Knott, Don C. Kuper, J. Robert Benz,
John Van Buskirk, Fish Engineering & Construction, Inc., and
Raymond Alvarez. For convenience we will refer to them as
"Phillips" or "Appellant." Phillips argues that it properly
grounded its removal on Bogle's separate and independent federal
law claims relating to an Employee Retirement Income Security Act
("ERISA") plan, that the district court erred in allowing Bogle
to evade federal jurisdiction by dismissing his ERISA claims and
by remanding after allowing dismissal of his ERISA claims. By
separate brief, Fish Engineering and Construction, Inc. argues
that multiple exactions of punitive damages violate the due
1
In determining whether the order is appealable, our threshold
inquiry is whether the district court based its remand on lack of
subject matter jurisdiction. If it determined it lacked such
jurisdiction, there is no appealable order. 28 U.S.C. §§ 1447(c)
& (d). The appeal was timely filed in accordance with Rule 4(a) of
the Federal Rules of Appellate Procedure. Our standard of review
as to determinations of jurisdiction is plenary. Ingalls
Shipbuilding, Inc. v. Asbestos Health Claimants, 17 F.3d 130, 132
(5th Cir.1994).
I.
In October of 1989, an explosion at Phillips' Houston Chemical
Complex caused 24 deaths, innumerable personal injuries and
property damage affecting thousands. Gary Bogle and other
employees and victims of the explosion filed suit in Harris County,
Texas in November of 1989, alleging negligence and gross negligence
on the part of Phillips. This lawsuit was subsequently
consolidated with other actions arising out of the explosion.
During the course of these consolidated proceedings, Gary Bogle and
the other plaintiffs (hereinafter "Appellee") filed a supplemental
petition alleging that Phillips wrongfully denied them medical
benefits, terminated part of its medical program and breached its
fiduciary duties.
In the supplemental petition, Appellee asserted:
3.13 Although in the wake of the occurrence in question, the
Phillips Defendants contracted with the Family Service Center
Corp. (an independent agency of United Way of the Texas Gulf
process clauses of the federal and Texas constitutions.
2
Coast), the Kelsey-Seybold Clinic, and the University of Texas
Health Science Center at Houston to provide medical services,
including diagnosis, treatment, and therapy for post-traumatic
stress syndrome and related disorders for survivors (and their
families) of that disaster, these services continued for only
about a month before they were abruptly terminated by
Phillips' legal counsel. Further medical treatment required
by victims of the explosions was unjustifiably interrupted,
although Phillips and its agents knew that these victims could
not obtain treatment either because they had no insurance
coverage, or Phillips, in bad faith, would obstruct their
workers' compensation coverage for such treatment.
. . . . .
5.1 Plaintiffs would further show that the occurrence giving
rise to this suit was also directly and proximately caused by
the negligence of Defendants Phillips Petroleum Company,
Phillips 66 Company, D.W. Price, John E. Knott, Don C. Kuper,
and J. Robert Benz, who are each vice-principals of the
Phillips Defendants. Such negligence includes, but is not
limited to, the following acts and/or omissions:
. . . . .
(n) in failing to provide therapeutic, medical, and other
services and continuing to provide such services in the
aftermath of the deadly explosions in 1989;
(o) in obstructing the payment of workers' compensation and
other benefits for necessary medical treatment;
(p) in refusing to provide for necessary medical services and
treatment to those who endured and survived the unreasonably
dangerous working conditions, as exemplified by the
boilerhouse explosion, the Plant 5 explosions, and the K-Resin
fire in 1989;
. . . . .
(z) in obstructing the provision of necessary medical
treatment provided by Phillips and/or the Employers Casualty
Company and the Employers National Insurance Company
Consolidated Supplemental Petition, 1992.
Appellee maintains that the sole reason for the supplemental
petition was to rebut Appellant's damages defense that many
plaintiffs, who belatedly sought medical or psychiatric treatment,
3
were faking their injuries or malingering. Brief of Appellee at 5.
Appellant removed this mass tort lawsuit to the district court
on the basis of the supplemental petition, contending that the new
allegations presented a sufficient basis for removal because they
brought into play provisions of the Employee Retirement Income
Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. It argued that
because medical treatment for Phillips' employees was governed by
a plan "established ... for the purpose of providing ... through
the purchase of insurance or otherwise, (A) medical, surgical, or
hospital care or benefits ...," 29 U.S.C. § 1002(1), ERISA's
preemption clause, 29 U.S.C. § 1144(a), would apply, thereby
ousting state court jurisdiction.
The Bogle plaintiffs filed an emergency Motion to Remand to
the state court, arguing that the supplemental petition did not
raise a federal question. They also submitted a Motion for Partial
Nonsuit with Prejudice of their own claims, the effect of which was
to dismiss the additional averments which formed the basis of
Appellant's removal petition.
After a status conference setting a briefing schedule, the
district court held a hearing on the Motion to Remand. It
subsequently granted the Bogle Plaintiffs' motion for a partial
nonsuit and granted their motion to remand. The district court
concluded that "the relation between the core of Plaintiffs' case
and ERISA is too tenuous, remote and peripheral for preemption to
occur. This case is not preempted by ERISA." Dist.Ct.Op. at 9.
In addition, the district court determined that the dictates of
4
justice warranted a remand back to state court. Id. at 11-12
(citing Carnegie-Mellon University v. Cohill, 484 U.S. 343, 108
S.Ct. 614, 98 L.Ed.2d 720 (1988) ). This appeal by Phillips
followed.
II.
Whether an order to remand is appealable, thereby vesting a
reviewing court with jurisdiction, turns on the reasons for the
remand. Our starting point is 28 U.S.C. § 1447(d):
An order remanding a case to the State court from which
it was removed is not reviewable on appeal or otherwise,
except that an order remanding a case to the State court from
which it was removed pursuant to section 1443 of this title
shall be reviewable by appeal or otherwise.
Notwithstanding this broad language, Section 1447(d) applies only
to remands made pursuant to the grounds set forth in Section
1447(c). See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S.
336, 350-52, 96 S.Ct. 584, 592-93, 46 L.Ed.2d 542 (1976). Section
1447(c) provides in relevant part:
A motion to remand the case on the basis of any defect in
removal procedure must be made within 30 days after the filing
of the notice of removal under section 1446(a). If at any
time before final judgment it appears that the district court
lacks subject matter jurisdiction, the case shall be remanded.
Section 1447(c) is not the only basis for a remand back to
state court. In Carnegie-Mellon University v. Cohill, 484 U.S. at
357, 108 S.Ct. at 596, the Court added a new dimension to removal
jurisprudence by holding that a district court "has discretion to
remand to state court a removed case involving pendent claims upon
a proper determination that retaining jurisdiction over the case
would be inappropriate." In the course of its discussion, the
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Court set forth factors to be considered by courts when deciding
whether to retain jurisdiction. Id.
Significantly, for our purposes, an order of remand in a
Carnegie-Mellon context is considered a non-Section 1447(c) remand.
Accordingly, as a non-statutory ground for removal, it is
reviewable by this court. See, e.g., Burks v. Amerada Hess Corp.,
8 F.3d 301, 304 (5th Cir.1993) (if district court relies on
nonstatutory ground for remand of case to state court, Court of
Appeals may review order to remand; however, if remand order is
based on statutory grounds of lack of subject matter jurisdiction,
order is immune from review). Thus, a remand order is reviewable
if it is based upon the Carnegie-Mellon rationale, but is immune
from review if it is based upon the grounds enumerated in Section
1447(c). See, e.g., Tillman v. CSX Transp. Inc., 929 F.2d 1023,
1027 (5th Cir.) (remand order, which stated that amendment to add
another party "would destroy subject matter jurisdiction in this
court," was unreviewable), cert. denied, --- U.S. ----, 112 S.Ct.
176, 116 L.Ed.2d 139 (1991).
The critical distinction for determining appealability is the
presence of federal subject matter jurisdiction prior to the order
of remand. In a Section 1447(c) remand, federal jurisdiction never
existed, and in a non-Section 1447(c) remand, federal jurisdiction
did exist at some point in the litigation, but the federal claims
were either settled or dismissed.
III.
The district court here concluded:
6
This case does not contain a federal claim, and three years of
important work and preparation occurred in state court.
Dist.Ct.Op. at 12. We construe the district court's order as a
remand based on lack of subject matter jurisdiction. Dist.Ct.Op.
at 9, 12 ("The core of Plaintiffs' cause of action, however, exists
independent of the ERISA plan.... This case is not preempted by
ERISA.... This case does not contain a federal claim ..."). The
district court's conclusion that ERISA preemption was inapplicable
and that, therefore, no federal claim existed, brings its order
"literally within [Section] 1447(c)." Tillman, 929 F.2d at 1027.
Nevertheless, after concluding that ERISA preemption did not
apply, the district court discussed its discretion to remand under
the factors set forth in Carnegie-Mellon. This was improper
because, as we have indicated, Carnegie-Mellon applies only in
cases where federal jurisdiction existed at one time, but was based
upon federal claims subsequently settled or dismissed. Here, the
district court determined that federal jurisdiction never did
exist. The court's confusion may have emanated from its decision
to grant the Bogle plaintiffs' simultaneous request for partial
nonsuit of the claims which formed the basis of the removal
petition. The district court's discussion, although improper
surplusage, does not taint its ultimate conclusion that it lacked
subject matter jurisdiction. We made this clear in Tillman, 929
F.2d at 1027:
[E]ven if the trial court neither states as grounds for remand
the specific words of § 1447(c) nor cites the statute itself,
the order is unreviewable if, by substantially similar
language, it is evident that the court intends to remand for
the grounds recited in § 1447(c).
7
The magic words "this case does not contain a federal claim"
rendered the district court's remand order unreviewable.
Having made the critical decision that ERISA did not preempt
any of the state law claims, the district court lacked jurisdiction
to rule on the Bogle plaintiffs' nonsuit motion. Therefore, its
decision to grant the partial nonsuit was error, and the order
implementing it is void and of no effect.
Appellant, however, should not be prejudiced by the district
court's error. Inasmuch as the Bogle plaintiffs made the motion
for partial nonsuit, Appellant may avail itself of judicial
estoppel principles to prevent Appellee from resurrecting these
claims in the state court proceeding. Reynolds v. Commissioner,
861 F.2d 469, 472 (5th Cir.1988) ("The judicial estoppel doctrine
protects the integrity of the judicial process by preventing a
party from taking a position inconsistent with one successfully and
unequivocally asserted by the same party in a prior proceeding.").
IV.
Finally, because we conclude that the district court's remand
order was anchored in Section 1447(c), we cannot review its
determination that ERISA preemption did not apply to the additional
averments. In Tillman, 929 F.2d at 1028, we specifically noted:
The Supreme Court has expressly held that a remand order based
upon lack of jurisdiction, even if clearly erroneous, cannot
be reviewed.
See Thermtron, 423 U.S. at 343, 96 S.Ct. at 589 (holding that a
remand order issued pursuant to Section 1447(c) is not reviewable
"whether erroneous or not and whether review is sought by appeal or
8
by extraordinary writ.").
The remand order will stand.
V.
The appeal is DISMISSED for lack of jurisdiction.
9