Bogle v. Phillips Petroleum Co.

                    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

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      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.

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     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,


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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


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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:


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     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).

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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


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by extraordinary writ.").

     The remand order will stand.

                               V.

     The appeal is DISMISSED for lack of jurisdiction.




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