UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 99-60754
LOUIS DOLEAC, Deceased, by Lilah Joyce Doleac his Widow, as
Personal Representative,
Plaintiff-Appellee,
UNITED STATES OF AMERICA,
Intervenor,
versus
ARNE MICHALSON, Etc.; ET AL.,
Defendants,
ARNE MICHALSON, M.D.,
Defendant-Appellant.
Appeal from the United States District Court
for the Southern District of Mississippi
August 27, 2001
Before GARWOOD, HALL,1 and BARKSDALE, Circuit Judges.
RHESA HAWKINS BARKSDALE:
For this appeal, the threshold issue is our jurisdiction vel
non to consider the district court’s permitting an amendment
joining a party, which resulted in both the destruction of
diversity of citizenship and the remand of the action to state
1
Circuit Judge of the Ninth Circuit, sitting by designation.
court. On the one hand, if we have jurisdiction, we must consider
whether allowing the amendment was proper. On the other hand, if
jurisdiction is lacking, we must consider the constitutionality of
28 U.S.C. § 1447(d)’s preclusion of our review. (Section 1447(d)
bars review of remand orders except in certain civil rights cases.)
Because we lack jurisdiction and § 1447(d) is constitutional, the
appeal is DISMISSED.
I.
In November 1998, Lilah Joyce Doleac filed this wrongful death
action in state court, claiming Dr. Arne Michalson was negligent in
failing to discover an aneurysm while reviewing an MRI of her
husband, Louis Doleac. Several years after the MRI, Mr. Doleac died
of complications arising from the aneurysm.
In addition to Dr. Michalson, the original complaint listed as
defendants “John Does A, B, C and D”, identified as
parties to this action whose identities are
unknown at this time, ... [who are] other
health care providers or persons ... which at
any time undertook ... or had a duty to
provide medical care or services to the
Plaintiff and whose negligence ... and/or
accountable conduct caused or contributed to
the Plaintiff’s damages and injuries as
alleged herein.
When the action was filed, Dr. Michalson was a citizen of
Idaho; Plaintiff, of Mississippi. Therefore, that December, Dr.
Michalson removed this action to federal court on the basis of
diversity of citizenship. 28 U.S.C. §§ 1332, 1441, 1446. The day
2
after removal, the magistrate judge issued an order concerning the
fictitious parties.
[A q]uestion appears regarding subject matter
jurisdiction.... Plaintiff shall file [a]
remand motion bringing jurisdictional concerns
to issue or identify, if possible, some of
[the] John Doe medical defendants, most of
whom would seem to be residents of this state
as was the removing defendant when this
alleged negligent act[] occurred. Under
certain circumstances, [a] case can be
remanded when [a] necessary defendant[] sued
under [a] ficti[ti]ous name is identified to
be non-diverse even though John Doe defendants
[are] disregarded for original removal
purposes pursuant to [the] 1988 Act[, 28
U.S.C. § 1441(a)].
(Emphasis added.) The court stayed discovery pending remand vel
non.
Plaintiff moved to remand in January 1999, asserting that
removal was improper “due to the existence of as yet unidentified
John Does [sic] Defendants, which are, upon information and belief,
resident citizens ... of Mississippi” and requesting limited
discovery to determine the identity of those defendants.
Five months later, in June 1999, Plaintiff moved to amend her
complaint to add as a co-defendant Gulf Coast Imaging, P.A. (GCI),
a citizen of Mississippi. Plaintiff alleged that Dr. Michalson had
acted under GCI’s direction and supervision and that its employees
assisted him in reading the films at issue and/or in completing the
report. The putative amended complaint named as defendants Dr.
Michalson, GCI, and John Does A through F. (As discussed infra,
3
the parties dispute whether GCI was substituted for a John Doe
defendant or added as a new party.)
In considering whether to allow the amendment to add a non-
diverse party whose inclusion would destroy diversity and thereby
divest the court of jurisdiction, the district court considered
four factors it gleaned from Hensgens v. Deere & Co.:
(1) the extent to which the purpose of the
amendment is to defeat federal
jurisdiction,
(2) whether plaintiff has been dilatory in
asking for amendment,
(3) whether plaintiff will be significantly
injured if amendment is not allowed, and
(4) any other factors bearing on the
equities.
Doleac v. Michalson, No. 1:98-CV-553-BrR (S.D. Miss. 28 Sept. 1999)
(unpublished) (emphasis added) (citing Hensgens v. Deere & Co., 833
F.2d 1179, 1182 (5th Cir. 1987), cert. denied, 493 U.S. 851
(1989)). The Hensgens factors guide the court in whether to allow
an amendment to add a “nondiverse nonindispensable party”.
Hensgens, 833 F.2d at 1182. The district court concluded:
Plaintiff had a reason to seek GCI’s joinder, independent of a
desire to remand, in that it was another potential source of funds
to satisfy a damages award; because the time-lapse between the
court’s December order and the motion to amend was inexplicably
lengthy, Plaintiff had been dilatory; denial of the amendment would
4
significantly injure Plaintiff by forcing her to undergo the delay
and expense of trying in two courts what was essentially the same
action; and other factors bearing on the equities included the
interest in judicial economy, Plaintiff’s choice of a non-federal
forum, and the stage of the proceedings. In a single order, the
district court: (1) ruled joinder was warranted; and (2) because
the amendment destroyed diversity, remanded the action to state
court, quoting 28 U.S.C. § 1447(c) (“[i]f at any time before final
judgment it appears that [it] lacks subject matter jurisdiction”).
II.
Dr. Michalson maintains we have jurisdiction to review the
order which allowed the amendment and then remanded, asserting that
the amendment is both separable and, under the collateral order
doctrine, appealable. Notwithstanding the facial simplicity of
this issue, the precedent addressing our jurisdiction is complex.
In addition to asserting we have jurisdiction, Dr. Michalson
contends: the district court erred in failing to apply 28 U.S.C.
§ 1441(a) (John Doe defendants ignored for purposes of removal);
and, if the order is reviewable, the district court abused its
discretion in allowing the amendment.2 In the alternative, he
2
Dr. Michalson requests either reversal through direct appeal
or issuance of a writ of mandamus; however, because he never filed
a mandamus petition, we need not reach that issue. Furthermore,
“Thermtron [Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1976),]
requires review by mandamus only when the district court has
remanded a cause without authority to do so”. McDermott Int’l,
Inc. v. Lloyds Underwriters of London, 944 F.2d 1199, 1203 (5th
5
contests the constitutionality of § 1447(d), which precludes
appellate review when the remand is for lack of subject matter
jurisdiction.3 (Pursuant to 28 U.S.C. § 2403, the United States
was permitted to intervene to defend the constitutionality of §
1447(d).)
A.
The parties dispute whether GCI was substituted for one of the
John Does or added under Federal Rule of Civil Procedure 19.
Although Doleac stated that the motion to amend under Rule 15(a)
was in response to the magistrate judge’s suggestion that Doleac
attempt to identify the John Does, the district court treated the
amendment as a joinder under Rules 15, 20, and 21 (not Rule 19),
and the amended complaint names as defendants Dr. Michalson, GCI,
and John Does A-F (i.e., the John Does in the original complaint
all reappear in the amended complaint4).
Cir. 1990) (emphasis added).
3
Dr. Michalson filed a timely notice of appeal of “the
Memorandum Opinion and Order granting Plaintiff’s Motion to Amend
Complaint” and moved for a stay of proceedings pending appeal,
which was denied. The parties dispute whether the notice limits
the appeal to simply whether the allowance of the amendment was
proper or whether the appeal extends to the propriety of remand as
well. Doleac contends that, because Dr. Michalson failed to appeal
the remand, he cannot challenge the constitutionality of denying
review of it. Because the remand was encompassed in the memorandum
and order referenced in the notice of appeal, Michalson has
appealed both issues. See FED. R. APP. PROC. 3(c)(1) (notice of
appeal must, inter alia, designate judgment, order, or part thereof
being appealed).
4
Not only do all the John Does in the initial complaint
reappear in the amended complaint, two more are named; the group
6
1.
Dr. Michalson asserts that, if GCI was substituted for a John
Doe defendant, § 1441(a) precludes consideration of its
citizenship. We disagree. Even assuming GCI was so substituted
(rather than added as a new party), its presence destroyed
diversity and defeated subject matter jurisdiction.
Section 1441(a) states: “For purposes of removal under this
chapter, the citizenship of defendants sued under fictitious names
shall be disregarded”. 28 U.S.C. § 1441(a). Section 1447(e)
allows joinder and remand to state court if, after removal, “the
plaintiff seeks to join additional defendants whose joinder would
destroy subject matter jurisdiction”. 28 U.S.C. § 1447(e).
Dr. Michalson admits that, under a traditional view of case
law, and pursuant to §§ 1447(c) and (e) and 1332(c), the action
could not remain in federal court after the addition of GCI.
Nevertheless, he contends that § 1441(a)’s “plain language” applies
even after a John Doe defendant has been identified. He
distinguishes the identification of a John Doe from the situation
covered by § 1447(e), explaining that a John Doe is not an
“additional” party but rather one that has been present from the
beginning of the case. Although the district court did not cite §
1447(e), it followed its procedure: allowing joinder, finding it
lacked subject matter jurisdiction, and then remanding.
grew from “A-D” to “A-F”.
7
Whether § 1441(a) continues to apply to parties substituted
for John Doe defendants is an issue of first impression in our
circuit. In Casas Office Machines, Inc. v. Mita Copystar America,
Inc., the First Circuit rejected a claim distinguishing the
application of § 1441(a) and § 1447(e) to amendments. 42 F.3d 668,
674 (1st Cir. 1995) (concluding Ҥ 1447(e) applies also to the
identification of fictitious defendants after removal”). In Casas,
the plaintiff, post-removal, replaced fictitious defendants with
two named defendants, whose presence destroyed diversity. Id. at
670. (The defendants did not bring the lack of diversity to the
district court’s attention and challenged jurisdiction for the
first time on appeal. Id. Unlike the case at hand, because there
was no remand order, the issue of the appellate court’s
jurisdiction over the district court’s order was not present in
Casas.) The First Circuit summarized the issue as “whether this
substitution [of named defendants for fictitious defendants], which
unquestionably destroyed complete diversity, also defeated federal
subject matter jurisdiction”. Id. at 673. Casas began by
distinguishing Freeport-McMoRan, which, in considering substitution
under Federal Rule of Civil Procedure 25 (substitution because of
death, incompetency, transfer of interest, or public official’s
separation from office), held diversity jurisdiction is established
at the commencement of the action and is not defeated by the
substitution of a non-diverse plaintiff who is not indispensable.
8
Id. at 673-74 (citing Freeport-McMoRan Inc. v. K N Energy, Inc.,
498 U.S. 426, 428 (1991) (per curiam)).
Casas held the specific legislative directive of § 1447(e)
overrode the general principle of Freeport-McMoRan because
“Congress has indicated that federal diversity jurisdiction is
defeated so long as, after removal, fictitious defendants are
replaced with nondiverse, named defendants, regardless of whether
they happen to be dispensable or indispensable to the action”. Id.
at 674. Congress, in the legislative history of the Judicial
Improvements and Access to Justice Act of 1988, stated that §
1447(e) “also helps to identify the consequences that may follow
removal of a case with unidentified fictitious defendants”. Id. at
674 (quoting H.R. REP. No. 889, 100th Cong., 2d Sess. 72-73 (1988),
reprinted in 1988 U.S.C.C.A.N. 5982, 6033). Therefore, the First
Circuit concluded: “diversity jurisdiction was lost ... when the
court allowed [the plaintiff] to identify the fictitious
defendants”. Id. at 675.5
5
In addition, the legislative history of § 1441 demonstrates
Congress intended § 1441 to apply only until the John Doe party was
identified:
If the plaintiff seeks to substitute a
diversity-destroying defendant after removal,
the court can act as appropriate under
proposed § 1447(d) [enacted as § 1447(e)] to
deny joinder, or to permit joinder and remand
to the State court.
H.R. REP. No. 889, at 112 (emphasis added), reprinted in 1988
U.S.C.C.A.N. at 6032. Likewise, the official commentary to the
9
Our court cited Casas with approval in Cobb v. Delta Exports,
Inc., 186 F.3d 675, 680 (5th Cir. 1999). Cobb dealt with the
addition of a defendant under Rule 19, not identification of a John
Doe. Nevertheless, we explained Casas’ conclusion that “the
legislative history to [§ 1447(e)] indicates that § 1447(e) applies
also to the identification of fictitious defendants after removal”.
Id. (quoting Casas, 42 F.3d at 674) (explaining that Casas found
rule of Freeport-McMoRan extremely narrow).
For the first time, we address the same issue as did the First
Circuit in Casas: “whether [] substitution [for a John Doe
defendant], which unquestionably destroyed complete diversity,
[could] also defeat[] federal subject matter jurisdiction”. Casas,
42 F.3d at 673. Finding the First Circuit’s reasoning persuasive,
we hold that § 1441(a) applies only to John Doe defendants as such,
not to subsequently named parties identifying one of those
fictitious defendants.
revisions of § 1441 supports this reading. It explains that,
although § 1441(a) allows the defendant to remove by ignoring the
citizenship of the unknown defendant for the time being,
the problem may return later, when, in the
course of the proceedings in federal court,
the unknown defendant becomes known, and it
also becomes known that his citizenship
defeats diversity. The result may be a remand
of the case for want of federal jurisdiction,
unless the plaintiff considers dropping the
spoilsport from the case.
Commentary on 1988 and 1990 Revisions of Section 1441, 28 U.S.C.A.
§ 1441 (emphasis added).
10
Because § 1441(a) applies only to John Doe defendants as such,
it is irrelevant whether Doleac’s amendment consisted of an
addition of a defendant or of an identification of a John Doe.
And, because § 1447(e) apparently encompasses both actions under
the term “join”, we will do the same for the balance of this
opinion.
2.
Dr. Michalson also asserts jurisdiction was fixed at the time
of removal and the district court could not consider a change in
parties. Again, we disagree.
Generally, jurisdiction is determined at the
time the suit is filed.... However, addition
of a nondiverse party will defeat
jurisdiction.... The language of 1447(c) does
not mean that the court cannot consider post-
removal developments.... [M]ost post-removal
developments — amendment of pleadings to below
jurisdictional amount or change in citizenship
of a party — will not divest the court of
jurisdiction but an addition of a nondiverse
defendant will....
Hensgens, 833 F.2d at 1181 (emphasis added; citations omitted); see
Cobb, 186 F.3d at 677 (“post-removal joinder of non-diverse
defendants under FED. R. CIV. P. 19 destroys diversity for
jurisdictional purposes and requires remand, even when the newly
joined defendants are not indispensable” (emphasis added)).
Furthermore, § 1447(e) supports this understanding by directing
remand if the district court permits joinder of a defendant whose
citizenship destroys subject matter jurisdiction.
11
B.
The far more difficult question is whether we can review the
order which first allowed amendment and then remanded.
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 [civil rights cases] shall be
reviewable by appeal or otherwise.
28 U.S.C. § 1447(d) (emphasis added). Beginning with the exception
carved out in Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.
336 (1976), the jurisprudence surrounding § 1447(d) grew
increasingly complex. See Baldridge v. Kentucky-Ohio Transp.,
Inc., 983 F.2d 1341, 1343-44 (6th Cir. 1993) (“The Supreme Court
stated long ago ... that the § 1447(d) proscription is not as broad
as it seems.... Since Thermtron, appellate courts have paved other
detours around § 1447(d)’s bar to review.”). The Third and Seventh
Circuits observed: “‘[S]traightforward’ is about the last word
judges attach to § 1447(d) these days”. Trans Penn Wax Corp. v.
McCandless, 50 F.3d 217, 222 (3d Cir. 1995) (quoting In re Amoco
Petroleum Additives Co., 964 F.2d 706, 708 (7th Cir. 1992))
(internal quotation marks omitted).
Our court summarized the situation as follows:
Appellate courts are precluded from reviewing
remand orders issued pursuant to § 1447(c)
[(lack of subject matter jurisdiction)], by
appeal, mandamus, or otherwise. This is true
even if the district court’s order was
12
erroneous. The rationale for the rule is that
allowing federal appeal of remand orders would
delay justice in state courts. The Supreme
Court in Thermtron identified one narrow
exception to the strict bar to appellate
review of remand orders. A remand order may
be reviewed where the district court “has
remanded [a case] on grounds not authorized by
the removal statutes.”
Angelides v. Baylor College of Medicine, 117 F.3d 833, 835-36 (5th
Cir. 1997) (emphasis added; citations omitted). As in Angelides,
that exception does not apply here; the district court expressly
remanded “[d]ue to the lack of subject-matter jurisdiction”. As
further explained below, the remand itself is not reviewable.
Despite the seeming clarity of this bar against review of
orders remanding based on a lack of subject matter jurisdiction,
the judiciary has created a doctrine that partially restrains the
otherwise preclusive § 1447(d). Although courts acknowledge this
bar, at times a separable and collateral order is reviewed. See
generally, e.g., First Nat’l Bank v. Genina Marine Servs., Inc.,
136 F.3d 391 (5th Cir. 1998) (finding dismissal of third-party
claims separable from remand, but after review, affirming district
court’s order); John G. & Marie Stella Kenedy Mem’l Found. v.
Mauro, 21 F.3d 667 (5th Cir.) (finding dismissal of federal claims
separate from remand of state law claims and affirming dismissal),
cert. denied, 513 U.S. 1016 (1994); Mitchell v. Carlson, 896 F.2d
128 (5th Cir. 1990) (finding resubstitution in Westfall Act case
separable and collateral and, although § 1447(c) and (d) barred
13
review of remand itself, dismissing action because resubstitution
was in error). Therefore, the key question at hand is whether we
can review the grant of the amendment that destroyed diversity.
The focus is not on an alleged error in remanding for lack of
jurisdiction due to the destruction of diversity, but rather on an
alleged underlying error in allowing the amendment.
A number of cases dealing with the reviewability of a remand
have followed a two-step consideration: first, of § 1447(d) and
separableness; and then, of 28 U.S.C. § 1291 and appealability.
E.g., Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1026-29 (5th
Cir.) (considering separable but not reviewable interlocutory
order), cert. denied, 502 U.S. 859 (1991); Mitchell, 896 F.2d at
132-33 (after determining resubstitution order was separable, must
ask whether reviewable under § 1291); see also Quackenbush v.
Allstate Ins. Co., 517 U.S. 706, 712 (1996) (after finding no §
1447(d) bar, considering collateral order exception).6 Several of
6
See, e.g., Aquamar S.A. v. Del Monte Fresh Produce N.A., 179
F.3d 1279, 1287 (11th Cir. 1999) (must address two questions:
whether § 1447(d) bars consideration of appeal and whether
dismissal of claims was “final order” within § 1291); Powers v.
Southland Corp., 4 F.3d 223, 224-25 (3d Cir. 1993) (because
petition granting motion for relation-back amendment was separable,
review was not barred by § 1447(d); however, that portion of order
was not final within § 1291); Aliota v. Graham, 984 F.2d 1350,
1352-53 (3d Cir.) (whether portion of order resubstituting
defendants is reviewable involves two subquestions: whether barred
by § 1447(d) and whether final within meaning of § 1291), cert.
denied, 510 U.S. 817 (1993); Pelleport Investors, Inc. v. Budco
Quality Theatres, Inc., 741 F.2d 273, 277 (9th Cir. 1984) (having
concluded § 1447(d) did not bar review of substantive decision,
14
our recent decisions have collapsed the questions of separableness
and collateralness. E.g., Falcon v. Transportes Aeros de Coahuila,
S.A., 169 F.3d 309, 313 (5th Cir. 1999) (personal jurisdiction
determination not separable, which is aspect of collateralness
determination; dismissing appeal for lack of jurisdiction);
Angelides, 117 F.3d at 838 (because immunity and exhaustion
decisions were not conclusive under separableness test, collateral
order doctrine did not apply; dismissing appeal of denial of remand
for lack of jurisdiction).
The concept of separableness originated in City of Waco v.
United States Fidelity & Guaranty Company:
True, no appeal lies from the order of remand;
but in logic and in fact the decree of
dismissal preceded that of remand and was made
by the District Court while it had control of
the case. Indisputably this order is the
subject of an appeal; and, if not reversed or
set aside, is conclusive upon the petitioner.
293 U.S. 140, 143 (1934) (emphasis added) (reviewing dismissal of
cross-complaint). An order is conclusive if “it will have the
preclusive effect of being functionally unreviewable in the state
court”. Linton v. Airbus Industrie, 30 F.3d 592, 597 (5th Cir.),
cert. denied, 513 U.S. 1044 (1994). (Conclusiveness seems to be
the focus of more recent opinions. E.g., Copling v. The Container
still must ask whether it is final order within § 1291).
15
Store, Inc., 174 F.3d 590, 596 (5th Cir. 1999); Falcon, 169 F.3d at
311; Angelides, 117 F.3d at 837; Linton, 30 F.3d at 596.)
Recently, in Quackenbush, the Court restated the rule of
finality and the collateral order exception:
[A] decision is ordinarily considered final
and appealable under § 1291 only if it ends
the litigation on the merits and leaves
nothing for the court to do but execute the
judgment. We have ... recognized, however, a
narrow class of collateral orders which do not
meet this definition of finality, but which
are nevertheless immediately appealable under
§ 1291 because they conclusively determine a
disputed question that is completely separate
from the merits of the action, effectively
unreviewable on appeal from a final judgment,
and too important to be denied review.
517 U.S. at 712 (emphasis added; citations and internal quotation
marks omitted) (finding appellate review not barred under §
1447(d), and then asking whether Burford-abstention was reviewable
under § 1291); see Mitchell, 896 F.2d at 133 (“The collateral order
doctrine embraces ‘that small class [of decisions] which finally
determine claims of right separable from, and collateral to, rights
asserted in an action, too important to be denied review and too
independent of the cause itself to require that appellate
consideration be deferred until the whole case is adjudicated.’”
(quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546
(1949)). Such an order is appealable under § 1291 “because it
put[s] the litigants effectively out of court”. Quackenbush, 517
U.S. at 713 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr.
16
Corp., 460 U.S. 1, 11 n.11 (1983)) (internal quotation marks
omitted).
Each of these inquiries — separableness and collateralness —
is more fully explained below.
1.
As mentioned, the concept of separableness is rooted in City
of Waco, in which the Court found separable a district court order
dismissing a third-party cross-claim. City of Waco, 293 U.S. at
142-43. A number of our decisions are factually analogous to City
of Waco, finding dismissal of a claim, dismissal of a party, and
the entry of summary judgment on federal claims separable and
reviewable under City of Waco despite the unreviewability of the
accompanying remand order. See First Nat’l Bank, 136 F.3d at 394
(dismissal of third-party claim); Mauro, 21 F.3d at 670 (dismissal
of federal claims); Briggs v. Am. Air Filter Co., Inc., 630 F.2d
414, 416 n.1 (5th Cir. 1980) (entry of summary judgment on federal
claims); Self v. Self, 614 F.2d 1026, 1028 (5th Cir. 1980)
(dismissal of party); Southeast Mortgage Co. v. Mullins, 514 F.2d
747, 748-49 (5th Cir. 1975) (dismissal of third-party complaint).
In each, the dismissal of the claims or grant of summary judgment
obviously was final under § 1291.
Four cases in which our circuit expanded and applied City of
Waco are particularly enlightening: Mitchell, because it is
17
foundational and oft-cited by this circuit and others; Soley,
because it explains the distinction between “substantive” and
“jurisdictional” decisions; Linton, because it was apparently the
first decision focusing on the “conclusiveness” aspect of City of
Waco’s test; and Angelides, because it was apparently the first
decision to blend the separableness and collateral order doctrine
inquiries.
In Mitchell, the United States had filed a notice of
substitution under the Westfall Act, 28 U.S.C. § 2679, and removed
the action to federal court. Mitchell, 896 F.2d at 130. The
district court concluded the substitution was improper,
resubstituted Carlson (the federal employee), and remanded to state
court. Id. On appeal, our court held § 1447(d) barred
consideration of the remand order grounded in lack of jurisdiction.
Id. 131 & n.3. However, it held the resubstitution order was
reviewable under City of Waco and its progeny, because, if the
district court had not resubstituted Carlson but had only dismissed
the action against the United States, there would have been no
action to remand. Id. at 132-33 (“the resubstitution order being
prior to and separable from the remand order, § 1447(d) does not
bar ... review of the resubstitution order”). (The court did not
examine conclusiveness as a separate inquiry.)
Having held § 1447(d) did not bar review of the resubstitution
order, Mitchell next considered whether § 1291 barred review. Id.
18
at 133. It ruled the collateral order doctrine allowed review
because the resubstitution effectively denied Carlson immunity.
Id. Holding that the resubstitution was in error and that the
district court simply should have dismissed the action after
dismissing the United States as a defendant, our court reversed and
dismissed. Id. at 135.
In Soley, the district court had remanded the action to state
court pursuant to § 1447(c), concluding the action did not arise
under ERISA and the plaintiff’s claims were not within the
boundaries of ERISA preemption. Soley v. First Nat’l Bank of
Commerce, 923 F.2d 406, 406-07, 409 (5th Cir. 1991). In
considering “the applicability of § 1447(d) to remand orders based
on preemption”, id. at 408, our court concluded precedent precluded
review because “the district court did not clearly and
affirmatively state a non-1447(c) ground”, id. at 409 (citing In re
Merrimack Mut. Fire Ins. Co., 587 F.2d 642, 647 (5th Cir. 1978)).
Moreover, it found helpful the Ninth Circuit’s distinction between
“complete preemption”, a jurisdictional issue, and the “preemption
defense”, a substantive inquiry. Id. at 408 (citing Whitman v.
Raley’s Inc., 886 F.2d 1177 (9th Cir. 1989)). Soley construed the
district court’s decision as jurisdictional, and therefore having
no preclusive effect on the state court’s consideration of the
substantive preemption defense. Id. at 409. Accordingly, it
distinguished the order from those in Mitchell and City of Waco, in
19
which the state court could not reconsider the resubstitution in
the former or the dismissal of the cross-claim in the latter. Id.
at 410. As to separableness, our court said:
[The] rejection of an ERISA preemption defense
does not “in logic and in fact” precede a
remand order because, under the “well-pleaded
complaint” rule, a defense does not confer
removal jurisdiction. Instead, if the
district court considered the preemption
defense, it did so only because of an
erroneous belief that the defense was relevant
to the jurisdictional issue.
Id. at 409-10; see Copling, 174 F.3d 590 (finding Soley
indistinguishable and dismissing appeal after district court
remanded in absence of ERISA conflict preemption (preemption
defense)). Because it concluded the remand was unreviewable and
the issue of preemption was not separable, Soley did not consider
the § 1291 issue.
In Linton, the defendants had removed the action on the
grounds of diversity and federal question jurisdiction. 30 F.3d at
593. When the defendants appealed the district court’s order that
they were not instrumentalities of a foreign state, our court
dismissed for lack of jurisdiction because, although denials of
immunity are generally subject to interlocutory appeal, the
district court had not ruled on the entire motion, which raised
questions of in personam jurisdiction and forum non conveniens.
Id. at 594. The parties then entered into a stipulation that one
plaintiff was “stateless” for jurisdictional purposes; the district
20
court subsequently concluded diversity was absent and remanded the
action for lack of subject matter jurisdiction. Id. at 594-95.
Relying on Mobil Corporation v. Abeille General Insurance Co., 984
F.2d 664, 665 (5th Cir. 1991) (concluding district court’s decision
that insurance company instrumentality of foreign sovereign was
jurisdictional, not substantive), our court held § 1447(d) barred
review of the jurisdictional decision to remand. Linton, 30 F.3d
at 596. Linton proceeded to consider the separableness doctrine,
however, because the defendants contended they sought review, not
of the remand, but rather of the Foreign Sovereign Immunities Act
(FSIA) order. Id. Linton explained:
In determining whether an order is “separable”
and thus can be afforded appellate review
under City of Waco, we have focused on
language in the Court’s opinion suggesting
that an order is “separable” from an order of
remand if it precedes that of remand “in logic
and in fact” and is “conclusive,” i.e., it
will have the preclusive effect of being
functionally unreviewable in the state court.
Although the district court’s FSIA order in
the instant case may have preceded the court’s
order of remand “in logic and in fact,” we
cannot say that it was “conclusive.” ...
[T]he district court’s determination that the
FSIA is inapplicable to the ... Defendants can
be deemed a jurisdictional finding under the
facts of this case and, as such, can be
reviewed by the state court upon remand.
Under City of Waco and the jurisprudence of
this circuit, the district court’s FSIA order
is therefore not “conclusive” upon the Airbus
Defendants so as to be “separable” and hence
reviewable by this court.
21
Id. at 597 (emphasis added). Linton appears to be the first
decision in which our court expressly focused on “conclusiveness”
as a distinct aspect of the separableness inquiry; but Linton’s
consideration of the issue was not without foundation because, for
example, In re Adams observed that, absent appellate review, the
district court’s reinstatement decision would be “functionally non-
reviewable” in state court, and Soley said that concluding that the
claims were not within ERISA preemption was jurisdictional, not
substantive, and thus reviewable by the state court. Id. at 597
n.26 (citing Adams v. Sidney Schafer & Assocs. (In re Adams), 809
F.2d 1187, 1189 (5th Cir. 1987), and Soley, 923 F.2d at 419).
Angelides considered reviewability following the district
court’s remanding the action for lack of subject matter
jurisdiction upon rejecting immunity and exhaustion defenses. 117
F.3d at 835. Our court held the remand order was unreviewable, id.
at 835-36, but turned to the collateral order doctrine to determine
whether the denial of the motion to dismiss on grounds of immunity
and nonexhaustion of administrative remedies was reviewable, id. at
836-38. Angelides blended the separableness and collateral order
exception inquiries. It first explained:
The collateral order doctrine embraces that
small class [of decisions] which finally
determine claims of right separable from, and
collateral to, rights asserted in the action,
too important to be denied review and too
independent of the cause itself to require
22
that appellate consideration be deferred until
the whole case is adjudicated.
Id. at 837 (internal quotation omitted; alteration in original).
Our court then turned to a consideration of separableness, defining
it as having two requirements:
First, it must precede the order of remand “in
logic and in fact,” so as to be made while the
district court had control of the case.
Second, the order sought to be separated must
be “conclusive.” An order is “conclusive” if
it will have the “preclusive effect of being
functionally unreviewable in the state court.”
Id. at 837 (emphasis added; citations omitted). It concluded that,
although the immunity and exhaustion decisions preceded the remand
order in logic and in fact, they were jurisdictional decisions that
could be reviewed by the state court and, therefore, were not
conclusive. Id. Angelides set out a comparison of issues that
were substantive and therefore conclusive and some that were
jurisdictional and therefore not conclusive: In City of Waco
(dismissal of cross-claim), Mitchell (resubstitution under Westfall
Act), and Mauro (dismissal of federal claims), “the separable
portion of the order denied a substantive right not subject to
review by the state court”. Id. at 837. Our court found the
immunity and exhaustion issues closer to those in Linton (immunity
under FSIA), Mobil Corporation (same), and Soley (ERISA
preemption), cases dealing with jurisdictional findings not binding
on the state court. As noted, it therefore concluded: “The
23
collateral order doctrine does not apply because the jurisdictional
issues determined by the district court are not conclusive”. Id.
at 838 (emphasis added). (Angelides appears to be the first
decision in which our court considered separableness from the
remand order in conjunction with the collateral order exception,
hinging the application of one on the other.) Therefore, the
appeal was dismissed. Id.
While Mitchell, Soley, Linton, and Angelides provide a
background for considering the issues in this case, our most
factually analogous precedent is Tillman. Tillman concerned the
reviewability of allowing the addition of a party claimed to be
immune. The case at hand presents a question of first impression
in our circuit: whether allowing the addition of parties who
destroy diversity is reviewable, notwithstanding § 1447(d).
Tillman does not completely control the outcome of this case
because there the district court found immunity, not lack of
diversity, precluded subject matter jurisdiction. Furthermore,
much of what the Tillman court stated is dicta, and some of what it
said conflicts with prior precedent.
In Tillman, plaintiffs moved to amend to name the Louisiana
Department of Transportation and Development (DOTD) as a defendant.
Tillman, 929 F.2d at 1025. In considering whether to allow the
amendment, the district court considered the Hensgens factors, id.,
just as did the district court in this case. The Tillman district
24
court, in a single order, granted the joinder of DOTD and remanded,
assuming erroneously that, because of DOTD’s Eleventh Amendment
immunity, the district court lost jurisdiction upon DOTD’s becoming
a party. Id.7
“Since the joinder of the DOTD provided the judge’s ...
impetus for remanding the case” and preceded the remand “both in
logic and in fact”, our court ruled the issues of the amendment and
the remand were separable. Id. at 1026 (internal quotation marks
omitted) (quoting City of Waco, 293 U.S. at 143).
Turning to the remand, our court stated, as discussed in note
7, supra, that the trial court was mistaken in assuming it lost
jurisdiction as soon as the DOTD became a party; DOTD’s immunity
did not affect diversity and DOTD could have waived its immunity.
Id. at 1027. Nevertheless, our court concluded it could not review
the remand because the district court had “explicitly stated that
the destruction of its jurisdiction[, a § 1447(c) basis,] served as
one of the grounds for remand ... [thereby] cloak[ing] the remand
7
Tillman explained: “The DOTD’s temporary presence as a party
would not have tainted or obliterated a classic case of diversity.
Consequently, the grant of leave to amend was an unreviewable
interlocutory order”. Tillman, 929 F.2d at 1028-29 (emphasis
added). It added: “Before an appellate court could review such an
interlocutory order, it must have practical finality; meaning that
the appellant was effectively out of federal court. As we have
concluded, despite the trial court’s mistaken assumption to the
contrary, the case still resided in federal court after the
addition of the DOTD”. Id. at 1029 n.9 (citing Moses H. Cone Mem’l
Hosp., 460 U.S. 1).
25
order in the § 1447(c) absolute immunity from review”. Id. at
1028. It then stated in sweeping terms:
Whether right or wrong — indeed on the
assumption that its premise for remand was
wholly unfounded — the trial court remanded
the case because the addition of the DOTD
deprived the court of jurisdiction. This case
therefore lies irretrievably in state
court.... [O]ur conclusion essentially
renders review of whether the trial court
abused its discretion by allowing the
amendment a postmortem exercise....
Id. at 1028.
Our court explained that its subsequent consideration of the
leave to amend was “extra postage”, implying that it was dictum,
yet proceeded to conclude that the amendment-allowance was an
unreviewable interlocutory order. Id. Nevertheless, the court
suggested that, had the grant of leave to amend been final, it
could have been reviewed. Id. at 1028-29 & 1029 n.9. The Tillman
court did not explicitly consider the collateral order exception,
but alluded to it by citing Moses H. Cone Memorial Hospital. Id.
at 1029 n.9.
In its conclusion, the court observed:
Consequently, having been erroneously
remanded on § 1447(c) jurisdictional grounds,
this case is irretrievably beyond anything we
can do about it. We cannot review it by any
means. We emphasize our complete inability to
do anything about the trial court’s joinder
order, whether interlocutory or final, because
what we cannot review we cannot by some
juridical self-help get back to federal court.
26
While we point out that the trial court
did not abuse its discretion in allowing
joinder, this determination only provides
extra postage. The mere presence of a §
1447(c) ground as one of the bases for the
trial court’s remand has returned this case to
sender, without a forwarding address for
federal jurisdiction.
Id. at 1029 (emphasis added).
Three aspects of this opinion raise concern. First, its final
statement that on no occasion could the court correct any error,
even if the amendment-allowance was a final order, is difficult to
reconcile with its earlier footnote that, had the amendment-
allowance been “final”, the court could review it. It appears the
Tillman court thought that, although the issues were separable,
even if the amendment were reviewable, no remedy was available
because it could not touch the remand.
Second, the Tillman court did not need to reach this last
issue of what effect an error as to the amendment, if a final
order, would have on an order to remand. Having concluded the
amendment was not final, any statement as to what would have
occurred if it were final is dictum.
Third, Tillman suggests that, once an action has been
remanded, if the resulting remand cannot be reviewed by the
appellate court, a prior, underlying order of the district court
cannot, in any circumstances, be reviewed. Yet, as detailed above,
our cases both preceding and following Tillman have allowed
27
appellate review of a separate issue, if it is reviewable under §
1291 or under an exception to § 1291-finality, such as the
collateral order doctrine. E.g., First Nat’l Bank, 136 F.3d 391;
Mauro, 21 F.3d 667; Mitchell, 896 F.2d 128; In re Adams, 809 F.2d
1187. In short, Tillman, or at least its dicta, conflicts with our
prior precedent that allows review of a separable, collateral order
despite preclusion of the review of remand. E.g., Mitchell, 896
F.2d 128 (finding resubstitution was separable and collateral, and,
although § 1447(c) and (d) barred review of remand itself,
dismissing action because resubstitution was in error); In re
Adams, 809 F.2d 1187 (considering district court’s dismissal of
appeal of bankruptcy court’s reinstatement and resulting remand to
state court; reversing dismissal and vacating reinstatement as
superfluous; finding no jurisdiction to consider removal).8 Of
8
The Third Circuit agrees that Tillman’s conclusion conflicts
with our earlier analysis in Mitchell:
[Tillman says:] “... We emphasize our complete
inability to do anything about the trial
court’s joinder order, whether interlocutory
or final, because what we cannot review we
cannot by some juridical self-help get back to
federal court.” ... [T]he statement was pure
dicta since the [court had previously]
conclu[ded] that [the] decision allowing
joinder was interlocutory.... [W]e disagree
with the possible implication of the quoted
material — that once an entire case has been
remanded and the underlying remand cannot be
reviewed, a prior order of the district court
cannot, in any circumstances, be reviewed by
the federal court of appeals. We believe, to
28
course, prior precedent controls. E.g., United States v. Texas
Tech Univ., 171 F.3d 279, 286 n.9 (5th Cir. 1999) (“Where two panel
decisions conflict, the prior decision constitutes the binding
precedent.”), cert. denied, 530 U.S. 1202 (2000). (Cases
subsequent to Tillman that review orders separable from remand
include: First National Bank, 136 F.3d 391 (ruling dismissal order
separable from remand, but after review, affirming district court’s
order), and Mauro, 21 F.3d 667 (ruling dismissal of federal claims
separate from remand of state law claims and affirming dismissal;
no appeal of remand).)
Within Tillman itself is an indication that the Tillman court
spoke too broadly: although it implied that an underlying order
could never be reviewed, Tillman took the time to find the
amendment a separable order and considered whether it was final;
this review would have been superfluous if the court “c[ould] not
review it by any means”.
the contrary, that if there is independent
appellate jurisdiction over an issue under the
governing federal statutes, the fact that the
district court may have remanded the case
cannot deprive the court of appeals of the
jurisdiction granted to it by Congress....
This result is supported by cases such as
Mitchell v. Carlson.
Powers, 4 F.3d at 229.
29
Accordingly, to the extent that Tillman stands for the
proposition that the joinder was separable, it is on point and
controlling. Therefore, consistent with Tillman, the amendment-
allowance in the case at hand is separable. But, as to whether
that amendment falls under the collateral order exception, Tillman
is distinguishable because it explained that DOTD’s joinder did not
immediately destroy jurisdiction (on the grounds of immunity),
whereas in this case, it did (on the grounds of lack of diversity).
Cf. Cobb, 186 F.3d at 678 (“once it permitted joinder of the non-
diverse defendants, the court lost subject matter jurisdiction and
thus had no power even to consider whether fraudulent joinder
applied”). In sum, Tillman considered only the appealability of an
interlocutory order, not the collateral order exception.
Furthermore, its conclusions regarding the interlocutory order were
dicta and its suggestion that on no occasion could the underlying
amendment be considered conflicts with our prior precedent.
Therefore, Tillman does not control our consideration of the
collateral order exception. Instead, and as noted supra, this is
an issue of first impression in our circuit.
2.
As mentioned, several recent cases collapse the inquiries
about separableness (whether § 1447(d) bars review) and
collateralness (whether § 1291 bars review). For example,
Angelides stated: “As the district court’s order was not
30
‘conclusive,’ the collateral order doctrine does not apply and this
court lacks appellate jurisdiction”. Angelides, 117 F.3d at 838.
Falcon considered the entire question of separableness as part of
the collateralness determination:
To fall within the collateral order doctrine,
however, an order must (among other
requirements) be “separable” from the merits
of the underlying action.... [I]t must
precede the order of remand “in logic and in
fact” ... [and] be “conclusive.”
Falcon, 169 F.3d at 311 (citations omitted). It is questionable
how distinct the inquiry into separableness should be from that
into collateralness, both in the light of precedent and also in the
light of the admitted overlap of the questions: both definitions
include the concept of conclusiveness, and the collateral order
exception includes the concept of separateness.
The inquiries should remain distinct for several reasons:
First, the definitions of separateness and of conclusiveness in the
context of the reviewability of a remand order may be distinct from
their definitions under the collateral order exception. For
example, the “separableness” requirement of the collateral order
doctrine requires that the issue be separable from the merits, not
that it be separable from the order of remand. Second, the
precedent most on point, Tillman, applies the two-step approach.
Third, the collateral order doctrine has an existence independent
of the remand question, and it arises, of course, in many
situations other than when § 1447(d) bars review.
31
a.
Regarding separableness, under Tillman, allowing an amendment
adding a party is a separable order. However, Tillman did not
explicitly consider the two specific aspects of separableness
considered by later decisions: whether the order preceded remand
and whether it was conclusive. E.g., Falcon, 169 F.3d at 311;
Angelides, 117 F.3d at 837.
For the case at hand, it is obvious that the amendment-
allowance preceded the remand “in logic”. Without an identified
Mississippi defendant, there would have been no basis to consider
remand; the amendment “provided the ... impetus for the remand of
the case”. Tillman, 929 F.2d at 1026. A Third Circuit opinion,
however, suggests the amendment did not precede the remand in fact:
If the court looks to an issue for the
purpose of determining subject matter
jurisdiction, the issue is not separable
because it cannot be said to have preceded the
remand decision “in logic and in fact.” If,
however, as in City of Waco, the issue has
independent relevance in adjudging the rights
of the parties (i.e., relevance beyond
determining the existence of federal subject
matter jurisdiction), the decision is
separable and falls within the reasoning of
City of Waco — even if it also happens to have
an incidental effect on the court’s
jurisdiction.
Powers v. Southland Corp., 4 F.3d 223, 228 (3d Cir. 1993) (emphasis
added and in original). Under Powers’ reasoning, it is
questionable whether the amendment had “independent relevance in
32
adjudging the rights of the parties” and only “an incidental
effect” on the court’s jurisdiction because, had GCI not been
added, GCI still could have been sued in state court; therefore,
arguably, it ultimately had little “relevance beyond determining []
jurisdiction”. Furthermore, it is questionable whether the
amendment-allowance preceded the remand “in fact”, because the
Hensgens factors make the consideration of the two issues
simultaneous and intertwined. Cf. Aliota, 984 F.2d at 1353
(“[U]nless the question of resubstitution [of parties] is viewed as
somehow inextricably linked to the question of remand, ... §
1447(d) ... does not bar review.”). Nevertheless, because the
district court in Tillman applied the Hensgens factors, we are
bound by our precedent which concludes the issues are separable.
Whether the amendment was conclusive, — having “the preclusive
effect of being functionally unreviewable in the state court”,
Angelides, 117 F.3d at 837 — is a question our court has not
previously considered.9 (Tillman did not address conclusiveness,
nor apparently had our court done so previously.) The state court
will be able to review whether GCI is a proper party, yet this is
not in dispute. The question of whether GCI was properly joined
under Hensgens, however, is a determination that the state court
9
Dr. Michalson asserts the decision to take away the federal
forum was conclusive. But, in considering separableness, we are
considering whether the amendment was conclusive, not whether the
remand was.
33
will not review. Therefore, allowance of the amendment appears to
be conclusive, thus separable and reviewable.
As discussed, our court has defined conclusiveness in terms of
whether the order was “substantive” or “jurisdictional”: if a
decision is simply jurisdictional, it is not conclusive. E.g.,
Angelides, 117 F.3d at 837; Mobil Corp., 984 F.2d at 666. The way
the terms commonly are used, it appears the district court’s
allowance of the amendment was jurisdictional — it was not based
upon the substance of the parties’ claims but, under Hensgens,
involved a balancing of interests; and it did not affect the merits
of the parties’ claims or their right to pursue those claims but
merely determined the forum in which they would be decided. Yet in
the context of remand and an exception to § 1447(d), “substantive”
does not necessarily refer to whether a decision involves
substantive rather than procedural law.10 Instead, as explained
10
The Eleventh Circuit avoided the seeming incongruity between
the two definitions of “substantive” by explaining:
Unlike the “matter of substantive law
exception” to section 1447(d), which allows
courts of appeals to review only those remand
orders that are based on substantive
determinations of law, the Waco doctrine
allows us to review a district court’s
jurisdictional determinations. This
distinction exists because the “matter of
substantive law exception” and the Waco
doctrine apply to different types of orders.
The “matter of substantive law exception”
applies to the review of a remand order
itself, that determines the substantive issues
of the case in a way that is conclusive
34
above, a “substantive” decision is one that will have a preclusive
effect in the state court; a “jurisdictional” finding can be
reviewed by the state court upon remand. Linton, 30 F.3d at 596;
Soley, 923 F.2d at 409. In this sense, because the state court
will not, indeed cannot, review the Hensgens factors, the decision
to allow the amendment was “substantive”. On the other hand, even
though the state court cannot review the application of those
factors (indeed, has no reason to), the district court’s
application of them does not exactly have a “preclusive” effect on
the state court. The district court’s application of the Hensgens
factors is irrelevant to the state court’s consideration of the
case, far from preclusive. This ground could support finding the
decision not substantive, because it is not binding on the state
because it is unreviewable by the state court.
The reason that the “matter of substantive law
exception” does not apply to a remand based on
a district court’s jurisdictional findings is
that these findings have no conclusive effect
upon the state court action.... When a
district court enters an order to do something
other than remand (such as dismissal of a
claim or a party), and this order changes the
contours of the state court action after
remand, however, it does not matter whether
the issue of law the court decided when it
entered the order was jurisdictional or
substantive; either way, the parties’ rights
have been altered in a manner that the state
court cannot revisit.
Aquamar, 179 F.3d at 1286 (citing Angelides, 117 F.3d at 836-38)
(multiple citations omitted; emphasis in original and added).
35
court. While the conclusiveness of the amendment suggests a
substantive decision, the lack of preclusiveness suggests a
jurisdictional decision.
Angelides found helpful a comparison of issues previously
found separable and those not separable. Angelides, 117 F.3d at
837. Along those lines, comparing the amendment at issue to
determinations found separable, it is not analogous to City of
Waco, Mauro, and First National Bank, all of which related to
dismissal of a claim, not addition of a party. See Nutter v.
Monongahela Power Co., 4 F.3d 319, 321 (4th Cir. 1993) (“Which
portions of a remand order are severable is not entirely clear,
although most decisions applying City of Waco have involved orders
dismissing some party or claim.”). Nor is this case analogous to
Mitchell, in which a party who would not otherwise have been
subject to litigation was resubstituted as a party, Mitchell, 896
F.2d at 133; here, the parties do not dispute that GCI could be
sued in state court. Nor is this case like In re Adams or
Mitchell in which, had the district court not taken a particular
action, no case would have remained for remand. Mitchell, 896 F.2d
at 132 (resubstitution); In re Adams, 809 F.2d at 1189 (dismissal
of appeal of reinstatement).
In contrast to these cases, the amendment at issue here simply
determined the forum in which the claims would be decided and that
36
both parties would be subject to the same action. Cf. Washington
Suburban Sanitary Comm’n v. CRS/Sirrine, Inc., 917 F.2d 834, 836
n.4 (4th Cir. 1990) (distinguishing remand under § 1447(e)
following joinder of defendant from City of Waco in that “district
court here did not reach an issue which resulted in substantive
issues being later barred”). Therefore, it does not appear
analogous to issues found separable.
On the other hand, the allowance of an amendment is more
separable than the issues of preemption or foreign sovereign
immunity, which were found non-separable in Linton, Mobil
Corporation, and Soley. In contrast to those issues, an amendment
adding a party generally requires a distinct order. See FED. R.
CIV. PROC. 15(a) (allowing party to amend once as matter of course
any time before responsive pleading or, if no responsive pleading
permitted and action not yet placed on trial calendar, within 20
days of service; otherwise requiring leave of court or written
consent of adversary). The determination of whether a party is of
diverse citizenship (the specific reason for the remand at issue)
is more analogous to preemption and immunity determinations than is
the allowance of the amendment.
One final consideration counsels toward concluding the issues
are not separable. Finding the amendment separable when remand is
under § 1447(c) may produce results incongruous with remand under
§ 1447(e). The precedent highlighting this issue arose in other
37
circuits and therefore is not binding on our court; however, we
find it noteworthy. And, should our court ever consider this issue
en banc, it may find a consideration of the relationships between
§§ 1447(c) and 1447(e) helpful in seeking a unified, logical,
harmonized approach to the review of remand orders that result from
the addition of a non-diverse party.
In the case at hand, as an alternative to remanding under §
1447(c), the district court could have remanded under § 1447(e). It
provides:
If after removal the plaintiff seeks to join
additional defendants whose joinder would
destroy subject matter jurisdiction, the court
may deny joinder, or permit joinder and remand
the action to the State court.
28 U.S.C. § 1447(e). Several courts have concluded that §
1447(d)’s bar of appellate review applies to this subsection, added
in 1988, by extending the reasoning of Thermtron, which bars review
of a remand under § 1447(c), to the whole statute, including
subsequent amendments. See In the Matter of Fl. Wire & Cable Co.,
102 F.3d 866 (7th Cir. 1993); Washington Suburban Sanitary Comm’n.,
917 F.2d 834; Harrell v. Pineland Plantation, Ltd., 914 F. Supp.
119, 120-21 (D.S.C. 1996) (denying motion for reconsideration of
remand because Ҥ 1447(d) precludes the court from reviewing its []
remand decision made pursuant to § 1447(e)” (citing Washington
Suburban Sanitary Comm’n)). For example, in Washington Suburban
Sanitary Commission, the Fourth Circuit explained:
38
We note that much of the language in Thermtron
is cast in terms of the grounds given for
remand in § 1447(c). Section 1447(e) was not
added to § 1447 by Congress until 1988. We
fail to see any reason to treat the grounds
for remand authorized by § 1447(e) in a
different way than the Supreme Court treated
the grounds authorized in § 1447(c). Our
opinion is reinforced by the policy behind the
Congressional decision to limit review of
remand orders.... It seems to us that the
interest in preventing delay is the same
whether the remand is based on the grounds
authorized in § 1447(c) or based on the
grounds authorized in § 1447(e).
Washington Suburban Sanitary Comm’n, 917 F.2d at 836 n.5 (emphasis
added). The court also concluded the joinder was not a separable,
reviewable order under City of Waco, explaining: “Unlike the
action of the district court in Waco, the district court here did
not reach an issue which resulted in substantive issues being later
barred. It merely, as expressly authorized by §1447(e), permitted
joinder of a party and remanded to the state court”. Id. at 836
n.4.
Of course, because the district court remanded under §
1447(c), the relationship between § 1447(d) and § 1447(e) is not
before us. We note, however, that, when the question comes before
this court, if our court agrees with the Fourth and Seventh
Circuits that § 1447(d)’s bar extends to a joinder and remand under
§ 1447(e), it would not seem to make sense to hold that the joinder
is separable and reviewable if the district court takes the same
action but references § 1447(c) instead of subpart(e).
39
Because Tillman’s holding that the allowance of an amendment
is separable does not clearly conflict with any prior precedent,
Tillman controls. E.g., Broussard v. S. Pac. Transp. Co., 665 F.2d
1387, 1389 (5th Cir. 1982) (en banc) (absent intervening change in
law, one panel cannot overturn another). Therefore, we must
conclude that the amendment-allowance was a separable order,
reviewable despite the § 1447(d) bar that applies to the review of
the remand itself.
b.
Having concluded the amendment-allowance was a separable
order, we must next decide whether that ruling is appealable under
§ 1291 or under an exception to the rule of finality. This
question is considered independently because, as noted, the
collateral order exception is defined by cases that cover an array
of subjects, not just remand.11
The parties discuss the applicability of Quackenbush, in which
the district court had remanded in the light of the Burford
abstention doctrine, but the Supreme Court held that § 1447(d) did
not bar review, because the remand had not been under § 1447(c).
11
See, e.g., Mitchell v. Forsyth, 472 U.S. 511 (1985) (pretrial
denial of defense of qualified immunity appealable); Coopers &
Lybrand v. Livesay, 437 U.S. 463 (1978) (no jurisdiction to review
certification of class); Eisen v. Carlisle & Jacquelin, 417 U.S.
156 (1974) (jurisdiction to review order imposing costs of notice
to class on defendants); Cohen, 337 U.S. 541 (jurisdiction to
consider statutory requirement that derivative action plaintiffs
post bond).
40
Quackenbush, 517 U.S. at 710-11. The Court ruled the order final
in that it effectively put the parties out of court.12 It concluded
the remand conclusively determined an issue separable from the
merits, that of whether the federal court should decline to
exercise jurisdiction in the interests of comity and federalism,
and it would not be subsumed in any other appealable order. Id. at
714. Finally, the issue of abstention was sufficiently important
to merit immediate appeal. Id. Yet Quackenbush is not completely
12
The Seventh Circuit in Amoco criticized our ruling in
McDermott, 944 F.2d 1199, that remand constituted putting the
parties effectively out of court. Amoco, 964 F.2d at 712
(reasoning that orders identifying appropriate forum for case are
not appealable because they do not effectively dismiss case and
therefore McDermott was in error). In Quackenbush, the Supreme
Court confirmed that a remand falls within the collateral order
exception. In the context of applying the collateral order
doctrine, the Court, comparing the factual scenario to its earlier
decision in Moses H. Cone Memorial Hospital, stated:
No less than an order staying a federal court
action pending adjudication of the dispute in
state court, it puts the litigants in this
case effectively out of court. Indeed, the
remand order is clearly more final than a stay
order in this sense. When a district court
remands a case to a state court, the district
court disassociates itself from the case
entirely, retaining nothing of the matter on
the federal court’s docket.
Quackenbush, 517 U.S. at 714 (emphasis added; internal quotation
marks and citation omitted). While establishing that remanding an
action to state court effectively puts a party out of court,
Quackenbush does not resolve whether an amendment that results in
remand can be viewed as doing the same.
41
on point because there the Court considered the remand itself, not
a decision prior to the remand.
The allowance of the amendment easily meets the first two
requirements of the collateral order doctrine. It was not
“tentative, informal or incomplete”, Cohen, 337 U.S. at 546, but
instead conclusively determined the disputed question of GCI’s
presence in the litigation. It also dealt with “claims of right
separable from, and collateral to, rights asserted in the action”.
Id. (emphasis added). A separable decision in the context of the
collateral order doctrine is “not of such an interlocutory nature
as to affect, or to be affected by, [a] decision [on] the merits”.
Id. Obviously, permitting adding GCI did not affect the negligence
claim.
The third consideration is whether the decision is effectively
unreviewable on the appeal from final judgment. If the case had
not been remanded, the decision to grant or deny the amendment
would not have been reviewable prior to appeal from the final
judgment. As the Third Circuit pointed out in Powers:
As a starting proposition, if the
relation back amendment were not tied to a
remand order, there would be little question
that review would be unavailable at this
juncture. First, it cannot be contended that
an order permitting (or denying) joinder of a
party, standing alone, is appealable under the
collateral order doctrine.... The right not
to be joined as a party is not significantly
different from the myriad of other pretrial
claims of a right to dismissal. But as is
made clear in Van Cauwenberghe [v. Biard, 486
42
U.S. 517 (1988)] these claims are insufficient
to satisfy the third prong of the collateral
order doctrine....
4 F.3d at 232.
Yet in this case, although the amendment conclusively
determined the issue of jurisdiction, which was completely separate
from the merits, the precise reason it was unreviewable on appeal
from a final judgment was because of § 1447(d). If the remand had
not been granted, the amendment-allowance would be reviewable on
appeal of the final judgment. If the remand had been granted on a
ground not covered by § 1447(c), review of the remand itself would
have been permissible, according to Quackenbush and the collateral
order exception. In this instance, § 1447(d) itself “put the
litigants effectively out of [federal] court”, yet this is the
specific purpose of § 1447(d).
To clarify the issue at hand, we consider an alternative
scenario. Suppose the district court had allowed the addition of
GCI several days before the parties pointed out GCI was non-
diverse. The addition would have immediately destroyed subject
matter jurisdiction (in contrast to Tillman), but that order would
not have been immediately appealable as a collateral order. Not
until the district court later remanded the case for lack of
subject matter jurisdiction could Dr. Michalson have plausibly
asserted the issue was reviewable.
43
Because we do not think Congress intended the bar in § 1447(d)
to turn an otherwise non-collateral, unreviewable interlocutory
order into a collateral, appealable order, we conclude that this
amendment does not meet the requirements of the third prong of the
collateral order exception. To conclude otherwise would create an
exception that swallows the rule, because if granting a motion to
amend that destroys diversity fell within the collateral order
doctrine, the very purpose of § 1447(d) would be frustrated, if not
destroyed.
The only precedent dealing with changes in parties are Tillman
and arguably Mitchell. In Tillman, the joinder did not immediately
destroy jurisdiction; thus, our court ruled the joinder an
unreviewable interlocutory order. See Tillman, 929 F.2d at 1028-
29. In Mitchell, the separable order subjected to suit an
otherwise immune party, Mitchell, 896 F.2d at 133, a situation
analogous to the immunity precedent of the Supreme Court. Pretrial
appeals are permitted to review immunity because it involves the
right to be free from the burden of trial, not merely the right to
be free from liability. See Van Cauwenberghe, 486 U.S. at 524-25
(“Because of the important interests furthered by the
final-judgment rule ... and the ease with which certain pretrial
claims for dismissal may be alleged to entail the right not to
stand trial, we should examine the nature of the right asserted
with special care to determine whether an essential aspect of the
44
claim is the right to be free of the burdens of a trial.”). In
this instance, the amendment-allowance merely affected the forum;
it had nothing to do with Dr. Michalson’s rights to be free from
the burdens of trial.
As to the fourth consideration, whether the issue is too
important to be denied review, we conclude that it does not counsel
in favor of review. The only right at issue is Dr. Michalson’s
right to a federal forum. Obviously, § 1447(d) represents
Congress’ express determination that the right to a federal forum
is not so significant that denial of that forum always merits
review — just the opposite. Courts have consistently explained
that “Congress immunized from all forms of appellate review any
remand order issued on the grounds specified in § 1447(c), whether
or not that order might be deemed erroneous by an appellate court”.
Thermtron, 423 U.S. at 351. In the light of that congressional
policy determination, the issue of the amendment is not too
important to be denied review.
“As its stringent requirements indicate, the collateral order
doctrine is not to be applied liberally. Rather, the doctrine is
extraordinarily limited in its application.” Ozee v. Am. Council
on Gift Annuities, Inc., 110 F.3d 1082, 1091 (5th Cir.), (internal
quotation marks omitted), vacated on other grounds, 522 U.S. 1011
(1997). Because the amendment, even though separable, fails to
45
meet the requirements of the collateral order exception, review is
barred.
C.
In challenging the constitutionality of the preclusion of
appellate review, Dr. Michalson asserts: § 1447(d) violates the
separation of powers doctrine by usurping the power of the federal
courts; and it raises due process and equal protection concerns.
He grounds the latter claim in the fact that, if a district court
refuses to remand a case, the party seeking remand can ultimately
attain appellate review; however, if a district court grants
remand, the party desiring a federal forum has no right to the
procedural protection of appellate review.
1.
As a preliminary matter, Doleac maintains we should decline to
consider this issue because it is raised for the first time on
appeal. Dr. Michalson replies that he did not have standing in
district court to raise the constitutional challenge to § 1447(d)
because, prior to remand, he had not yet sustained injury.
Although we generally do not entertain issues not raised in, or
decided by, the district court, we will do so “in extraordinary
instances when such consideration is required to avoid a
miscarriage of justice”. Bayou Liberty Ass’n, Inc. v. United
States Army Corps of Eng’rs, 217 F.3d 393, 398 (5th Cir. 2000). We
46
will consider the issue; the issue could not be raised in the
district court pre-remand.
2.
The roots of § 1447(d)’s preclusion of appellate review are in
the Act of Mar. 3, 1887, 24 Stat. 552. Thermtron, 423 U.S. at 346.
In the nearly 115 years since the limitation originated, its
constitutionality has apparently never been challenged.
Dr. Michalson’s claims are without merit. It is axiomatic
that Congress has plenary authority to regulate the jurisdiction of
the federal courts. Kline v. Burke Constr. Co., 260 U.S. 226, 234
(1922) (“Every [] court [other than the Supreme Court] ... derives
its jurisdiction wholly from the authority of Congress. That body
may give, withhold or restrict such jurisdiction at its discretion,
provided it be not extended beyond the boundaries fixed by the
Constitution.... [T]he jurisdiction having been conferred may, at
the will of Congress, be taken away in whole or in part”); Sheldon
v. Sill, 49 U.S. 441, 449 (1850) (“Congress may withhold from any
court of its creation jurisdiction of any of the enumerated
controversies.”); Cary v. Curtis, 44 U.S. 236, 245 (1845)
(“Congress [] possess[es] the sole power of creating the tribunals
(inferior to the Supreme Court) ... and of investing them with
jurisdiction either limited, concurrent, or exclusive, and of
withholding jurisdiction from them in the exact degrees and
character which to Congress may seem proper for the public good.”).
47
United States v. Klein explicitly recognized: “If [Congress]
simply denied the right of appeal in a particular class of cases,
there could be no doubt that it must be regarded as an exercise of
the power of Congress to make ‘such exceptions from the appellate
jurisdiction’ as should seem to it expedient.” 80 U.S. 128, 145
(1872).
3.
Furthermore, the Fifth Amendment confers no due process right
to appellate review in a federal forum. The remand order affects
only the procedural question as to the forum in which Dr. Michalson
will seek to defend his interests, and “[n]o one has a vested right
in any given mode of procedure”. Crane v. Hahlo, 258 U.S. 142, 147
(1922); see Olim v. Wakinekona, 461 U.S. 238, 250 (1983) (“Process
is not an end in itself. Its constitutional purpose is to protect
a substantive interest to which the individual has a legitimate
claim of entitlement.”). There is no due process right to
appellate review even in circumstances in which much more is at
stake than a litigant’s preference for a federal forum: even in
criminal cases, appellate review does not constitute “a necessary
element of due process of law”. McKane v. Durston, 153 U.S. 684,
687 (1894).13
13
Contrary to Dr. Michalson’s suggestion, Honda Motor Co., Ltd.
v. Oberg, 512 U.S. 415 (1994), did not create a due process right
to appellate review: the provision of the Oregon Constitution that
Oberg struck down did not merely restrict appellate review, but
instead completely prohibited judicial review, including review by
48
4.
Finally, because litigants who oppose remand are not a suspect
class and § 1447(d) deprives them of no fundamental right, the
statute need only be based in “a rational relationship between the
disparity of treatment and some legitimate governmental purpose”.
Heller v. Doe, 509 U.S. 312, 320 (1993). Thermtron recognized
Congress’ purpose in enacting § 1447(d) as “prevent[ing] delay in
the trial of remanded cases by protracted litigation of
jurisdictional issues”. Thermtron, 423 U.S. at 351. This reason
forms a rational basis for the decision in that review of an order
denying remand does not threaten to disrupt a pending state court
decision, whereas providing review of an order granting remand
does. The United States offers additional claimed rational reasons
for this distinction, but we need not reach them. With even one
rational reason supporting the distinction, Dr. Michalson fails to
meet his burden of negating “every conceivable basis which might
support” the distinction. Heller, 509 U.S. at 320.14
the trial court, of a jury’s punitive damage award. Id. at 420
(“the question is whether the Due Process Clause requires judicial
review of the amount of punitive damage awards”). Moreover, Oberg
found denying protection against arbitrary deprivations of property
abrogated well-established common law. Id. at 430. In contrast,
appellate review of remand orders was unavailable until the
Judiciary Act of 1875; and review of the grant of remand orders
under § 1447(c) has been unavailable since 1887. Thermtron, 423
U.S. at 346.
14
Doleac’s request, pursuant to Federal Rule of Appellate
Procedure 38, that Dr. Michalson be sanctioned for raising
frivolous issues on appeal is without merit and, accordingly, is
49
III.
The district court’s application of the Hensgens factors to
allow the amendment joining GCI as a defendant was a separable
order but did not come within the collateral order exception.
Therefore, § 1447(d) bars our review of the remand and also of the
amendment itself. Such preclusion, based upon the dictates of §
1447(d), is not unconstitutional. Because we lack jurisdiction to
consider the appeal, it is
DISMISSED.
DENIED.
50