United States Court of Appeals
For the First Circuit
No. 03-1899
MICHELE GRISPINO; FRANCES GRISPINO,
Plaintiffs, Appellants,
v.
NEW ENGLAND MUTUAL LIFE INSURANCE CO.;
CREATIVE FINANCIAL GROUP; JOHN F. MAZZOLA,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, Senior U.S. District Judge]
Before
Boudin, Chief Judge,
Lourie,* Circuit Judge, and
Lynch, Circuit Judge.
Rudolph J. DiMassa and DiMassa Associates Ltd. were on brief
for appellants.
Peter S. Terris, Ruth T. Dowling, Marc J. Goldstein, and
Palmer & Dodge were on brief for appellees.
February 6, 2004
*
Of the United States Court of Appeals for the Federal
Circuit, sitting by designation.
LYNCH, Circuit Judge. Michele and Frances Grispino
appeal the district court's dismissal of their action under
Pennsylvania state law against the New England Mutual Life
Insurance Company,1 Creative Financial Group, and John F. Mazzola.
After reviewing the record, we affirm.
I.
The Grispinos are Pennsylvania residents who purchased
life insurance policies in 1989 from New England Mutual. They came
to believe that these policies were sold to them through deceptive
means –- notably, by falsely representing that the premiums due
under the policies would "vanish" after nine years -- and that they
were owed damages.
The Grispinos were not alone. As it turns out, others
had made similar claims against New England Mutual, prompting the
Multidistrict Litigation Panel in 1996 to consolidate a national
class action against the company in the District of Massachusetts.
On October 4, 2000, the class action was settled, with the district
court judge retaining continuing jurisdiction over any post-
settlement issues. The Grispinos timely opted out of the class
settlement and, on October 3, 2001, instituted a civil action
against New England Mutual, Creative Financial Group (the policy
1
New England Mutual merged in August 1996 with Metropolitan
Life Insurance Company, which is the proper defendant in this
action. Like the parties, we refer to the defendant by its former
name for clarity and convenience.
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issuing agent for New England Mutual in Pennsylvania), and John F.
Mazzola (the Creative Financial Group representative who sold them
their policies) in Pennsylvania state court. The record does not
show why the Grispinos decided to opt out.
Like the federal class action suit, the Grispinos' state
court complaint included a count for violation of the federal
Racketeering Influenced and Corrupt Organizations (RICO) Act, 18
U.S.C. § 1961 et seq. Based on this federal claim, the defendants
removed the state court action to the District Court for
Pennsylvania. 28 U.S.C. § 1441. They then filed with the district
court a motion to dismiss the complaint on the grounds that most of
the claims were barred by the applicable statutes of limitations
and the remaining claim did not state a cause of action.
Around the same time that they moved to dismiss, the
defendants notified the MDL panel that the case was a potential
"tag-along" action under Panel Rule 1.1 and was eligible to be
transferred to the District of Massachusetts, where the original
class action was litigated.2 In response, the Grispinos amended
their complaint to withdraw the sole federal claim. They then
filed a motion with the Pennsylvania federal district court to
remand the case back to Pennsylvania state court. Rather than rule
2
Rule 1.1 of Procedure of the Judicial Panel on Multidistrict
Litigation states, in relevant part, that "A 'tag-along action'
refers to a civil action pending in a district court and involving
common questions of fact with actions previously transferred under
[28 U.S.C. § 1407]."
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on either the Grispinos' motion for remand or the defendants'
motion to dismiss, the Pennsylvania federal court, at the
defendants' request, stayed the proceeding pending a decision from
the MDL panel on whether the case should be transferred to
Massachusetts.
On June 26, 2002, the MDL panel ordered the case
transferred to the District of Massachusetts, where it was assigned
to the judge who had handled the class action case. The Grispinos
submitted to the MDL panel a motion to vacate the transfer order,
which was denied.
Now in Massachusetts federal court, the Grispinos filed
a motion requesting remand of the case to Pennsylvania federal
court or Pennsylvania state court. On May 20, 2003, the district
court denied this motion, explaining that it did not have authority
to transfer or remand the case to Pennsylvania state or federal
court; it could only make a recommendation to the MDL panel on
these issues, and it was not inclined to do so.
Having considered the Grispinos' procedural arguments,
the district court turned to the defendants' motion to dismiss,
which had originally been filed in Pennsylvania federal court. The
court held that the Grispinos' fraud, negligence and breach of
fiduciary duty claims were barred by the applicable statute of
limitations and that the contract claims were otherwise defective.
The one remaining claim, under the Pennsylvania Unfair Trade
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Practices and Consumer Protection Law, was withdrawn by the
Grispinos in order to perfect an appeal from the order of dismissal
and the denial of the motion to remand.
II.
Our ruling is limited to the issues raised on appeal and
the arguments presented.3 United States v. Berrio-Callejas, 219
F.3d 1, 3 (1st Cir. 2000) (claims not argued on appeal are waived).
First, the Grispinos argue that the district court should
have granted some form of a remand order because there was no
federal subject matter jurisdiction once they amended the complaint
to delete the federal RICO claim. This argument is wrong: the
dismissal of the only federal claim after removal of an action to
federal court does not by itself deprive the federal court of
jurisdiction over the remaining state claims. See 28 U.S.C. §
1367(c) (the district court "may decline to exercise supplemental
jurisdiction over a claim . . . if . . . the district court has
3
A portion of the plaintiffs' brief appears to challenge the
MDL panel's decision to transfer the case to Massachusetts District
Court. The language of 28 U.S.C. § 1407(e) only permits the court
of appeals for the transferee court to review the MDL panel's
transfer decision via the issuance of an extraordinary writ
pursuant to 28 U.S.C. § 1651, which the Grispinos have not sought.
See In re Patenaude, 210 F.3d 135, 140-41 (3d Cir. 2000).
Regardless of the Grispinos' failure to bring a mandamus action,
the panel's transfer of the case was clearly within its discretion.
On its face, this case appeared to be a tag-along action that
raised issues of fact common to both the class action and the suits
that had already been transferred to Massachusetts. The fact that
there were pending jurisdictional objections did not deprive the
MDL panel of the ability to transfer the case. See In re Ivy, 901
F.2d 7, 9 (2d Cir. 1990).
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dismissed all claims over which is has original jurisdiction"
(emphasis added)); Roche v. John Hancock Mut. Life Ins. Co., 81
F.3d 249, 256-57 (1st Cir. 1996) ("In a federal-question case, the
termination of the foundational federal claim does not divest the
district court of power to exercise supplemental jurisdiction but,
rather, sets the stage for an exercise of the court's informed
discretion.").
While the court could easily have concluded that a
recommendation for remand was appropriate in light of the many
unsettled questions of Pennsylvania state law that were presented,
our review is only for abuse of discretion. See Cotter v. City of
Boston, 323 F.3d 160, 172 (1st Cir. 2003). We find no such abuse
of discretion. The Massachusetts federal court had already handled
a large class action involving the same sorts of claims as this
case and had continuing jurisdiction. Its familiarity provided a
sufficient basis for its decision to retain jurisdiction over the
action. See Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350
(1988) (relevant factors for determining whether to retain
jurisdiction include judicial economy and procedural convenience).
The Grispinos' next argument is that the district court
incorrectly found that their negligence, fraud, and breach of
fiduciary duty claims were time-barred.4 Having concentrated their
4
The court also found that no viable contract claim was
stated. Plaintiffs have waived this issue by failing to raise and
brief it on appeal.
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ammunition on the transfer and remand issue, the Grispinos pay
scant attention to developing this issue; they argue only that
their claims did not accrue until New England Mutual actually
terminated their policy, on May 31, 2000. The district court
flatly rejected this argument, finding that, at the latest, the
Grispinos' cause of action accrued in 1998, when they were still
required to make payments on their policy despite the defendants'
earlier representations that the premium would have vanished by
that point. The Grispinos' reassertion, without any supporting
authority, that their cause of action did not accrue until May 2000
borders on frivolous. The district court's ruling was correct.
See In re New England Life Ins. Co. Sales Practice Litig., 346 F.3d
218, 221-23 (1st Cir. 2003) (cause of action accrued when the
plaintiffs received a written notice indicating that their
"vanishing premiums" would not vanish at the end of the anticipated
payment period).
Before dismissing the Grispinos' fraud, negligence, and
fiduciary duty claims, the district court sua sponte considered and
rejected the possibility that the pendency of the class action
tolled the applicable statute of limitations. See Am. Pipe &
Constr. Co. v. Utah, 414 U.S. 538, 553-54 (1974). It provided no
opportunity for briefing on this issue. Relying on a Pennsylvania
intermediate appellate court decision, Ravitch v. Price Waterhouse,
793 A.2d 939 (Pa. Super. 2002), the district court concluded that
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Pennsylvania law does not provide for the tolling of a state
statute of limitations based on a federal class action. Although
the district court was correct to identify the class action tolling
issue, we have considerable doubts about the soundness of its
analysis. For instance, the court overlooked a consistent line of
federal circuit court cases holding that the American Pipe tolling
doctrine applies to plaintiffs who opt out of a class action in
federal district court. See Realmonte v. Reeves, 169 F.3d 1280,
1284 (10th Cir. 1999); Adams Pub. Sch. Dist. v. Asbestos Corp., 7
F.3d 717, 718 n.1 (8th Cir. 1993); Tosti v. City of Los Angeles,
754 F.2d 1485, 1488 (9th Cir. 1985); Edwards v. Boeing Vertol Co.,
717 F.3d 761, 766 (3d Cir. 1983). The district court also failed
to consider the relevance of the fact that the case had been
removed to federal court from state court in determining how to
approach the tolling issue. And there are significant questions
about whether the Pennsylvania Supreme Court would, in any event,
follow the rule announced in Ravitch.
We need not reach a conclusion on these issues. Despite
the fact that the district court reached the tolling issue, the
Grispinos make no argument on appeal regarding the class action
tolling doctrine specifically, or even tolling more generally. The
argument has been waived. See Berrio-Callejas, 219 F.3d at 3.
Intertwined with these arguments is a final assertion by
the plaintiffs that they have been denied due process, equal
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protection and other constitutional rights. This frivolous
argument is once again premised on the plaintiffs' claim that there
is no federal subject matter jurisdiction. But by pleading a
federal cause of action, the Grispinos' attorney created federal
removal jurisdiction, and the deletion of that claim once the case
was in federal court did not deprive that court of federal
jurisdiction.
III.
The judgment of the district court dismissing the claims
is affirmed. We do so without approval of its reasoning on the
class action tolling doctrine. Costs are awarded to the
defendants.
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