United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT November 16, 2004
Charles R. Fulbruge III
Clerk
No. 03-60283
RICHARD C. RAINWATER and ANNA D. RAINWATER,
Plaintiffs-Appellants,
versus
LAMAR LIFE INSURANCE CO., CONSECO LIFE INSURANCE CO., THOMAS
STROO and JAMES PAYTON,
Defendants-Appellees.
Appeal from the United States District Court
for the Southern District of Mississippi
Before HIGGINBOTHAM, SMITH, and WIENER, Circuit Judges.
PER CURIAM:
Plaintiffs-Appellants Richard and Anna Rainwater (the
“Rainwaters”) appeal the district court’s denial of their motion to
remand this action to Mississippi state court. Specifically, the
Rainwaters bring this interlocutory appeal to contest the district
court’s ruling that Defendants-Appellees Thomas Stroo and James
Payton, who are Mississippi residents, were “improperly” joined
because of the Rainwaters’ inability to establish a cause of action
against them. The district court’s ruling was based on its
conclusion that any claims that the Rainwaters may have had against
Stroo and Payton were time-barred under the applicable Mississippi
statute of limitations.1 The district court nevertheless certified
its order pursuant to 28 U.S.C. § 1292(b) to allow the Rainwaters
to pursue this interlocutory appeal on the question of fraudulent
concealment, which the district court determined was a controlling
question of law in this action. The district court’s principal
concern was that Mississippi state law on the fraudulent
concealment doctrine was ambiguous or one where “there is
substantial ground for difference of opinion.”2
We granted permission to the Rainwaters to pursue this
interlocutory appeal. On August 29, 2003, after the parties’
appellate briefs were filed, however, we decided Ross v.
CitiFinancial, Inc.3 Our decision in Ross resolved any remaining
doubts that the district court may have had about a substantial
ground for a difference of opinion on the doctrine of fraudulent
concealment. This does not, however, resolve the remand issue in
this case.
While this interlocutory appeal was winding its way through
our court, another Mississippi case involving removal and remand
was being reheard en banc so that this court could consider whether
cases removed from state court on grounds of diversity of
citizenship under a claim then labeled “fraudulent” joinder must be
1
See Rainwater v. Lamar Life Ins. Co., 246 F. Supp. 2d 546,
552-53 (S.D. Miss. 2003).
2
Id. at 553.
3
244 F.3d 458 (5th Cir. 2003).
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remanded if the legal basis for determining that there is no
reasonable probability for recovery against the in-state defendants
would constitute a common defense that eschews any reasonable
probability of recovery against all out-of-state defendants as
well. The en banc opinion in that case, Smallwood v. Illinois
Central Railroad,4 was filed on September 10, 2004, and its holding
casts a new and different doubt on the remand issue of the instant
case.
Specifically, if the statute of limitations that we now know
from the holding in Ross precludes any recovery by the Rainwaters
against in-state defendants Stroo and Payton, also precludes
recovery against all defendants, resident and diverse, then under
Smallwood such a determination would go “to the entire case” rather
than to the appropriateness of the joinder.5 Thus it would follow
under Smallwood that, if the statute of limitations in question
does bar recovery against all defendants, the joinder of Stroo and
Payton would not necessarily be “improper” and the entire case
would have to be remanded to state court.
This case turns, therefore, on whether the limitations defense
that disposes of all claims against in-state defendants in fact
disposes of all claims against all defendants, as the principle of
Smallwood is triggered only when all defendants are reached. Lamar
4
385 F.3d 568 (5th Cir. 2004).
5
Id. at 574.
3
Life insists that, even assuming that the time bar in play in this
case goes to the fraud-related claims against all defendants, this
bar does not dispose of all claims against Lamar Life. This
defendant reads the complaint as alleging additional violations of
Mississippi law, viz., improperly setting interest rates and
improperly charging particular fees, that are not necessarily
disposed of by the limitations defense.
If plaintiffs’ complaint were pellucid and Lamar Life’s
reading of it could be verified beyond cavil, the inclusion of such
claims against Lamar Life would mean that the statute of
limitations that disposes of all claims against the in-state
defendants would not constitute a “common defense.” That in turn
would preclude remand under the rule of Smallwood. Unfortunately,
however, we have considerable difficulty discerning the distinct
theories of recovery advanced and causes of actions alleged in the
plaintiff’s complaint; and the parties have not fully clarified
this question for us. Whether by design or inadvertence, the
plaintiffs have nebulously drafted their complaint. Its only
reference to improper fees is a description of the benefits
realized by Lamar Life, as distinguished from its in-state agents,
as a result of the alleged fraud.
Even though application of Smallwood’s common defense rule is
truly a question of law and thus an issue that we could dispose of
on appeal, prudence dictates that, under these circumstances, the
district court is likely better positioned to make that call in the
4
first place, given the benefit of its background knowledge of
Mississippi law and its opportunity to hold hearings on those
questions about the complaint that remain in doubt. We therefore
remand this case to the district court for further consistent
proceedings in light of both Ross and Smallwood. If that court
should determine that the limitations defense in question is
dispositive of all claims against all defendants, then Smallwood
would require remand to state court (where, presumably, the entire
case would be dismissed). If, however, the district court should
determine that the time bar defense is not dispositive of every
claim against every defendant, it should continue to deny remand
and proceed with the proper disposition of the case. Under these
circumstances, the interlocutory appeal that we previously granted
under § 1292(b) must be dismissed and the case remanded to the
district court for further proceedings consistent with this
opinion.
APPEAL DISMISSED; CASE REMANDED with instructions.
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