In Re: Benjamin

• Court: Court of Appeals for the Fifth Circuit
• Decided: January 9, 2003
• Docket: 02-60714
• Status: Published

Opinion

IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT _____________________

No. 02-60714 _____________________

In re: BENJAMIN MOORE & CO., wholly-owned subsidiary of Berkshire Hathaway Inc., et al.,

Petitioners.

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DANNY BORDEN, et al.,

Plaintiffs - Respondents.

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Petition for Writ of Mandamus to the United States District Court for the Southern District of Mississippi

_________________________________________________________________ December 18, 2002 Before JOLLY, JONES, and EMILIO M. GARZA, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Seventeen plaintiffs, all Mississippi residents, filed suit

against diverse paint manufacturers and distributors, as well as 33

Mississippi retail establishments, asserting product liability

claims for alleged exposure to paint that contained lead. The

diverse manufacturers and distributors removed the case to federal

court, claiming that the Mississippi retail establishments were

fraudulently joined as defendants. The plaintiffs moved to remand.

1 In opposition to the motion to remand, the removing defendants

asserted, in a footnote, that the plaintiffs were fraudulently

misjoined. They pointed out that the plaintiffs’ claims did not

arise out of the same transaction or occurrence, nor the same

series of transactions or occurrences. In support, they cited

Tapscott v. MS Dealer Serv. Corp., 77 F.3d 1353, 1360 (11th Cir.

1996), abrogated on other grounds, Cohen v. Office Depot, Inc., 204

F.3d 1069 (11th Cir. 2000). In Tapscott, one group of plaintiffs

sued a group of non-diverse defendants in state court for fraud

arising from the sale of automobile service contracts. 77 F.3d at

1355, 1359-60. In the same lawsuit, another group of plaintiffs

sued an entirely separate group of diverse defendants for fraud

arising from the sale of service contracts covering retail

products. Id. The Eleventh Circuit affirmed the district court’s

denial of the plaintiffs’ motion to remand, stating that the

plaintiffs’ misjoinder of the two groups of unrelated defendants

was “so egregious as to constitute fraudulent joinder.” Id. at

1360.

The district court in this case granted the motion to remand

(unlike the district court in Tapscott, which denied remand). The

removing defendants moved for reconsideration, arguing that the

fraudulent misjoinder of the plaintiffs constituted fraudulent

joinder under the federal removal statute. They requested that the

district court reconsider its remand order, sever the claims of the

2 seventeen plaintiffs, and remand only the claims of those four

plaintiffs whose testimony indicated that they had a possibility of

recovery against the non-diverse defendants.

The district court denied the motion for reconsideration,

holding that the defendants failed to establish any of the grounds

for granting a motion for reconsideration under Federal Rule of

Civil Procedure 59(e): (1) an intervening change in controlling

law; (2) the availability of new evidence not previously available;

or (3) the need to correct a clear error of law or prevent manifest

injustice.

The removing defendants filed a petition for writ of mandamus

on August 30, 2002. The defendants argued that the district

court’s failure to consider misjoinder of plaintiffs before

determining whether diversity jurisdiction existed deprived them of

their right to a federal forum. They asked us to vacate the remand

order, remand the case to the district court, and require the

district court to assess the misjoinder of plaintiffs before

determining whether it had diversity jurisdiction. According to

the defendants, only four of the seventeen plaintiffs have any

possibility of recovery against the non-diverse defendants;

therefore, the other thirteen plaintiffs’ claims should be severed

and the district court should retain jurisdiction over their

claims.

3 The removing defendants moved for leave to file an amended

petition for writ of mandamus on September 9, to address the

district court’s amended order entered on September 3. In that

September 3 order, the district court amended its order denying the

defendants’ motion for reconsideration. The district court noted

that the fraudulent misjoinder argument “was not made by defendants

in their notice of removal or response to the motion for remand,”

and stated that it was inappropriate for the defendants to advance

new arguments in a motion for reconsideration.

We denied the petition for writ of mandamus without prejudice,

stating:

Petitioners’ motion is framed around the district court’s failure to address whether diversity jurisdiction was fraudulently defeated because among the seventeen plaintiffs herein, who have nothing in common with each other, only four have asserted claims that relate in any way to the nondiverse defendants. It may thus be contended that the other thirteen did raise claims cognizable in diversity jurisdiction. See Tapscott .... Further, it might be concluded that misjoinder of plaintiffs should not be allowed to defeat diversity jurisdiction. See Tapscott id. (holding misjoinder may be as fraudulent as the joinder of a resident against whom a plaintiff has no possibility of a cause of action). The district court no doubt inadvertently overlooked that this point was timely raised, but the point cannot be ignored, since it goes to the court’s jurisdiction and to the defendants’ rights to establish federal jurisdiction following removal. Because we are confident that the able district court did not intend to overlook a feature critical to

4 jurisdictional analysis, there is no reason to grant mandamus relief at this time.

In Re Benajmin Moore & Co., 309 F.3d 296 (5th Cir. 2002).

On October 14, the district court issued another opinion to

clarify its treatment of the defendants’ fraudulent misjoinder

allegations. The district court stated that it “was aware of the

defendants’ argument, duly considered it, and found it to be

without merit.” The district court explained that it did not

address the argument in its initial opinion because the defendants

presented the claim “as a bare, conclusory allegation” without any

argument or evidentiary support. The district court stated that

the new arguments advanced in the defendants’ motion for

reconsideration should have been offered earlier.

On October 30, the defendants filed a second Petition for Writ

of Mandamus. They request that we order the district court to:

(1) address the joinder of plaintiffs; (2) sever the plaintiffs who

are clearly improperly joined; and (3) retain jurisdiction where

the remaining plaintiffs have complete diversity with defendants.

On November 12, 2002, the district court issued a memorandum

order denying the defendants’ Joint Motion to Recall Remand Order

and Joint Motion for Reconsideration. In that opinion and order,

the district court stated, once again, that it had considered and

rejected the defendants’ fraudulent misjoinder argument.

We first must determine whether we have jurisdiction to

consider the defendants’ requests for relief. Congress has limited

5 our jurisdiction to review remand orders issued pursuant to 28

U.S.C. § 1447(c) (requiring remand if district court lacks subject

matter jurisdiction): Except in civil rights cases, “[a]n order

remanding a case to the State court from which it was removed is

not reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d). The

defendants maintain that § 1447(d) does not apply, and that we have

jurisdiction to address the issue of misjoinder by way of mandamus

because joinder determinations “preced[e] the remand in logic and

in fact.” Arnold v. State Farm Fire & Casualty Co., 277 F.3d 772,

776 (5th Cir. 2001); Doleac v. Michalson, 264 F.3d 470, 489 (5th

Cir. 2001); Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1026-29

(5th Cir. 1991). The plaintiffs contend, however, that we do not

have jurisdiction to review either the remand order or the district

court’s rejection of the misjoinder claim. The plaintiffs maintain

that resolution of joinder issues is inappropriate unless and until

the court determines that it has jurisdiction, and that the

defendants’ arguments about the propriety of joinder should be

addressed in state court under state joinder rules.

As we have stated earlier, the defendants seek mandamus to

order the district court to take three actions: (1) address the

joinder of plaintiffs; (2) sever the plaintiffs who are clearly

improperly joined; and (3) retain jurisdiction where the remaining

plaintiffs have complete diversity with defendants. The

defendants’ first request is moot, because the district court’s

6 orders make clear that it considered, but rejected, the defendants’

argument that the plaintiffs are fraudulently misjoined.* As we

shall explain, under our precedent, we do not have jurisdiction to

grant the remaining relief requested by the defendants. Thus,

without detracting from the force of the Tapscott principle that

fraudulent misjoinder of plaintiffs is no more permissible than

fraudulent misjoinder of defendants to circumvent diversity

jurisdiction, we do not reach its application in this case.

Although the defendants are correct that our court has held

that joinder decisions are separable from a decision to remand a

case for lack of subject matter jurisdiction, Doleac and Arnold

hold that more is required for the court to review the joinder

decision. In addition to logically preceding the remand, a

separable order also must be “conclusive, in the sense of being

functionally unreviewable in state court.” Arnold, 277 F.3d at

776. Moreover, the order must “also be independently reviewable by

* Perhaps the district court would have taken a more favorable view of the defendants’ argument had it been raised earlier (either in the removal papers, in a motion to sever, or in the defendants’ initial response to the motion to remand), and had it been supported by evidence. Instead, as the district court observed, the defendants mentioned the issue only in a footnote in their opposition to the motion to remand. They did not present any supporting arguments or evidence until they moved for reconsideration after the district court had already remanded the case. Although the point goes to the court’s jurisdiction, as well as to the defendants’ right to a federal forum, the point cannot be sustained simply on the basis of conclusory allegations unsupported by any evidence or argument.

7 means of devices like the collateral order doctrine.” Id.; see

also Doleac, 264 F.3d at 478.

Doleac involved a remand following the district court’s

decision to allow an amendment adding a nondiverse defendant. Our

court held that the district court’s decision to allow the

amendment was separable from the remand, but dismissed the appeal

because the decision allowing the amendment did not satisfy the

collateral order doctrine. In their original petition for writ of

mandamus, the defendants argued that Doleac does not bar review of

the district court’s joinder decision because, unlike the defendant

in Doleac, they are pursuing mandamus relief. In their reply to

the plaintiffs’ response to the renewed petition for writ of

mandamus, the defendants state, without citation of authority, that

the collateral order rule does not apply to writs of mandamus. In

Arnold, however, our court dismissed the appeal and denied mandamus

relief because the district court’s decision to disregard class

action allegations, although separable from the decision to remand

for lack of subject matter jurisdiction, was not a reviewable

collateral order. 277 F.3d at 777. The court observed further

that “engaging in appellate review of the district court’s joinder

decision would lead to an impermissible advisory opinion, for ...

our decision cannot reverse the remand order, which in any event

has no effect, preclusive or otherwise, on the ongoing state

litigation.”

8 Under Doleac and Arnold, we do not have jurisdiction to review

the district court’s decision regarding misjoinder. Although that

decision is separable from, and logically precedes, the remand, it

is not conclusive, because the state court can consider misjoinder

of the plaintiffs on remand. Moreover, the decision is not

independently reviewable under the collateral order doctrine. In

sum, under Doleac and Arnold, the district court’s decision on

misjoinder, like its decision to remand the case to state court, is

not reviewable “by appeal or otherwise.” 28 U.S.C. § 1447(d);

Arnold, 277 F.3d at 777. Accordingly, the petition for writ of

mandamus is

D E N I E D.