Opinions of the United
1999 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


12-2-1999

White v ABCO Eng.Corp
Precedential or Non-Precedential:

Docket 98-6206, 98-6207




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1999

Recommended Citation
"White v ABCO Eng.Corp" (1999). 1999 Decisions. Paper 317.
http://digitalcommons.law.villanova.edu/thirdcircuit_1999/317


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Filed December 2, 1999

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

NOS. 98-6206 and 98-6207

KENNETH WHITE

v.

ABCO ENGINEERING CORP.,
Defendant/Third-Party Plaintiff

v.

H.H.S. RECYCLING, INC.; HAMM'S SANITATION, INC.;
Third-Party Defendants

Kenneth E. White, Appellant in No. 98-6206
Hamm's Sanitation, Inc., Appellant in No. 98-6207

On Appeal From the United States District Court
For the District of New Jersey
(D.C. Civ. No. 98-cv-00622)
District Judge: Honorable Alfred J. Lechner, Jr.

Submitted Under Third Circuit LAR 34.1(a)
September 28, 1999

Before: BECKER, Chief Judge, McKEE, and
NOONAN,* Circuit Judges

(Filed December 2, 1999)



_________________________________________________________________

* Honorable John T. Noonan Jr., United States Circuit Judge for the
Ninth Circuit, sitting by designation.
       BRUCE L. SAFRO, ESQUIRE
       Suite 14
       One University Plaza
       Hackensack, NJ 07601

       JOHN S. SELINGER, ESQUIRE
       Levinson, Zeccola, Reineke, Ornstein
        & Selinger, P.C.
       11 Abrams Road
       P.O. Box 244
       Central Valley, NY 10917

       Counsel for Plaintiff-Appellant
       Kenneth E. White

       THOMAS R. NEWMAN, ESQUIRE
       Luce, Forward, Hamilton & Scripps
       153 East 53rd Street, 26th Floor
       New York, NY 10022

       Counsel for Third-Party Defendant-
       Appellant Hamm's Sanitation, Inc.

       PHILLIP A. TUMBARELLO, ESQUIRE
       LORETTA MENKES, ESQUIRE
       Wilson, Elser, Moskowitz, Edelman
        & Dicker
       150 East 42nd Street
       New York, NY 10017

       KEITH G. VON GLAHN, ESQUIRE
       Wilson, Elser, Moskowitz, Edelman
        & Dicker
       Two Gateway Center, 12th Floor
       Newark, NJ 07102

       Counsel for Defendant-Appellee
       ABCO Engineering Corp.

OPINION OF THE COURT

BECKER, Chief Judge.

This is an appeal from an order of the United States
District Court for the Southern District of New York

                                 2
granting summary judgment for the defendant ABCO
Engineering Corporation and against the plaintiff Kenneth
E. White in a products liability personal injury case
founded on diversity jurisdiction. Our opening sentence,
describing an appeal to the United States Court of Appeals
for the Third Circuit from the United States District Court
for the Southern District of New York (in the Second
Circuit) should raise eyebrows, and compels immediate
inquiry into how such review could take place. The
legitimacy of the review depends on whether White's claims
against ABCO were properly transferred to the Third
Circuit. Resolution of this question turns on one legal
question of first impression and one factual question: (1)
whether a S 1404(a) inter-district transfer may validly be
made by stipulation (in the absence of a judicial balancing
exercise), and (2) whether the transferring judge in this
case made a de facto severance of the White/ABCO claims,
purposely attempting to transfer only the White claims
against a third party, Hamm's Sanitation.

We conclude that S 1404(a) transfers may not be made
simply by stipulation, and insofar as the record reveals, the
transferring judge did not engage in the requisite
independent balancing of S 1404(a) factors. Alternatively,
even if there had been a valid transfer, the transferring
judge effectively severed the claims against ABCO, leaving
them in the Second Circuit. We will therefore transfer the
appeal to the United States Court of Appeals for the Second
Circuit pursuant to 28 U.S.C. S 1631.

I.

After White was injured working on a conveyor belt, he
brought suit in the Southern District of New York against
ABCO, the manufacturer of the conveyor belt, alleging
defective design and negligence for failure to provide
adequate safety guards. He later amended his complaint to
state a direct claim against Hamm's Sanitation, the solid
waste collector which had fabricated the side barrier guards
for the ABCO conveyor at issue, alleging negligence in the
installation, alteration, repair, and control of the conveyor.1
_________________________________________________________________

1. ABCO had previously joined Hamm's Sanitation as a Third-Party
Defendant.

                               3
White also filed a separate suit against Hamm's Sanitation
in the District Court for the District of New Jersey, making
the same claim.

In September 1997, the Southern District of New York
case was transferred by United States District Judge
Barrington Parker to Magistrate Judge Mark D. Fox for all
purposes permitted by 28 U.S.C. S 636(b)(1) of the Federal
Magistrates Act.2 In November Judge Parker granted
ABCO's motion for summary judgment. In December all
parties agreed to proceed before Magistrate Judge Fox
pursuant to 28 U.S.C. S 636(c)(1), which provides that upon
consent of the parties, a magistrate judge "may conduct
any or all proceedings in a jury or nonjury civil matter and
order the entry of judgment in the case." 28 U.S.C.
S 636(c)(1).

On January 9, 1998, White and Hamm's Sanitation
stipulated that White's direct actions against Hamm's
Sanitation would be transferred to the District Court for the
District of New Jersey where, as noted above, a case was
already pending between the parties. The stipulation, which
was signed by Magistrate Judge Fox and the lawyers for
both White and Hamm's Sanitation, clearly indicated that
the parties intended to transfer only the White claims
against Hamm's Sanitation.3 Presumably ABCO's counsel
received notice of the transfer from the Clerk, but she
_________________________________________________________________

2. A judge may unilaterally assign a magistrate judge to determine most
pretrial matters, excepting, among other things, "a motion for injunctive
relief, for judgment on the pleadings, for summary judgment . . . to
dismiss for failure to state a claim upon which relief can be granted, and
to involuntarily dismiss an action." 28 U.S.C.S 636(b)(1).

3. The stipulation provided: "It is hereby stipulated and agreed as and
between Plaintiff, Kenneth White and Defendant, Hamm's Sanitation,
Inc. that Plaintiff's direct actions against Hamm's Sanitation, Inc.
stemming from the above shall be transferred for prosecution in the
United States District Court, District of New Jersey." The stipulation,
whose caption included the names of all the parties, was signed "so
ordered" by Magistrate Judge Fox on January 8, 1998. Since several
other facts compel our conclusion that we do not have jurisdiction in
this case, we need not reach the question whether S 636(c)(1) or
S 636(b)(1)(A) confer upon a Magistrate Judge the power to transfer a
case to another district court.

                               4
neither objected to nor signed the stipulation. Magistrate
Judge Fox notified Judge Parker that the case against
Hamm's Sanitation had been transferred. On January 26,
1998, Judge Parker amended his earlier opinion, but again
granted summary judgment for ABCO.

II.

A.

The authority for the transfer to the District of New
Jersey is not recited in the order. The most obvious source
is 28 U.S.C. S 1404(a) which provides: "For the convenience
of parties and witnesses, in the interest of justice, a district
court may transfer any civil action to any other district or
division where it might have been brought."4 This section
makes no mention of transfer by stipulation, in contrast to
the succeeding section which allows for transfer by "motion,
consent or stipulation of all parties," but only for (intra-
court) inter-division, not inter-district transfer. See 28
U.S.C. S 1404(b). The implication of the juxtaposition of
these rules is that inter-district transfer by stipulation is
inappropriate. See In re Orthopedic Bone Screw Prods. Liab.
Litig., 

 n.6 (E.D. Pa. 1995) ("It
should be recalled that the parties, with court approval,
can only stipulate to transfer a civil action to another
division within a district, but not to another district."). This
conclusion is supported by the history and policies
undergirding S 1404(a).

By its terms, S 1404(a) requires that a court make a case
specific determination that such a transfer is proper. See
_________________________________________________________________

4. A transfer is typically deemed to be complete when the files of a case
are lodged in the transferee court. See 15 Wright, Miller & Cooper,
Federal Practice and Procedure: Jurisdiction 2dS 3846 (2d Ed. 1986).
When the papers are sent, "the transferor court--and the appellate court
that has jurisdiction over it--lose all jurisdiction over the case and may
not proceed further with regard to it." Id. According to the docket
sheet,
the files were all sent to New Jersey after the stipulated transfer. The
New Jersey file, which we have examined, contains the Southern District
of New York papers. Be that as it may, shifting papers cannot validate
an otherwise invalid transfer, or extend the scope of a limited transfer.

                                5
Stewart Organization, Inc. v. Ricoh Corp., 

(1988). "The idea behind S 1404(a) is that where a `civil
action' to vindicate a wrong--however brought in a
court--presents issues and requires witnesses that make
one District Court more convenient than another, the trial
judge can, after findings, transfer the whole action to the
more convenient court." Continental Grain Co. v. Barge FBL-
585, 

 (1960) (emphasis added). In Stewart
Organization, the Court concluded that a forum selection
clause in a contract was relevant, but not binding, in a
S 1404(a) determination. "The district court also must weigh
in the balance the convenience of the witnesses and those
public-interest factors of systemic integrity and fairness
that, in addition to private concerns, come under the
heading of `the interest of justice.' " Id. at 29. The Court
stated that "[a] motion to transfer underS 1404(a) thus
calls on the district court to weigh in the balance a number
of case-specific factors." Id.

No such requirement attends a S 1404(b) transfer, which
is much less cumbersome than its inter-district
counterpart. A case that is the subject of an intra-district
(S 1404(b)) transfer can be handled by the same lawyer(s)
and will be governed by the same rules and procedures. A
case that is the subject of a S 1404(a) transfer is unloaded
onto an entirely new system. The former is like moving a
card table within a house from the living room to the
kitchen; the latter is like collecting all the chips and going
to the neighbor's house to play. The house rules, as any
gamesperson knows, are usually different. For these
reasons, the stipulated transfer of any of White's claims is
highly problematic. There is no indication in the record that
Magistrate Judge Fox engaged in the "flexible and
multifaceted analysis that Congress intended to govern
motions to transfer within the federal system." Stewart
Organization, 487 U.S. at 31.5

We acknowledge that we have, in dicta, stated that
written findings of fact and law need not always accompany
_________________________________________________________________

5. Had Magistrate Judge Fox engaged in such an evaluation, perhaps he
might have decided that a S 1404(a) transfer was appropriate. We can
only speculate.

                               6
a transfer order. See Plum Tree, Inc. v. Stockment, 

 (3d Cir. 1973). While scolding the district court for
failing to do so in a difficult case, the Plum Tree panel noted
that "we have not imposed a requirement that district
courts make findings of fact and conclusions of law with
respect to the three factors stated in 28 U.S.C.S 1404(a) on
each transfer motion." Id. at 756. The Supreme Court's
Stewart Organization decision focused on the requirement
of considering multiple factors, not the requirement of
stating them, so Plum Tree's dicta is undisturbed.

We do not need to decide whether a court must always
state the reasons for every S 1404(a) transfer. We do note,
however, that in the absence of anything but a scrawled "so
ordered" under a stipulation to transfer, there is every
indication that the court relied on the stipulation alone in
its decision to transfer and failed to engage in the requisite
balancing. Accordingly, we conclude that the transfer was
invalid, and none of White's claims against ABCO, or
anyone else, were transferred out of the Second Circuit.

B.

Even had Magistrate Judge Fox engaged in the requisite
balancing before transferring the case, however, we would
still not have jurisdiction to hear this appeal for several
reasons. First, even appropriate stipulated transfers require
the consent of all affected parties. See S 1404(b); 15 Wright,
Miller & Cooper, Federal Practice and Procedure:
Jurisdiction 2d S 3844 (2d Ed. 1986). In this case, it does
not appear that ABCO stipulated or otherwise consented to
having its dispute with White transferred to New Jersey.
Although S 1404(a) contemplates transfer without the
consent of all the parties, for transfer to be effective all
relevant parties must be apprised that the court is
considering a transfer and have the opportunity to voice
opposition. See id. There is no evidence that ABCO was
given an opportunity to oppose the transfer in this case, or
that it was informed that its rights might be affected by it.

A better interpretation of Magistrate Judge Fox's order is
that the transfer was preceded by a severance. Nothing
within S 1404 prohibits a court from severing claims

                                7
against some defendants from those against others and
transferring the severed claims. See id.S 3845 & nn.27-29.
Before effecting such a severance, a judge should weigh the
convenience to the parties requesting transfer against the
potential inefficiency of litigating the same facts in two
separate forums. See Sunbelt Corp. v. Nobel, Denton &
Associates, Inc., 

, 33 (3d Cir. 1991) (stating that
a court " `should not sever if the defendant over whom
jurisdiction is retained is so involved in the controversy to
be transferred that partial transfer would require the same
issues to be litigated in two places' ") (quoting Liaw Su Teng
v. Skaarup Shipping Corp., 

, 1148 (5th Cir.
1984)). In this case, however, although the underlying facts
are intertwined, Magistrate Judge Fox could have properly
concluded that the interests of judicial economy dictated
such a severance and transfer.

Rule 21 allows that "[a]ny claim against a party may be
severed and proceeded with separately." F.R.C.P. Rule
21(b). Although Magistrate Judge Fox never made a formal
Rule 21 severance, all involved parties treated the case as
if it had been so severed, with White and Hamm's
Sanitation transferred to New Jersey, while White's claims
against ABCO remained in New York for purposes of appeal.6
_________________________________________________________________

6. In Chrysler Credit Corp. v. Country Chrysler, Inc., 

 (10th
Cir. 1991), the court concluded that a S 1404(a) transfer effectively
transferred all parties and claims in the case. Chrysler dealt with a case
which had been explicitly bifurcated pursuant to a Rule 42(b) motion,
which allows for the separate trials of claims within an action "in
furtherance of convenience or to avoid prejudice, or when separate trials
will be conducive to expedition or economy." F.R.C.P. 42(b). The court
was careful to distinguish this situation from one in which claims had
been severed pursuant to Rule 21. A separation pursuant to Rule 42(b)
separates elements of the complaint for trial, but all the aspects
"remain[ ] part of one single action which would result in a single
judgment." Id. at 1519. On the other hand, if claims are severed
pursuant to Rule 21 they "become independent actions with separate
judgments entered in each." Id. Nothing on the face of Rule 21 indicates
that it must be explicitly invoked in order to have effect. There must be,
however, a strong indication that the judge intended to effect a
severance. See Allied Elevator v. East Texas State Bank of Buna, 

, 36 (5th Cir. 1992). Magistrate Judge Fox's actions demonstrate
that he had such an intention.

                               8
In a letter from Magistrate Judge Fox to Judge Parker on
January 8, 1998, the "Re" line reads "White v. Hamm's
Sanitation, Inc." and the body of the letter states that "the
parties have consented to transfer the case to New Jersey."
There is no mention of ABCO as one of "the parties." More
importantly, Judge Parker continued to exercise jurisdiction
over the White/ABCO dispute in the Southern District of
New York, not only by his Opinion of January 26, 1998,
but also by his October 8th, 1998 order that dismissed all
claims against ABCO. Finally, White treated the ABCO
controversy as being alive in New York, not New Jersey, by
filing his initial appeal in the Court of Appeals for the
Second Circuit.

In sum, even if White's other claims had been properly
transferred, Magistrate Judge Fox effectively severed them
from the claims against ABCO, and White's claims against
ABCO would still have remained in the Southern District of
New York.

III.

In view of the foregoing, the transfer order of Magistrate
Judge Fox resulted in an invalid--and therefore
ineffectual--inter-district transfer by stipulation.
Alternatively, the order effected a valid severance. Under
either scenario, jurisdiction over the ABCO/White claims
was never validly transferred from the Southern District of
New York to the District of New Jersey. Moreover, in a
practical sense, the case in New Jersey is over and the case
in New York is alive.7 Under these circumstances, the best
course of action is to transfer the appeal to the United
States Court of Appeals for the Second Circuit pursuant to
28 U.S.C. S 1631. That section allows for transfers from an
appellate court without jurisdiction to the appellate court in
which the appeal should have been filed.
_________________________________________________________________

7. We note, however, that even if the transfer were treated as plenary
and legitimate, the District of New Jersey has not entered a final
judgment that makes any mention of ABCO. Lacking afinal order to
review, we would not have jurisdiction to hear the merits.

                                9
A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               10