Filed: May 02, 2014
Latest Update: Mar. 02, 2020
Summary: Filed: May 2, 2014 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1839 (1:12-cv-01780-WMN) JOYCE BARLOW, Plaintiff - Appellee, v. COLGATE PALMOLIVE COMPANY, Defendant – Appellant, and JOHN CRANE-HOUDAILLE, INCORPORATED; E.L. STEBBING & COMPANY, INC.; HAMPSHIRE INDUSTRIES, INC., f/k/a John H. Hampshire Company; UNIVERSAL REFRACTORIES COMPANY; J.H. FRANCE REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER COMPANY, f/k/a Kelly Springfield Tire Company; MCIC, INC., and its remaining Dire
Summary: Filed: May 2, 2014 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 13-1839 (1:12-cv-01780-WMN) JOYCE BARLOW, Plaintiff - Appellee, v. COLGATE PALMOLIVE COMPANY, Defendant – Appellant, and JOHN CRANE-HOUDAILLE, INCORPORATED; E.L. STEBBING & COMPANY, INC.; HAMPSHIRE INDUSTRIES, INC., f/k/a John H. Hampshire Company; UNIVERSAL REFRACTORIES COMPANY; J.H. FRANCE REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER COMPANY, f/k/a Kelly Springfield Tire Company; MCIC, INC., and its remaining Direc..
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Filed: May 2, 2014
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1839
(1:12-cv-01780-WMN)
JOYCE BARLOW,
Plaintiff - Appellee,
v.
COLGATE PALMOLIVE COMPANY,
Defendant – Appellant,
and
JOHN CRANE−HOUDAILLE, INCORPORATED; E.L. STEBBING & COMPANY,
INC.; HAMPSHIRE INDUSTRIES, INC., f/k/a John H. Hampshire
Company; UNIVERSAL REFRACTORIES COMPANY; J.H. FRANCE
REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER COMPANY,
f/k/a Kelly Springfield Tire Company; MCIC, INC., and its
remaining Director Trustees, Robert I. McCormick, Elizabeth
McCormick and Patricia Schunk; CBS CORPORATION, a Delaware
Corporation f/k/a Viacom, Inc., Successor by merger to CBS
Corporation, a Pennsylvania Corporation, f/k/a Westinghouse
Electric Corporation; METROPOLITAN LIFE INSURANCE COMPANY;
A.W. CHESTERTON COMPANY; CERTAINTEED CORPORATION,
individually and as successor to Bestwall Gypsum Co.; KAISER
GYPSUM COMPANY, INC.; UNION CARBIDE CORPORATION;
INTERNATIONAL PAPER COMPANY, individually and as successor
in interest to Champion International Corporation and U.S.
Plywood Corp.; BAYER CROPSCIENCE, INC., individually and as
successor in interest to Benjamin Foster Co., Amchem
Products, Inc., H.B. Fuller Co., Aventis CropScience USA,
Inc., Rhone−Poulenc AG Company, Inc., Rhone−Poulenc, Inc.
and Rhodia, Inc.; COOPER INDUSTRIES, INC., individually and
as successors in interest to Crouse Hinds Co.; PFIZER
CORPORATION; SCHNEIDER ELECTRIC USA, INC., f/k/a Square D
Company, individually and as successor in interest to
Electric Controller and Manufacturing Co.; GEORGIA−PACIFIC,
LLC, individually and as successor to Bestwall Gypsum Co.;
FOSTER WHEELER CORPORATION; THE WALLACE & GALE ASBESTOS
SETTLEMENT TRUST; CONWED CORPORATION; GENERAL ELECTRIC
COMPANY; and GEORGIA PACIFIC CORPORATION, individually and
as successor in interest to Bestwall Gypsum Co.,
Defendants.
No. 13-1840
(1:12-cv-01781-WMN)
CLARA G. MOSKO,
Plaintiff - Appellee,
v.
COLGATE PALMOLIVE COMPANY,
Defendant – Appellant,
and
JOHN CRANE−HOUDAILLE, INCORPORATED; E.L. STEBBING & CO.,
INCORPORATED; HAMPSHIRE INDUSTRIES, INC., f/k/a John H.
Hampshire Company; UNIVERSAL REFRACTORIES COMPANY; J.H.
FRANCE REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER
COMPANY, f/k/a Kelly Springfield Tire Company; MCIC, INC.,
and its remaining Director Trustees, Robert I. McCormick,
Elizabeth McCormick and Patricia Schunk; CBS CORPORATION, a
Delaware Corporation f/k/a Viacom, Inc.,f/k/a Westinghouse
Electric Corporation; METROPOLITAN LIFE INSURANCE COMPANY;
A.W. CHESTERTON COMPANY; CERTAINTEED CORPORATION,
individually and as successor to Bestwall Gypsum Co.; KAISER
GYPSUM COMPANY, INC.; UNION CARBIDE CORPORATION;
INTERNATIONAL PAPER COMPANY, individually and as successor
in interest to Champion International Corporation and U.S.
Plywood Corp.; BAYER CROPSCIENCE, INC., individually and as
successor in interest to Benjamin Foster, Co., Amchem
Products, Inc., H.B. Fuller Co., Aventis Cropscience USA,
Inc., Rhone−Poulenc AG Company, Inc., Rhone−Poulenc, Inc.
and Rhodia, Inc.; COOPER INDUSTRIES, INC., individually and
as successors in interest to Crouse Hinds Co.; PFIZER
CORPORATION; SCHNEIDER ELECTRIC USA, INC., f/k/a Square D
Company, individually and as successor in interest to
2
Electric Controller and Manufacturing Co.; FOSTER WHEELER
CORPORATION; THE WALLACE & GALE ASBESTOS SETTLEMENT TRUST;
CONWED CORPORATION; GEORGIA−PACIFIC, LLC, individually and
as successor to Bestwall Gypsum Co.; 3M COMPANY;
MALLINCKRODT, INC.; CROWN, CORK & SEAL CO., INC.; KOPPERS
COMPANY, INC.; WALTER E. CAMPBELL CO., INC.; KRAFFT−MURPHY
COMPANY, individually and as successor to National Asbestos
Company, a dissolved Delaware Corporation; AC&R INSULATION
CO., INC.; COTY, INC.; JOHNSON & JOHNSON; LUZENAC AMERICA
INC.; R.T. VANDERBILT COMPANY, INC.; BAYER CORPORATION, as
successor in interest to Sterling Drug, Inc., and
Sterling−Winthrop Inc.; and GENERAL ELECTRIC COMPANY,
Defendants.
O R D E R
The Court amends its opinion filed April 30, 2014, as
follows:
On page 28, first full paragraph, line 1 -- “the
opinion is Durango Crushers” is corrected to read “the opinion
in Durango Crushers.”
For the Court – By Direction
/s/ Patricia S. Connor
Clerk
3
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 13-1839
JOYCE BARLOW,
Plaintiff - Appellee,
v.
COLGATE PALMOLIVE COMPANY,
Defendant – Appellant,
and
JOHN CRANE−HOUDAILLE, INCORPORATED; E.L. STEBBING & COMPANY,
INC.; HAMPSHIRE INDUSTRIES, INC., f/k/a John H. Hampshire
Company; UNIVERSAL REFRACTORIES COMPANY; J.H. FRANCE
REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER COMPANY,
f/k/a Kelly Springfield Tire Company; MCIC, INC., and its
remaining Director Trustees, Robert I. McCormick, Elizabeth
McCormick and Patricia Schunk; CBS CORPORATION, a Delaware
Corporation f/k/a Viacom, Inc., Successor by merger to CBS
Corporation, a Pennsylvania Corporation, f/k/a Westinghouse
Electric Corporation; METROPOLITAN LIFE INSURANCE COMPANY;
A.W. CHESTERTON COMPANY; CERTAINTEED CORPORATION,
individually and as successor to Bestwall Gypsum Co.; KAISER
GYPSUM COMPANY, INC.; UNION CARBIDE CORPORATION;
INTERNATIONAL PAPER COMPANY, individually and as successor
in interest to Champion International Corporation and U.S.
Plywood Corp.; BAYER CROPSCIENCE, INC., individually and as
successor in interest to Benjamin Foster Co., Amchem
Products, Inc., H.B. Fuller Co., Aventis CropScience USA,
Inc., Rhone−Poulenc AG Company, Inc., Rhone−Poulenc, Inc.
and Rhodia, Inc.; COOPER INDUSTRIES, INC., individually and
as successors in interest to Crouse Hinds Co.; PFIZER
CORPORATION; SCHNEIDER ELECTRIC USA, INC., f/k/a Square D
Company, individually and as successor in interest to
Electric Controller and Manufacturing Co.; GEORGIA−PACIFIC,
LLC, individually and as successor to Bestwall Gypsum Co.;
FOSTER WHEELER CORPORATION; THE WALLACE & GALE ASBESTOS
SETTLEMENT TRUST; CONWED CORPORATION; GENERAL ELECTRIC
COMPANY; and GEORGIA PACIFIC CORPORATION, individually and
as successor in interest to Bestwall Gypsum Co.,
Defendants.
No. 13-1840
CLARA G. MOSKO,
Plaintiff - Appellee,
v.
COLGATE PALMOLIVE COMPANY,
Defendant – Appellant,
and
JOHN CRANE−HOUDAILLE, INCORPORATED; E.L. STEBBING & CO.,
INCORPORATED; HAMPSHIRE INDUSTRIES, INC., f/k/a John H.
Hampshire Company; UNIVERSAL REFRACTORIES COMPANY; J.H.
FRANCE REFRACTORIES COMPANY; THE GOODYEAR TIRE & RUBBER
COMPANY, f/k/a Kelly Springfield Tire Company; MCIC, INC.,
and its remaining Director Trustees, Robert I. McCormick,
Elizabeth McCormick and Patricia Schunk; CBS CORPORATION, a
Delaware Corporation f/k/a Viacom, Inc.,f/k/a Westinghouse
Electric Corporation; METROPOLITAN LIFE INSURANCE COMPANY;
A.W. CHESTERTON COMPANY; CERTAINTEED CORPORATION,
individually and as successor to Bestwall Gypsum Co.; KAISER
GYPSUM COMPANY, INC.; UNION CARBIDE CORPORATION;
INTERNATIONAL PAPER COMPANY, individually and as successor
in interest to Champion International Corporation and U.S.
Plywood Corp.; BAYER CROPSCIENCE, INC., individually and as
successor in interest to Benjamin Foster, Co., Amchem
Products, Inc., H.B. Fuller Co., Aventis Cropscience USA,
Inc., Rhone−Poulenc AG Company, Inc., Rhone−Poulenc, Inc.
and Rhodia, Inc.; COOPER INDUSTRIES, INC., individually and
as successors in interest to Crouse Hinds Co.; PFIZER
CORPORATION; SCHNEIDER ELECTRIC USA, INC., f/k/a Square D
Company, individually and as successor in interest to
Electric Controller and Manufacturing Co.; FOSTER WHEELER
CORPORATION; THE WALLACE & GALE ASBESTOS SETTLEMENT TRUST;
2
CONWED CORPORATION; GEORGIA−PACIFIC, LLC, individually and
as successor to Bestwall Gypsum Co.; 3M COMPANY;
MALLINCKRODT, INC.; CROWN, CORK & SEAL CO., INC.; KOPPERS
COMPANY, INC.; WALTER E. CAMPBELL CO., INC.; KRAFFT−MURPHY
COMPANY, individually and as successor to National Asbestos
Company, a dissolved Delaware Corporation; AC&R INSULATION
CO., INC.; COTY, INC.; JOHNSON & JOHNSON; LUZENAC AMERICA
INC.; R.T. VANDERBILT COMPANY, INC.; BAYER CORPORATION, as
successor in interest to Sterling Drug, Inc., and
Sterling−Winthrop Inc.; and GENERAL ELECTRIC COMPANY,
Defendants.
Appeals from the United States District Court for the District
of Maryland, at Baltimore. William M. Nickerson, Senior
District Judge. (1:12-cv-01780-WMN; 1:12-cv-01781-WMN)
Argued: March 19, 2014 Decided: April 30, 2014
Before FLOYD, Circuit Judge, DAVIS, Senior Circuit Judge, and
Max O. COGBURN, United States District Judge for the Western
District of North Carolina, sitting by designation.
Affirmed by published opinion. Senior Judge Davis wrote the
majority opinion, in which Judge Cogburn joined. Judge Floyd
wrote a dissenting opinion.
ARGUED: William Balden Adams, QUINN EMANUEL URQUHART & SULLIVAN,
LLP, New York, New York, for Appellant. Jennifer Louise Lilly,
LAW OFFICES OF PETER G. ANGELOS, Baltimore, Maryland, for
Appellees. ON BRIEF: Thomas P. Bernier, SEGAL MCCAMBRIDGE SINGER
& MAHONEY, Baltimore, Maryland; Faith E. Gay, QUINN EMANUEL
URQUHART & SULLIVAN, LLP, New York, New York, for Appellant.
3
DAVIS, Senior Circuit Judge:
The federal removal statute immunizes from review -
appellate or otherwise - any order remanding to state court a
case removed to federal court, with an exception for certain
civil rights cases or suits against federal officers. 28 U.S.C.
§ 1447(d). In particular, the statute has been interpreted to
“preclude review only of remands for lack of subject-matter
jurisdiction and for defects in removal procedure.” Powerex
Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 229
(2007). The removing defendant in this case, the Colgate
Palmolive Company, asks us to hold that the statute permits an
exception to its prohibition: that a federal court may strike a
remand order and retrieve a remanded case from its state cousin
as a sanction against plaintiffs’ counsel for making
misrepresentations to the federal court related to the existence
of subject-matter jurisdiction. It invokes in support the
district court’s inherent authority and Rules 11 and 60 of the
Federal Rules of Civil Procedure.
We are unpersuaded. In the face of Congress’ explicit
direction to federal courts that an order remanding a case for
lack of subject-matter jurisdiction after it has been removed
“is not reviewable on appeal or otherwise,” 28 U.S.C. § 1447(d),
we reject Colgate’s collateral attack on the remand orders in
4
this case and affirm the order of the district court insofar as
it ruled that it lacked jurisdiction.
I.
Joyce Barlow and Clare Mosko separately sued Colgate and a
variety of other companies in Maryland state court, asserting
that each of the defendants’ products had at some point exposed
them to asbestos. With respect to Colgate, the plaintiffs’
theory was that its “Cashmere Bouquet” line of powder makeup
products contained unhealthy levels of asbestos and had thereby
contributed to the plaintiffs’ health problems. Despite
plaintiffs’ joinder of in-state defendants, Colgate removed the
two cases to federal court on the basis of diversity of
citizenship, asserting fraudulent joinder as to the in-state
defendants, and alleging that the plaintiffs’ deposition
testimony and interrogatory responses demonstrated that they did
not intend to pursue a claim against any defendant other than
Colgate, a citizen of Delaware and New York.
After removal, the plaintiffs’ lawyers moved to remand the
cases to state court, arguing that they had viable claims
against the nondiverse defendants. The district court agreed,
finding that although only Colgate’s Cashmere Bouquet products
had been identified by the plaintiffs as the source of their
asbestos exposure, there was still more than a “glimmer of
hope,” Hartley v. CSX Transportation, Inc., 187 F.3d 422, 426
5
(4th Cir. 1999), that the plaintiffs could identify a basis to
recover against the nondiverse defendants as discovery
proceeded. J.A. 358, 368. The cases were remanded.
On remand, counsel for the plaintiffs asked the state court
to consolidate the two cases because, among other reasons,
“[a]ll [plaintiffs] allege exposure to asbestos-containing
Cashmere Bouquet powder products only and do not allege exposure
to any other asbestos, asbestos-containing products or asbestos-
containing dust in any other form.” J.A. 474 (emphasis added).
Irritated by the change in tune, Colgate then promptly moved in
the district court for vacatur of the remand order as a
sanction. The district court denied the motion, stating that
reconsideration of the remand order is prohibited by the removal
statute and pertinent Circuit law. The district court stated
further that it was “not convinced that counsel’s conduct is
sanctionable” because the alleged misrepresentations were
“attributable to different attorneys in markedly different
litigation contexts.” J.A. 1108.
II.
On appeal, Colgate contends that it was error for the
district court to rule that it did not have the authority to
consider whether plaintiffs’ counsel committed misconduct and
“whether such misconduct warrants relief from the Remand
Orders.” App. Reply Br. 2. It asks that we reverse the district
6
court’s order denying the motion for vacatur and remand the case
with instructions that the remand orders be vacated. Colgate
maintains that the district court had authority, pursuant to its
inherent authority and Rules 11 and 60(b)(3) of the Federal
Rules of Civil Procedure, to strike the remand orders as a
sanction. We review questions of law de novo. Trans Energy, Inc.
v. EQT Prod. Co., 743 F.3d 895, 900 (4th Cir. 2014).
Fueled by a desire to cut off costly and prolonged
jurisdictional litigation, Powerex, 551 U.S. at 238, the federal
removal statute generally prohibits review of orders remanding
removed cases:
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 1442 [cases against federal officers] or 1443
[certain civil rights cases] of this title shall be
reviewable by appeal or otherwise.
28 U.S.C. § 1447(d) (emphasis added). Read in conjunction with
28 U.S.C. § 1447(c), the statute’s prohibition has been
construed to preclude review of remands “colorably
characterized” as for lack of subject-matter jurisdiction or
defects in removal procedure. Powerex, 551 U.S. at 234, 229.
Courts may not review, for example, an order remanding a case
for lack of diversity jurisdiction even in the face of evidence
of fraudulent joinder, In re Lowe,
102 F.3d 731, 733-34 (4th
Cir. 1996), or an order remanding a case for lack of federal
7
question jurisdiction after the district court has held that a
federal statute did not completely preempt state law. In re
Blackwater Security Consulting LLC, 460 F.3d 576, 585 (4th Cir.
2006). The corollary to the statute’s prohibition is that courts
may review remands when they are not based on a lack of subject-
matter jurisdiction or a defect in removal procedure, such as
when the review is of a decision collateral and severable from
the remand order, or when the remand order is outside the
district court’s authority. Lisenby v. Lear,
674 F.3d 259, 261
(4th Cir. 2012).
Colgate frames the issue in this case as whether the
statute permits appellate review of an order denying a request
to strike a remand order as a sanction for counsel’s alleged
misrepresentation regarding the existence of subject-matter
jurisdiction. 28 U.S.C. § 1447(d). Put differently, Colgate,
seeking to draw us into the merits (rather than the procedural
correctness) of the district court’s order, asks us to hold that
we may review a remand order, even though the case does not
relate to the exceptions noted in 28 U.S.C. § 1447(d), if the
basis for review relates to a material misrepresentation made by
counsel that induced the district court to remand the case. We
decline Colgate’s invitation. Put simply, we discern no basis to
infer that Congress intended to etch a litigation-integrity
8
policing exception into its prohibition on the review of remand
orders.
As an initial matter, no court has ever embraced the
argument Colgate puts forward today, and for a simple reason: it
is a long-standing principle that entry of an order remanding a
case to state court divests the district court “of all
jurisdiction in [the] case and preclude[s] it from entertaining
any further proceedings of any character, including the
defendants’ motion to vacate the original remand order.” Three J
Farms, Inc. v. Alton Box Bd. Co., 609 F.2d 112, 115 (4th Cir.
1979) (emphasis added). In this context, it is manifest that the
law favors finality so that jurisdictional litigation comes to
an end and the parties can proceed to the merits and avoid
unnecessary delay and expense. For Colgate to have returned to
the district court to seek a sanction in the form of vacatur of
the remand orders is, to put it simply, an anomaly in federal
jurisdiction.
Colgate insists that counsel’s misrepresentation undermines
the basis for the remand order, and it cites Rules 11 and
60(b)(3) of the Federal Rules of Civil Procedure and the case
law describing the district court’s inherent authority as
support for its argument that a district court may take some
9
remedial action to sanction a lawyer for misconduct. ∗ But there
is nothing in the Federal Rules or the case law bearing on a
federal court’s inherent authority that authorizes the retention
of federal jurisdiction as a sanction. Nor could there be: while
a defendant certainly has a right to a federal forum, it is
something quite different to argue that a district judge should
claw a case back into federal court as a remedy to deter future
attorney misconduct or to remedy a perceived injury to the
integrity of the litigation process. After all, a state court
“operates with an eye to justice, just the same as that of the
federal court,” and both equally offer Colgate a meaningful
opportunity to vigorously litigate its defense on the merits. 20
Charles Alan Wright & Mary Kay Kane, Federal Practice and
Procedure § 43 (2d ed. 2011) (quoting Pabst v. Roxana Petroleum
Co., 30 F.2d 953, 954 (S.D. Tex. 1929)).
Colgate counters with a clever but ultimately misplaced
argument: the federal statute prohibits “review” of remand
∗
Rule 11 specifically authorizes the imposition of
sanctions for misrepresentations, but the sanction “must be
limited to what suffices to deter repetition of the conduct or
comparable conduct by others similarly situated,” Fed. R. Civ.
P. 11(c)(4). Analogously, Rule 60(b)(3) provides that a court
“may relieve a party” from an “order” for “fraud (whether
previously called intrinsic or extrinsic), misrepresentation, or
misconduct by an opposing party,” Fed. R. Civ. P. 60(b)(3).
Furthermore, “the inherent power . . . allows a federal court to
vacate its own judgment upon proof that a fraud has been
perpetrated upon the court,” Chambers v. NASCO, Inc., 501 U.S.
32, 44 (1991).
10
orders, but a “request for vacatur as either a sanction or
pursuant to Rule 60(b)(3) based on misrepresentations and
misconduct does not seek . . . ‘review’” of a remand order. App.
Br. 21. Review, argues Colgate, is “directed at the substance of
what is being reviewed, not at matters collateral” to the merits
of the remand order. App. Br. 21. Here, the issue is whether the
district court should impose a sanction against plaintiffs’
counsel for allegedly misrepresenting their intent to pursue
relief against nondiverse defendants; Colgate argues that its
request is therefore unrelated to the merits of the remand
orders and is instead about something collateral to the remand
orders, i.e., attorney misconduct.
Colgate’s proffered distinction suffers from three flaws.
First, creating an attorney-misconduct exception to the
prohibition on review of remand orders would be contrary to
Congress’ intent, as evidenced by the text and underlying policy
goals of the federal statute. The statute provides that “[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) (emphasis added); a phrase of such breadth clearly
sweeps collateral challenges on remand orders within the
statute’s prohibition. Our case law construing the text is even
clearer: we have said, unequivocally, that “the district court
has one shot, right or wrong,” to decide whether a removed case
11
should be remanded. Lowe, 102 F.3d at 735 (alterations,
quotations, and citations omitted).
Even more conclusive is that the policy underlying 28
U.S.C. § 1447(d) – to neutralize “prolonged litigation on
threshold nonmeritorious questions” – weighs strongly against
the argument that Congress intended to carve an attorney-
misconduct exception into the federal statute. Powerex, 551 U.S.
at 237. The prohibition on reviewability of remand orders has
been “a part of American jurisprudence for at least a century,”
Lowe, 102 F.3d at 734, and we have said that the underlying
policy is so potent that it mandates nonreviewability “even if
the remand order is manifestly, inarguably erroneous.”
Lisenby,
674 F.3d at 261 (citations and quotations omitted). The Supreme
Court has acknowledged that the absolute nature of the
prohibition creates “undesirable consequences” even in cases
with significant countervailing federal interests.
Powerex, 551
U.S. at 237. The consequence of all of this is that it is
difficult, if not impossible, for us to conclude that Congress
intended implicitly for the rules against litigation misconduct
to create an escape hatch within its robust statutory
prohibition on the reviewability of remand orders.
Second, Colgate’s argument that it is not seeking “review”
is simply incorrect because its request necessarily requires a
merits review of the remand orders. Colgate’s argument boils
12
down to the following: the plaintiffs’ fraudulent joinder was so
deeply buried that they managed to deceive the district court
into remanding, and now that we know the truth because of new
evidence (the transcript of what plaintiffs’ counsel told the
state court, post remand), the remand must be vacated as a
sanction. The argument fails because it seeks to relitigate the
merits of an issue already litigated: whether the plaintiffs
fraudulently joined the nondiverse defendants, which was the
issue the first-time around. Colgate had its chance to prove
fraudulent joinder. It failed. It does not get a second try with
an improved record.
Third, the cases cited by Colgate, in support of the
proposition that its request for vacatur as a sanction is not
“review” of a remand order, are easily distinguishable because
they involved vacatur of remands based on rulings several steps
removed from the core jurisdictional inquiry. In Aquamar v. Del
Monte Fresh Produce, 179 F.3d 1279, 1285-89 (11th Cir. 1999),
the Eleventh Circuit reversed the district court’s dismissal of
claims on the merits, ultimately requiring vacatur of the
district court’s subsequent remand because the erroneous
dismissal of the claims removed the nondiverse defendants; in
Tramonte v. Chrysler Corp.,
136 F.3d 1025, 1027-28 (5th Cir.
1998), the Fifth Circuit held that an erroneous recusal decision
that preceded the remand order required vacatur of the remand
13
order; and in Williams v. Beemiller, Inc., 527 F.3d 259, 264 (2d
Cir. 2008), the Second Circuit assessed the “scope of authority
of a magistrate judge,” a question not requiring review of the
merits of the remand order. These cases involved rulings that
preceded the remand orders and that were on issues of
substantive law wholly unrelated to the merits of the remand.
Wright &
Kane, supra. Even assuming we agree with these out-of-
Circuit cases, which we need not and do not decide, the case
before us is different because Colgate’s contention attacks the
district court’s analysis of the merits of the remand. That is,
Colgate sought a reconsideration of the merits with a new
(complete) record. And that is barred by statute.
The bottom line is that if Congress wanted to carve out an
attorney-misconduct exception to the prohibition on review of
remand orders, it would have done so: the text of the statute
itself contains two such exceptions, 28 U.S.C. § 1447(d), and
other statutes contain express exemptions for certain types of
cases. E.g., Blackwater Security Consulting, 460 F.3d at 582-83
n.5 (discussing 25 U.S.C. § 355, which creates an exemption for
certain cases involving land restrictions to the Five Civilized
Tribes of Oklahoma). But in the absence of any express
indication otherwise, “[w]e will not ignore a clear
jurisdictional statute in reliance upon supposition of what
Congress really wanted.”
Powerex, 551 U.S. at 237. We take the
14
Supreme Court at its word in its instruction to us that
“[a]ppellate courts must take [the § 1447(d)] prescription
seriously.” Id. at 238. Thus, because remand orders are not
reviewable on appeal or otherwise, the district court correctly
ruled that it lacked jurisdiction to revisit its remand orders;
dressing up the request that it do so as a motion for sanctions
does not alter the analysis or the result.
III.
For the reasons set forth, we DENY AS MOOT Colgate’s motion
for expedited consideration and we affirm the order of the
district court insofar as it ruled that it lacked jurisdiction.
AFFIRMED
15
FLOYD, Circuit Judge, dissenting:
I agree that we cannot vacate the remand orders and return
the lawsuits to the district court pursuant to Federal Rule of
Civil Procedure 11; but that determination pertains to the type
of remedy available, not the threshold issue of whether there is
jurisdiction to consider the motion. Because I think that the
district court had jurisdiction to entertain Colgate’s Rule 11
motion, I would reverse the district court’s order denying that
motion for lack of jurisdiction. I would also reverse the
district court’s denial of Colgate’s Rule 60(b)(3) motion for
lack of jurisdiction insofar as vacating the remand orders does
not require any prohibited “review” of those orders. Further,
because the district court indicated how it would have ruled if
it thought that it had jurisdiction, I would reach the merits of
Colgate’s motions on appeal. I respectfully dissent.
I.
To fully grasp the gravity of plaintiffs’ shifty positions
and counsel’s misrepresentations in the district court, a more
detailed recitation of the facts is necessary. The majority
provided less than two pages of facts and glossed over the
written declarations made by plaintiffs while the lawsuits were
removed to federal court. I therefore feel duty-bound to shed
more light on plaintiffs’ assertions that form the very basis of
Colgate’s motions and this appeal beyond the general statement
16
that, “After removal, the plaintiffs’ lawyers moved to remand
the case to state court, arguing that they had viable claims
against the nondiverse defendants.” Ante at 5.
After Colgate removed Barlow’s and Mosko’s cases to federal
court, plaintiffs’ counsel 1 represented the following in a motion
for remand in Barlow’s case:
[T]here is some circumstantial evidence to suggest Ms.
Barlow could possibly have been exposed to asbestos-
containing products while working at RMR Corporation.
. . . The evidence is certainly circumstantial, but it
cannot be said that there is no possibility that a
claim could be successfully proven against any of the
non-diverse defendants.
(J.A. 106.) Based on the above representations, the district
court (Judge Nickerson) remanded Barlow’s case to state court.
Importantly, the district court relied solely on the claim that
Barlow was exposed to asbestos at RMR Corporation: “Barlow
argues that her joinder of the in-state defendants was not
fraudulent because there remains a possibility that she was
1
I use “plaintiffs’ counsel” to refer to both Barlow’s
attorney and Mosko’s attorney because their attorneys are the
same person, or at least hale from the same law firm. Although
different attorneys from the Law Offices of Peter G. Angelos
represented Barlow and Mosko at different stages of litigation
(e.g., Jennifer Lilly signed Barlow’s and Mosko’s respective
motions for remand in federal court, but Thomas Kelly signed
Barlow and Mosko’s joint motion for severance of their cases
from a first consolidated trial group and for consolidation of
their cases into a second trial group with two different cases),
Barlow and Mosko were at all times represented by the same
person for the same or similar matters in their separate cases
and were represented by the same person when matters were argued
on their behalves together.
17
exposed to asbestos while working at RMR Corporation[.] . . .
As a result, the Court finds that joinder of the in-state
defendants here was not fraudulent[.]” (Id. at 368.)
Similarly, in Mosko’s case, plaintiffs’ counsel represented
the following in the motion for remand:
[G]iven the extent of work that [Mosko] recalled being
done in the [Department of Agriculture] building [her
place of employment for twenty-eight years], it was
certainly plausible at the time that [Mosko] filed her
complaint that local defendants should be implicated.
. . . In fact, Plaintiff’s counsel do have some
circumstantial evidence that Mrs. Mosko may have been
exposed to asbestos at the Department of Agriculture
in the form of invoices [from an in-state defendant].
(Id. at 247.) Based on the above representations, the district
court (Judge Quarles) remanded Mosko’s case to state court.
Importantly, the district court relied solely on the claim that
Mosko was exposed to asbestos at the Department of Agriculture
(DOA) building: “Mosko has shown more than a ‘glimmer of hope’
of recovering against . . . an in-state defendant[] for exposure
during the renovations to the DOA building. Therefore, removal
was improper.” (Id. at 358.)
The remand orders in Mosko’s and Barlow’s cases were handed
down on September 21, 2012, and November 1, 2012, respectively.
Just eight days after the remand in Barlow’s case, plaintiffs
filed a joint motion to sever their cases from a consolidated
trial group for which trial was scheduled for March 12, 2013,
and to consolidate their cases with two other asbestos-related
18
cases into a separate trial group. See supra note 1. Colgate
opposed this motion on the basis that all lawsuits should
proceed separately because the alleged other sources of asbestos
(i.e., sources other than Cashmere Bouquet, such as the
plaintiffs’ individual workplaces) are so different that Colgate
could not receive a fair trial in a consolidated proceeding. In
reply to Colgate’s opposition, plaintiffs made the following
statements, which directly contradict their representations that
formed the bases of the remand orders:
[Plaintiffs] allege exposure to asbestos-containing
Cashmere Bouquet power products only and do not allege
exposure to any other asbestos, asbestos-containing
products or asbestos-containing dust in any other
form. . . . Colgate attempts to highlight alleged
differences in Plaintiffs’ worksites and occupations
as well as their alleged exposures to [other]
asbestos-containing products. However, neither
Plaintiffs’ worksites nor their occupations are
relevant to this consolidation because each of the
Plaintiffs were exposed, in their homes, to asbestos-
containing Cashmere Bouquet only. . . . The
occupations or worksites of the Plaintiffs should not
affect the consolidation of these cases for trial
because not one of the Plaintiffs testified that they
were exposed to asbestos as a result of their
employment. . . . Neither were any Plaintiffs exposed
to asbestos at any place of residence or secondarily
through any family member. . . . In short, there is
absolutely no evidence to indicate or even suggest
that the Plaintiffs were exposed to asbestos in any
form other than Cashmere Bouquet.
(J.A. 474–76 (paragraph breaks omitted) (emphases added).)
This last statement in particular represents a 180-degree
departure by plaintiffs’ counsel from statements made while the
19
cases were removed to federal court, and Colgate’s lawyers were
not the only ones who were “[i]rritated by [plaintiffs’] change
in tune.” Ante at 6. At the post-remand hearing in state court
regarding plaintiffs’ motion for severance and consolidation,
Judge Glynn recognized the bait-and-switch that occurred in
federal court and admonished plaintiffs’ counsel, stating,
“I can’t believe you actually told Judge Nickerson and Judge
Quarles one thing and tell me another.” (J.A. 494.) Judge
Glynn then posed the following question to plaintiffs’ counsel:
“It is a one-defendant case, right?” Counsel answered, “Yes.”
(Id.) Judge Glynn and plaintiffs’ counsel then engaged in the
following exchange:
THE COURT: So you told [Judges Quarles and Nickerson]
in the U.S. District Court that you were contending
[that] there was no viable claim against any of these
[in-state] defendants?
MR. KELLY: All we had to prove in federal court is
that there was a glimmer of hope. . . .
THE COURT: So once the case came back here [to state
court], the glimmer disappeared?
. . .
MR. KELLY: The glimmer is in federal court. What we
have here is what plaintiffs testified to. . . . The
federal court is well aware of that. We didn’t tell
the federal court anything that they didn’t know. We
didn’t tell the federal court anything different than
what we put in our pleadings here. . . .
THE COURT: What exactly did you tell [the federal
judges]? You told them you filed a claim against in-
state defendants?
MR. KELLY: . . . We recited how—what possibility
there was that each [plaintiff] might have been
exposed to the products of a Maryland defendant.
THE COURT: What was the possibility that you recited?
20
MR. KELLY: I just told you. Ms. Mosko worked at the
FDA. . . . But—so there is the possibility. But the
reality is—and the federal court knew that—is that she
said before it was removed, I wasn’t exposed at the
FDA. I wasn’t exposed at any location other than the
houses where I used Cashmere Bouquet. I mean, nothing
was held secret from the federal court. To suggest
other wise is wrong.
(Id. at 494–95 (emphasis added).)
Mr. Kelly’s statement above that plaintiffs “didn’t tell
the federal court anything different than what [plaintiffs] put
in [their] [post-remand] pleadings” is squarely refuted by
comparing the statements made in plaintiffs’ motions to remand
and the statements made in plaintiffs’ joint motion for
severance and consolidation. As recited above, in one instance,
after the case was removed, Ms. Lilly proclaimed that, “[T]here
is some circumstantial evidence to suggest [that] Ms. Barlow
could possibly have been exposed to asbestos-containing products
while working at RMR Corporation,” (id. at 106 (all emphasis
added)), and “Plaintiff’s counsel do have some circumstantial
evidence that Mrs. Mosko may have been exposed to asbestos at
the Department of Agriculture,” (id. at 247 (emphasis added)).
Yet, on remand, Mr. Kelly averred that, “there is absolutely no
evidence to indicate or even suggest that the Plaintiffs were
exposed to asbestos in any form other than Cashmere Bouquet.”
(Id. at 476 (all emphasis added).) What is worse is that the
respective district court judges based their remand decisions
21
precisely (and solely) on counsel’s factual misrepresentations.
(See id. at 358 (“Mosko has shown more than a ‘glimmer of hope’
of recovering against . . . an in-state defendant[] for exposure
during the renovations to the DOA building. Therefore, removal
was improper.” (emphasis added));
id. at 368 (“Barlow argues
that her joinder of the in-state defendants was not fraudulent
because there remains a possibility that she was exposed to
asbestos while working at RMR Corporation[.] . . . As a result,
the Court finds that joinder of the in-state defendants here was
not fraudulent[.]” (emphasis added)).) In other words, the
bait-and-switch worked.
Colgate then moved in the district court for relief from
the plaintiffs’ (now-confirmed) intentional misrepresentations
that were perpetrated upon the district judges while the cases
were removed. In particular, Colgate sought relief pursuant to
Rule 11 and asked that the district court sanction plaintiffs’
attorneys by imposing monetary penalties, referring them to the
state bar, and awarding to Colgate any other relief that the
district court deemed appropriate. The nearly identical motions
in Barlow’s and Mosko’s separate cases were consolidated before
Judge Nickerson. After a hearing on the motions, Colgate also
moved pursuant to Rule 60(b)(3) as a supplement to its Rule 11
motion. In its Rule 60(b)(3) motion, Colgate sought vacatur of
the remand orders.
22
On June 26, 2013, Judge Nickerson issued an order denying
Colgate’s motions. Although the district court characterized
the allegations in the motions as “substantial,” (id. at 712),
and acknowledged that the different statements by plaintiffs’
counsel “appear to be in sharp conflict” and that such conflict
is “troubling,” (id. at 1106), the court concluded that it did
not have jurisdiction to rule on the motions. This appeal
followed.
Having provided a more comprehensive account of the facts,
I will now explain why I disagree with the majority regarding
the district court’s jurisdiction to consider Colgate’s motions.
Then, because the district court indicated how it would have
ruled if it had jurisdiction, I will explain why I would reverse
the district court’s would-be denials of Colgate’s motions.
II. Jurisdiction
Although Colgate’s Rule 11 motion and Rule 60(b)(3) motion
seek relief based on the same misconduct, the motions require
separate jurisdictional analyses. Accordingly, I address the
district court’s jurisdiction regarding each motion in turn.
A. Rule 11
Although the majority’s research led the majority to the
conclusion that “no court has ever embraced the argument Colgate
puts forward,” ante at 9, my research shows otherwise (as does
examining the record, namely, Colgate’s motion for sanctions—one
23
of the two motions underlying this appeal). In fact, and au
contraire to the majority’s assertion, it appears that every
federal court that has addressed the issues of (1) whether
district courts retain jurisdiction to impose sanctions after
remand to state court and (2) whether appeals courts can review
such decisions regarding sanctions, has answered those questions
affirmatively. 2 Desert Sch. Fed. Credit Union v. Johnson, 473
2
To the extent that the majority’s statement that “no court
has ever embraced the argument Colgate puts forward,” ante at 9,
is narrowed to focus on Colgate’s request for vacatur of the
remand orders and reinstatement of federal jurisdiction as a
Rule 11 sanction, I agree with the majority’s assertion. But
vacatur pertains to the type of remedy/relief sought by Colgate,
not the threshold issue of whether the district court had
jurisdiction to consider Colgate’s Rule 11 motion in the first
instance. Although the district court appears to think that
vacatur is the only relief that Colgate now seeks, (see, e.g.,
J.A. 1106 (“A hearing was held on [the sanctions] motions . . .
and there, [Colgate] clarified that the relief sought was for
this Court to vacate, or strike, its remand orders.”); id.
(“[Colgate] clarified in the hearing that the only ‘sanction’
being sought was for the Court to strike the orders of
remand.”)), I could not find any statement in the transcript
from the motions hearing wherein Colgate disavowed or otherwise
withdrew its written prayers for any other (nonjurisdictional)
relief (e.g., monetary penalties and referral of plaintiffs’
counsel to the state bar). Moreover, I have a very difficult
time believing that Colgate’s lawyers abandoned their quest for
attorneys fees relating to what they believe to be fraudulently
obtained remand orders. But regardless of whether Colgate did
narrow the relief that it seeks, the specific remedy sought
pursuant to Rule 11 does not dictate whether the court has
jurisdiction to consider the motion in the first place. It is
wrong for the majority to leapfrog over the antecedent question
only to look back and claim that the district court lacked
jurisdiction to consider the relief sought in Colgate’s motion
because of the very relief sought in Colgate’s motion. This
bootstrapping approach is, quite simply, not the law.
24
F. App’x 804 (9th Cir. 2012) (cited by Colgate; “[T]he district
court had jurisdiction to impose Rule 11 sanctions in the amount
of attorney’s fees even after remanding the case to state
court.”); Bryant v. Britt, 420 F.3d 161, 164 (2d Cir. 2005) (per
curiam) (cited by Colgate; “[T]he district court was not
deprived of jurisdiction to resolve the collateral issue of
Rule 11 sanctions by virtue of its earlier order remanding the
suit.”); Midlock v. Apple Vacations W., Inc.,
406 F.3d 453 (7th
Cir. 2005) (affirming Rule 11 sanctions imposed subsequent to a
post-remand hearing); Lazorko v. Penn. Hosp.,
237 F.3d 242, 247
(3d Cir. 2000) (“Although the District Court relinquished
jurisdiction over this case when it either dismissed or remanded
all the claims before it, it still had jurisdiction to order
sanctions.”); Miranti v. Lee,
3 F.3d 925, 927 (5th Cir. 1993)
(“There is no question but that if an order of sanctions had
been entered under Rule 11 . . . , we would have jurisdiction to
review it despite the statutory limitation on our review of the
order of remand.”); Vatican Shrimp Co. v. Solis,
820 F.2d 674,
680 n.7 (5th Cir. 1987) (“Although 28 U.S.C. § 1447(d) precludes
our review of the order of remand, it does not shield the
subsidiary issue of Rule 11 sanctions from appellate review.
. . . [O]ur review on the merits of the Rule 11 sanctions is
distinct and separable from a review on the merits of the order
of remand.”); e.g., Pisciotta v. Dobrynina, No. 08-CV-5221, 2009
25
WL 1913393, at *2 (E.D.N.Y. July 2, 2009) (“On January 21, 2009,
the parties appeared for oral argument before the Court
[regarding the removal notice]. The next day, the Court . . .
remand[ed] the underlying action to state court but retain[ed]
jurisdiction to consider sanctions under Rule 11 and costs and
fees under § 1447(c).” (citing
Bryant, 420 F.3d at 162)); Creek
Ventures, LLC v. World Parts, LLC, No. 01-CV-89C,
2004 WL
1166642, at *3 (W.D.N.Y. Apr. 14, 2004) (“The court notes that
it retains continuing jurisdiction over the motion for
sanctions, despite the remand to state court.”); Park Nat’l Bank
of Houston v. Kaminetzky,
976 F. Supp. 571, 573 n.2 (S.D. Tex.
1996) (“Although this Court does not have jurisdiction over the
merits of the remanded action, the Court retained jurisdiction
to impose sanctions, costs, and fees.”); see also Perpetual
Sec., Inc. v. Tang,
290 F.3d 132, 141 (2d Cir. 2002) (“Although
the district court lacked jurisdiction to decide the merits of
the underlying action, it retained the power to determine
collateral issues, such as the appropriateness of [Rule 11]
sanctions.”); Olcott v. Del. Flood Co.,
76 F.3d 1538, 1553 (10th
Cir. 1996) (“Among the collateral issues a federal court may
consider after an action is no longer pending is a Rule 11
sanction.”); Westlake N. Prop. Owners Ass’n v. City of Thousand
Oaks,
915 F.2d 1301, 1303 (9th Cir. 1990) (“[E]ven if a court
does not have jurisdiction over an underlying action, it may
26
have jurisdiction to determine whether the parties have abused
the judicial system and whether sanctions are appropriate to
remedy such abuse.”).
This Court’s own precedent aligns with the chorus of cases
cited above, thus exposing as hollow the majority’s far-reaching
statement that “entry of an order remanding a case to state
court divests the district court ‘of all jurisdiction in [the]
case and preclude[s] it from entertaining any further
proceedings of any character[.]’” Ante at 9 (first and second
alterations in original) (quoting Three J Farms, Inc. v. Alton
Box Board Co., 609 F.2d 112, 115 (4th Cir. 1979)). In ITT
Industrial Credit Co. v. Durango Crushers, Inc.—a case decided
eight years after Three J Farms—this Court affirmed the district
court’s award of attorneys’ fees to the plaintiff as a sanction
based on the defendants’ improper removal of the case to federal
court.
832 F.2d 307, 308 (4th Cir. 1987). Specifically, this
Court stated the following:
Ordinarily, a district court may not award attorneys’
fees absent express Congressional authorization.
Exceptions to the “American Rule,” whereby each party
pays its own attorney’s fees, are matters of
legislative providence. . . . [H]owever, courts do
have inherent power to award attorney’s fees against a
party who has acted in bad faith. The limited
authority of the district courts to award fees as a
sanction for a removal taken in bad faith is widely
recognized. Although § 1447(c) itself conveys no
power on the district courts to award attorneys’ fees,
the district court did not err in awarding attorney’s
fees . . . because the[] removal petition was so
27
patently without merit that the inescapable conclusion
is that it was filed in bad faith.
Id. (emphasis added) (citations omitted) (internal quotation
marks omitted). 3
To be absolutely sure, the opinion in Durango Crushers is
ambiguous about (1) whether the district court ordered sanctions
subsequent to remand, as would be the case here (as opposed to
in conjunction with remand), and (2) whether the court ordered
sanctions sua sponte or pursuant to a post-remand motion or
request. However, this Court’s subsequent decision in Anton
Leasing, Inc. v. Engram, 846 F.2d 69 (4th Cir. 1988) (per
curiam) (unpublished table decision)—handed down less than six
months after Durango Crushers—purges any lingering doubt about
district courts’ ability to order sanctions after remand. 4 In
Engram, the district court granted the plaintiff’s motion to
remand the case to state court for failure to remove the case to
the proper venue. Prior to the remand, the plaintiff requested
costs and fees. “[The defendant] failed to respond to [the
3
At the time that this Court decided Durango Crushers, the
then-current (1982) version of 28 U.S.C. § 1447(c) did not
include attorneys’ fees as part of the “just costs” available
based on an improvident removal. See Graphic Commc’ns Local 1B
Health & Welfare Fund A v. CVS Caremark Corp., 636 F.3d 971, 974
(8th Cir. 2011).
4
Two of the three judges who were on the panel for Durango
Crushers—Judge Wilkinson (author) and Judge Chapman—were also
panel members for Engram.
28
plaintiff’s] motion, and the district court granted [the] . . .
motion to remand and dismissed the case from the docket. The
court awarded no costs or fees.” Id. Then, after remand, the
defendant filed a motion in the district court to transfer venue
to cure the lack of subject jurisdiction. The plaintiff opposed
this motion and again requested attorneys’ fees, which the
district court awarded. The defendant appealed.
On appeal, this Court held that, “While the district court
was without jurisdiction to rule on the transfer motion, . . .
the court had jurisdiction to review the [post-remand] request
for just costs and that that part of the order is appealable.”
Id. (citing News-Texan, Inc. v. City of Garland,
814 F.2d 216,
220 (5th Cir. 1987), and Vatican Shrimp
Co., 820 F.2d at 680
n.7—both Rule 11 cases). Importantly, and like in Durango
Crushers, this Court characterized the attorneys’ fees award as
a sanction.
Id. (citing Durango Crushers and noting that the
then-current version of § 1447(c) “convey[ed] no power on the
district courts to award attorneys’ fees”); see supra note 3.
The myriad cases cited above from other circuit courts,
district courts, and this Court are just appetizers, for the
Supreme Court itself has spoken on the propriety of Rule 11
sanctions ordered (1) after a case has been dismissed and
(2) even when a district court was without jurisdiction in the
first instance. The first of these two cases is Cooter & Gell
29
v. Hartmarx Corp., 496 U.S. 384 (1990). There, the plaintiff
filed a complaint but then dismissed the complaint pursuant to
Rule 41(a)(1)(i) after the defendant moved for dismissal and for
Rule 11 sanctions because of the baseless allegations in the
complaint.
Id. at 389. The district court heard oral argument
on the Rule 11 motion prior to dismissal but dismissed the case
without ruling on the motion.
Id. More than three-and-a-half
years later, the district court granted the defendants’ Rule 11
motion.
Id. at 389–90. After losing on appeal, the plaintiff’s
law firm petitioned the Supreme Court, arguing that the district
court was without jurisdiction to order sanctions.
The Supreme Court held that the district court did have
jurisdiction to sanction plaintiffs’ counsel. Specifically, the
Court stated that “a voluntary dismissal does not expunge the
Rule 11 violation,” and “a court must have the authority to
consider whether there has been a violation of [Rule 11]
regardless of the dismissal of the underlying action.” Id.
at 395; see
id. (“It is well established that a federal court
may consider collateral issues after an action is no longer
pending.”); see also
id. at 398 (“The filing of complaints,
papers, or other motions without taking the necessary care in
their preparation is a separate abuse of the judicial system,
subject to separate sanction.”). Although the underlying case
in Cooter & Gell became “no longer pending” before the district
30
court due to the plaintiff’s voluntary dismissal, numerous
circuit courts have applied Cooter & Gell’s holding to cases
that were “no longer pending” due to remand to state court.
E.g., Desert Sch. Fed. Credit Union, 473 F. App’x 804 (“The
Supreme Court has long held that a district court retains
jurisdiction to impose Rule 11 sanctions even after a case has
been dismissed. . . . Thus, the district court had jurisdiction
to impose Rule 11 sanctions in the amount of attorney’s fees
even after remanding the case to state court.” (citing Cooter &
Gell)); Bryant, 420 F.3d at 164 (“Nothing in Cooter & Gell
limits its observations concerning collateral jurisdiction over
Rule 11 motions to dismissals under Fed. R. Civ. P. 41(a)(1).”).
The second Supreme Court case that directs the conclusion
that the district court had jurisdiction to consider Colgate’s
Rule 11 motion for sanctions is Willy v. Coastal Corp., 503 U.S.
131 (1992) (9-0) (Rehnquist, C.J.). In Willy, the petitioner
sued the respondent in state court and the respondent removed
the case to federal court.
Id. at 132. Over the petitioner’s
objection, the district court concluded that it had subject
matter jurisdiction and subsequently granted the respondent’s
motion to dismiss for failure to state a claim.
Id. at 132–33.
At the same time, the district court granted the respondent’s
motion for Rule 11 sanctions against the petitioner and his
attorney for certain filings made in the district court, and the
31
petitioner appealed. Id. at 133. The appeals court determined
that federal subject matter jurisdiction over the case was
improper and reversed the district court’s order dismissing the
claims with instructions to remand the case to state court.
Id.
However, the appeals court did not reverse the sanctions award.
Neither did the Supreme Court. Instead, the Court stated
that, although “[a] final determination of lack of subject-
matter jurisdiction of a case in a federal court . . . precludes
further adjudication of it[,] . . . such a determination does
not automatically wipe out all proceedings had in the district
court at a time when the district court operated under the
misapprehension that it had jurisdiction.” Id. at 137. Citing
Cooter & Gell, the Court reiterated that Rule 11 sanctions are
“collateral to the merits” of an action,
id. at 138, and that
“[t]he interest in having rules of procedure obeyed . . . does
not disappear upon a subsequent determination that the court was
without subject-matter jurisdiction,”
id. at 139. Like those
circuit court decisions applying Cooter & Gell, appeals courts
have likewise relied on Willy for the proposition that district
courts maintain jurisdiction to order Rule 11 sanctions after
remand. E.g.,
Bryant, 420 F.3d at 164 (“[T]he Supreme Court
. . . has . . . held that district courts have jurisdiction over
Rule 11 motions where the district court has remanded a case to
state court. It follows that in [appellant]’s case the district
32
court was not deprived of jurisdiction to resolve the collateral
issue of Rule 11 sanctions by virtue of its earlier order
remanding the suit.” (citing Willy)); see also Lazorko, 237 F.3d
at 247.
In view of the above, the district court had, at a minimum,
jurisdiction to consider Colgate’s Rule 11 motion for sanctions
and to fashion appropriate relief, if any; the law could not be
more clear on this point. Jurisdiction is a court’s ability to
consider a motion in the first instance, not the court’s ability
to actually grant the relief requested therein. The majority
misunderstands this basic legal distinction and, in reaching the
opposite conclusion, maroons itself on an island all alone,
thereby creating a cosmic circuit split and contravening Supreme
Court precedent and this Court’s precedent. Indeed, it appears
that it is the majority’s rigid position that is the “anomaly in
federal jurisdiction.” Ante at 9.
B. Rule 60(b)(3)
“Exactness in the use of words is the basis of all serious
thinking.” Felix Frankfurter, Some Reflections on the Reading
of Statutes, 47 Colum. L. Rev. 527, 546 (1947) (citation
omitted) (internal quotation marks omitted). “[C]ourts must
presume that a legislature says in a statute what it means and
means in a statute what it says there.” Conn. Nat’l Bank v.
Germain, 503 U.S. 249, 253–54 (1992). “[U]nless otherwise
33
defined, words will be interpreted as taking their ordinary,
contemporary, common meaning.” Perrin v. United States, 444
U.S. 37, 42 (1979). These are fundamental tenets for drafting
and interpreting legislation, and yet the majority spurns such
bedrock principles by failing to appreciate the distinction
between “vacating” an order and “reviewing” an order, only the
latter of which is prohibited by 28 U.S.C. § 1447(d).
The Eleventh Circuit recognized the distinction noted above
in Aquamar, S.A. v. Del Monte Fresh Produce N.A. and explained
it as follows:
Vacatur of a remand order does not necessarily
constitute a forbidden “review” of the remand
decision. To “review” an order, a court must do more
than merely cancel it; it must, to some extent,
examine it and determine its merits. A “review” is a
“reconsideration; second view or examination;
revision; consideration for purposes of correction.”
Black’s Law Dictionary 1320 (6th ed. 1990). A vacatur
does not necessarily implicate this sort of
examination.
If we order the district court to vacate an order for
reasons that do not involve a reconsideration or
examination of its merits, then we have not “reviewed”
the order, and therefore have not fallen afoul of
section 1447(d)’s prohibition on review.
179 F.3d 1279, 1288 (11th Cir. 1999) (citing U.S. Bancorp Mortg.
Co. v. Bonner Mall P’ship,
513 U.S. 18, 22–23 (1994)); see also
Tramonte v. Chrysler Corp.,
136 F.3d 1025, 1028 (5th Cir. 1998)
(“[V]acatur of the remand order would . . . not constitute a
review of the merits of that order, prohibited by 28 U.S.C.
§ 1447(d).”). The majority is speedy to attempt to distinguish
34
Aquamar and Tramonte on their facts and the reasons for vacatur
in those cases, but is conspicuously silent as to why the
vacate/review distinction ceases to apply in this case, which
deals with the same statutory provision. Indeed, and just like
the Aquamar court, this Court has several times relied on
dictionaries to interpret statutes when the statutes’ words were
not defined therein. See, e.g., Country Vintner of N.C., LLC v.
E. & J. Gallo Winery, Inc., 718 F.3d 249, 258–59 & n.10–17 (4th
Cir. 2013) (Davis, J.); United States v. Hampton,
628 F.3d 654,
660 (4th Cir. 2010) (Davis, J.); FindWhere Holdings, Inc. v.
Sys. Env’t Optimization, LLC,
626 F.3d 752, 756 (4th Cir. 2010)
(Davis, J.); Torres v. O’Quinn,
612 F.3d 237, 243, 245–46 (4th
Cir. 2010) (Davis, J.); see also United States v. Perez-Perez,
737 F.3d 950, 955 (4th Cir. 2013) (Davis, J., concurring); David
v. Alphin,
704 F.3d 327, 339 (4th Cir. 2013) (Davis, J.).
This Court should not treat this case and this statute any
differently, and to dismiss the distinction as mere semantics
runs afoul of long-standing statutory interpretation principles.
The majority relies heavily on In re Lowe, 102 F.3d 731
(4th Cir. 1996), and the flowery “one shot”-language contained
therein, but without solid justification for doing so on these
facts and without any discussion of the particulars of that
case. In Lowe, the district court remanded the case due to lack
of complete diversity between the parties, and the defendants
35
moved for “reconsideration”—not vacatur—of the remand order.
Id. at 732–33. The district court granted the motion, and the
plaintiff petitioned this Court for a writ of mandamus.
Id.
at 733. This Court framed the “principal issue” in the appeal
as “whether the district court exceeded its jurisdiction when it
reconsidered its remand order.”
Id. at 733 (emphasis added).
This Court then determined that, “[i]ndisputably, ‘otherwise’ in
§ 1447(d) includes reconsideration by the district court.”
Id.
at 733–34 (emphasis added).
Lowe’s holding is consistent with the holdings of several
factually similar cases (i.e., cases wherein a party asked for
reconsideration of a remand order), all of which I think were
correctly decided in view of § 1447(d)’s bar on “review.” See,
e.g., Gravitt v. Sw. Bell Tel. Co., 430 U.S. 723 (1977) (per
curiam) (reversing judgment where the court of appeals “ordered
the District Court to vacate its remand order because the latter
had employed erroneous principles in concluding that it was
without jurisdiction”); Agostini v. Piper Aircraft Corp.,
729
F.3d 350, 355 (3d Cir. 2013) (“[W]e hold that we do not have
jurisdiction to review an order denying a motion to reconsider a
remand order.”); Harris v. Blue Cross/Blue Shield of Ala., Inc.,
951 F.2d 325, 326, 330 (11th Cir. 1992) (addressing the issue of
“whether the district court had jurisdiction to ‘reconsider’ its
order remanding the case to state court” and concluding that it
36
did not). Fortunately for Colgate, however, the case before the
Court today is not Lowe, Gravitt, Agostini, or Harris insofar as
vacatur does not require review or reconsideration of a ruling.
See Aquamar, 179 F.3d at 1288;
Tramonte, 136 F.3d at 1028.
Contrary to the majority’s claim that “Colgate[] seek[s] to
draw us into the merits . . . of the district court’s order,”
ante at 8, Colgate never once argues that remand was wrong based
on the facts that were presented to the district court at the
time the cases were removed. Of course, Colgate argues that the
joinder of certain parties has now been confirmed as fraudulent;
but this is a separate issue from the question of whether remand
was proper under the facts as plaintiffs’ counsel originally
presented them (i.e., that all Maryland defendants were properly
joined). The majority couches Colgate’s argument as “attacking
the district court’s analysis of the merits of the remand,” id.
at 14, but has not cited to a single instance—because there is
not one—where Colgate claims that the district court erred by
remanding the cases based on the facts as plaintiffs’ counsel
represented them. Colgate’s real argument, which the majority
either simply misunderstands or chooses to ignore and remold
into a new argument, is that plaintiff counsel’s representations
were not a truthful portrayal of the actual facts of the case;
Colgate therefore attacks the manner by which the plaintiffs
secured the remand orders, not the merits or correctness of the
37
orders themselves. Compare ante at 12 (“Colgate’s argument that
it is not seeking ‘review’ is simply incorrect because its
request necessarily requires a merits review of the remand
orders.”), with Colgate’s Reply Br. at 3 (“The instant motions
do not seek relief on the ground that the Remand Orders were
substantively incorrect. Instead, they contend that the orders
were procured unfairly through misconduct. Thus the ‘review’
requested is of counsel’s conduct—not the orders themselves.”
(third emphasis added)).
In view of the proper understanding of Colgate’s argument
and the fact that Colgate never once argues that the district
court erred in remanding the cases—only that that the district
court erred in subsequently denying Colgate’s post-remand
motions—§ 1447(d) does not prohibit this Court from vacating the
remand orders pursuant to Rule 60(b)(3) if it is determined that
such relief is warranted. In Schultz v. Butcher, 24 F.3d 626
(4th Cir. 1994), this Court clarified that Rule 60(b)(3) does
not pertain to the merits of a judgment, order, or proceeding,
but rather ensures the integrity of the manner by which such
ruling was procured. There, the plaintiff’s lawyer deliberately
withheld a document that fell plainly within the scope of one of
the defendant’s interrogatories.
Id. at 629. The district
court (by a bench trial) ruled in favor of the plaintiff, and
the defendant moved post-judgment pursuant to Rule 60(b)(3) for,
38
inter alia, a new trial, alleging that the plaintiff concealed
the pertinent document and that the absence of that document
prejudiced the defendant. Id. at 630. The district court
denied the motion because “the report was not newly discovered
evidence and . . . would not have altered the court’s
determination as to liability.”
Id. at 631.
This Court reversed on appeal and explained that
[t]he “newly discovered evidence” provision of
Rule 60(b)(2) is aimed at correcting an erroneous
judgment stemming from the unobtainability of
evidence. Consequently, a party seeking a new trial
under Rule 60(b)(2) must show that the missing
evidence was “of such a material and controlling
nature as [would] probably [have] change[d] the
outcome” . . . In contrast, Rule 60(b)(3) focuses not
on erroneous judgments as such, but on judgments which
were unfairly procured.
Id. at 631 (alterations in original) (emphasis added) (quoting
Anderson v. Cryovac, Inc.,
862 F.2d 910, 924 n.10 (1st Cir.
1988)); see also Square Constr. Co. v. Wash. Metro. Area Transit
Auth.,
657 F.2d 68, 72 (4th Cir. 1981) (“Setting aside a
judgment under [Rule] 60(b)(3) does not require that the [fraud,
misrepresentation, or misconduct] be sufficient to alter the
district court's judgment[.]”). As noted above, Colgate does
not argue that the reasoning of the remand orders was erroneous
based on the facts as plaintiffs’ counsel presented them when
the cases were removed; rather, Colgate argues only that the
orders were “unfairly procured” due to the contortion of facts
39
and evidence supporting a claim against the in-state defendants.
The law recognizes such factual manipulation as fundamentally
unfair and provides to a party the opportunity to seek relief
pursuant to Rule 60(b)(3). Schultz, 24 F.3d at 631 (“[W]rongful
[withholding] of . . . material makes it inequitable for the
withholder to retain the benefit of the [judgment][.]”).
In Cooter & Gell, the Supreme Court stated that, “If a
litigant could purge his violation of Rule 11 merely by taking a
dismissal, he would lose all incentive to stop, think and
investigate more carefully before serving and filing papers.”
496 U.S. at 398 (citation omitted) (internal quotation marks
omitted). The same is true in the context of a remand order: if
a litigant could flout his duty of candor before a district
court and secure remand by misrepresentation, knowing that such
remand is never subject to vacatur, he would lose all incentive
to present the facts of a case honestly to the court during
removal. Righting this wrong and protecting the sanctity and
integrity of judicial proceedings overrides the value of any
purported finality of a remand order. 5 Green v. Foley,
856 F.2d
5
It is ironic that the majority would lean on the notion
that “it is manifest that the law favors finality.” Ante at 9;
see Whiteside v. United States, __ F.3d __, No. 13-7152,
2014 WL
1364019, at *11 (4th Cir. Apr. 8, 2014) (Davis, J., concurring)
(criticizing one of our colleagues for “prostrat[ing] . . . at
the altar of finality” and for “favor[ing] what’s ‘finished’
over what’s ‘right’”).
40
660, 667 (4th Cir. 1988) (“[T]he policy of deterring misconduct
which threatens the fairness and integrity of the fact finding
process must outweigh considerations of finality. Any other
result would reward [a litigant’s] wrongful acts by permitting
him to retain the benefit of those acts . . . in derogation of
the proper function of the federal courts.” (emphasis added)
(citation omitted) (internal quotation marks omitted)).
Finally, before proceeding to the merits of Colgate’s
motions, a word about Powerex Corp. v. Reliant Energy Services,
Inc., 551 U.S. 224 (2007), is in order. The majority erects a
cathedral around Powerex but, as with Lowe and every other case
that the majority relies upon, provides no discussion of the
facts—only selective sound bytes in support of its position. In
Powerex, two foreign defendants (including Powerex Corp.) and
two federal defendants removed a state-law action, claiming that
the district court had subject matter jurisdiction pursuant to
28 U.S.C. § 1441(d) (authorizing removal by a “foreign state” as
defined in the Foreign Sovereign Immunities Act (FSIA)) and
28 U.S.C. § 1442(a) (authorizing removal by federal agencies).
Id. at 227–28. The plaintiffs moved to remand the case, and the
district court determined that the two federal defendants and
one of the foreign defendants were immune from suit, but that
Powerex Corp. did not qualify as a “foreign state.”
Id. at 228.
Accordingly, because Powerex Corp. did not satisfy the criteria
41
for federal jurisdiction pursuant to § 1441(d) and all other
defendants were immune from suit, the district court remanded
the case. Id. at 228.
Powerex Corp. appealed, arguing that it was “foreign state”
for FSIA purposes, and the plaintiffs countered, arguing that
the appeal was barred by § 1447(d). The Ninth Circuit held that
it “ha[d] jurisdiction to review the underlying merits of the
district court’s substantive rulings on immunity and sovereign
status[,]” California v. NRG Energy, Inc., 391 F.3d 1011, 1022
(2004) (emphasis added)—or in the words of the Supreme Court,
the Ninth Circuit held that § 1447(d) “did not preclude it from
reviewing substantive issues of law that preceded the remand
order,”
Powerex, 551 U.S. at 228 (emphasis added). The Ninth
Circuit then affirmed the district court’s ruling that Powerex
Corp. was not a “foreign state” for purposes of § 1441(d).
Id.
The Supreme Court subsequently vacated that decision and
remanded the case with instructions to dismiss the appeal for
lack of jurisdiction. The Court reasoned that “[n]othing in the
text of § 1447(c) supports the proposition that a remand for
lack of subject-matter jurisdiction is not covered so long as
the case was properly removed in the first instance.”
Id.
at 230. Specifically, the Court held that Ҥ 1447(d) bars
appellate consideration of [Powerex Corp.]’s claim that it is a
foreign state for purposes of the FSIA.”
Id. at 239.
42
At the end of this discussion of Powerex, one might be left
wondering, “Well, so what? How does Powerex apply here, where
Colgate does not claim that the district court erred as a matter
of law in granting plaintiffs’ motions for remand and does not
seek appellate review of the merits of the remand orders?” And
that is precisely the point—Powerex does not apply to this case
insofar it is no different from Lowe, Gravitt, Agostini, and
Harris (except that Powerex Corp. did not seek reconsideration
of the remand order by the district court, but instead jumped
straight to the court of appeals for review of the district
court’s decision on the merits). I belabor the details of
Powerex merely to show that the majority’s quoting here and
there of the case without any facts is nothing but an attempt to
distract and divert attention away from the critical distinction
between “vacatur” and “review”, which goes wholly unaddressed by
the majority. 6 Powerex is a case about the jurisdiction of an
appeals court to review a district court’s reasoning on issues
6
Well, almost unaddressed—the majority does state that
Colgate’s proffered review/vacatur distinction fails “because it
seeks to relitigate the merits of an issue already litigated.”
Ante at 13. But the majority has not explained how relitigating
an issue using completely different facts and, more importantly,
without referring back to the first remand orders disposing of
that issue, in any way requires reviewing the first orders. By
engaging in such linguistic gymnastics, the majority declares
that “review” now also means “to litigate anew on a blank
slate,” thus expanding its definition far beyond Mr. Webster’s,
Mr. Garner’s, and Congress’s wildest imaginations.
43
of substantive law; it is not a case about the jurisdiction of
an appeals court to vacate an order procured by alleged
fraudulent representations and attorney misconduct. Indeed, if
Powerex does anything, it underscores the difference between
vacatur and review insofar as the Supreme Court never reached
the merits of (“reviewed”) the principal issue for which it
granted certiorari—“whether, under [FSIA], [Powerex Corp.] is an
‘organ of a foreign state or political subdivision thereof,’”
id. at 226 (citation omitted)—because it vacated the appeals
court’s decision on jurisdictional grounds. 7
7
It is curious that the statement, “If Congress wanted to
carve out an attorney-misconduct exception to the prohibition on
review of remand orders, it would have done so[,]” ante at 14,
appears in an opinion that places such heavy reliance on Powerex
when all nine Justices in Powerex recognized that § 1447(d) has
exceptions that were not carved out by Congress. Powerex, 551
U.S. at 229 (“[W]e have interpreted § 1447(d) to cover less than
its words alone suggest.”);
id. at 240 (Breyer, J., dissenting)
(“[T]his Court has found exceptions to § 1447’s seemingly
blanket prohibition [on review].” (citing Thermtron Prods., Inc.
v. Hermansdorfer,
423 U.S. 336, 350–52 (1976), and Osborn v.
Haley,
549 U.S. 225, 240–44 (2007))); see also Bujanowski v.
Kocontes, 359 F. App’x 112, 113 (11th Cir. 2009) (per curiam)
(“Generally, 28 U.S.C. § 1447(d) provides that ‘[a]n order
remanding a case to the State court from which it was removed is
not reviewable on appeal.’ We have, however, carved out a
limited exception in that the appellate court ‘may review the
merits of a remand order in considering whether the district
court abused its discretion by awarding attorneys' fees and
costs under 28 U.S.C. § 1447(c).’” (quoting Legg v. Wyeth,
428
F.3d 1317, 1319 (11th Cir. 2005))); In re Blackwater Sec.
Consulting, LLC,
460 F.3d 576, 587 (4th Cir. 2006) (relied upon
by the majority; “Having determined that the order before us
was, indeed, predicated upon § 1447(c), and therefore within the
purview of § 1447(d), we turn now to a consideration of whether
(Continued)
44
In sum, nothing in the plain language of § 1447(d) or
courts’ interpretation thereof bars vacatur of the district
court’s remand orders. Although I agree that reconsideration is
a subspecies of review, see Lowe, 102 F.3d at 733–34, vacatur,
without revisiting the merits of the prior order, is no such
cousin or relative.
III. Merits
Having concluded that the district court had jurisdiction
to rule on Colgate’s Rule 11 and Rule 60(b)(3) motions, I will
now proceed to analyze the merits of those motions. See Liberty
Univ., Inc. v. Geithner, 671 F.3d 391, 422 (4th Cir. 2011)
(Davis, J., dissenting) (“My good colleagues in the majority
hold that the Anti–Injunction Act strips us of jurisdiction in
this case. For reasons I explain at length below, I disagree.
As I reject the reasoning and the result of the majority’s
one of the other judicially created exceptions to § 1447(d)
applies.” (emphasis added)); Nutter v. Monongahela Power Co.,
4 F.3d 319, 321 (4th Cir. 1993) (“Although § 1447(d) appears to
foreclose any review of remand orders, that limitation is
subject to several exceptions.” (citing Brannon v. Babcock &
Wilcox Co.,
940 F.2d 832, 848 (3d Cir. 1991), which held that
§ 1447(d) does not bar review of remand orders where the
district court determines it lacks jurisdiction because the
federal statute conferring jurisdiction is unconstitutional)).
Although I do not think that we need to carve out any new
exception to § 1447(d) because vacatur does not require review
and, thus, Colgate’s request is outside the reach of the
statute, it is nonetheless worth noting that, even if that is
what we were doing, we would certainly not be the first court to
do so.
45
jurisdictional analysis, I am entitled to reach the merits of
appellants’ claims.”). Although normally all that would be
required of this Court at this particular procedural juncture
would be to reverse and remand for further consideration on the
merits, the district court indicated how it would have ruled if
it thought that it had jurisdiction. Specifically, the district
court stated that, although there is a “sharp conflict” between
plaintiff counsel’s statements made while the cases were removed
and those statements made subsequent to remand, and that such
conflict is “troubling,” the statements “are attributable to
different attorneys in markedly different litigation contexts,”
(J.A. 1106); therefore, the court was “not convinced that
counsel’s conduct is sanctionable,” (id.). These statements by
the district court were made after the parties had the
opportunity to brief whether plaintiff counsel’s conduct
warranted sanctions and after a hearing was held regarding the
same; in other words, the merits of the issue have been fully
presented and argued.
In such a situation, this Court has the ability to rule on
the merits of Colgate’s motions even though the district court
technically did not. See Brown & Williams Tobacco Corp. v. FTC,
710 F.2d 1165, 1172–73 & n.3 (6th Cir. 1983) (“The District
Court never ruled on [plaintiffs’] two arguments on the merits
because the court below erroneously held that it lacked
46
jurisdiction. Rather than remand the case which would entail
further delay, we have decided in the interest of judicial
economy to reach the merits of this case.”). This is especially
the case where the proper exercise of discretion could lead to
only one outcome and the district court has already shown how it
would rule if this Court were to simply remand the case. See
United States v. Fenner, 147 F.3d 360, 363 (4th Cir. 1998)
(“[W]e need not remand to permit the district court to exercise
its discretion [regarding an issue that it did think that it had
the authority to decide] if its decision to do so on remand
would constitute an abuse of discretion.”).
This Court reviews district courts’ decisions on Rule 11
and Rule 60(b)(3) motions for an abuse of discretion. Hunter v.
Earthgrains Co. Bakery, 281 F.3d 144, 150 (4th Cir. 2002)
(standard of review for Rule 11 motions);
Green, 856 F.2d at 665
(standard of review for Rule 60(b) motions). “A district court
abuses its discretion if it bases its ruling on an erroneous
view of the law or on a clearly erroneous assessment of the
evidence.” Brubaker v. City of Richmond,
943 F.2d 1363, 1374
(4th Cir. 1991). As noted above, the same underlying conduct
forms the bases of each of Colgate’s respective motions.
47
A. Rule 11 Sanctions
In relevant part, Federal Rule of Civil Procedure 11(b)
provides as follows:
By presenting to the court a pleading, written motion,
or other paper—whether by signing, filing, submitting,
or later advocating it—an attorney or unrepresented
party certifies that to the best of the person’s
knowledge, information, and belief, formed after an
inquiry reasonable under the circumstances . . . the
factual contentions have evidentiary support or, if
specifically so identified, will likely have
evidentiary support after a reasonable opportunity for
further investigation or discovery[.]
Fed. R. Civ. P. 11(b)(3). Here, Colgate seeks sanctions for
plaintiff counsel’s averments to Judge Nickerson that “there is
some circumstantial evidence to suggest [that] Ms. Barlow could
possibly have been exposed to asbestos-containing products while
working at RMR Corporation,” (J.A. 106), and to Judge Quarles
that “Plaintiff’s counsel do have some circumstantial evidence
that Mrs. Mosko may have been exposed to asbestos at the
Department of Agriculture,” (id. at 247). Colgate claims that,
in view of plaintiff counsel’s subsequent statement after remand
that “there is absolutely no evidence to indicate or even
suggest that the Plaintiffs were exposed to asbestos in any form
other than Cashmere Bouquet,” (id. at 476), counsel’s statements
in federal court were without evidentiary support and deceived
the district court into ordering remand based on a sham factual
record.
48
At the hearing on the motions for sanctions, plaintiffs’
counsel claimed that the statements made in federal court were
“legal conclusion[s]” and “legal argument[s],” not “factual
contention[s]” subject to Rule 11 sanctions. (Id. at 1070–71.)
Counsel maintained this purported distinction on appeal,
claiming that “[t]he fact that an attorney calls evidence
circumstantial, or claims a piece of evidence gives rise to an
inference, falls squarely into the category of legal argument.”
Plaintiffs’ Br. at 37. Although I agree that characterizing the
type of evidence can, at times, be subject to some legal
significance, I strongly disagree that a statement regarding the
existence of evidence—be it direct, circumstantial, or some
other type—requires application of any law. Evidence exists or
it does not exist; this is a binary factual determination.
On appeal, plaintiffs’ counsel attempted to backpedal and
retreat further from the prior statements made during removal
proceedings by framing those statements as follows:
The truth is that the Plaintiffs in this case never
represented to the federal court that it intended to
generate evidence against any of the in-state
defendants, or even that they would prevail against
the in-state defendants. Indeed, such representations
would have been irrelevant to the inquiry, because
that is not what the federal standard [for remand]
requires. Instead, the Plaintiffs argued that there
was a possibility that evidence could be generated or
a possibility that the Plaintiffs could prevail
against the local defendants, and that is all that is
required to obtain remand in a fraudulent joinder
argument.
49
Id. at 29 (emphasis added on all words but the first
“possibility” and the first “could”). This qualification of the
previous statements is wholly unavailing and, worse, all but
confirms that counsel’s prior statements in federal court were
misrepresentations. While the cases were removed, plaintiffs
did not merely claim that evidence against in-state defendants
“could be generated”; rather, counsel told the district court
that “there is some circumstantial evidence” and “Plaintiff’s
counsel do have some circumstantial evidence.” (J.A. 106, 247
(emphases added).) In other words, counsel told the district
court that such evidence against the in-state defendants was
already in the plaintiffs’ possession. Insofar as plaintiffs’
counsel is on the record as telling the court that plaintiffs
had evidence that apparently did not exist, counsel’s misconduct
is subject to Rule 11. See, e.g., Pope v. Fed. Express Corp.,
39 F.3d 1327, 1328 (8th Cir. 1995) (affirming award of Rule 11
sanctions for offering a falsified document into evidence).
Plaintiffs’ constant altering of their position to cater to
the forum of the day is further demonstrated by Ms. Lilly’s
statements at the hearing on Colgate’s motions for sanctions
before Judge Nickerson. There, Ms. Lilly claimed that Mr. Kelly
“overstated things” subsequent to remand when he submitted that
“there is absolutely no evidence to indicate or even suggest
50
that the Plaintiffs were exposed to asbestos in any form other
than Cashmere Bouquet.” (J.A. 1092.) Ms. Lilly then asserted,
“Yes, there was some evidence[,]” referring to the alleged
existence of evidence that Barlow could have been exposed to
asbestos at her place of employment and not via Cashmere Bouquet
only. (Id.) But even setting aside the existence (or not) of
evidence, Mr. Kelly also asserted after remand that Barlow and
Mosko “do not allege exposure to . . . asbestos . . . in any
other form” other than Cashmere Bouquet. (J.A. 474 (emphasis
added).) In other words, notwithstanding the named defendants
in the complaint, plaintiffs had no intention to pursue claims
against any party but Colgate; Mr. Kelly therefore confirmed
that this truly is a “one-defendant” case, (see J.A. 494).
“[W]here a party assumes a certain position in a legal
proceeding, and succeeds in maintaining that position, he may
not thereafter, simply because his interests have changed,
assume a contrary position[.]” New Hampshire v. Maine, 532 U.S.
742, 749 (2001) (quoting Davis v. Wakelee,
156 U.S. 680, 689
(1895)) (internal quotation marks omitted)). That is precisely
what happened here: first, there was evidence in federal court
of other sources of exposure to asbestos when the existence of
such evidence was advantageous for defeating complete diversity
and obtaining remand; then, just eight days after the remand
order in Barlow’s case was handed down, there was no such
51
evidence in state court when the lack of any evidence was
advantageous for reconsolidating plaintiffs’ cases for trial;
then, there was again evidence in federal court when Ms. Lilly
had to answer for her prior representations made during removal
proceedings to avoid being sanctioned. This ping-pong match
must come to an end.
Although one might expect a multinational corporation,
embroiled in several types of lawsuits around the country and
represented by different law firms, to now and again take
inconsistent positions without being aware that it has done so
(not that doing so is excusable), the constant shifting of
positions by the same two lawyers from the same law firm and in
the same matters for two individual plaintiffs is unacceptable.
Lawyers are mouthpieces for their clients; they do not speak for
themselves. Thus, regardless of which lawyer makes an argument
on behalf of a client, it is still the client (i.e., party to
the lawsuit) who is taking a certain position, and this position
cannot change as does the weather in spring whenever it favors
the client’s instant cause or depending on which lawyer is
appearing to represent the client on any given day.
The district court provided no explanation as to why it
would not award sanctions other than counsel’s statements “are
attributable to different attorneys in markedly different
litigation contexts.” (J.A. 1106.) As explained above, the
52
fact that different lawyers made the statements is wholly
irrelevant. Moreover, the fact that the statements were made in
different contexts is precisely what makes the misconduct so
egregious—one would not expect a party to even attempt such a
blatant about-face before the same judge; but plaintiffs’
counsel knew that it was making the post-remand statements
before a different judge and in a different forum. When this is
the case, the consistency of a party’s position must be at its
pinnacle to ensure the fair adjudication of claims based on
prior rulings that impacted those same claims. To not order
sanctions on these facts would be an abuse of a district court’s
discretion. See, e.g., Judin v. United States, 110 F.3d 780,
781 (Fed. Cir. 1997) (“Because we find a clear violation of
Rule 11, we hold that the trial court abused its discretion in
determining otherwise.”); see also Thompson v. RelationServe
Media, Inc.,
610 F.3d 628, 671 (11th Cir. 2010) (Tjoflat, J.,
concurring in the appeal and dissenting the cross-appeal)
(“[T]he district court necessarily abused its discretion when it
denied sanctions. That is, the violations are so clear that no
matter what rationale the district court might have had, it
abused its discretion when it denied sanctions.”); Rentz v.
Dynasty Apparel Indus., Inc.,
556 F.3d 389, 400–03 (6th Cir.
2009) (concluding that the district court abused its discretion
for not ordering more severe sanctions because the amount of the
53
“token sanction” that was ordered was “insufficient to serve
Rule 11’s deterrent purposes”).
Rule 11(c)(1) provides, “If . . . the court determines that
Rule 11(b) has been violated, the court may impose an
appropriate sanction on any attorney, law firm, or party that
violated the rule or is responsible for the violation.” I agree
with the majority that we cannot order that the case be returned
to district court as a sanction; federal jurisdiction is not a
tool by which to ensure deterrence of future misconduct. But we
can compensate Colgate for any attorneys’ fees and costs that it
has amassed as a result of plaintiffs’ shifty positions. I
therefore would sanction the plaintiffs and their counsel by
ordering that plaintiffs pay Colgate’s attorneys’ fees and costs
for the following proceedings and any related filings: (1) the
original removal proceedings before Judge Nickerson and Judge
Quarles; (2) any proceedings in state court subsequent to
remand, including the hearing before Judge Glynn; (3) the
proceedings in the district court relating to Colgate’s motions
for sanctions; and (4) this appeal. Further, I would refer
plaintiffs’ counsel to the bars of any states in which they are
licensed to practice law.
B. Rule 60(b)(3) Relief
In Square Construction Co., this Court established a three-
pronged test for a moving party to obtain Rule 60(b)(3) relief:
54
the movant must (1) “demonstrate the existence of a meritorious
claim or defense”; (2) “prove the misconduct complained of by
clear and convincing evidence”; and (3) “demonstrate that such
misconduct prevented him from fully and fairly presenting his
claim or defense.” 657 F.2d at 71. “In consideration of these
proofs, the court must balance the competing policies favoring
the finality of judgments and justice being done in view of all
the facts, to determine, within its discretion, whether relief
is appropriate in each case.”
Id. In analyzing these factors
as applied to this case, Colgate satisfies them all.
First, Colgate demonstrated the existence of a meritorious
defense to the remand orders, namely that the Maryland in-state
defendants were fraudulently joined. Colgate maintained this
position from the time that Colgate filed its notices of removal
in the respective state-court actions throughout this appeal.
(See, e.g., J.A. 30–31 (Notice of Removal in Barlow’s case); id.
at 39–40 (Notice of Removal in Mosko’s case);
id. at 377–78
(Motion for Sanctions in Mosko’s case);
id. at 530–31 (Motion
for Sanctions in Barlow’s case)); Colgate’s Opening Br. at 18.
And just as the district court in Schultz “observed that the
[meritorious defense] was a close question” but ultimately
denied the plaintiff’s Rule 60(b) motion,
see 24 F.3d at 630,
the district court here similarly observed that plaintiff
counsel’s statements “appear to be in sharp conflict” and that
55
such conflict is “troubling,” (J.A. 1106), even though it
likewise denied Colgate’s motion.
Second, Colgate proved the misconduct complained of by
clear and convincing evidence. Although the burden belongs to
Colgate, the contradictory assertions contained in plaintiffs’
filings and the statements made by plaintiffs’ counsel speak for
themselves. See supra at 2–7. Moreover, as demonstrated above,
plaintiff counsel’s attempts to backpedal and cover their tracks
all but confirmed their prior misrepresentations. See supra
at 34–37.
Third, counsel’s misconduct prevented Colgate from fully
presenting its case as to federal jurisdiction. As noted above,
the plaintiffs’ alleged existence of evidence against the in-
state defendants is the precise and only reason that the
respective district judges granted plaintiffs’ motions for
remand. (See id. at 358, 368); supra at 7.
Lastly, any finality of the remand orders yields to
“justice being done in view of all of the facts.” Schultz, 24
F.3d at 630. The majority claims that the representations by
plaintiffs’ counsel on remand merely form a more “improved” and
“complete” record, ante at 13, 14; this is an understatement, to
put it lightly. In reality, the record on remand is starkly
different than the record put forth prior to remand. Apples and
oranges. Night and day. Although I agree that the district
56
court “‘has one shot, right or wrong,’ to decide whether a
removed case should be remanded,” ante at 11–12 (quoting Lowe,
102 F.3d at 735), this “one shot” must be based on an honest and
candid (i.e., accurate) representation of the facts and record.
Here, it was not, and the law provides a remedy to Colgate for
such misconduct. See, e.g.,
Schultz, 24 F.3d at 632 (reversing
denial of Rule 60(b)(3) motion for withholding key evidence);
see Square Constr.
Co., 657 F.2d at 68 (vacating denial of
Rule 60(b)(3) motion and concluding that the district court’s
finding that evidence was not withheld was clearly erroneous).
For the reasons set forth above, I would vacate the denial
of Colgate’s Rule 60(b)(3) motion and remand the case for a
hearing in federal court regarding whether subject matter
jurisdiction over plaintiffs’ claims against Colgate exists
based on the facts as presented at the post-remand, state-court
hearing on plaintiffs’ motion for severance and consolidation.
IV.
It is a truly sad day for this Court to claim that a party
“failed” to make its case, ante at 13, and should be deprived of
a forum to which it is entitled when its adversary concealed or
otherwise obfuscated the information that would have allowed the
party to do so. Under this disquieting logic, the majority
would also claim that a person “fails” to compute the
circumference of a circle when that person is not provided with
57
the circle’s radius or diameter or the value of pi. This simply
cannot be the law, should not be the law, and is not the law.
Because the law is clear that remand does not deprive a
court of jurisdiction to sanction a party pursuant to Rule 11,
I would reverse the district court’s denial of Colgate’s Rule 11
motion. And because it would have been an abuse of discretion
to not sanction plaintiffs and their counsel, I would sanction
plaintiffs and their counsel as set forth above in Part III.A.
Furthermore, because vacatur of the remand orders does not
require “review” of the merits of those orders, I would reverse
the district court’s denial of Colgate’s Rule 60(b)(3) motion
for lack of jurisdiction. And because I think that Colgate has
met the criteria to obtain relief under Rule 60(b)(3) and that
it would have been an abuse of discretion to not grant relief to
Colgate, I would vacate the remand orders and remand the cases
with instructions as set forth above in Part III.B.
If honesty in the judicial system means anything, it means
proceeding with candor before the tribunal, which plaintiffs’
counsel did not do during the removal proceedings. Whatever
prolonging of this litigation vacatur of the remand orders might
cause, Barlow and Mosko have only their own lawyers to blame.
And the truth is well worth the delay.
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