Joseph Agostini v. Piper Aircraft Corp

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

No. 12-2098

_____________

JOSEPH L. AGOSTINI,

Individually and as co-executor of the estate of Jordyn

Agostini, Deceased;

SUELLEN AGOSTINI,

Individually and as co-executor of the estate of Jordyn

Agostini, Deceased;

DOUGLAS J. HENEGAR,

Individually and as natural father of Kyle Henegar, Deceased;

SHARON K. HENEGAR,

Individually and as administratrix of the estate of Kyle

Henegar, Deceased;

DOUGLAS J. HENEGAR,

Individually and as natural father of Kristopher Henegar,

Deceased;

SHARON K. HENEGAR,

Individually and as administratrix of the estate of Kristopher

Henegar, Deceased

v.

PIPER AIRCRAFT CORPORATION; AVSTAR FUEL

SYSTEMS;

LYCOMING, a/k/a Lycoming Engines,

a/k/a Textron Lycoming Reciprocating Engine Division;

AVCO CORPORATION; TEXTRON, INC.; DUKES

AEROSPACE, INC.;

FLORIDA INSTITUTE OF TECHNOLOGY; F.I.T.

AVIATION, LLC

Avco Corporation and Textron, Inc.,

Appellants

_____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

District Court No. 02-11-cv-07172

District Judge: The Honorable Mary A. McLaughlin

Before: SMITH, CHAGARES, and SCIRICA, Circuit Judges.

(Filed: September 5, 2013)

James E. Robinson, Esq.

Catherine B. Slavin, Esq.

Sara A. Frey, Esq.

Gordon & Rees

2005 Market Street

Suite 2900

Philadelphia, PA 19103

Counsel for Appellants

Bradley J. Stoll, Esq.

The Wolk Law Firm

1710-12 Locust Street

Philadelphia, PA 19103-0000

2

J. Denny Shupe, Esq.

Schnader Harrison Segal & Lewis

1600 Market Street

Suite 3600

Philadelphia, PA 19103

Robert J. Williams

Schnader Harrison Segal & Lewis

120 Fifth Avenue

2700 Fifth Avenue Place

Pittsburgh, PA 15222

Counsel for Appellees

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OPINION

________________

CHAGARES, Circuit Judge.

This motion to dismiss requires us to consider whether

we have jurisdiction to review a district court’s denial of a

motion for reconsideration when the order to be reconsidered

is a remand to state court for lack of subject-matter

jurisdiction. For the reasons that follow, we hold that

although the District Court had jurisdiction to rule on the

motion to reconsider the remand order in this particular

instance, this Court has no jurisdiction to review the District

Court’s ruling on the motion for reconsideration.

Accordingly, we will grant the motion to dismiss the instant

appeal.

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I.

On November 11, 2010, an airplane crashed in West

Palm Beach, Florida, resulting in the death of the pilot and

three passengers. Personal representatives for the estates of

the deceased pilot and two deceased passengers (collectively,

the “plaintiffs”) filed suit in the Court of Common Pleas of

Philadelphia County in November 2011, asserting state law

claims against Textron, Inc., AVCO Corporation, and other

corporate entities (collectively, the “defendants”). Textron

removed the case to the United States District Court for the

Eastern District of Pennsylvania under 28 U.S.C. § 1441,

asserting diversity of citizenship pursuant to 28 U.S.C.

§ 1332. The plaintiffs moved to remand the matter to state

court, arguing that AVCO is a citizen of Pennsylvania, and

therefore not diverse from all plaintiffs.

Based on the documents submitted by the plaintiffs,

the District Court granted the plaintiffs’ motion on February

29, 2012 and ordered that the case be remanded to

Pennsylvania state court. AVCO moved for reconsideration

of the remand order on March 13, 2012, arguing that the

District Court improperly granted the motion to remand on

the basis of unsubstantiated argument, unauthenticated

documents, and facts outside the record that had not been

established by affidavit or testimony. Citing the standard

governing motions for reconsideration, the District Court

determined that it had not clearly erred in granting the

plaintiffs’ motion to remand and therefore denied AVCO’s

motion for reconsideration on March 15, 2012. A certified

copy of the District Court’s February 29, 2012 remand order

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was mailed to the state court on March 20, 2012. The notice

of appeal was filed on April 16, 2012.

II.

We begin by examining whether we have jurisdiction

to consider this appeal. 28 U.S.C. § 1447(d) provides, in

relevant part: “[a]n order remanding a case to the State court

from which it was removed is not reviewable on appeal or

otherwise . . . .” The plain text of § 1447(d) clearly bars our

review of the District Court’s February 29, 2012 remand

order. Indeed, in Quackenbush v. Allstate Insurance

Company, the United States Supreme Court underscored that

“only remands based on grounds specified in § 1447(c)” —

namely, remand orders based on the lack of subject-matter

jurisdiction, like the remand order here — “are immune from

review under § 1447(d).” 517 U.S. 706, 712 (1996)

(quotation marks omitted); see also 28 U.S.C. § 1447(c).

Textron and AVCO (together, the “Lycoming defendants”)

acknowledge — as they must — that we do not have

jurisdiction to review the District Court’s remand order.

Nevertheless, the Lycoming defendants maintain that we have

appellate jurisdiction over the District Court’s denial of the

motion for reconsideration. They argue that a remand order is

distinct from a motion to reconsider a remand order, and that

our review of the latter is not barred by § 1447(d).

The plaintiffs respond that our review of the denial of

the motion to reconsider the remand order would serve to

circumvent the jurisdiction-stripping function of § 1447(d).

That is, if we do not have jurisdiction to review a remand

order itself, we cannot have jurisdiction to review a motion to

reconsider a remand order. The Lycoming defendants’

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valiant effort to escape this rather self-evident principle relies

upon their observation that “in certain circumstances,” “an

appellate court . . . may reach the merits of an unreviewable

remand order.” Brief of Lycoming Defendants in Opposition

to Motion to Dismiss Appeal (“Defs. Br.”) 8. Culling several

cases wherein a remand order was held subject to appellate

review, the Lycoming defendants maintain that “the existence

of a severable or separable order on the merits of a collateral

issue, as opposed to an order on subject matter jurisdiction, is

appealable notwithstanding 28 U.S.C. § 1447(c), and federal

appellate courts have jurisdiction to review the order despite

the fact that a case has been remanded to state court.” Id. at

9. According to the Lycoming defendants, the motion to

reconsider a remand order is just such a “collateral issue”

over which we retain jurisdiction.

We have indeed held in other contexts that federal

courts may exercise jurisdiction over certain collateral issues

even after a case has been remanded to state court. For

example, in Mints v. Education Testing Services, 99 F.3d

1253 (3d Cir. 1996), we held that a district court had

jurisdiction to grant attorneys’ fees associated with a motion

to remand a matter to state court even after the district court

had remanded the case to state court. In Mints, we cited to

Cooter & Gell v. Hartmarx Corporation, 496 U.S. 384 (1990),

wherein the Supreme Court determined that even after a

plaintiff voluntarily dismissed an action, a district court could

impose sanctions pursuant to Federal Rule of Civil Procedure

11. Mints, 99 F.3d at 1258. Although “recogniz[ing] that

Cooter & Gell is distinguishable because it did not implicate

the special jurisdictional problems presented when a case is

remanded to a state court,” we nevertheless held that the

award of attorneys’ fees — like the imposition of sanctions,

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or the award of costs — “is collateral to the decision to

remand and cannot affect the proceedings in the state court.”

Id.

Thus, our precedent establishes that federal courts may

decide “collateral” issues after remand because such issues by

definition “cannot affect” the progress of a case once it has

been returned to state court. This accords with the Cooter &

Gell Court’s characterization of collateral issues as those for

which “determination[s] may be made after the principal suit

has been terminated.” See Cooter & Gell, 496 U.S. at 396

(identifying motions for costs or attorneys’ fees and motions

to impose contempt sanctions as “collateral”).

We hold that a motion to reconsider a remand order is

not such a collateral issue. To begin with, we explicitly noted

in Mints that a motion to reconsider a remand order is distinct

from a motion for attorneys’ fees, as far as the application of

§ 1447(d) is concerned:

While there is no doubt that under Hunt v. Acromed

Corp., . . . , the district court should not have

reconsidered the order of remand after the clerk of the

district court sent the certified copy of the order to the

clerk of the Superior Court, the principles underlying

our opinion in that case are not applicable with respect

to the . . . application [for attorneys’ fees].

Mints, 99 F.3d at 1257.

This interpretation of the collateral-issues exception is

reinforced by the Supreme Court’s holding in City of Waco v.

United States Fidelity and Guaranty Co., 293 U.S. 140

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(1934). There, the Supreme Court held that the Court of

Appeals retained jurisdiction to review an order by a district

court to dismiss a party, even though the district court then

remanded the case to state court because the party’s dismissal

resulted in a lack of diversity jurisdiction. Id. at 143. The

Lycoming defendants cite the Waco Court’s ruling as

supportive of their position that this Court may entertain a

post-remand challenge to a district court’s order. However, in

our view, the Supreme Court’s decision in Waco underscores

that once a case has been remanded for lack of subject-matter

jurisdiction, that remand order cannot be undone.

Significantly, the Waco Court explained that the appellate

court’s “reversal [could] not affect the order of remand, but

[would] at least, if the dismissal of the petitioner’s complaint

was erroneous, remit the entire controversy, with the

[dismissed company] still a party, to the state court for such

further proceedings as may be in accordance with law.” Id. at

143-44. The same cannot be said of the case before us now,

as reversal of the District Court’s reconsideration order would

necessarily affect the District Court’s decision to remand the

case to state court. Indeed, returning this matter to federal

court from state court is precisely what the motion for

reconsideration sought to do, and it is what the Lycoming

defendants seek on appeal as well.

The interpretation of Waco by other Courts of Appeals

reinforces the distinction between the limited exception to

§ 1447(d) and the rule the Lycoming defendants ask us to

adopt in the instant case. In particular, the Court of Appeals

for the Fourth Circuit concluded that implementing the so-

called Waco exception requires: (1) that the “purportedly

reviewable order . . . have a conclusive effect upon the

parties’ substantive rights,” including “a preclusive effect

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upon the parties in subsequent proceedings”; and (2) that the

reviewable decision is “able to be disaggregated from the

remand order itself.” Palmer v. City Nat’l Bank of West Va.,

498 F.3d 236, 240-41 (4th Cir. 2007) (quotation marks

omitted). Accordingly, the Palmer court held that it had

jurisdiction to review dismissal of federal defendants who

“were not subject to the remand order,” id. at 243, because

they had ceased to be parties in the case. The Palmer court

noted the critical fact that, “[w]ere we to reverse the dismissal

of the federal defendants, the remand order would not be

subverted.” Id. at 244 (quotation marks omitted).

In the instant case, it is impossible to disaggregate the

order denying reconsideration from the remand order itself,

despite the Lycoming defendants’ insistence that the two

orders are distinct and therefore permit application of the

Waco exception as applied in Palmer. The Lycoming

defendants are correct that the District Court’s denial of the

reconsideration motion “will have the preclusive effect of

being functionally unreviewable in state court.” Defs. Br. 9.

But that is not the standard that this Court or the Palmer court

— or, it appears, any Court of Appeals — applies when

determining whether or not review of an order issued in a

remanded case is permitted. As with the motion for

reconsideration filed before the District Court, the very

purpose of this appeal is to subvert the remand order by

convincing this Court that diversity jurisdiction does, indeed,

exist. Therefore, even if we were to adopt the procedure of

the Fourth Circuit Court of Appeals for applying the Waco

exception, we would find that the instant case fails the Palmer

test because reversing the District Court’s denial of the

motion for reconsideration would subvert the District Court’s

remand order.

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We note that the “functionally unreviewable” standard

proposed by the Lycoming defendants is confounding

because it is the express effect of § 1447(d) to ensure that a

remand order based on lack of subject-matter jurisdiction is

unreviewable — in state court or elsewhere. Our own

jurisprudence on § 1447(d) makes this clear:

The purpose of the rule is to prevent a

party to a state lawsuit from using

federal removal provisions and appeals

as a tool to introduce substantial delay

into a state action. . . . Without §

1447(d), a party to a state action could

remove the action to federal court, await

remand, request reconsideration of the

remand, appeal, request rehearing, and

then file a petition for a writ of certiorari,

all before being forced to return to state

court several years later. . . . To avoid

this delay, Congress has fashioned an

exception to the general rule of review,

and made a district court’s initial

determination that removal was

inappropriate a nonreviewable one.

Hudson United Bank v. LiTenda Mortg. Corp., 142 F.3d 151,

156-57 (3d Cir. 1998). Accordingly, we hold that we do not

have jurisdiction to review an order denying a motion to

reconsider a remand order.

III.

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Whether or not the District Court itself had jurisdiction

to reconsider the remand order depends upon establishing the

moment at which jurisdiction was transferred from federal to

state court. According to our precedent, the mailing of a

certified copy of the remand order to state court is the event

that formally transfers jurisdiction from a district court within

this Circuit to a state court. Trans Penn Wax Corp. v.

McCandless, 50 F.3d 217, 225 (3d Cir. 1995) (“The general

rule is that a district court loses jurisdiction over a case once

it has completed the remand by sending a certified copy of the

remand order to state court.”).1 In our view, the text of 28

U.S.C. § 1447(c) establishes that jurisdiction remains with the

district court until the jurisdiction-transferring event has

occurred: “[a] certified copy of the order of remand shall be

mailed by the clerk to the clerk of the State court. The State

court may thereupon proceed with such case.” 28 U.S.C.

§ 1447(c).2 Thus, in this case, the District Court had

1

This Court decided Trans Penn Wax on a petition for writ of

mandamus, not as an as-of-right appeal, because the remand

order in that case was pursuant to 28 U.S.C. § 1367 — not

§ 1447(c). Trans Penn Wax, 50 F.3d at 227. In Thermtron

Products, Inc. v. Hermansdorfer, the Supreme Court held that

§ 1447(d) does not bar mandamus review of remand orders

grounded in legal authority other than § 1447(c). 423 U.S.

336, 345 (1976); see also James E. Pfander, Collateral

Review of Remand Orders: Reasserting the Supervisory Role

of the Supreme Court, 159 U. Pa. L. Rev. 493, 495-96 (2011)

(discussing the Supreme Court’s expansion of as-of-right

review through the collateral order doctrine).

2

This accords with the rule recognized by the Court of

Appeals for the Second Circuit as well. Shapiro v. Logistec

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jurisdiction to deny the defendants’ motion for

reconsideration because, at the time when the District Court

considered the motion for reconsideration, a certified copy of

the remand order had not yet been mailed from the District

Court Clerk to the state court.

Our holding does not trouble that general rule, which,

in addition to being “premised on . . . the language of §

1447(c) and (d),” is also grounded in “the need to establish a

determinable jurisdictional event after which the state court

can exercise control over the case without fear of further

federal interference.” Trans Penn Wax, 50 F.3d at 225. Here,

that determinable jurisdictional event occurred after the

District Court denied the motion to reconsider its remand

order and before the Lycoming defendants filed their notice

of appeal. Therefore, it was not until the certified copy of the

remand order was mailed to state court that the mandate of

USA, Inc., 412 F.3d 307, 312 (2d Cir. 2005) (“Section

1447(c) . . . is not self-executing. . . . This provision creates

legal significance in the mailing of a certified copy of the

remand order in terms of determining the time at which the

district court is divested of jurisdiction. . . . Thus, section

1447(d) divests the district court of jurisdiction upon mailing

of a remand order based on section 1447(c) grounds to state

court.” (quotation marks omitted)). But see In re Lowe, 102

F.3d 731, 734 (4th Cir. 1996) (“Subsection 1447(d) provides

only that a remand ‘order’ may not be reviewed; it does not

condition reviewability on any other event. Thus, the plain

language of subsection (d) indicates that a court may not

reconsider its decision to remand, as soon as it formalizes that

decision in an ‘order.’”).

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§ 1447(c) was fulfilled, triggering § 1447(d). At the moment

of mailing — the jurisdictional event — the remand order

became unreviewable “on appeal or otherwise.” A district

court that seeks to preserve the ability to reconsider remand

orders issued under § 1447(c), in order to guard against the

occasional error in assessing subject-matter jurisdiction, may

wish to bear in mind that jurisdiction is not transferred until

the Clerk mails a copy of the certified remand order to state

court. Once mailed, the order may not be reconsidered.

IV.

The plaintiffs request, finally, that we award them

costs and counsel fees for responding to what they claim is a

baseless appeal. Because, until now, this Court had not

conclusively settled the question of whether appellate review

of a motion to reconsider a remand order is permissible, we

hold that the appeal was not “utterly without basis in law or in

fact” and, accordingly, an award of damages and costs

pursuant to Federal Rule of Appellate Procedure 38 is

unwarranted. Quiroga v. Hasbro, Inc., 943 F.2d 346, 347 (3d

Cir. 1991). Moreover, Rule 38 permits the award of “just

damages and single or double costs to the appellee” “after a

separately filed motion” has been made. Fed. R. App. P. 38.

The plaintiffs failed to file such a motion. For these reasons,

we will deny the award of fees and any damages to the

plaintiffs under Rule 38. However, we will order that costs

be taxed against the Lycoming defendants, pursuant to

Federal Rule of Appellate Procedure 39(a)(1).

V.

For the foregoing reasons, we will grant the plaintiffs’

motion to dismiss this appeal. We will deny the request for

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attorneys’ fees, costs, and damages pursuant to Rule 38, and

will order that costs be taxed against the Lycoming

defendants pursuant to Rule 39(a)(1).

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