Petition — Martin Steel Corp. v. United States District Court for the District of Minnesota

‘ Office - Su Court, U.S.

838-1682 FILED

APR 12 1984 |

Docket No.

ALEXANDER L. STEVAS,

LER K

IN THE

Supreme Court of the Gnited States

October, 1983 Term

In Re: Martin Steel Corporation and Lloyd O. Shawber

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

Richard J. Nygaard

RIDER, BENNETT, EGAN &

& ARUNDEL

2500 First Bank Place West

Minneapolis, Minnesota *5402

(612) 340-7912

1984—Northwest Brief Printing Co, 3010 Ind St. No. Minneapolis 554! |—588-7506

QUESTION PRESENTED FOR REVIEW

Does the United States Court of Appeals for the Eighth

Circuit’s erroneous reading of 28 U.S.C. § 1447(c) and

(d), and Thermtron Products, Inc. v. Hermansdorfer, 423

U.S. 336 (1976), in its orders of January 30, and February

2, 1984 violate the Congressional intent of § 1447 as ex-

plained in Thermtron?

PARTIES

Petitioners:

Martin Steel Corporation,

Lloyd O. Shawber.

Respondents:

Owatonna Elevator Company,

Chicago-Eastern Corporation,

Mid-State Bolt and Nut Company, Inc.

Industrial Fasteners, Inc.

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

Cases:

Midwestern Distribution v. Paris Motor Freight Lines,

563 F. Supp. 489 (E.D. Ark. 1983) ............ 7

Powers v. Chesapeake & O. Ry., 169 U.S. 92 (1898) 7

Thermtron Products, Inc. v. Hermansdorf, 423 U.S.

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Statutes:

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iii

IN THE

Supreme Court of the Grited States

October, 1983 Term

Docket No.

In Re: Martin Steel Corporation and Lloyd O. Shawber

ON WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

REPORT REFERENCES

The United States Court of Appeals for the Eighth Cir-

cuit issued unpublished orders in Jn Re: Martin Steel Cor-

poration and Lloyd O. Shawber, No. 83-2668, and In Re:

Industrial Fasteners, Inc., No. 83-2706, dated January 30,

and February 2, 1984.

STATEMENT OF GROUNDS

Review is sought pursuant to 28 U.S.C. § 1254(1) of

Orders of the United States Court of Appeals for the Eighth

Circuit dated January 30, and February 2, 1984, denying

review on jurisdictional grounds of an order of the United

States District Court, District of Minnesota, dated Novem-

ber 18, 1983.

2

STATUTES

28 U.S.C. § 1447. Procedure after removal generally

(c) If at any time before final judgment it appears

that the case was removed improvidently and without

jurisdiction, the district court shall remand the case,

and may order the payment of just costs. A certified

copy of the order of remand shal! be mailed by its

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

may thereupon proceed with such case.

(d) 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 1443 of this title shall be review-

able by appeal or otherwise.

(As amended May 24, 1949, c. 139, § 84, 63 Stat.

102; July 2, 1964, Pub.L. 88-352, Title IX, § 901.

78 Stat. 266.)

STATEMENT OF THE CASE

On August 21, 1981, Respondent Owatonna Elevator

Company’ sued diverse and non-diverse defendants, includ-

ing Petitioner Martin Steel Corporation,” in Steele County

District Court, Third Judicial District, State of Minnesota.

On January 3, 1983, plaintiff interposed an Amended Com-

plaint which named additional diverse and non-diverse de-

fendants, including Petitioner Lloyd Shawber.” After a hear-

‘Owatonna Elevator M with

—~ lace of eo.) imnesota corporation its prin-

"Martin Steel Corporation is an Ohio corporation with its principal

of business in Mansfield, Ohio. It is no’ a subsidiary nor does

it hold ary subsidiaries.

*"Lioyd Shawber is a resident of Mansfield, Ohio.

3

ing on Ociober 12, 1983, the Steele County District Court

entered orders on October 21, and October 26, 1983, dis-

missing with prejudice all non-diverse defendants.

Or October 17, 1983, the diverse defendants, including

Martin Steel Corporation and Lloyd Shawber, petitioned

for removal to the United States District Court, District of

Minnesota. Upon learning that the orders for dismissal were

executed on October 21 and October 26, 1983, rather than

on October 12, 1983, the date of the dismissal hearing, the

diverse defendants amended their petition for removal and

refiled it on November 15, 1983.*

On November 18, 1983, the United States District Court

remanded the action to the state court. The remand order

stated:

A review of the file in this case indicates that it was

initiated in Minnesota State District Court at Austin

in 1981. The State District Judge, the Hon. William

J. Nierengarten, has been deeply involved in the pre-

trial proceedings. He has supervised discovery, issued

a number of orders, severally reprimanded counsel for

their conduct, established a discovery termination date

and set a trial date which is imminent.

After all this had been done, defendants filed a peti-

tion for removal. It is very doubtful if the petition

for removal was filed within the required statutory

period after removability was ascertained and, at all

events, it would make little sense to try the case here

given Judge Nierengarten’s long and deep involve-

ment. It would be unseemly and at variance with es-

tablished principles of comity for the federal court to

now intervene and thus abort state court jurisdiction.

“Both the original Petition for removal and the Amended Petition were

filed within time limits prescribed by 28 U.S.C. § 1446(6).

4

It is ordered that this case is remanded to the

Minnesota District Court for the Third Judicial Dis-

trict.

On December 12, 1982, Martin Steel Corporation and

Lloyd Shawber filed a petition for a Writ of Mandamus,

seeking review of the November 18, 1983, order remanding

the case. On January 30, 1984, the United States Court of

Appeals for the Eighth Circuit issued an order denying

the mandamus petition and stated:

Martin Steel Corporation and Lloyd O. Shawber

seek a writ of mandamus vacating a district court or-

der which remanded the case of Owatonna Elevator

Company v. Martin Steel Corporation, No. 3-83-1298,

to state court. As we view the district court’s order,

the case was remanded because the petitioners had

failed timely to remove from state to federal court,

stating that “it is very doubtful that the petition for

removal was filed within the required statutory period

after removability was ascertained .. .

We belicve the district court’s determination that

the case had been improvidently removed is within the

bounds of 28 U.S.C. § 1447(c). See Royal v. State

Farm Fire & Casualty Company, 685 F.2d 124, 127

(Sth Cir. 1982); Robertson v. Ball, 534 F.2d 63, 65

N. 2 (Sth Cir. 1976). Hence, the remand order is not

reviewable in this court. First, pursuant to 28 U.S.C. §

1447(d) removal orders are not reviewable unless the

order is based on grounds wholly different from those

permitted by § 1447(c). Second the section “prohibits

review of all remand orders issued pursuant to § 1447

(c) whether erroneous or not and whether review is

sought by appeal or by extraordinary writ. Thermtron

Products, Inc. v. Hermansdorfer, 423 U.S. 336, 343

(1976).

5

It is ordered that the petitions for writ of manda-

mus are denied.

This order was amended on February 2, 1984, to include

denial of the petition by another diverse defendant, Indus-

trial Fasteners, Inc., who had joined Martin Steel Corpora-

tion and Lloyd Shawber in petitioning for a Writ of Man-

damus.

Martin Stee] Corporation and Lloyd Shawber, now, peti-

tion for a Writ of Certiorari to the United States Court of

Appeals for the Eighth Circuit.

ARGUMENT

The district court based its decision to remand to the

state court on the grounds that “[i]t would be unseemly and

at variance with established principles of comity” for the

federal court to assume jurisdiction of this case.

28 U.S.C. § 1447(c) and (d), as interpreted in Therm-

tron Products, Inc. v. Hermansdorfer, 423 U.S. 336 (1936),

establishes the basis for the return of a removed case to a

state forum. Remand that does not comply with the statu-

tory provision, as consrued by Thermiron, is forbidden and

beyond the authority of a district court.

Subdivisions (c) and (d) of § 1447 permit a remand only

when a suit has been “removed improvidently and without

jurisdiction.” The grounds for remand mandated by these

subsections are exclusiye in that a remand cannot exceed

its statutory definition. An order that purports to remand

on grounds that a suit was “removed improvidently and

without jurisdiction” is not subject to review in a court of

appeals, even if remand was clearly erroneous. But, if the

remand is on grounds not provided for by § 1447, subds. (c)

and (b), a limited review is available by writ of mandamus.

bi,

6

In the instant case, the District Court remanded on

grounds wholly different from those provided for by sub-

sections (c) and (d). Its order remanding considered pro-

cedural actions of the state court, the imminence of trial,

and the principles of comity; none of these considerations

are recognized by the statute as a basis for remand. The

District Court intimated that removal was untimely but

clearly based its decision on its perception of comity and

orderly judicial administration. The Eigtth Circuit read

this ambiguous part of the District Court’s order remanding

and erroneously concluded review was barred. The off-hand

comment by the district court that it was “doubtful” that the

demand for removal was timely filed was clearly not the

basis for the district court’s action; rather, the district court

was motivated solely by concerns of comity and orderliness

of the judicial proceedings—grounds wholly analogous to

the trial court’s improper concern for its crowded docket in

Thermtron:

The determining factor was the District Court’s heavy

docket, which respondent thought would unjustly de-

lay plaintiffs in going to trial on the merits of their ac-

tion. This consideration, however, is plainly irrelevant

to whether the District Court would have had juris-

diction of the case had it been filed initially in that

court, to the removability of a case from the state court

under § 1441, and hence to the question whether this

cause was removed “improvidently and without juris-

diction” within the meaning of the statute.

Thermtron, 423 U.S. at 344. Likewise, the federal district

court’s concerns in this case for orderliness or comity are

not among the grounds specified by Congress for remand.

The Eighth Circuit’s denial of review by mandamus perpe-

eek

7

tuates a wrongful denial of a federal forum to diverse de-

fendants, contrary to the Congressional intent to permit

diverse defendants access to federal forums. Powers v.

Chesapeake & O. Ry., 169 U.S. 92 (1898).

Deprivation of a Congressionally granted right through

erroneous readings of federal statutes and this Court’s prec-

edent, without sufficient findings to justify remand or de-

nial of review, is arbitrary and unjust. The Petition for a

Writ of Certiorari should be granted to assure the Petition-

ers, and others,’ their Congressional right to a federal for-

um.

Respectfully submitted,

Richard J. Nygaard

RIDER, BENNETT, EGAN & ARUNDEL

2500 First Bank Place West

Minneapolis, Minnesota 55402

(612) 340-7912

‘In this case and others, lower courts are now erroneously using per-

ceived practical considerations to justify remand contrary to the stat-

ute, Another district court within the Eighth Circuit recently wrote:

A court cou'd i.ore appropriately address the propriety of remand

by considering the following set of fact:

1) The nature and gravity of the defect in removal;

2) Principles of comity and judicial economy;

3) Relative to the parties, including deference to the

a. salt dpibeel teson aut

4) Actions taken by the party seeking remand that imply it has

affirmatively sought the federal court's intervention.

APPENDIX INDEX

Page

United States District Court for the District of Minne-

sota, Order dated November 18, 1983 ..........

United States Court of Appeals for the Eighth Circuit,

Order dated January 30, 1984 ..........0eceees

United States Court of Appeals for the Eighth Circuit,

Order dated February 2, 1984 ............455. A-7

A-3

APPENDIX

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

THIRD DIVISION

Owatonna Elevator Co., a Minnesota corporation,

Plaintiff,

VS.

Martin Stee! Corporation, Chicago-Eastern Corporation,

Mid-State Bolt & Nut Company, Inc., Industrial Fasten-

ers, Inc., and Lloyd Shawber,

Defendants.

ORDER

Civ. 3-83-1298

A review of the file in this case indicates that it was initi-

ated in Minnesota State District Court at Austin in 1981.

The State District Judge, the Honorable William J. Nieren-

garten, has been deeply involved in the pretrial proceedings.

He has supervised discovery, issued a number of orders,

severely reprimanded counsel for their conduct, established

a discovery termination date and set a trial date which is

imminent.

After all this had been done, defendants filed a petition

for removal. It is very doubtful if the petition for removal

was filed within the required statutory period after remov-

ability was ascertained and, at all events, it would make

little sense to try the case here given Judge Nierengarten’s

A-4

long and deep involvement. It would be unseemly and at

variance with established principles of comity for the Fed-

eral Court to now intervene and thus abort State Court

jurisdiction.

IT IS ORDERED THAT this case is remanded to the

Minnesota State District Court for the Third Judicial Dis-

trict.

Dated: November 18, 1983.

EDWARD J. DEVITT

United States District Judge

A-5

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 83-2668

In Re: Martin Steel Corporation and Lloyd O. Shawber,

Petitioners.

No. 83-2706

In Re: Industrial Fasteners, Inc.,

Petitioner.

On Petition for Writ of Mandamus

Filed: January 30, 1984

Before HEANEY, ROSS and FAGG, Circuit Judges.

ORDER

Martin Steel Corporation and Lloyd O. Shawber seek a

writ of mandamus vacating a district court order which re-

manded the case of Owatonna Elevator Co. v. Martin Steel

Corporation, No. 3-83-1298, to state court. As we view the

district court’s order, the case was remanded because the

petitioners had failed timely to remove it from state to fed-

eral court, stating that “it is very doubtful if the petition

for removal was filed within the required statutory period

A-6

after removability was ascertained * * *.” We believe the

district court’s determination that the case had been im-

providently removed is within the bounds of 28 U.S.C. §

1447(c). See Royal v. State Farm Fire and Casualty Co.,

685 F.2d 124, 127 (Sth Cir. 1982); Robertson v. Ball, 534

F.2d 63, 65 n.2 (Sth Cir. 1976). Hence, the remand order

is not reviewable in this court. First, pursuant to 28 U.S.C.

§ 1447(d) removal orders are not reviewable unless the

order is based on grounds wholly different from those per-

mitted by section 1447(c). Second, the section “prohibits

review of all remand orders issued pursuant to § 1447(c)

whether erroneous or nut and whether review is sought by

appeal or by extraordinary writ.” Thermtron Products, Inc.

v. Hermansdorfer, 423 U.S. 336, 343 (1976).

IT IS ORDERED that the petitions for writ of man-

damus are denied.

A true copy.

Attest:

CLERK; U.S. COURT OF APPEALS,

EIGHTH CIRCUIT

-_ ene he oe

A-7

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No. 83-2668

In Re: Martin Steel Corp. and Lloyd O. Shawber,

Petitioners.

No. 83-2706

In Re: Industrial Fasteners, Inc.,

Petitioner.

On Petition for Writ of Mandamus

Filed: February 2, 1984

Before HEANEY’, ROSS and FAGG, Circuit Judges.

AMENDED ORDER

Martin Steel Corporation and Lloyd O. Shawber and

Industrial Fasteners, Inc. seek writs of mandamus vacating

a district court order which remanded the case of Owaton-

na Elevator Co. v. Martin Steel Corporation, No. 3-83-

1298, to state court. As we view the district court’s order,

the case was remanded because the petitioners had failed

timely to remove it from state to federal court, stating that

A-8

“it is very doubtful if the petition for removal was filed

within the required statutory period after removability was

ascertained * * *.” We believe the district court’s deter-

mination that the case had been improvidently removed is

within the bounds of 28 U.S.C. § 1447(c). See Royal v.

State Farm Fire and Casualty Co., 685 F.2d 124, 127 (Sth

Cir. 1982); Robertson v. Ball, 534 F.2d 63, 65 n.2 (Sth

Cir. 1976). Hence, the remand order is not reviewable in

this court. First, pursuant to 28 U.S.C. § 1447(d) removal

orders are not reviewable unless the order is based on

grounds wholly different from those permitted by section

1447(c). Second, the section “prohibits review of all re-

mand orders issued pursuant to § 1447(c) whether errone-

ous or not and whether review is sought by appeal or by

extraordinary writ.” Thermtron Products, Inc. v. Hermans-

dorfer, 423 U.S. 336, 343 (1976).

IT IS ORDERED that the petitions for writ of manda-

mus are denied.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS,

EIGHTH CIRCUIT