# Supplemental Brief — Ford Motor Co. v. McCauley

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Supplemental Brief
- **Published:** January 1, 2002
- **Citation:** 536 U.S. 987

## Text

Supreme Court, U.S

N2/) FILED

SEP 2 6 2002
No. 01-896
| OFFICE OF THE CLERK
IN THE
Supreme Court of the United States
FORD MOTOR COMPANY and
CITIBANK (SOUTH DAKOTA), N.A.,
Petitioners,
v.
JOHN B. McCAULEY, et al.,
Respondents.

On Wait oF CERTIORARI TO THE
Unitep States Court OF APPEALS FOR THE NINTH CIRCUIT

SUPPLEMENTAL BRIEF FOR RESPONDENTS

Steve W. BERMAN
Counsel of Record
R. BRENT WALTON
HAGENS BERMAN LLP
1301 Fifth Avenue
Suite 2900
Seattle, WA 98101
(206) 623-7292

Counsel for Respondents

(Additional Counsel for Respondents Listed on Signature Page)

176453 g

COUNSEL PRESS
(800) 274-3321 + (800) 359-6859

QUESTION PRESENTED BY THE COURT

Whether there is appellate jurisdiction when Petitioners,
as the nominally prevailing party in the district court,’ appeal
the district court’s dismissal of a complaint for lack of subject
matter jurisdiction.

1. Respondents/Plaintiffs do not understand as a factual matter
how Petitioners are a nominally prevailing party in the district court.
Other than the order appealed from, the only other order entered by
the district court relevant to the issue here was one denying
Petitioners’ motion to dismiss the consolidated complaint under
Fed. R. Civ. P. 12(b)(6). J.A. 110. In contrast, the dismissal of the
consolidated complaint was done by the district court sua sponte,
after briefing on class certification, and was unrelated to Petitioners’
motion.

il

TABLE OF CONTENTS
Page
Question Presented by the Court ............... i
Table of Contents ....cccccccssssessuneueneeee il
Table of Cited Authorities .............00000e: ill
Respondents’ Supplemental Statement .......... |
Summary Of Argument ....ccccccccsesssusnaes 2
| tt UUUCt~”~—~— 2
I. If The Court Determines That The Appeal
Was A Review Of A Remand Order, Appellate
Jurisdiction Is Lacking ................. 2
II. If The Court Determines That The Appeal
Was A Review Of The Dismissal Of The
Consolidated Action, Then There Is Appellate
Jurtedictios .....ccsscceseeuee eee 5
III. The Consolidated Complaint Does Not
Supercede The State-Court Actions ....... 8

iii
TABLE OF CITEDAUTHORITIES

Cases:

Anusbigian v. Trugreen/Chemlawn, 72 F.3d 1253
Meee c ch ch decenseduccacevcess

Archuleta v. Lacuesta, 131 F.3d 1359 (10th Cir. 1997)

Board of Managers of 2900 Ocean Ave. Condo. v.
Bronkovic, 83 F.3d 44 (2d Cir. 1996) .........

Briscoe v. Bell, 432 U.S. 404 (1977) ............

Budget Rent-A-Car Inc. v. Higashiguchi, 109 F.3d
ee ees ec eccebacecece

Carney v. BIC Corp., 88 F.3d 629 (8th Cir. 1996) ...

Carr v. American Red Cross, 17 F.3d 671 (3d Cir.
eee ee eececccecketecseces

Eyak Native Village v. Exxon Corp., 25 F.3d 773
eee ehkcakheeecesessecccccss

Glasser v. Amalgamated Workers Union Local 88,
806 F.2d 1539 (11th Cir. 1986) ..............

Gravitt v. Southwestern Bell Tel. Co., 430 U.S. 723
Ne i eecesesse

In re Ticketmaster Corp. Antitrust Litig., 929 F. Supp.
re anes cance idereneecens

Page

iv

Cited Authorities
Page
International Primate Protection League v.
Administrators of Tulane Educ. Fund, 500 U.S.
PPEEEED cncucdcctevcetéeneceusescéuueueteas 2
Lexecon Inc. v. Milberg Weiss Bershad Hynes &
SONG, TEP a SP ENESED scccccncnncvesses 9
Liberty Mut. Ins. Co. v. Ward Trucking Corp., 48 F.3d
PGE DUE 6 6S ceueeantoseeueesesusue 5,8
Morey v. Lockhart, 123 U.S. 56 (1887) .......... 5
Pelleport Investors, Inc. v. Budco Quality Theatres,
Inc., 741 F.2d 273 (9th Cir. 1984) ............ 6
Quackenbush vy. Allstate Ins. Co., 517 U.S. 706
DEE cebadnsneneceaouveseeuuecesbaeeenent 3
Robertson v. Ball, 534 F.2d 63 (Sth Cir. 1976) .... 5
Thermtron Products v. Hermansdorfer, 423 U.S. 336
SPEED ccicenenceensetasecilentaekins 3, 4, 5, 6, 8
Things Remembered v. Petrarca, 516 U.S. 124 (1995)
senaeeueuseusseeesiededesbeskieeetenwens 3-4, 5
United States v. Rice, 327 U.S. 742 (1946) ....... 4

Waco v. United States Fidelity & Guar. Co., 293 U.S.
DPE acctecndennneneddbatsatensentes 5,6

ee

Vv
Cited Authorities

Page
Statutes:
PEE Sd encennccnesccusccacéuesess |
SP EET Sede denccncedessvcucessecees 1,9
Pe OED Sov adedcccctisdendscceeucnces 3
BP le OF ED ho sctesecesscncsscceuscess 2, 3,5
PEED Kuuvedecedtinensunedennnce 2,3,4
Rules:
Pe Ee SED cedunccscccccansennéees i
es SE Oe SEED hd 6 cdnecctctconunensass 2
Other Authorities:
Section 5 of the Judiciary Act of 1875, 18 Stat. 472 -
The Act of Mar. 3, 1887, c. 373, 24 Stat. 553 ..... 7

l

RESPONDENTS’ SUPPLEMENTAL STATEMENT

In each of the underlying actions, Plaintiffs filed their cases
under state law asserting state law claims. Petitioners removed
each case to federal court and petitioned the Judicial Panel
on Multidistrict Litigation (“MDL Panel”) to consolidate the
cases for pretrial proceedings under 28 U.S.C. § 1407. J.A. 109.
The MDL Panel granted the petition, plaintiffs consented to the
transfer, and all cases were transferred to the Western District
of Washington. J.A. 31-32.

In the Case Management Order proposed by the parties,
the district court noted that the cases were “consolidated for
pretrial purposes,” and ordered that “a consolidated complaint”
— if one was to be filed — must “be filed within fifteen (15)
days after this Order becomes effective.” J.A. 41, 44.
To streamline the pretrial proceedings, Plaintiffs filed a single,
consolidated complaint. J.A. 70.

After class discovery, and following two initial hearings,
sua sponte the district court issued an order to show cause why
the action should not be dismissed for lack of jurisdiction and
why the six original cases “should not be . . . remanded to state
court.” J.A. 66. On October 29, 1999, the district court found
that it lacked subject matter jurisdiction over the claims in the
consolidated complaint, which it therefore dismissed, J.A. 91-
101, and it then remanded to state court each of the six actions
originally filed in state court and removed to federal court by
Petitioners. J.A. 100-101.

The district court dismissed the consolidated complaint and
indicated an intention to dispose of the federal action while
remanding the cases back to their original state courts. J.A. 100-
101, 124-126. Thus, the court of appeals concluded that the
district court’s decision *vas/reviewable under 28 U.S.C. § 1291.
J.A. 111-112.?

2. The district court’s order remanding the state actions is not
before this Court, and the panel below concluded that it was not
reviewable. J.A. 126.

2

The Ninth Circuit affirmed the dismissal of the
consolidated complaint for lack of jurisdiction. The panel
confirmed that it had jurisdiction to review the district
court’s order, which the panel construed as dismissing the
consolidated action. J.A. 111-112.

SUMMARY OF ARGUMENT

Courts cannot review an order of remand that is based
on a lack of subject matter jurisdiction. 28 U.S.C. § 1447(d).
Courts do have the authority to review dismissals of actions,
even those that are based on subject matter jurisdiction.
Accordingly, if this Court concludes as the panel did that
appellate jurisdiction is based on the dismissal of the
consolidated action, even though it is predicated solely on
lack of subject matter jurisdiction, then appellate jurisdiction
may be proper.

ARGUMENT

I. IF THE COURT DETERMINES THAT THE
APPEAL WAS A REVIEW OF A REMAND ORDER,
APPELLATE JURISDICTION IS LACKING

A district court must remand a removed action when it
appears to the court that it lacks subject matter jurisdiction.
28 U.S.C. § 1447(c) (“If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction,
the case shall be remanded”).’ Indeed, the Court has observed
that “‘the literal words of § 1447(c)... give. . . no discretion
to dismiss rather than remand an action.’ The statute declares
that, where subject matter jurisdiction is lacking, the removed
case ‘shall be remanded.’” /nternational Primate Protection
League v. Administrators of Tulane Educ. Fund, 500 U.S.
72, 89 (1991) (citation omitted).

3. See also Fed. R. Civ. P. 12(h)(3) (“Whenever its appears by
suggestion of the parties or otherwise that the court lacks jurisdiction
over the subject matter, the court shall dismiss the action.”)

3

The very next subsection of the removal statute appears
to bar all appellate review of remand orders. 28 U.S.C.
§ 1447(d) (except civil rights cases removed pursuant to
28 U.S.C. § 1443, “[a]n order remanding a case to the State
court from which it was removed is not reviewable on appeal
or otherwise ...”). However, this Court has also stated
“Section 1447(d) is not dispositive of the reviewability of
remand orders in and of itself.” Thermtron Products v.
Hermansdorfer, 423 U.S. 336, 345 (1976). Thus, there are
at least some remand orders that are reviewable. See, e.g.,
Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996)
(permitting review of remand order because the “District
Court’s abstention based remand order does not fall into
either category of remand order described in § 1447(c), as it
is not based on lack of subject matter jurisdiction or defects
in removal procedure.”)

Nevertheless, the interplay and command of section
1447(c) and 1447(d) are clear when a remand is based on a
finding that the district court lacks subject matter jurisdiction.

Title 28 U.S.C. § 1447(c) provides for remanding
a removed action when the district court
determines that “the case was removed
improvidently and without jurisdiction”; and
when a remand has been ordered on these grounds,
28 U.S.C. § 1447(d) unmistakably commands that
the order “remanding a case to the State court from
which it was removed is not reviewable on appeal
or otherwise... .”

Gravitt v. Southwestern Bell Tel. Co., 430 U.S. 723, 723
(1977). As the Court explained in Thermtron Products, Inc.
v. Hermansdorfer, 423 U.S. 336 (1976), Ҥ 1447(d) must be
read in pari materia with § 1447(c), so that only remands
based on grounds specified in § 1447(c) are immune from
review under § 1447(d).” Things Remembered v. Petrarca,

4

516 U.S. 124, 127 (1995). And, more recently, the Court
reaffirmed this principle, emphatically stating:

As long as a district court’s remand is based on a
timely raised defect in removal procedure or on lack
of subject-matter jurisdiction — the grounds for
remand recognized by § 1447(c) — acourt of appeals
lacks jurisdiction to entertain an appeal of the remand
order under § 1447(d).

Jd. at 127-28. This bright-line rule applies “no matter how plain
the legal error.” Briscoe v. Bell, 432 U.S. 404, 414n.13 (1977).

The purpose of denial of any review of remand orders is to
prevent delay of the litigation that the removing party may
achieve by seeking appellate reconsideration of a remand order.
United States v. Rice, 327 U.S. 742, 751-52 (1946).

There is no doubt that in order to prevent delay in
the trial of remanded cases by protracted litigation
of jurisdictional issues, ... Congress immunized
from all forms of appellate review any remand order
issued on the grounds specified in § 1447(c), whether
or not that order might be deemed erroneous by an
appeliate court.

Thermtron, 423 U.S. at 351 (citation omitted). In a very real
sense, delay is exactly what Petitioners have already achieved.
Other than one motion to remand that was withdrawn, Plaintiffs
have never opposed any court, be it state or federal court, to
hear the underlying claims; they simply desire them to proceed.

Here, because the district court’s “remand order was plainly
within the bounds of § 1447(c)”* — indeed remand was

4. Even if the Court were to construe the remand order as one
made pursuant to R.P.J.P.M.L. 7.6, section 1447(d) would still apply.
Section 1447(d) applies “not only to remand orders made in suits
removed under [the general removal statute], but to orders of
remand made in cases removed under any other statutes, as well.”
United States v. Rice, 327 U.S. at 752.

5

specifically made because the court found it lacked subject
matter jurisdiction — the remand order !s “unreviewable by
the Court of Appeals, by mandamus or otherwise.”
Thermtron, supra; Gravitt, supra; Things Remembered,
supra; Morey v. Lockhart, 123 U.S. 56 (1887); Board of
Managers of 2900 Ocean Ave. Condo. v. Bronkovic, 83 F.3d
44 (2d Cir. 1996); Liberty Mut. Ins. Co. v. Ward Trucking
Corp., 48 F.3d 742 (3d Cir. 1995); Robertson v. Ball, 534
F.2d 63 (Sth Cir. 1976); Anusbigian v. Trugreen/Chemlawn,
72 F.3d 1253 (6th Cir. 1996); Carney v. BIC Corp., 88 F.3d
629 (8th Cir. 1996); Archuleta v. Lacuesta, 131 F.3d 1359
(10th Cir. 1997); Glasser v. Amalgamated Workers Union
Local 88, 806 F.2d 1539 (11th Cir. 1986).

Il. ‘F THE COURT DETERMINES THAT THE
#P? EAL WAS A REVIEW OF THE DISMISSAL OF
THE CONSOLIDATED ACTION, THEN THERE IS
APPELLATE JURISDICTION

Here, the district court dismissed the consolidated action
before remanding the actions back to their respective state
courts. Leaving aside for one moment the reason for the
district court’s dismissal was for finding a lack of subject
matter jurisdiction — one of the two reasons specified by
Congress in section 1447(c) — this Court has held that
dismissal of an action that precedes an order of remand is
reviewable.

[N]o appeal lies from the order of remand; but in
logic and in fact the decree of dismissal preceded
that of remand and was made by the District Court
while it had control of the cause. ... We are of
the opinion that the petitioner was entitled to have
the Circuit Court of Appeals determine whether
the dismissal of its cross-action . . . was proper.

Waco v. United States Fidelity & Guar. Co., 293 U.S. 140,
143 (1934). In Waco, the Court permitted review of the
dismissal but not the order of remand. Moreover, the Court

6

did so to determine whether the dismissal of the cross-action
against Fidelity was valid because the substantive decision
in the district court was binding on the parties. /d. Similarly,
courts have found appellate jurisdiction to review some
remand orders when that review is predicated on a prior order
that is reviewable. See, e.g., Carr v. American Red Cross, 17
F.3d 671, 682-83 (3d Cir. 1994); Pelleport Investors, Inc. v.
Budco Quality Theatres, Inc., 741 F.2d 273, 277 (9th Cir.
1984).

Accordingly, the panel was at least plausibly correct in
asserting jurisdiction over the appeal as the district court
dismissed the consolidated action. Specifically, the district
court stated: “The consolidated complaint is hereby dismissed
for lack of jurisdiction, and the six cases originally filed in
state court, and removed to federal court by the defendants,
are now remanded to state court...” J.A. 100. Of course,
courts of appeal routinely review dismissals for subject
matter jurisdiction. See, e.g., Budget Rent-A-Car Inc. v.
Higashiguchi, 109 F.3d 1471 (9th Cir. 1997).

At the same time, Petitioners did not appeal the
substantive decision on the merits of the action denying the
motion to dismiss; instead, Petitioners appealed the dismissal
of the consolidated action for lack of jurisdiction and remand
order. This distinction seems to take this case out of the Waco
line of decisions, as there is no substantive decision on the
merits to review or any threat that some order of the court
will be unreviewable at a later date. Furthermore, Plaintiffs
are hard pressed to find any reason why appellate jurisdiction
should be found here because historically courts were
permitted to dismiss or remand the action to state court for
lack of jurisdiction, as either decision achieves the same result
without impacting the merits of the case. Indeed, as this Court
has noted, “Section 1447(d) has its roots in the Act of Mar.
3, 1887, 24 Stat. 552. Prior to 1875, orders of remand were
not reviewable by appeal or writ of error for want of a final
judgment.” Thermtron, 423 U.S. at 346. However, in 1875,

ee ee

7

Congress enacted Section 5 of the Judiciary Act of 1875,
18 Stat. 472, which provided:

That if, in any suit commenced in a circuit court
or removed from a State court to a circuit court of
the United States, it shall appear to the satisfaction
of said circuit court, at any time after such suit
has been brought or removed thereto, that such
suit does not really and substantially involve a
dispute or controversy properly within the
jurisdiction of said circuit court, or that the parties
to said suit have been improperly or collusively
made or joined, either as plaintiffs or defendants,
for the purpose of creating a case cognizable or
removable under this act, the said circuit court
shall proceed no further therein, but shall dismiss
the suit or remand it to the court from which it
was removed as justice may require, and shall
make such order as to costs as shall be just; but
the order of said circuit court dismissing or
remanding said cause to the State court shall be
reviewable by the Supreme Court on writ of error
or appeal, as the case may be.

(Emphasis added). Subsequently, in 1887, Congress repealed
the provision contained in Section 5 of the 1875 Act
providing for appellate review of ard included a new
provision that forbid review of remand orders. Specifically,
The Act of Mar. 3, 1887, c. 373, 24 Stat. 553, provided in
part:

Whenever any cause shall be removed from any
State court into any circuit court of the United
States, and the circuit court shall decide that the
cause was improperly removed, and order the
same to be remanded to the State court from
whence it came, such remand shall be immediately
carried into execution, and no appeal or writ of

a

: 9
error from the decision of the circuit court so Indeed, such an Order is required when cases are transferred
remanding such cause shall be allowed. pursuant to 28 U.S.C. § 1407, as pretrial proceedings are all

Thus, “while not disturbing the provision for dismissal or that Congress permits the transferee court to conduct in MDL
remand for want of jurisdiction, [the Act] not only repealed proceedings. Lexecon Inc. v. Milberg Weiss Bershad Hynes &
the provision in § 5 of the 1875 Act providing for appellate Lerach, 523 U.S. 26 (1998). At the close of pretrial
review of remand orders but contained a provision that proceedings, the transferred cases must be remanded by the
‘improperly removed’ cases should be remanded” and that transferee court. /d. Although plaintiffs filed a “consolidated
“no appeal or writ of error from the decision of the circuit complaint as expressly permitted by 28 U.S.C. § 1407, this
court so remanding such cause shall be allowed.” Thermtron, streamlining did not, and could not, expand the jurisdiction
423 U.S. at 346-47 (emphasis on “so remanding” in original, of the district court or any court.
otherwise emphasis added). Petitioners’ citation to Jn re Ticketmaster Corp. Antitrust

The statutory history thus indicates that Congress has Litig., 929 F. Supp. 1272 (E.D. Mo. 1996), is inapplicable
determined no review of the decision remanding the action as: (i) all of the claims at issue were brought under federal
is permissible when that decision is based on a lack of subject antitrust law, and hence federal jurisdiction was not an issue,
matter jurisdiction. The only question then is whether and (ii) that decision was a substantive dismissal (i.€., on
Congress intended to permit review of a dismissal for lack the merits) which was therefore dispositive of the claims.
of subject matter jurisdiction when that dismissal is included Furthermore, Eyak Native Village v. Exxon Corp., 25 F.3d
with the decision to remand and is based on the very same 773, 780-81 (9th Cir. 1994), is equally inapplicable, eocause
grounds. Respectfully, and as much as Plaintiffs would like there the court was concerned with whether the consolidated
the Court to provide clear guidance on the amount-in- class complaint joined all actions into a single action to thus
controversy issue presented, Plaintiffs cannot think of a good make them removable as a group. Here, Petitioners’ use of
reason to permit such review. Indeed, an exception to permit the citation goes to authority to oe the issuance of
review of dismissals based on subject matter jurisdiction remand order. Indeed, the panel considered and repudiated
when included in the same order as a remand order would Petitioners’ argument stating:
swallow the rule and, contrary to Congress’ intent, permit Ford and Citibank begin their argument with the
review of a remand decision based on the lack of subject premise that a consolidated complaint is “akin to
matter jurisdiction. See Liberty Mutual, 48 F.3d at 748-49. an amended complaint,” which “supersedes the
Ill. THE CONSOLIDATED COMPLAINT DOES NOT original, the latter thereafter being treated as non-

SUPERCEDE THE STATE-COURT ACTIONS existent.” Loux v. Rhay, 375 F.2d 55, 57 (9th Cir.

1967). They thus contend that the consolidated
complaint amended the original state complaints,
rendering them “non-existent.” However, they
provide ne authority for this proposition. The
cases on which they rely merely stand for the
unremarkable propositions that: (1) an amended
complaint supersedes an original and (2) in a

Petitioners erroneously contend that the consolidated
complaint “supercedes the state-court actions.” See, e.g., Pet.
Reply at 19. When the MDL panel transferred the cases to
the Western District of Washington, it specifically instructed
the district court to conduct “coordinated or consolidated
pretrial proceedings with the action pending there.” J.A. 32.

10

consolidated action, a consolidated complaint is
the operative pleading and supersedes all
previously filed complaints. No authority supports
the contention that a consolidated complaint
touches or disturbs underlying state claims.

Nor is there anything cited to us in the record that
demonstrates the district court meant for the
complaints in the remand cases to disappear.
On the contrary, the plaintiffs “consolidate” their
efforts into one document which becomes the
operative pleading. No court order did anything
more than this. Once that umbrella complaint was
dismissed, it left the underlying state removed
complaints intact. Therefore, the district court
did not exceed its authority in remanding the
underlying removed actions to state court and,
pursuant to section 1447(d), we lack jurisdiction
to review its decision.

Micuaet J. ROSENFELD
Ka.s, Rosenreco & Essic
283 Commack Road
Commack, NY 11725
(516) 499-3800

James G. Lewis
9911 W. Pico Blvd, Suite 503
(310) 553-1661

Russert J. Drake

Wuat.ey Drake LLC

2323 2nd Ave., North

P.O. Box 10647
Birmingham, AL 35202-0647
(205) 328-9576

|

Respectfully submitted,

Steve W. Berman
Counsel of Record
R. Brent WaLTON
Hacens Berman LLP
1301 Fifth Avenue
Suite 2900

Seattle, WA 98101
(206) 623-7292

Rocer W. Kirsy

ANDREA BIERSTEIN

Kurpy McInerney & Squire
830 Third Ave., 10” Floor
New York, NY 10022
(212) 317-2300

Joun H. ALEXANDER

J.A. 126. There is nothing, by virtue of filing a consolidated ALEXANDER & ASSOCIATES
complaint, that extinguishes the underlying state law 100 W. Monroe Street
complaints, nor could any order issued by a federal court | 21" Floor
without subject matter jurisdiction do so. Chicago, IL 60603

(312) 263-7731

Counsel for Respondents

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385014_0531%3A10. Public record. Not legal advice.