Opposition Brief — Ocean Marine Mutual Protection & Indemnity Ass'n v. Wilson

No. 93-1117

: le The

Supreme Court Of The United States

October Term 1993

OCEAN MARINE MUTUAL PROTECTION AND

INDEMNITY ASSOCIATION, LTD. and ROBERT

DAVIS d/b/a DAVIS MARINE INSURANCE AGENCY,

Petitioners,

VS

EDISON WILSON,

Respondent

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

CHARLES LIPCON, ESQ SHARON L. WOLFE, ESQ

Counsel of Record

2480 One Biscayne Tower CHRISTINE M. NG, ESQ

Two So. Biscayne Boulevard COOPER & WOLFE, P.A

Miami, Florida 33131 44 W. Flagler Street, #700

Telephone: (205) 373-3016 Miami, Florida 33130

Telephone: (305) 371-1597

Counsel for Respondent

i

QUESTION PRESENTED FOR REVIEW

Can a federal appellate court review a district court order

which finds a case was untimely removed under 28 U.S.C. §

1446(b), where the case was removed pursuant to the Convention

on the Recognition and Enforcement of Foreign Arbitral Awards,

9 U.S.C. § 205?

TABLE OF CONTENTS

Page

QUESTION PRESENTED FOR REVIEW ............ i

TABLE OF AUTHORITIES .........ccccveccecs iii

CITATIONS OF OPINIONS BELOW ........... 2

STATEMENT OF THE CASE ............ 2

SUMMARY OF ARGUMENT ............... 5

pt erermrrrerars rs 6 7

CONUG LIN (i ie ee eee eee 20

iii

TABLE OF AUTHORITIES

Cases Page

Air-Shields, Inc. v. Fullam,

a ck lec clewte’s 15

Alleghany Corp. v. United States Dist. Ct.,

Ce 1]

Clorox Co. v. United States Dist. Ct.,

i 15

Fed. Sav. & Loan Ins. Corp. v. Frumenti Dev. Corp.,

ee 14

Foster v. Mut. Fire, Marine & Inland Ins. Co..,

986 F.2d 48 (3d Cir. 1993)................ tae ae

In re Amoco Petroleum Additives Co. ,

a 18

In re Savers Fed. Sav. & Loan Ass'n,

Ce 14

In re Ocean Marine Mut. Protection and

Indem. Ass'n,

A) passim

In re Fed. Sav. & Loan Ins. Corp.,

A re 14

In re Fed. Sav. & Loan Ins. Corp.,

ED ee 13

In re TMI Litigation Cases Consolidated II,

I Eo ce + oo + oo bo ov ee we 14,15

iV

In re Medscope Marine Lid..,

972 F.2d 107 (Sth Cir. 1992) ............... 8,10,15

Levy v. Weissman,

bX » is ix 3h errr area tae 15

Maniar v. FDIC,

oo UR gS ee re 15

Massachusetts v. V & M Mgt., Inc.,

fe Ff) ee ae | ne 15

McDermott Int'l, Inc. v. Lloyds Underwriters

of London,

So Bd Le A | ee reer 15

Merrill Lynch, Pierce, Fenner & Smith, Inc.

v. Haydu,

oe & & F. Lo Ae | | Erne e Pre ener a 7

Nasuti v. Scannell,

a ee ee | aw chlo bin ow be oe Oe 16

Pacor, Inc. v. Higgins,

Pe ee Oe Ge FU fo 6. oe oe ode ve eee ees 14

Pelleport Investors, Inc. v. Budco Quality

Theaters, Inc.,

poke Pp. fk | er ee 15

Royal v. State Farm Fire & Cas. Co.,

Gi © .ae Ce Come Ce. BSD nc cc eee seen 10

Smith v. City of Picayune,

Faw ae ee Gs Dk ccc che se cuscwboues 10

Thermtron Prods., Inc. v. Hermansdorfer,

423 U.S. S50, FO 3.0K. SEA CIGTO) 0 wc ccc cee passim

Tillman v. CSX Transp., Inc.,

an © ae pees Ge Ge. I9P8) . we eu vectuen 9

United States v. Rice,

327 U.S. 742, 66 S.Ct. 835 (1946) .............. passim

Statutes

F aes ee es he ec et eee eee passim

vei oi Sy) See PP OR at Oa) f- 14

vg k 3 Wil 3 Fg SAEs Syl ote: 16

28 U.S.C. § 1441 ...... io estate 4,5,11,13,14

ae U.BA. 9 9008. wc ee: SP ee wrk 4,9,10,11,12

et es EE 6 0 ao 8 6 eae eo eee passim

28 U.S.C. § 1478 (amended and now codified as

ee aes OE Eh 6 ere ee eee eee 14

PG Oe i 0%, 2k ee ee ee 4,10,15

H.R.Rep. No. 889, 100th Cong., 2d Sess. 1988,

reprinted in 1988 U.S.C.C.A.N. 5982 .............. 10

No. 93-1117

In The

Supreme Court Of The United States

October Term 1993

OCEAN MARINE MUTUAL PROTECTION AND

INDEMNITY ASSOCIATION, LTD. and ROBERT

DAVIS d/b/a DAVIS MARINE INSURANCE AGENCY,

Petitioners,

vs

EDISON WILSON,

Respondent

On Petition For A Writ Of Certiorari

To The United States Court Of Appeals

For The Eleventh Circuit

BRIEF IN OPPOSITION TO

PETITION FOR A WRIT OF CERTIORARI

Respondent Edison Wilson respectfully requests this

Court to decline to review the judgment and opinion of the Unit-

ed States Court of Appeals for the Eleventh Circuit entered on

October 12, 1993.

CITATIONS OF OPINIONS BELOW

Petitioners have included all the opinions below in this

case in their appendix. However, the Eleventh Circuit Court of

Appeals only wrote a brief order in the case now before this

Court. The opinion of the Eleventh Circuit on the issues now

presented was written in full in a related case. In re Ocean

Marine Mut. Protection and Indem. Ass'n, 3 F.3d 353 (11th Cir.

1993)(hereinafter Deras}. For the Court’s convenience, that

opinion is reprinted in the Appendix to this brief.

STATEMENT OF THE CASE"

The underlying action. Edison Wilson was a seaman

who was severely injured in an accident while returning to his

ship, the M/V TOMA. Andy Corp. and ATA Nautical Corp.

("Andy/ATA") owned the vessel. Ocean Marine Mutual Protec-

tion and Indemnity Association Ltd. ("Ocean Marine") provided

coverage to Andy/ATA and the M/V TOMA. It refused to

defend or settle the claim. Wilson obtained a consent judgment

against Andy/ATA and the vessel for $275,000. As part of the

consent judgment/settlement agreement, Andy/ATA assigned its

rights against Ocean Marine and others to Wilson. Ocean Ma-

rine refused to pay the judgment.

This case. Wilson then filed this action against Ocean

Marine and Davis, the agent who had procured insurance cover-

age for Andy/ATA. Wilson filed the action in state court.

The claims against Ocean Marine arose out of the insur-

ance agreement between Andy/ATA and Ocean Marine. That

agreement contained an international arbitration provision which

wf Plaintiff/Respondent Edison Wilson will be referred to as he stands in

this Court and by name. Petitioners/Defendants Ocean Marine Mutual Protec-

tion and Indemnity Association, Lid. and Robert Davis d/b/a Davis Marine

Insurance Agency will be referred to as they stand in this Court and as Ocean

Marine and Davis. Emphasis is by counsel unless otherwise noted.

2

br

States:

If any differences or disputes shall arise between

a member and the Association out of or in con-

nection with these Rules or any contract between

them or as to the rights and obligations of the

Association or the member thereunder or in

connection therewith such differences or dispute

shall in the first instance be referred to and adju-

dicated upon by the Directors... .

If the member concerned in such differences or

disputes does not accept the decision of the Di-

rectors or if the Directors shall fail to make any

decision within three months of the reference to

them of the difference or the dispute, it shall be

referred to arbitration in London... .

(Emphasis added).

Davis, a Florida insurance agent, was not a party to this

agreement between Ocean Marine [the Association] and

Andy/ATA [the member]. The claims against Davis, therefore,

did not arise out of the insurance contract. Instead. Wilson, as

Andy/ATA’s assignee, sued Davis for negligence in failing to

obtain adequate coverage for Andy/ATA and in selecting an

insurance company which he knew or should have known did not

pay its claims.”/

The removal. About four months after he was served,

Davis filed a notice of removal to the United States District

Court for the Southern District of Florida. Ocean Marine filed a

z In their petition at 3-4, Ocean Marine and Davis claim that Wilson seeks

recovery from Davis “under the OCEAN MARINE Policy.” As explained

above, that is simply not the case. See also Deras, 3 F.3d at 354 (“the claims

against Davis . . . allege negligence for failure to obtain adequate insurance

coverage.”).

special appearance for the limited purpose of consenting to re-

moval. Davis claimed that removal was proper under 9 U.S.C.

§ 201 et seq., the Convention on the Recognition and Enforce-

ment of Foreign Arbitral Awards and 28 U.S.C. § 1441(c).*

Wilson moved to remand within 30 days of removal.”

He argued that Davis was not entitled to remove the action

against him. Davis could not invoke 9 U.S.C. § 205 because he

had no arbitration agreement with Andy/ATA and § 205 does not

authorize removal of joined claims. Nor could Davis rely on 28

U.S.C. § 1441(c) because the claims against him are not separate

and independent from the claims against Ocean Marine.

Shortly after it received Wilson’s motion, the court grant-

ed it. It did not address the grounds Wilson had raised. Instead,

the court ruled that the requirement of 28 U.S.C. § 1446(b) that

cases be removed within 30 days of service applied to cases re-

moved under 9 U.S.C. § 205. The court remanded the case

because Davis had not removed for almost four months.

Within ten days. Davis and Ocean Marine moved to

reconsider the remand order. They claimed the district court

could reconsider the remand order because the district court clerk

had not yet transmitted the certified copy of remand to the state

court pursuant to 28 U.S.C. § 1447(c).

The district court granted rehearing. The court rejected

its previous determination that § 205 incorporated the 30-day

requirement. It then rejected Wilson’s arguments on the merits.

It found that the claims against Davis were sufficiently related to

the arbitration clause to fall within § 205, even though Davis was

ad Although the notice of removal cites only 9 U.S.C. § 205, Davis invoked

28 U.S.C. § 1441(c) as well in his memorandum in support of removal.

ad Although the district court did not grant the motion on procedural

grounds within the 30-day period, it was free to do so because the motion was

filed within the time limit. Compare Fed.R.Civ.P. 59d).

4

not a party to the arbitration agreement. The court did not ad-

dress Wilson’s arguments under 28 U.S.C. § 1441(c).

Wilson moved for rehearing. He Suggested that the court

did not have jurisdiction to grant Davis’ and Ocean Marine’s mo-

tion for rehearing in the first place. Once the court issued the re-

mand order, it had no jurisdiction to reconsider its order, regard-

less of the status of the clerk’s certificate, a ministerial act unre-

lated to the court’s jurisdiction. The district court granted that

motion. It vacated its first rehearing order and reinstated the

original remand order. Davis and Ocean Marine filed a petition

for writ of mandamus in the United States Court of Appeals for

the Eleventh Circuit.

The Eleventh Circuit dismissed the petition in a brief

order which addressed neither the facts nor the law. In Deras,

another case which the Eleventh Circuit reviewed at the same

time and which also involved Ocean Marine, Davis, the same

arbitration clause, the same removal issues, but a different in-

jured plaintiff named Deras, the court wrote an opinion which

explained why it found that the remand orders at issue in both

Wilson and Deras could not be reviewed by the district court, the

circuit court “or otherwise.”

SUMMARY OF ARGUMENT

The district court remanded this case to state court on

procedural grounds as authorized by 28 U.S.C. § 1447(c). Pur-

suant to 28 U.S.C. § 1447(d), remands on procedural grounds

are not reviewable by either the district court on rehearing or by

the appellate court, on appeal or otherwise. This rule barring

review applies even if the remand was wrong.

Ocean Marine and Davis have attempted to get around

these rules by claiming that § 1447(d) does not limit review of

remand orders entered pursuant to the special removal statute of

the Convention on the Recognition of Foreign Arbitral Awards.

There is nothing in the Convention to indicate such intent. And

this Court has long held that the limitation on review of remand

orders applies even to cases removed under special removal stat-

utes, unless Congress has specifically stated otherwise. Some

special removal statutes contain statements by Congress that re-

mand orders under those statutes shall be reviewable. The Con-

vention does not.

Ocean Marine and Davis claim that this Court should

take jurisdiction of this case because there is a conflict in the

circuits on the issue of whether § 1447(d) precludes review of

orders entered pursuant to special removal statutes. There is no

such conflict. The circuits are all in accord: if the special re-

moval statute contains no statement of Congressional intent to

permit review, then § 1447(d) applies and no review is permit-

ted. The two primary cases on which Ocean Marine and Davis

rely have each been criticized and revised by later opinions of the

same circuits that wrote them.

Finally, this entire petition is premised on the assumption

that Davis had an absolute right of removal. That assumption is

incorrect. Davis, the only party who filed a notice of removal,

improperly relied on the special removal statute because he was

not a party to an international arbitration agreement and the claim

against him did not arise out of such an agreement. Nor does

Wilson concede that Ocean Marine could have removed the case

either. '

In sum, this case was decided consistently with every

other circuit that addressed an analogous issue. The Eleventh

Circuit was correct; it had no jurisdiction to review this case.

This Court should deny the petition for writ of certiorari.

ot cea

ARGUMENT

REASONS FOR DENYING THE WRIT

This case is a classic example of the reason for the gener-

al rule that remand orders are not reviewable. The purpose of

the prohibition against review of such orders is to avoid delay in

addressing the merits of a case because of prolonged litigation

over the forum. Thermtron Prods., Inc. v. Hermansdorfer, 423

U.S. 336, 351, 96 S.Ct. 584, 593 (1976); United States v. Rice,

327 U.S. 742, 751-52, 66 S.Ct. 835, 839 (1946); Merrill Lynch,

Pierce, Fenner & Smith, Inc. v. Haydu, 637 F.2d 391, 396 n.9

(Sth Cir. 1981). That is precisely what is happening here. This

Court should deny the writ of certiorari. The Eleventh Circuit

correctly ruled that it had no jurisdiction to review the district

court orders relating to the remand of this case to state court.

This ruling is consistent with the rulings of other circuits. More-

over, contrary to Ocean Marine’s and Davis’ contention, Davis

did not properly remove this case.

The § 1447(d) prohibition on review of remand

orders applies here ~ "The horse before the

cart."

Review of all remand orders is governed by 28 U.S.C. §

1447, regardless of the basis for removal. See argument infra at

11-13. Thus, an understanding of the Eleventh Circuit’s decision

should begin and end with review of that statute and not, as

Ocean Marine and Davis have done, with review of the Conven-

tion on the Recognition and Enforcement of Foreign Arbitral

Awards.

The basis for the general rule that prohibits review of re-

mand orders is 28 U.S.C. § 1447(d). It provides:

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 re-

manding a case to the State court from which it

was removed pursuant to section 1443 of this

title shall be reviewable by appeal or otherwise.

This section bars reconsideration of a remand order by the dis-

trict court on rehearing and by the appellate court through appeal

or writ of mandamus. See Thermtron, 423 U.S. 336, 96 S.Ct.

584.°’ Significantly, review is foreclosed even if the district

court erroneously remanded the case. /d. at 343, 96 S.Ct. at

589. Thus, Davis’ and Ocean Marine’s emphasis on the alleged

erroneous reasoning behind the district court’s first remand order

is misplaced. The threshold question is whether § 1447(d) ap-

plies to this order. If it does, it is unreviewable -- right or

wrong. See In re Medscope Marine Lid. , 972 F.2d 107 (Sth Cir.

1992)(court will not reach question of whether remand was erro-

neous because unreviewable under § 1447({d)).

By its terms, § 1447(d) appears to proscribe any review

of remand orders. However, in Thermtron, this Court held that

28 U.S.C. § 1447(c) only prohibited review of remand orders

issued pursuant to § 1447(d). 423 U.S. at 346, 96 S.Ct. at 590.

Remands basec on considerations outside §

1447(c), e.g., a crowded docket, were an excep-

tion to § 1447(d) and remained subject to review

on mandamus.

Deras, 3 F.3d at 355 (citing Thermtron, 423 U.S. at 344-45, 96

S.Ct. at 590).

Thus, this Court must first determine whether the original

remand order in this case was issued pursuant to § 1447(c). It

ov Mandamus is the only potential vehicle for review and it is limited.

Thermtron, 423 U.S. at 343, 96 S.Ct. at 589.

8

was.”

vided:

When this Court decided Thermtron, this subsection pro-

If at any time before final judgmeni it appears

that the case was removed improvidently and

without jurisdiction, the district court shall re-

mand the case, and may order the payment of

just costs.

423 U.S. at 342, 96 S.Ct. at 589. This subsection was amended

in 1988” to read:

A motion to remand the case on the basis of any

defect in removal procedure must be made within

30 days after the filing of the notice of removal

under section 1446(a). If at any time before final

judgment it appears that the district court lacks

subject matter jurisdiction, the case shall be re-

manded.

28 U.S.C. § 1447(c) (1988). See Deras, 3 F.3d at 355.%/

o The district court did not cite § 1447(c) in its order. But its failure to do

SO IS Not dispositive.

{E]}ven if the trial court neither states as grounds for remand

the specific words of § 1447(c) nor cites the statute itself,

the order is unreviewable if, by substantially similar lan-

guage, it is evident that the court intends to remand for the

grounds recited in § 1447(c).

Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1027 (Sth Cir. 1991).

7/ PL. 100-702, Title X, § 1016(c), 102 Stat. 4670.

ad The district court in Deras followed the district court in this case and

remanded the case for failure to comply with the requirements of § 1446(b). 3

F.3d at 354. As in this case, Davis and Ocean Marine sought a writ of manda-

(continued...)

Remands based on defects in removal procedure, such as untime-

liness, formerly were covered under the phrase “removed im-

providently." See Royal v. State Farm Fire & Cas. Co., 685

F.2d 124, 127 (Sth Cir. 1982). Although the words "removed

improvidently" have been deleted, procedural defects remain a

basis for remand under § 1447(c). The statute merely places a

time limit on raising such procedural defects. Therefore, a re-

mand based either on lack of jurisdiction or on a defect in re-

moval procedure such as untimeliness still comes under §

1447(c).” Deras, 3 F.3d at 355; Foster v. Mut. Fire, Marine

& Inland Ins. Co., 986 F.2d 48, 50 (3d Cir. 1993); In re Med-

scope Marine Lid., 972 F.2d at 109-10.

The district court here held in its original remand order

that Davis had not complied with the time requirements of §

1446(b).'"” Failure to comply with the requirements of §

8/ (...contunued)

mus in the Eleventh Circuit to vacate the remand order. As in this case, the

Eleventh Circuit dismissed the petition for writ of mandamus. It held that §

1447(d) precluded review of the remand order. /d. at 355-56. Davis and

Ocean Marine have not sought a writ of certiorari on that case.

ad This interpretation is supported by the limited legislative history of the

1988 amendment to § 1447(c). It indicates that the amendment was intended to

prevent “a party who is aware of a defect in removal procedure [from]

hold[ing] a defect in reserve as a means of forum shopping.” H.R.Rep. No

889, 100th Cong., 2d Sess.1988, reprinted in 1988 U.S.C.C.A.N. 5982, 6033

See also In re Medscope Marine Lid., 972 F.2d at 109.

1 Although the order clearly was based on a defect in removal procedure,

Davis and Ocean Marine seek to avoid this conclusion by arguing that the order

was not entered pursuant to § 1447(c) because Wilson had not sought remand

on that basis. They cite no authority for the proposition that the grounds on

which remand is sought is dispositive. Indeed, under Thermtron, review is

prohibited where the remand order is issued under § 1447(c). 423 U.S. at 346,

96 S.Ct. at 590. Furthermore, the motion was filed within the 30-day period

and was still pending at the time the district court decided on its own to remand

the case on procedural grounds. Compare Fed.R.Civ.P. 59(d) with Smith v.

(continued...)

10

a ere ee

~—

meinen ities to ee

1446(b) is a defect in removal procedure with the meaning of §

1447(c). Deras, 3 F.3d at 356; Alleghany Corp. v. United States

Dist. Ct., 881 F.2d 777 (9th Cir. 1989). Thus, this remand

order was entered pursuant to § 1447(c). Whether or not that

order was correct, it was unreviewable by the district court (on

motion for reconsideration) and was unreviewable by the Elev-

enth Circuit (on petition for writ of mandamus) under § 1447(d).

The Convention does not alter the plain lan-

guage of § 1447(d) - "Leading the horse away

from the garden path.”

Davis and Ocean Marine argue that § 1447(d) does not

apply to this order because the case was removed pursuant to a

special removal statute -- the Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, 9 U.S.C. § 205 ("the

Convention"). That argument fails.

In United States v. Rice, this Court considered a case re-

moved under a special removal statute. 327 U.S. at 744-45, 66

S.Ct. at 836. This Court held that the limitation on review in the

predecessor to § 1447(d)'"’ applied to cases removed under

special removal statutes, not merely those removed under § 1441:

[T]hese provisions [governing removal procedure

and remands] were intended to be applicable not

only to remand orders made in the suits removed

under [the general removal statutes], but to or-

ders of remand made in cases removed under any

other statutes as well.

10/ (...contunued)

City of Picayune, 795 F.2d 482, 484 (Sth Cir. 1986)(district court has power to

consider correctness of grounds for removal on its own).

he The limitation found in § 1447(d) has remained substantially unchanged

since its enactment in 1887. Thermtron, 423 U.S. at 343, 96 S.Ct. at 89.

11

327 U.S. at 752, 66 S.Ct. at 839. Congress did not indicate any

intent to exempt cases removed under that special statute from

the general remand act. /d. at 752-53, 66 S.Ct. at 839. There-

fore, this Court found that the remand order was not reviewable

by mandamus or otherwise. /d. at 753, 66 S.Ct. at 839.

Contrary to Petitioners’ argument, Thermtron does not

alter this holding. It does not limit the class of cases to which §

1447(d) applies based on the authority for removal. Instead,

Thermtron simply limits the applicability of § 1447(d) based on

the method by which the cases are remanded. Regardless of

whether the case is removed pursuant to a special statute or a

general removal statute, the § 1447(d) prohibition against review

applies if the trial court purports to remand it under § 1447(c).

See 423 U.S. at 342-46, 96 S.Ct. at 589-90. See also Deras, 3

F.3d at 355.

In Thermtron, the district court remanded the case be-

cause the court’s crowded docket would delay proceeding to trial.

This Court found that consideration irrelevant to the court’s

jurisdiction to hear the case or to the procedure by which it was

removed. Thus, it was not a ground authorized by § 1447(c).

This Court declined to construe the prohibition against review of

remand orders in § 1447(d)

sO aS to extinguish the power of an appellate

court to correct a district court that has not mere-

ly erred in applying the requisite provision for

remand but has remanded a case on grounds not

specified in the statute and not touching the

propriety of the removal.

423 U.S. at 352, 96 S.Ct. at 593.

By contrast, the district court here remanded the case be-

cause Davis failed to comply with the time limits in § 1446(b)

While the district court may have erred in doing so on those

grounds, its action was not unauthorized. Therefore, Thermtron

12

a

does not alter Rice as applied to this case. Davis’ reliance on the

special provision of the Convention for removal does not alter the

rule of nonreviewability found in the general remand statute, §

1447(d).

There is no conflict among the circuits on this

issue that requires resolution by this Court -

"Clearing away the underbrush."

Contrary to Davis’ and Ocean Marine’s contention, the

circuit courts are unanimous on this issue. This was not the first

case in which a similar issue arose. As the Eleventh Circuit said

in Deras:

Two other circuits have addressed this issue,

however, concluding that § 1447(d) precludes

review of an order of remand based upon a

timely § 1447(c) motion to remand for defects in

removal procedure. We find these circuits’

reasoning persuasive and agree that a remand

order based on a timely § 1447(c) motion to

remand for defects in removal procedure is unre-

viewable pursuant to § 1447(d).

3 F.3d at 355 (citations omitted).

First, Davis and Ocean Marine rely on the Eleventh

Circuit’s decision in In re Fed. Sav. & Loan Ins. Corp., 837

F.2d 432 (11th Cir. 1988){hereinafter FSLIC].'"" They claim it

"held" that § 1447(c) does not apply to cases removed pursuant

to a special removal statute. FSLIC did not so "hold." In dicta,

it summarily limited the application of § 1447(c) to cases which

had been removed pursuant to § 1441(a). This apparently ex-

cluded from § 1447(c) any case removed pursuant to a special

?/

oe This would not give rise to conflict among the circuits; it is the same

circuit that issued the opinion here.

13

removal statute. FSLIC did not discuss Rice.

The Eleventh Circuit made clear in Deras that FSLIC’s

cursory comments were limited to cases removed under 12

U.S.C. § 1730(k)(1), the removal provision of the FSLIC statute.

3 F.3d at 356 n.4. See also In re Savers Fed. Sav. & Loan

Ass'n, 872 F.2d 963, 965 (llth Cir. 1989)(remand of cases

removed pursuant to FSLIC statute reviewable by mandamus).

In fact, as Deras noted, the three other circuits which

have considered this issue all criticized FSLIC because it appears

to conflict with Rice. Deras, 3 F.3d at 356 n.4 (citing In re TMI

Litigation Cases Consolidated II, 940 F.2d 832 (3d Cir. 1991);

In re Fed. Sav. & Loan Ins. Corp., 881 F.2d 564 (8th Cir.

1989); Fed. Sav. & Loan Ins. Corp. v. Frumenti Dev. Corp.,

857 F.2d 665 (9th Cir. 1988)).'*’ Deras has now resolved that

criticism.

FSLIC cited only one case in support of the proposition

that § 1447(c) is limited to cases removed under § 1441(a) -- the

Third Circuit's decision in Pacor, Inc. v. Higgins, 743 F.2d 984

(3d Cir. 1984). Davis and Ocean Marine also rely on Pacor. In

Pacor, the court held that the general removal provisions of §§

1441-47 did not apply to cases removed to the bankruptcy court

under 28 U.S.C. § 1478 (amended and now codified as 28

U.S.C. § 1452). The Third Circuit recently discussed its Pacor

decision and FSLIC’s reliance on that decision. Jn re TMI Litiga-

tion, 940 F.2d at 838-39 n.4. The court rejected FSLIC’s broad

interpretation of Pacor in light of Rice. Id. It noted that its

holding in Pacor was very narrow. Thus, even the court which

authored the one case on which FSLIC relied disagrees with such

ad Frumenti did state that “Thermtron creates an exception to section

1447(d)'s generai review preclusion only for remand orders that are not based

on jurisdictional grounds.” 857 F.2d at 670. However, as the order at issue

was based on jurisdictional grounds, the court did not consider if defects in

removal procedure came under Thermtron.

14

a narrow interpretation of § 1447(c).'#

oo ag ot edb ea cali

The other cases on which Davis and Ocean Marine rely

are equally inapplicable. In Massachusetts v. V & M Mgt., Inc.,

929 F.2d 830 (ist Cir. 1994), remand was not based on either a

lack of jurisdiction or a defect in removal procedure. Thus, it

was not issued pursuant to § 1447(c) and was reviewable under

Thermtron. Id. at 832-33. See also Maniar v. FDIC, 979 F.2d

782, 784-85 (3d Cir. 1992)(swa sponte remand for procedural

defect more than 30 days after removal violated time limits for

raising procedural defects under § 1447(c) and thus was unautho-

rized by that statute; remand reviewable under Thermtron);'*

Air-Shields, Inc. v. Fullam, 891 F.2d 63 (3d Cir. 1989)(remand

reviewable because court improperly remanded based on old ver-

sion of § 1447(c); remand not authorized by current statute);

Levy v. Weissman, 671 F.2d 766 (3d Cir. 1982)(remand for

failure to follow local rule not based on ground authorized by §

od Davis and Ocean Marine attempt to argue that TMI supports their

position because the court in that case found that it had the authority to review

the remand order in question. However, the court reached that conclusion

because district court had found the removal statute in quesuion unconstitutional.

The TMI court stated that § 1447(d) did not intend to insulate a district court's

ruling on the unconstitutionality of a statute from appellate review. 940 F.2d at

843. The district court here made no such substantive ruling as a basis for the

remand. See also McDermont Int'l, Inc. v. Lloyds Underwriters of London, 944

F.2d 1199 (Sth Cir. 1991); Clorox Co. v. United States Dist. Ct., 779 F.2d 517

(9th Cir. 1985); Pelleport Investors, Inc. v. Budco Quality Theaters, Inc., 741

F.2d 273 (9th Cir. 1984)(in all these cases we court was required to make

substantive rulings before remand).

15/ Davis and Ocean Marine also rely on Maniar to argue that the district

court's original remand order was reviewable because it was based on a proce-

dural defect not raised by Wilson and was filed more than 30 days after remov-

al. However, unlike Maniar, Wilson did file a motion to remand within the 30-

day period. Although the district court did not grant the motion within the 30-

day period, it should be free to do so, as long as a motion was filed within the

time limit. See In re Medscope Marine Lid., 972 F.2d at 109-10 (legislative

history indicates § 1447(c) intended to place time limitation on filing motion to

remand based on procedural defect). Compare Fed.R.Civ.P. 59d).

——annmeee = 15

t.

1447(c) and thus reviewable).

Further, in Nasuti v. Scannell, 906 F.2d 802 (ist Cir.

1990), the First Circuit noted a recent amendment to a relevant

Statute that expressly set out Congressional policy to protect

federal employees by insuring their right to have actions against

them determined in federal court. /d. at 811. The court thus

found express Congressional intent to permit review of orders

remanding such cases to state court. /d. This conclusion is fully

consistent with Rice. However, Rice found no express Congres-

sional intent in that special removal statute to permit review of

remand orders. Nor is any present here.

The circuits therefore unanimously and uniformly apply

Rice and hold that, absent specific Congressional intent to the

contrary, the prohibition against review of remand orders in §

1447(d) applies where the case was removed pursuant to a special

removal statute.'" There is no express Congressional intent to

permit review of orders that remand cases removed under the

Convention.'”’ Thus there is no conflict between the circuits.

The petition for writ of certiorari should be denied.

al Davis and Ocean Marine note that Congress has since amended the

removal statute at issue in FSLIC to expressly provide for review of remand

orders in cases removed pursuant to that statute. See 12 U.S.C. § 1821 et seq.

This amendment actually supports Wilson's position. If Congress intended to

exclude all cases removed pursuant to special removal statutes from the provi-

sions of § 1447(d), such an amendment would be unnecessary. Moreover, al-

though Congress amended the FSLIC statute to provide for review of remand

orders, it did not do so for the Convention.

sa Davis and Ocean Marine claim that this Court should ignore the Elev-

enth Circuit's decision in Deras because “(i]t improperly and arbitrarily treats

litigants under special removal statutes differently.” Petition for Writ of Certio-

rari at 13.1.6. However, Deras merely followed this Court's mandate in Rice

that remand orders cannot be reviewed, regardless of the basis for removal,

absent express Congressional intent to the contrary.

16

This case was not properly removed under 9

U.S.C. § 205 -- "Arriving at the right destina-

tion without getting lost along the way."

Throughout their petition, Davis and Ocean Marine as-

sume that the district court’s first order on rehearing, which

found that Davis had properly removed the case, was correct on

the merits. This response would not be complete if it failed to

refute that fundamentally incorrect assumption. Davis was not

entitled to remove this case in the first place. To the extent the

district court’s order so found, it was incorrect.

Davis removed this case and cited 9 U.S.C. § 205.'"

Ocean Marine did not remove this case; it only filed a special

appearance for the limited purpose of consenting to removal.

Davis claims he is entitled to remove this case under § 205 be-

cause the agreement between the two other parties, Ocean Marine

and Andy/ATA (Wilson's assignor), contains an arbitration pro-

vision subject to the Convention. That position must fail for two

reasons.

First, Davis is not entitled to invoke this provision.

Davis, a Florida insurance agent, was not a party to the agree-

ment between Ocean Marine and Andy/ATA. The claims against

Davis, therefore, did not arise out of the insurance contract.

ad 9 U.S.C. § 205 provides in pertinent part:

Where the subject matter of an action or proceeding pending

in a State court relates to an arbitration agreement or award

falling under the Convention, the defendant or the defen-

dants may, at any time before the trial thereof, remove such

action or proceeding to the district court of the United States

for the district and division embracing the place where the

action or proceeding is pending. The procedure for removal

of causes otherwise provided by law shall apply, except that

the ground for removal provided in this section need not

appear on the face of the complaint but may be shown in the

petition for removal... .

17

Ocean Marine and Andy/ATA are the only parties to the

arbitration agreement. When Davis removed this case and the

court remanded it, no one had sought arbitration. Thus, this

Court is faced with a removal petition filed by one who is not a

party to the arbitration agreement where neither party to the

agreement had invoked it at that time and where the claim against

the removing party does not arise out of the insurance agreement

that contains the arbitration clause. No matter how one looks at

it, the claims against Davis do not fall within § 205.

Second, § 205 does not authorize removal of joined

claims not subject to arbitration. If a dispute is subject to arbitra-

tion under the Convention, then that cause of action may be

removed to federal court by the defendant who is a party to the

arbitration agreement at any time prior to trial. Indeed, the plain

language of the statute limits what may be removed to "such

action or proceeding,” referring to one in which the subject

matter “relates to an arbitration agreement.”

The claims against Davis do not relate to an arbitration

agreement. Therefore, even though the claims against O-ean

Marine may arguably be subject to arbitration under the Conven-

tion and thus theoretically removable by Ocean Marine under §

205, that section does not authorize the removal of the claims

against Davis which are not subject to arbitration.'” Davis’ at-

tempt to remove this entire case under § 205 must fail.

In In re Amoco Petroleum Additives Co., 964 F.2d 706,

713 (7th Cir. 1992), the Seventh Circuit made the following

observations in denying a writ of mandamus to petitioners seek-

ing removal under § 205:

Arbitration is supposed to be quick. Litigation

about arbitration frustrates that objective. Litiga-

ad Wilson does not concede that his claim against Ocean Marine must be

arbitrated. Wilson was not a party to the arbitration agreement. That obliga-

tion was never assigned to him.

18

tion about where to litigate about arbitration

mocks that objective.

” - -

It is time to get down to the merits. Wisconsin

will decide the meaning of the treaties; interpre-

tation of contracts is a staple of business in state

courts. The [Petitioners] do not contend that

Wisconsin disfavers arbitration or that any other

doctrine or practice used there would inhibit

prompt and accurate resolution of the parties’

dispute. Eight months of litigation about where

to litigate is plenty.

964 F.2d at 713 (emphasis by court).

This dispute also has gone on long enough. The com-

plaint was filed two years ago and still has not been answered.

The Florida state court can determine if Davis’ claims can be

arbitrated under the agreement, should Davis ever decide to file a

motion to compel arbitration. The Florida court can also decide

if it has jurisdiction over Ocean Marine. If the state court finds

it has jurisdiction over Ocean Marine, Ocean Marine can try to

have that court compel arbitration. There is no allegation that

Davis’ inability to litigate in federal court under § 205 precludes

any of this. Davis simply failed to meet his burden of establish-

ing that removal was proper. The Eleventh Circuit properly

denied the petition for writ of mandamus. The petition for writ

of c’ rtiorari should likewise be denied.

19

CONCLUSION

For the foregoing reasons, Wilson respectfully requests

this Court to deny the petition for writ of certiorari.

Respectfully submitted,

CHARLES LIPCON, ESQ.

2480 One Biscayne Tower

Two So. Biscayne Boulevard

Miami, Florida 33131

Telephone: (305) 373-3016

Counsel for Respondent

SHARON L. WOLF

Counsel of Record

CHRISTINE M. NG

COOPER & WOLF!

44 W. Flagler Street

Miami, Florida 331.

Telephone: (305) 37)

Re

Al

THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

No. 93-4639

(Filed Sept. 15, 1993)

IN RE:

OCEAN MARINE MUTUAL PROTECTION AND INDEMNI-

TY ASSOCIATION, LTD., ROBERT DAVIS, d/b/a DAVIS

MARINE INSURANCE AGENCY, and MARIMAR MARINE

INDUSTRIES, INC.,

Petitioners.

On Petition for Writ of Mandamus or on Petition for Writ of

Prohibition to the United States District Court for the Southern

District of Florida.

Before EDMONDSON, COX and CARNES, Circuit Judges.

PER CURIAM:

FACTS AND PROCEDURAL HISTORY

Ricardo Deras filed an action in Florida state court in 1989

against Ocean Marine Mutual Protection and Indemnity

Association, Ltd., a British insurer ("Ocean Marine"), Robert

Davis, and Marimar Marine Industries, Inc. ("Marimar").

Deras’ claims against Ocean Marine are based on an insurance

agreement; the claims against Davis and Marimar allege

negligence for failure to obtain adequate insurance coverage. In

A2

December 1991, Deras obtained a default judgment against

Ocean Marine, which never answered his complaint. In May

1992, Marimar asserted that the case fell under the Convention

on the Recognition and Enforcement of Foreign Arbitral

Awards'’ and removed it to federal court pursuant to 9 U.S.C.

§ 205 (1988).

Deras then filed a timely motion to remand the case to state

court. Deras contended that the action did not fall under the

New York Convention and that Marimar had failed to follow

proper removal procedure because all of the defendants did not

join in removal as required by 28 U.S.C. § 1446(a)(1988).

Davis subsequently joined in the petition for removal, and Ocean

Marine filed a special appearance consenting to removal.

In March 1993, the district court granted Deras’ motion to

remand "for Defendants’ failure to comply with § 1446(a) and

(b).". (Order of Remand at 1). To support its decision, the

district court cited, among other cases, Wilson v. Ocean Marine

Mut. Protection & Indem. Ass’n, No. 92-1505-CIV-NESBITT

(S.D.Fla. Aug. 4, 1992), vacated, Oct. 16, 1992, reinstated,

Jan. 7, 1993 (concluding that 9 U.S.C. § 205 retains the §

1446(b) thirty-day time limit for filing notice of removal) and

Woods v. Firestone Tire & Rubber Co., 560 F.Supp. 588

(S.D.Fla. 1983)(holding that all defendants must join in the

notice of removal).

DISCUSSION es.

The defendants (petitioners) seek a writ of mandamus, or

alternatively a writ of prohibition, directing the district court to

vacate the Order of Remand. Deras responds that, pursuant to

1/

Convention on the Recognition and Enforcement of Foreign Arbitral

Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, reprinted following

9 U.S.C.A. § 201 (West Supp.1993)(hereinafter New York Convention).

A3

28 U.S.C. § 1447(d)(1988),?’ the district court’s remand order

is not reviewable on mandamus. Because we conclude that §

1447(d) precludes our review of the district court’s remand

order, we dismiss the petition for lack of jurisdiction.

By its terms, § 1447(d) appears to proscribe any review of

remand orders. In Thermtron Products, Inc. v. Hermansdorfer,

423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976), however,

the Supreme Court held that § 1447(d) only prohibited review of

remand orders issued pursuant to 28 U.S.C. § 1447(c). When

Thermtron was decided, § 1447(c) provided for remand of cases

that had been removed "“improvidently and without jurisdiction. "

423 U.S. at 342, 96 S.Ct. at 589. Remands based on

considerations outside § 1447(c), e.g., a crowded docket, were

an exception to § 1447(d) and remained subject to review on

mandamus. /d. at 344-45, 96 S.Ct. at 590.

In 1988, Congress amended § 1447(c) to read:

A motion to remand the case on the basis of any defect

in removal procedure must be made within 30 days

after the filing of the notice of removal under section

1446(a).- If at any time before final judgment it appears

that the district court lacks subject matter jurisdiction,

the case shall be remanded. . . .

28 U.S.C. § 1447(c) (1988). While it was generally accepted

that cases remanded for lack of subject matter jurisdiction

2/

2/ -: 28: U.S.C. § 1447(d)(1988) provides:

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 reviewable by

appeal or otherwise.

This case was not removed pursuant iv § 1443, which provides for the removal

of civil rights cases.

A4

remained immune from review after the 1988 amendment, see,

e.g., Harris v. Blue Cross/Blue Shield of Ala., 951 F.2d 325,

326-27 (11th Cir.1992), the status of cases remanded for defects

in removal procedure was less certain. See McDermott Int'l v.

Lloyds Underwriters of London, 944 F.2d 1199, 1201 (Sth

Cir.1991). The reviewability of a remand order based on a

timely § 1447(c) motion to remand for defects in removal

procedure is an issue of first impression in this circuit.

Two other circuits have addressed this issue, however,

concluding that § 1447(d) precludes review of an order of

remand based upon a timely § 1447(c) motion to remand for

defects in removal procedure. /n re Medscope Marine Litd., 972

F.2d 107 (Sth Cir. 1992); Foster v. Mutual Fire, Marine & Inland

Ins. Co., 986 F.2d 48, 50 (3d Cir.1993); see also Creekmore v.

Food Lion, Inc., 797 F.Supp. 505 (E.D.Va.1992). We find

these circuits’ reasoning persuasive and agree that a remand order

based on a timely § 1447(c) motion to remand for defects in

removal procedure is unreviewable pursuant to § 1447(d).>”

In this case the district court remanded the action after Deras

filed a timely motion alleging inapplicability of the New York

Convention and defects in the removal procedure employed by

the defendants. The court premised its decision on the

defendants’ failure to comply with § 1446(a) and (b), citing cases

which held that all defendants must join the notice of removal

under § 1446(a) within thirty days of the time when the case

becomes removable under § 1446(b). The procedural

requirements of § 1446(a) and (b) are generally applicable to a

removal under the New York Convention, because 9 U.S.C. §

3

It may be that an order of remand based on an untimely motion to

remand for defects in removal procedure is reviewable on mandamus. See /n

re Shell Oil Co., 932 F.2d 1518 (Sth Cir.1991), cert. denied, — U.S. --, 112

S.Ct. 914, 116 L.Ed.2d 814 (1992); Air-Shields, Inc. v. Fullam, 891 F.2d 63

(3d Cir.1989). Because Deras’ motion was timely, we need not address the

reviewability of a remand order based on an untimely motion to remand for

defects in removal procedure.

A5

205 provides that "(t]he procedure for removal of causes

otherwise provided by law shall apply, except that the ground for

removal provided in this section need not appear on the face of

the complaint but may be shown in the petition for removal."

See In re Amoco Petroleum Additives Co., 964 F.2d 706, 712

(7th Cir.1992). Failure to comply with § 1446(a) and (b)

constitutes a defect in removal procedure within the meaning of §

1447(c). See Wilson v. General Motors Corp., 888 F.2d 779,

781 n. 1 (11th Cir. 1989).

The district court’s remand order is based upon a timely §

1447(c) motion to remand for defects in removal procedure.”

Therefore the remand order, “whether erroneous or not," is not

subject to review in this court pursuant to § 1447(d). Thermtron,

423 U.S. at 343, 96 S.Ct. at 589. Because the district court’s

order is not subject to review, we do not reach the question of

the applicability of the New York Convention to Deras’ state

court action or the question of defendants’ joinder; we state no

opinion as to the correctness of the district court’s conclusion that

9 U.S.C. § 205 retains the thirty-day time limit of § 1446(b) for

the same reason.

The defendants’ application for a writ of mandamus, or

alternatively a writ -of prohibition, is dismissed for lack of

jurisdiction.

aad We have previously stated that “[sJection 1447(c)’s application is . . .

limited to cases removed from state court pursuant to section 1441(a)." In re

Federal Sav. & Loan Ins. Corp., 837 F.2d 432, 436 (llth Cir.1988). We

made this statement in a case removed under 12-U.S.C. § 1730(k)(1) (1988),

which authorizes the FSLIC to remove to federal court when acting as the

receiver of a federal savings and loan association; it is dictum as to cases

removed under other statutes. Moreover, our statement has been criticized as

conflicting with the Supreme Court’s decision in United States v. Rice, 327

U.S. 742, 66 S.Ct. 835, 90 L.Ed. 982 (1946). See In re TMI Litig. Cases

Consol. Il, 940 F.2d 832, 838-39 n. 4 (3d Cir.1991), cert. denied, —- U.S. —,

112 S.Ct. 1262, 117 L.Ed.2d 491 (1992); Federal Sav. & Loan Ins. Corp v.

Frumenti Dev. Corp., 857 F.2d 665 (9th Cir.1988).