Barlow v. Colgate Palmolive Co.

750 F.3d 437

Joyce BARLOW, Plaintiff–Appellee,

v.COLGATE PALMOLIVE COMPANY, Defendant–Appellant,andJohn Crane–Houdaille, Incorporated; E.L. Stebbing & Company, Inc.; Hampshire Industries, Inc., f/k/a John H. Hampshire Company; Universal Refractories Company; J.H. France Refractories Company; The Goodyear Tire & Rubber Company, f/k/a Kelly Springfield Tire Company; MCIC, Inc., and its remaining Director Trustees, Robert I. McCormick, Elizabeth McCormick and Patricia Schunk; CBS Corporation, a Delaware Corporation f/k/a Viacom, Inc., Successor by merger to CBS Corporation, a Pennsylvania Corporation, f/k/a Westinghouse Electric Corporation; Metropolitan Life Insurance Company; A.W. Chesterton Company; Certainteed Corporation, individually and as successor to Bestwall Gypsum Co.; Kaiser Gypsum Company, Inc.; Union Carbide Corporation; International Paper Company, individually and as successor in interest to Champion International Corporation and U.S. Plywood Corp.; Bayer CropScience, Inc., individually and as successor in interest to Benjamin Foster Co., Amchem Products, Inc., H.B. Fuller Co., Aventis CropScience USA, Inc., Rhone–Poulenc AG Company, Inc., Rhone–Poulenc, Inc. and Rhodia, Inc.; Cooper Industries, Inc., individually and as successors in interest to Crouse Hinds Co.; Pfizer Corporation; Schneider Electric Usa, Inc., f/k/a Square D Company, individually and as successor in interest to Electric Controller and Manufacturing Co.; Georgia–Pacific, LLC, individually and as successor to Bestwall Gypsum Co.; Foster Wheeler Corporation; The Wallace & Gale Asbestos Settlement Trust; Conwed Corporation; General Electric Company; and Georgia Pacific Corporation, individually and as successor in interest to Bestwall Gypsum Co., Defendants.

Clara G. MOSKO, Plaintiff–Appellee,

v.Colgate Palmolive Company, Defendant–Appellant,andJohn Crane–Houdaille, Incorporated; E.L. Stebbing & Co., Incorporated; Hampshire Industries, Inc., f/k/a John H. Hampshire Company; Universal Refractories Company; J.H. France Refractories Company; The Goodyear Tire & Rubber Company, f/k/a Kelly Springfield Tire Company; MCIC, Inc., and its remaining Director Trustees, Robert I. McCormick, Elizabeth McCormick and Patricia Schunk; CBS Corporation, a Delaware Corporation f/k/a Viacom, Inc., f/k/a Westinghouse Electric Corporation; Metropolitan Life Insurance Company; A.W. Chesterton Company; Certainteed Corporation, individually and as successor to Bestwall Gypsum Co.; Kaiser Gypsum Company, Inc.; Union Carbide Corporation; International Paper Company, individually and as successor in interest to Champion International Corporation and U.S. Plywood Corp.; Bayer CropScience, Inc., individually and as successor in interest to Benjamin Foster, Co., Amchem Products, Inc., H.B. Fuller Co., Aventis CropScience USA, Inc., Rhone–Poulenc AG Company, Inc., Rhone–Poulenc, Inc. and Rhodia, Inc.; Cooper Industries, Inc., individually and as successors in interest to Crouse Hinds Co.; Pfizer Corporation; Schneider Electric USA, Inc., f/k/a Square D Company, individually and as successor in interest to Electric Controller and Manufacturing Co.; Foster Wheeler Corporation; The Wallace & Gale Asbestos Settlement Trust; 3 Conwed Corporation; Georgia–Pacific, LLC, individually and as successor to Bestwall Gypsum Co.; 3M Company; Mallinckrodt, Inc.; Crown, Cork & Seal Co., Inc.; Koppers Company, Inc.; Walter E. Campbell Co., Inc.; Krafft–Murphy Company, individually and as successor to National Asbestos Company, a dissolved Delaware Corporation; AC & R Insulation Co., Inc.; Coty, Inc.; Johnson & Johnson; Luzenac America Inc.; R.T. Vanderbilt Company, Inc.; Bayer Corporation, as successor in interest to Sterling Drug, Inc., and Sterling–Winthrop Inc.; and General Electric Company, Defendants.

Nos. 13–1840, 13–1839.

United States Court of Appeals, Fourth Circuit.

Argued: March 19, 2014.

Decided: April 30, 2014.

Rehearing En Banc Granted June 6, 2014.

ARGUED:William Balden Adams, Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York, for Appellant. Jennifer Louise Lilly, Law Offices of Peter G. Angelos, Baltimore, Maryland, for Appellees. ON BRIEF:Thomas P. Bernier, Segal McCambridge Singer & Mahoney, Baltimore, Maryland; Faith E. Gay, Quinn Emanuel Urquhart & Sullivan, LLP, New York, New York, for Appellant.

Before FLOYD, Circuit Judge, DAVIS, Senior Circuit Judge, and MAX O. COGBURN, United States District Judge for the Western District of North Carolina, sitting by designation.

Affirmed by published opinion. Senior Judge DAVIS wrote the majority opinion, in which Judge COGBURN joined. Judge FLOYD wrote a dissenting opinion.

DAVIS, Senior Circuit Judge:

The federal removal statute immunizes from review—appellate or otherwise—any order remanding to state court a case removed to federal court, with an exception for certain civil rights cases or suits against federal officers. 28 U.S.C. § 1447(d). In particular, the statute has been interpreted to “preclude review only of remands for lack of subject-matter jurisdiction and for defects in removal procedure.” Powerex Corp. v. Reliant Energy Services, Inc., 551 U.S. 224, 229, 127 S.Ct. 2411, 168 L.Ed.2d 112 (2007). The removing defendant in this case, the Colgate Palmolive Company, asks us to hold that the statute permits an exception to its prohibition: that a federal court may strike a remand order and retrieve a remanded case from its state cousin as a sanction against plaintiffs' counsel for making misrepresentations to the federal court related to the existence of subject-matter jurisdiction. It invokes in support the district court's inherent authority and Rules 11 and 60 of the Federal Rules of Civil Procedure.

We are unpersuaded. In the face of Congress' explicit direction to federal courts that an order remanding a case for lack of subject-matter jurisdiction after it has been removed “is not reviewable on appeal or otherwise,” 28 U.S.C. § 1447(d), we reject Colgate's collateral attack on the remand orders in this case and affirm the order of the district court insofar as it ruled that it lacked jurisdiction.

I.

Joyce Barlow and Clare Mosko separately sued Colgate and a variety of other companies in Maryland state court, asserting that each of the defendants' products had at some point exposed them to asbestos. With respect to Colgate, the plaintiffs' theory was that its “Cashmere Bouquet” line of powder makeup products contained unhealthy levels of asbestos and had thereby contributed to the plaintiffs' health problems. Despite plaintiffs' joinder of in-state defendants, Colgate removed the two cases to federal court on the basis of diversity of citizenship, asserting fraudulent joinder as to the in-state defendants, and alleging that the plaintiffs' deposition testimony and interrogatory responses demonstrated that they did not intend to pursue a claim against any defendant other than Colgate, a citizen of Delaware and New York.

After removal, the plaintiffs' lawyers moved to remand the cases to state court, arguing that they had viable claims against the nondiverse defendants. The district court agreed, finding that although only Colgate's Cashmere Bouquet products had been identified by the plaintiffs as the source of their asbestos exposure, there was still more than a “glimmer of hope,” Hartley v. CSX Transportation, Inc., 187 F.3d 422, 426 (4th Cir.1999), that the plaintiffs could identify a basis to recover against the nondiverse defendants as discovery proceeded. J.A. 358, 368. The cases were remanded.

On remand, counsel for the plaintiffs asked the state court to consolidate the two cases because, among other reasons, “[a]ll [plaintiffs] allege exposure to asbestos-containing Cashmere Bouquet powder products only and do not allege exposure to any other asbestos, asbestos-containing products or asbestos-containing dust in any other form.” J.A. 474 (emphasis added). Irritated by the change in tune, Colgate then promptly moved in the district court for vacatur of the remand order as a sanction. The district court denied the motion, stating that reconsideration of the remand order is prohibited by the removal statute and pertinent Circuit law. The district court stated further that it was “not convinced that counsel's conduct is sanctionable” because the alleged misrepresentations were “attributable to different attorneys in markedly different litigation contexts.” J.A. 1108.

II.

On appeal, Colgate contends that it was error for the district court to rule that it did not have the authority to consider whether plaintiffs' counsel committed misconduct and “whether such misconduct warrants relief from the Remand Orders.” App. Reply Br. 2. It asks that we reverse the district court's order denying the motion for vacatur and remand the case with instructions that the remand orders be vacated. Colgate maintains that the district court had authority, pursuant to its inherent authority and Rules 11 and 60(b)(3) of the Federal Rules of Civil Procedure, to strike the remand orders as a sanction. We review questions of law de novo. Trans Energy, Inc. v. EQT Prod. Co., 743 F.3d 895, 900 (4th Cir.2014).

Fueled by a desire to cut off costly and prolonged jurisdictional litigation, Powerex, 551 U.S. at 238, 127 S.Ct. 2411, the federal removal statute generally prohibits review of orders remanding removed cases:

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 [cases against federal officers] or 1443 [certain civil rights cases] of this title shall be reviewable by appeal or otherwise.

28 U.S.C. § 1447(d) (emphasis added). Read in conjunction with 28 U.S.C. § 1447(c), the statute's prohibition has been construed to preclude review of remands “colorably characterized” as for lack of subject-matter jurisdiction or defects in removal...