In Re: Excel Corp v. Vela ( 1997 )


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  •                                    REVISED
                         United States Court of Appeals,
    
                                  Fifth Circuit.
    
                                     No. 96-41220.
    
         In re EXCEL CORPORATION, Cargill, Incorporated;           Freddie
    Franklin; Steve Steffe, Petitioners.
    
                                  Feb. 19, 1997.
    
    Petition for Writ of Mandamus to the United States District Court
    for the Southern District of Texas.
    
    Before JONES, DeMOSS and PARKER, Circuit Judges.
    
         BY THE COURT:
    
         Petitioners      Excel      Corporation     (Excel),   Cargill,     Inc.
    
    (Cargill), Freddie Franklin, and Steve Steffe (collectively "the
    
    defendants") filed this petition for writ of mandamus pursuant to
    
    29 U.S.C. § 1651 and FED.R.APP.P. 21(a).          The defendants ask this
    
    court to issue a writ of mandamus directing the district court to
    
    vacate its order that consolidated for purposes of remand the
    
    claims and parties of the eight underlying cases at issue. Because
    
    we hold that the district court erred in consolidating these cases
    and remanding the cases on the basis of that consolidation order,
    
    we grant the writ of mandamus, vacate the consolidation order and
    
    the remand order, and direct the district court to reconsider the
    
    motions to remand on a case by case basis.
    
                                      BACKGROUND
    
         Eight   civil     actions     were   originally   filed   against   the
    
    defendants in various state district courts in the southern-most
    
    county in Texas, Cameron County, between June 1994 and August
    1995.1   The plaintiffs' claims arise out of their employment at two
    
    Excel meat packing plants located in the Texas Panhandle towns of
    
    Plainview, Hale County, Texas, and Friona, Parmer County, Texas.
    
    The defendants timely removed these cases to the United States
    
    District Court for the Southern District of Texas, Brownsville
    
    Division.
    
         Plaintiffs are employees of Excel, a wholly owned subsidiary
    
    of Cargill, and brought these suits alleging various claims of
    
    personal injury due to negligence and a single claim of wrongful
    
    discharge based on an attempt to pursue a compensation claim for a
    
    work related injury.    Plaintiffs are all citizens of either New
    
    Mexico   or   Texas.   Excel   is   a   Delaware   corporation   with   its
    
    principal place of business in Kansas.             Cargill is a Delaware
    
    corporation with its principal place of business in Minnesota. The
    
         1
          The eight cases at issue are styled as follows:
    
              1. Rendon v. Excel Corporation, Cargill, Inc., and
         Freddie Franklin, No. B-94-313;
    
              2. Trevizo v. Excel Corporation, Cargill, Inc., and
         Freddie Franklin, No. B-94-321 (Trevizo I );
    
              3. Trevizo v. Excel Corporation, Cargill, Inc., and
         Freddie Franklin, No. B-94-322 (Trevizo II );
    
              4. Moreno v. Excel Corporation, Cargill, Inc., and
         Steve Steffe, No. B-94-323;
    
              5. Quezada, et al. v. Excel Corporation, Cargill, Inc.,
         No. B-95-26;
    
              6. Rhoads, et al. v. Excel Corporation, Cargill, Inc.,
         No. B-95-37;
    
              7. Arpero, et al. v. Excel Corporation, Cargill, Inc.,
         No. B-95-115; and
    
              8. Morales v. Excel Corporation, Cargill, Inc., No. B-
         95-169.
    individual defendants, Freddie Franklin and Steve Steffe, are
    
    citizens of either Texas or New Mexico.
    
         In the first four cases, Rendon, Trevizo I, Trevizo II, and
    
    Moreno, an individual plaintiff sued Excel, Cargill, and one of the
    
    individual defendants.        In three of these cases, the plaintiffs
    
    alleged that they suffered personal injuries due to the defendants'
    
    failure to provide a safe workplace.         In Trevizo II, the plaintiff
    
    alleged that he was wrongfully discharged after he attempted to
    
    pursue   a   claim   for   compensation     for   a   work-related   injury.
    
    Defendants invoked diversity jurisdiction in Rendon, Trevizo I, and
    
    Moreno, based on the alleged fraudulent joinder of the non-diverse
    
    defendant.     In Trevizo II, the defendants assert that federal
    
    question jurisdiction exists and removal is proper because the
    
    plaintiff's wrongful discharge claim falls under the purview of the
    
    Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.
    
    § 1001 et seq. (1994), due to Excel's decision not to become a
    
    subscriber under the Texas workers' compensation statute.
    
         In the second set of four cases, the plaintiffs sued Excel and
    
    Cargill alone.   Quesada involves 64 plaintiffs, Rhoads involves 12
    
    plaintiffs, Apero had 11 plaintiffs, and Morales is a single
    
    plaintiff    case.    These    plaintiffs    allege    that   they   suffered
    
    personal injuries in the course of their employment due to the
    
    defendants' negligent failure to provide a safe workplace.             The 88
    
    plaintiffs involved in these four cases did not name a non-diverse
    
    defendant.    As such, defendants invoked diversity jurisdiction.2
    
         2
          We also note that some of these plaintiffs may have failed
    to timely file motions to remand. For example, the defendants
    timely removed the Rendon case on November 21, 1994. The
          On    September    27,    1996,   Plaintiffs    filed     a    "Motion    to
    
    Consolidate, Motion to Remand and for Ruling on Pending Motions to
    
    Remand."     The case had been assigned to a magistrate judge.                 The
    
    magistrate judge entered an order consolidating these eight cases
    
    and   adopted      verbatim    the   proposed    findings     and    conclusions
    
    submitted     by   the   plaintiffs.3      The    defendants        filed   timely
    
    objections to the magistrate's order.                On November 21, 1996,
    
    approximately two weeks after the magistrate's consolidation and
    
    remand order, the district court issued an order approving the
    
    consolidation of these cases for purposes of remand and remanded
    
    these cases based on its determination that the claims raised in
    
    the consolidated case arise under the Texas Worker's Compensation
    
    Act, which rendered them non-removable under 28 U.S.C. § 1445(c).
    
                                         ANALYSIS
    
              We must first ascertain whether we have jurisdiction to
    
    review the district court's order of consolidation and remand.                  28
    
    U.S.C. § 1447(d) severely restricts our authority to review remand
    
    orders.     "An order remanding a case to the State court from which
    
    
    plaintiff filed a motion to remand on January 3, 1995, 43 days
    after the defendants removed the case. Additionally, the
    plaintiffs in Rhoads waited 41 days to file their motion to
    remand.
          3
          In its findings and conclusions, the magistrate
    consolidated the eight cases for purposes of considering the
    plaintiffs' motions to remand. The magistrate expressly found
    the remand motions to be timely. Although we do not reach this
    issue, it appears from the face of the record that at least two
    of the motions to remand were not timely filed. After the
    consolidation, the magistrate found that "each Plaintiff is a
    resident of Texas or New Mexico and has joined a non-diverse
    individual defendant." As explained herein, a consolidation
    order cannot serve to merge the suits into a single cause. As
    such, four of the eight cases do not have non-diverse defendants.
    it was removed is not reviewable on appeal or otherwise...."              28
    
    U.S.C. § 1447(d).       The Supreme Court has thrice held that "§
    
    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)."        Quackenbush v. Allstate Ins. Co., ---
    
    U.S. ----, ----, 
    116 S. Ct. 1712
    , 1718, 
    135 L. Ed. 2d 1
     (1996);             see
    
    also Things Remembered, Inc. v. Petrarca, 
    516 U.S.
    ----, ----, 
    116 S. Ct. 494
    , 495, 
    133 L. Ed. 2d 461
     (1995);          Thermtron Products, Inc.
    
    v. Hermansdorfer, 
    423 U.S. 336
    , 345-46, 
    96 S. Ct. 584
    , 590, 
    46 L. Ed. 2d 542
     (1976).      As such, only remand orders based on lack of
    
    subject matter jurisdiction or on defects in removal procedure are
    
    affirmatively barred from appellate review.           See Quackenbush, ---
    
    U.S. at ----, 116 S.Ct. at 1718;            Linton v. Airbus Industry, 
    30 F.3d 592
    , 600 (5th Cir.1994).
    
          The district court determined that this case involves a
    
    worker's compensation remand order based on 28 U.S.C. § 1445(c) ("A
    
    civil action    in    any   State   court   arising   under   the   workmen's
    
    compensation laws of such State may not be removed to any district
    
    court of the United States.").        Because we are reviewing a remand
    
    order which is not grounded on subject matter jurisdiction or
    
    defects in removal procedure under 28 U.S.C. § 1447(c) we have
    
    jurisdiction to consider the propriety of such order.
    
          The Supreme Court has recognized that mandamus may be an
    
    appropriate remedy where the district court has remanded the case
    
    on grounds not authorized by removal statutes. See Quackenbush, --
    
    - U.S. at ----, 116 S.Ct. at 1718;          Thermtron, 423 U.S. at 353, 96
    
    S.Ct. at 594.        This Circuit has recognized this exception and
    concluded that "[w]e may review a remand order on a petition for
    
    writ of mandamus ... provided that it was entered on grounds not
    
    authorized by § 1447(c)."   In re Allstate Ins. Co., 
    8 F.3d 219
    , 221
    
    (5th Cir.1993);   see also In re Shell Oil Co., 
    932 F.2d 1518
    , 1521
    
    (5th Cir.1991).
    
         In the non-§ 1447(c) context, the Supreme Court in Carnegie-
    
    Mellon Univ. v. Cohill, 
    484 U.S. 343
    , 357, 
    108 S. Ct. 614
    , 623, 
    98 L. Ed. 2d 720
     (1988), held that a district court has discretion to
    
    remand a case involving pendent claims upon a determination that
    
    retaining jurisdiction over such a case would be inappropriate.
    
    See also Bogle v. Phillips Petroleum Co., 
    24 F.3d 758
    , 761 (5th
    
    Cir.1994) ("a remand order is reviewable if it is based upon the
    
    Carnegie-Mellon rationale, but is immune from review if it is based
    
    upon the grounds enumerated in Section 1447(c).").
    
         Relying on Cohill, this Court has held that courts of appeals
    
    may review remand orders that are issued on grounds other than §
    
    1447(c). See Bogle, 24 F.3d at 761.   Because the Supreme Court has
    
    permitted our review of remand orders based on provisions other
    
    than § 1447(c), Quackenbush, --- U.S. at ----, 116 S.Ct. at 1718,
    
    and because we are bound by prior panel opinions, Trizec Prop.,
    
    Inc. v. United States Mineral Prod. Co., 
    974 F.2d 602
    , 604 n. 9
    
    (5th Cir.1992) (recognizing that we are "bound to prior panel
    
    opinions absent en banc reconsideration or a superseding contrary
    
    Supreme Court case"), Bogle permits our review of the district
    
    court's order remanding this case on § 1445(c) grounds.   Bogle, 24
    
    F.3d at 761.
    
         In the instant case, the district court issued an order
    consolidating these eight cases, and then based its decision to
    
    remand the eight cases by considering them as a single cause.       The
    
    district court then applied 28 U.S.C. § 1445(c), the provision
    
    which forbids removal of civil actions arising under state worker's
    
    compensation laws, to the consolidated case and remanded the cause
    
    to state court.4    The district court found that both the personal
    
    injury claims and the wrongful discharge claim arose under the
    
    worker's compensation laws of the State of Texas and ruled that the
    
    magistrate's order consolidating these cases for purposes of remand
    
    was, therefore, proper.     Accordingly, the district court's remand
    
    order in this case was based solely on § 1445(c) not § 1447(c) and,
    
    therefore, we may review the propriety of that order.       See Bogle,
    
    24 F.3d at 761.
    
             Having established our jurisdiction to consider this case,
    
    this Court will issue a writ of mandamus "to remedy a clear
    
    usurpation of power or abuse of discretion."        In re F.D.I.C., 
    58 F.3d 1055
    , 1060 (5th Cir.1995) (citations and quotations omitted).
    
    Here,     the   district   court   adopted   the   magistrate's   order
    
         4
          Section 1445(c) is not jurisdictional. If a defendant
    removes a civil action arising under a state's workers'
    compensation laws, we have held that the wrongful removal is a
    procedural defect is waived under 28 U.S.C. § 1447(c), if not
    raised in 30 days. Williams v. AC Spark Plugs, 
    985 F.2d 783
     (5th
    Cir.1993).
    
              On remand from this decision, the district court should
         first ascertain whether each individual case does, in fact,
         arise under the workers' compensation laws of Texas. See
         Patin v. Allied Signal, Inc., 
    77 F.3d 782
    , 786 (5th
         Cir.1996) (analyzing when a cause of action arises under the
         administrative procedures applicable to a state workers'
         compensation claim). If the individual cases do arise under
         the workers' compensation laws of Texas, the district court
         should determine whether the plaintiffs properly and timely
         objected to the removal under § 1447(c).
    consolidating     these    eight    cases     for    purposes    of     remand.      By
    
    consolidating these cases and then remanding them on § 1445(c)
    
    grounds, the district court erred by merging these suits into a
    
    single cause which altered the rights of some of the parties
    
    involved. See Johnson v. Manhattan Railway Co., 
    289 U.S. 479
    , 496-
    
    97, 
    53 S. Ct. 721
    , 727-28, 
    77 L. Ed. 1331
     (1933);                 Langley v. Jackson
    
    State Univ., 
    14 F.3d 1070
    , 1072 n. 5 (5th Cir.1994);                       Kuehne &
    
    Nagel (AG & Co.) v. Geosource, Inc., 
    874 F.2d 283
    , 287 (5th
    
    Cir.1989).    Before Rule 42(a) was adopted, the Supreme Court in
    
    Johnson v. Manhattan Railway Co., 289 U.S. at 496-97, 53 S.Ct. at
    
    727-28, held that consolidation "does not merge suits into a single
    
    cause, or change the rights of the parties, or make those who are
    
    parties in one suit parties in another."                We have adhered to this
    
    instruction after the adoption of Rule 42(a).              See Langley, 14 F.3d
    
    at 1073;    Kuehne, 874 F.2d at 287;          McKenzie v. United States, 
    678 F.2d 571
    , 574 (5th Cir.1982);             9 Charles A. Wright & Arthur R.
    
    Miller, FEDERAL PRACTICE   AND   PROCEDURE:   CIVIL 2d § 2382 at 430 (1995).
    
    Consequently,     the     district    court       abused   its     discretion        by
    
    consolidating these suits for purposes of determining the propriety
    
    of remand.
    
         In    four   of    these    cases,     the     plaintiffs    did    not   sue    a
    
    non-diverse defendant.          Further, it appears that the plaintiffs in
    
    the Rendon case filed their motion to remand on January 3, 1995, 43
    
    days after the defendants removed the case.                     Additionally, the
    
    plaintiffs in Rhoads waited 41 days to file their motion to remand.
    
    By considering these eight cases as one single cause after the
    
    consolidation order, the district court adversely affected the
    rights of the defendants by failing to separately determine the
    
    jurisdictional premise upon which each stands and the propriety of
    
    removal or remand resulting therefrom.
    
                                   CONCLUSION
    
         Finding that the order of consolidation and the ensuing remand
    
    order on the basis of that consolidation adversely affected the
    
    parties in this case, we grant the defendants' writ of mandamus,
    
    vacate   the   consolidation   and   remand   order,   and   instruct   the
    
    district court to consider each plaintiffs' motion to remand on a
    
    case by case basis, determining in each case as appropriate the
    
    issues of diversity of citizenship, federal question, fraudulent
    
    joinder,5 timeliness of remand motion and non-removability of
    
    workers' compensation claims.
    
    
    
    
         5
          While we express no opinion as to the resolution of this
    issue, the recently decided Supreme Court of Texas case Leitch v.
    Hornsby, 
    935 S.W.2d 114
    , 120 (Tex.1996) may be pertinent to a
    determination of the defendants' fraudulent joinder claims. In
    Leitch, the court held that a company's employees have no duty to
    furnish a safe work place and, as such, may not be held liable in
    their individual capacities for the company's negligent failure
    to provide a safe place to work. Leitch, 935 S.W.2d at 120.