In Re: Excel Corp v. Vela ( 1997 )

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.