IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

 

No. 96-31274

 

KRISTIE A. TRAMONTE,

Plaintiff-Appellee,

versus

CHRYSLER CORPORATION, also known as Chrysler

Motors Corporation, ET AL

Defendants,

CHRYSLER CORPORATION, also known as Chrysler

Motors Corporation Defendant-Appellant.

 

Appeal from the United States District Court

For the Eastern District of Louisiana

 

March 10, 1998

Before GARWOOD, JOLLY, and HIGGINBOTHAM, Circuit Judges.

HIGGINBOTHAM, Circuit Judge:

Defendant Chrysler Corporation appeals from an order of the

district court denying its motion to recuse and a later order

remanding the case to state court for want of jurisdiction.

Chrysler contends that the denial was erroneous and invalidates all

post-recusal rulings by the district judge, here the remand of this

case to state court. Concluding that the record is inadequate to

permit review of the recusal decision, we vacate the district

court’s order remanding the case to state court and we remand with

instructions to the district court to supplement the record and

reconsider Chrysler’s recusal motion.
2

I.

Kristie A. Tramonte filed a “Class Action Petition” in

Louisiana state court on May 17, 1995. The Petition alleged that

Chrysler’s manufacturing process from 1983 through 1994 caused

paint to flake from its vehicles. Tramonte, a Louisiana resident,

sued Chrysler, an out-of-state entity, and Murphy-Graham, Inc., the

Louisiana dealership from whom she purchased her automobile.

Tramonte asserted her claim and the claim of an asserted class,

described as consisting of all those who “have incurred or will

incur damages arising out of the purchase of a defective

[Chrysler].”

Chrysler removed the case to federal court, contending that

Tramonte had fraudulently joined Murphy-Graham to defeat diversity.

Tramonte responded with a motion to remand the case to state court,

arguing that there was no complete diversity of citizenship.

The federal case fell first to Judge Okla Jones, but was

reassigned to Judge Sarah Vance because of Judge Jones’s poor

health. Judge Vance also had before her In re Ford Motor Co.

Vehicle Paint Litig., No. MDL 1063, that includes a class action

alleging that the paint on certain Ford vehicles would peel due to

a defective process of manufacture. The same lawyers represented

the plaintiffs in the Ford and Chrysler litigations. Before the

Ford case had been designated as multidistrict litigation and

transferred to Judge Vance, the district court of the Northern

District of Alabama held that the joinder of a single, non-diverse
 

1Chrysler has never alleged, nor have we found, that Judge

Lemmon has demonstrated any bias in this matter. Rather, Chrysler

has contended that the federal recusal statute is absolutist in

nature, and Judge Lemmon’s personal, though attenuated, connection

to the case created at least the potential for an appearance of

impropriety.

3

auto dealership in the Ford class action would not defeat federal

jurisdiction. 

Tramonte withdrew her motion to remand, and several months

later the Chrysler class action was reassigned to the newlyappointed Judge Mary Ann Lemmon. Two days later, Tramonte refiled

her motion to remand. Chrysler then ran what it describes as a

“routine” check of its auto ownership records and discovered that

someone in Judge Lemmon’s family owned a Chrysler, making that

person a potential class member. Then within thirty days of the

reinstituted motion to remand, Chrysler asked Judge Lemmon to

recuse and return the Chrysler litigation to Judge Vance.1

Two months later, on November 8, 1996, by minute order Judge

Lemmon summarily disposed of the then-pending motions. She denied

Chrysler’s motion to recuse, reasoning: “Although members of my

family are present and past owners of Chrysler vehicles, only one

of them is a present owner and he has no interest in joining the

putative class in this case. I have no ‘direct or immediate’

interest in this case which requires my recusal.” Judge Lemmon

then granted Tramonte’s motion to remand the case to state court,

concluding that Chrysler had not demonstrated that Murphy-Graham

had been fraudulently joined to defeat diversity. At the time

remand was ordered, no decision regarding certification of the
4

class had been made and it appeared that the district court had not

devoted substantial judicial time to the case.

On December 4, 1996, Chrysler filed a notice of appeal of the

orders refusing to recuse, refusing to transfer the case, and

remanding to state court. Chrysler also attacked the recusal

decision by a petition for a writ of mandamus. On December 11,

1996, we denied Chrysler’s writ petition by a summary order without

opinion.

II.

We first consider Tramonte’s challenge to our jurisdiction.

Tramonte argues that we cannot reverse the remand order, because

the merits of a district court’s ruling on jurisdiction are beyond

us. As 28 U.S.C. § 1447(d) provides, “[a]n order remanding a case

to the State court from which it was removed is not reviewable on

appeal or otherwise.” See also Thermtron Prods., Inc. v.

Hermansdorfer, 423 U.S. 336, 343 (1976).

Yet the dictates of § 1447(d) are not as absolutist as its

language would imply. Rather, “only remands based on grounds

specified in § 1447(c) are immune from review under § 1447(d). 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) --

a court of appeals lacks jurisdiction to entertain an appeal of the

remand order under § 1447(d).” Things Remembered, Inc. v.

Petrarca, 116 S. Ct. 494, 497 (1995); see also Thermtron Prods.,

423 U.S. at 345-52. Thus, the Court has recognized that § 1447(d)
5

intends to insulate from appellate review a district court’s

determinations as to its subject matter jurisdiction and compliance

with remand procedures. By implication therefore, we may reach and

modify a remand order on appeal, so long as we do not engage in the

review prohibited by § 1447(d).

Here, the district court unquestionably based its decision to

remand on a lack of subject matter jurisdiction. Yet Chrysler does

not seek to revisit that jurisdictional determination. Rather, it

contends that Judge Lemmon lacked the authority to enter the remand

order, because she was disqualified from handling the case by the

federal recusal statute. See 28 U.S.C. § 455(b). As we have held,

once a judge recuses herself, that judge should take no further

action in the case, except to transfer the matter to another

federal judge. See United States v. O’Keefe, 128 F.3d 885, 891

(5th Cir. 1997); Doddy v. Oxy USA, Inc., 101 F.3d 448, 458 (5th

Cir. 1996). Thus, if Judge Lemmon should have recused herself, any

orders she entered following disposition of the recusal motion

should be vacated.

Our vacatur of the remand order would therefore not constitute

a review of the merits of that order, prohibited by 28 U.S.C. §

1447(d). Rather, we would be performing an essentially ministerial

task of vacating an order that the district court had no authority

to enter for reasons unrelated to the order of remand itself. We

have previously gone so far as to vacate a remand order after

concluding that a district court did not have the authority to

determine sua sponte that there was a procedural defect in a
 

2Chrysler also suggests that we have jurisdiction pursuant to

City of Waco v. United States Fidelity & Guar. Co., 293 U.S. 140

(1934). In Waco, the Supreme Court held that orders entered before

a remand to state court which are separate from the remand may be

reviewed on appeal, even if the remand itself is nonreviewable.

See id. at 143. As we have explained the Waco doctrine:

Although this court has no jurisdiction to review a district

court’s judgment which remands a cause of action to state

court for lack of subject matter jurisdiction, any aspect of

that judgment which is distinct and separable from the remand

proper may be reviewed on appeal.

John G. & Marie Stella Kenedy Mem’l Found. v. Mauro, 21 F.3d 667,

670 (5th Cir.) (citations omitted), cert. denied, 513 U.S. 1016

6

removal from state court, even though that determination implicated

nonreviewable jurisdictional questions. See In re Allstate Ins.

Co., 8 F.3d 219 (5th Cir. 1993). Surely, therefore, we can vacate

a remand order because of a judge’s preceding failure to recuse

herself, a rationale far removed from the issue of subject matter

jurisdiction, taboo to us under § 1447(d).

Tramonte also contends that our denial of mandamus relief to

Chrysler should prohibit this appeal, which raises the same issues

as the mandamus petition. Yet it is fundamental that mandamus is

only appropriate in extraordinary circumstances, typically where

relief is unavailable via an appeal. See Campanioni v. Barr, 962

F.2d 461, 464 (5th Cir. 1992). Our summary denial of Chrysler’s

petition for a writ of mandamus cannot be considered an

adjudication of these issues on the merits. Cf. Key v. Wise, 629

F.2d 1049, 1054-55 (5th Cir. 1980), cert. denied, 454 U.S. 1103

(1981). Accordingly, no law of the case has been established, and

Chrysler is free to relitigate the recusal issue on appeal. See In

re Chevron U.S.A. Inc., 121 F.3d 163, 167 (5th Cir. 1997).

We conclude that we have jurisdiction over this appeal.2 In
(1994). It is unnecessary to utilize Waco in this case, however,

because we find the remand order itself to be reviewable, as it was

entered without authority if the district court should have

recused.

7

entertaining this appeal, we do not intrude upon the bar against

reviewing the merits of remand orders.

III.

We now turn to the merits of Judge Lemmon’s recusal decision.

Chrysler argues that Judge Lemmon should have automatically

disqualified herself from the case pursuant to 28 U.S.C. §§

455(b)(4) & (b)(5). Section 455 provides, in relevant part:

(b) [A judge] shall also disqualify himself in the following

circumstances:

. . . .

(4) He knows that he, individually or as a fiduciary,

or his spouse or minor child residing in his

household, has a financial interest in the subject

matter in controversy . . . .

(5) He or his spouse, or a person within the third

degree of relationship to either of them, or the

spouse of such a person:

(i) Is a party to the proceeding . . . .

. . . .

(d) For the purposes of this section . . .

. . . .

(4) “financial interest” means ownership of a legal or

equitable interest, however small . . . .

In ruling on the recusal motion, Judge Lemmon disclosed that

members of her family had owned Chryslers, and she acknowledged

that one member presently owns one. Chrysler thus contends that a

family member of Judge Lemmon’s either has a “financial interest”

in the outcome of the case under § 455(b)(4) or is a “party” to the

action under § 455(b)(5). Judge Lemmon declined to recuse herself,

however, reasoning that her family member who is an owner of a

Chrysler had no interest in joining the class.
8

Unfortunately, Judge Lemmon’s disclosure and the record

otherwise is not adequate to review the order denying Chrysler’s

motion to recuse. Judge Lemmon’s statement that family members

have in the past owned Chryslers, and one family member presently

possesses one, does not disclose whether those family members

purchased Chryslers manufactured between 1983 and 1994, the

relevant class period, nor does it disclose whether any of those

Chryslers ever exhibited flaking paint. The class petition is

unclear as to the precise parameters of the putative class. We

decline to read it as broadly as Chrysler suggests to include any

purchaser of a Chrysler between 1983 and 1994, even if that

purchaser later resold the vehicle. To establish a claim for that

large a class, the plaintiffs would have to prove that the price of

all Chryslers in the resale market was depressed by the flakingpaint problem, whether or not those vehicles had yet exhibited

defective paint. Neither the plaintiffs’ attorneys nor the Class

Petition have expressed a willingness to tackle such a daunting

task. On the other hand, an original purchaser of a Chrysler who

sold the vehicle while its paint was flaking or who repainted the

car at his own expense would arguably fall within the class, as

that individual would have incurred quantifiable, rather than

abstract, damages. Judge Lemmon’s statement that her family

members have in the past owned Chryslers is insufficient to

determine her recusal status, because it does not indicate whether

those Chryslers ever exhibited flaking paint.
9

More importantly, Judge Lemmon’s statement does not reflect

the degree of relationship between herself and the family member

who owns a Chrysler and the family members who have owned

Chryslers, if the latter fall within the class definition. This

relationship is critical to the recusal question.

If the unknown family members are a spouse or minor children

residing in Judge Lemmon’s household, then her recusal would be

required under the per se rule of § 455(b)(4). Should the class

action prove successful, Judge Lemmon’s spouse or minor child would

be entitled to recover financially. Although few federal courts

have ever reached the issue squarely, it seems fairly obvious that

where a judge or an immediate family member is a member of a class

seeking monetary relief, § 455(b)(4) requires recusal because of

the judge’s financial interest in the case. Cf. In re City of

Houston, 745 F.2d at 928 n.6 (strongly implying that judges must

recuse themselves if they are class members with a pecuniary

interest in the outcome of the litigation); Christiansen v.

National Sav. & Trust Co., 683 F.2d 520, 526 (D.C. Cir. 1982)

(implying that judges should recuse themselves if they are members

of a class for which individual recovery is sought); In re Cement

Antitrust Litig., 673 F.2d 1020, 1024 (9th Cir. 1982) (implying

that judge’s ownership of stock in a putative class member requires

recusal). A remote, contingent, or speculative interest is not a

disqualifying financial interest under the statute. See In re

Placid Oil Co., 802 F.2d 783, 786-87 (5th Cir. 1986) (holding that

judge’s investment in a non-party bank did not require his recusal
10

from a case with a different bank as a party, even though that case

might have affected the banking industry). For example, owning

stock in a publicly held company that may own a Chrysler vehicle

offers no more than a remote or speculative interest. On the other

hand, of course, where a judge is a class member in an action

seeking monetary relief, her direct financial interest runs afoul

of § 455(b)(4).

Tramonte contends that even if the family members Judge Lemmon

spoke of satisfied the degrees of relatedness specified in §

455(b)(4), because the plaintiff’s class has not yet been

certified, those family members have acquired no “financial

interest” in the case. To support this proposition, Tramonte

relies upon New Orleans Pub. Serv. v. United Gas Pipe Line Co., 719

F.2d 733 (5th Cir. 1983). New Orleans Pub. Serv. is neither a

panel nor an en banc opinion of this court; rather, it is a

published order by Chief Judge Clark explaining why several circuit

judges opted not to recuse themselves from an en banc poll. In the

order, Chief Judge Clark quoted with approval an advisory letter

expressing the opinion of the Advisory Committee on Codes of

Conduct of the Judicial Conference of the United States. The

Committee believed that only judges who are members of certified

classes are parties to class litigation. See id. at 735. Because

the en banc issue did not involve class certification itself, the

four judges who were potential class members concluded that they

could participate in the en banc poll. See id.
11

To the extent that New Orleans Pub. Serv. order has

precedential value, it does not control the § 455(b)(4) issue in

this case. The problem in New Orleans Pub. Serv., as described by

Chief Judge Clark, was whether the four judges in question were

“members of a putative class and therefore potential parties to

[the] action.” Id. at 734. That inquiry is a § 455(b)(5)

question. Chief Judge Clark did not address the separate problem

of those judges’ “financial interest” in the case under §

455(b)(4).

We conclude that where a judge, her spouse, or a minor child

residing in her household is a member of a putative class, there

exists a “financial interest” in the case mandating recusal under

§ 455(b)(4). The statute stresses that any financial interest,

“however small,” requires the recusal of a judge. The fact that a

class has not yet been certified unquestionably diminishes the

expected value of the outcome of the litigation to the interested

judge, as it makes a financial recovery less certain. Yet recovery

in any matter that has not reached a final judgment is uncertain;

otherwise, there would be no case or controversy. Because §

455(b)(4) requires recusal for even paltry financial interests, the

increased uncertainty of recovery in the precertification stage of

a class action affects the size but not the existence of a

disqualifying financial interest. The decision on a request to

certify is itself a critical step, often with large financial

consequences. An assertion that a member of a putative class lacks
 

3The difference in the degrees of relationship identified by

§§ 455(b)(4) & (b)(5) make the differing standards of recusal in

the two sections relevant. Cf. In re City of Houston, 745 F.2d at

928 n.6 (“The issue is not before us whether a member of a class is

a party where the interest involved is pecuniary. Yet we doubt

that the question need ever be reached, since where the interest is

pecuniary the judge will be disqualified under the per se rule [of

§ 455(b)(4)], and the matter of whether the judge or a close

relation is a party becomes moot.”).

 

4We need not reach the question of whether a class member who

is not the named plaintiff is a party to a class action under §

455(b)(5). See In re Cement Antitrust Litig., 688 F.2d 1297, 1309-

13 (discussing the issue).

12

a financial interest relevant to the trial court’s decision until

after the class is certified blinks at reality.

A different result obtains, however, if Judge Lemmon’s unknown

family members are neither her spouse nor minor children, but are

related to her within the third degree, as specified by §

455(b)(5).3 In such a case, the statute requires recusal if the

family members are a “party” to the class action. But members of

a putative class are not “parties” to a class action for these

purposes. See New Orleans Pub. Serv., 734 F.2d at 735 (reporting

opinion of Advisory Committee on Codes of Conduct of the Judicial

Conference of the United States that judges need not recuse

themselves for being “parties” to a class action if the class had

not yet been certified).4

Of course, even if a judge’s relative is not yet “a party” to

a class action, a judge could advance the interests of that

relative in the pre-certification stage of class litigation. The

way to guard against this danger, however, lies not with §

455(b)(5), but under § 455(a). According to 28 U.S.C. § 455(a), a
13

judge should recuse herself from “any proceeding in which [her]

impartiality might reasonably be questioned.” Thus, if upon remand

Judge Lemmon discloses that the family members in question are

neither her spouse nor minor children residing in her household,

she should consider her recusal status under § 455(a).

In sum, a remand is necessary for Judge Lemmon to clarify the

degree of relationship between herself and the individuals who own

or have owned a Chrysler. If those family members are her spouse

or minor children residing in her household, her recusal would have

been required and her remand to state court would be void. If, on

the other hand, those family members are more distantly related and

Judge Lemmon determines that there is no § 455(a) basis for

disqualification, recusal would be unnecessary and Judge Lemmon

would be free to reinstate the order of remand to state court that

we vacate today.

Tramonte, however, contends that our remand to Judge Lemmon is

inappropriate because the inadequacy of the record demonstrates

that Chrysler has failed to meet its burden of proof for recusal.

Yet Judge Lemmon was under the duty to police her disqualification

status. A judge has a duty to be watchful of such disqualifying

circumstances and decide any requests to recuse with disclosure

necessary to the decision made clear upon the record.

Tramonte advances a further argument that she contends makes

a remand unnecessary. Tramonte asserts that it is irrelevant

whether or not Judge Lemmon’s family members ever had a financial

interest in this case pursuant to § 455(b)(4), because that
14

interest was relinquished by Judge Lemmon’s statement that her

family member “has no interest in joining the putative class in

this case.” As this case would be a class action under Rule

23(b)(3), the argument goes, Judge Lemmon’s family member would

have the right to opt out. See Fed. R. Civ. Pro. 23(b)(3). Thus,

contends Tramonte, Judge Lemmon’s stated intent to opt out of any

certified class ends any disqualifying interest, pointing to Union

Carbide Corp. v. United States Cutting Serv., 782 F.2d 710 (7th

Cir. 1986). In Union Carbide, a trial judge’s husband owned stock

in an unnamed class member. The Seventh Circuit held that the

judge was not required to recuse herself under § 455(b)(4), because

once she learned of her financial interest in the case, she halted

her participation in the matter until her husband sold the stock in

question. See id. at 714-15.

Subsequent statutory developments, however, have substantially

undercut the majority rationale in Union Carbide. The dissent in

Union Carbide argued that the provisions of § 455(b)(4) are

absolutist; as soon as a judge becomes aware that she has a

financial interest in a case, that judge must disqualify herself

immediately. See id. at 717 (Flaum, J., dissenting). The statute

as it existed in 1986 spoke nothing of divestment of a financial

interest. See id. Thus, according to the dissent,

disqualification becomes automatic from the moment a judge

discovers her financial interest in the litigation; relinquishment

of that interest at any point after discovery is no remedy.

Congress partially adopted the Union Carbide dissent’s position in
15

its 1988 amendments to § 455. In that legislation, Congress added

subsection (f) to § 455, permitting judges to divest themselves of

financial interests in a case and retain control over it so long as

they have devoted “substantial judicial time” to the matter. See

28 U.S.C. § 455(f). Logically, therefore, divestment should only

be an effective way to escape recusal if a judge has already

devoted “substantial judicial time” to a case.

Chrysler argues to us that Judge Lemmon’s disavowal of an

interest in participating in the class action was somehow

inadequate, as it was not formal and it was not clear that Judge

Lemmon had the legal authority to speak on behalf of her family

member. Whether this is true or not is immaterial, however,

because § 455 makes the divestment option unavailable to Judge

Lemmon. Judge Lemmon first received this case on July 24, 1996,

and she ruled on the recusal and remand motions summarily on

November 8, 1996. From the record, it appears that Judge Lemmon

did little additional work on the matter in the interim. Thus, it

can hardly be said that Judge Lemmon devoted “substantial judicial

time” to the case.

Consequently, if Judge Lemmon’s spouse or a minor child

residing in her household had a financial interest in the outcome

of the case, she was automatically required to recuse herself; she

did not have the option under § 455(f) to divest herself of that

interest. Furthermore, Judge Lemmon stated only that her family

member who presently owns a Chrysler had no interest in

participating in the class action. She did not also “opt out” any
16

of her family members who had in the past purchased Chryslers but

no longer possessed them, who might be members of the putative

class as well.

Finally, Tramonte advances a policy argument against our

holding today. She contends that requiring recusal in a case like

this one would cause disaster in the federal courts, as scores of

judges would have to recuse themselves in typical consumer class

actions. Thus, Tramonte argues that Judge Lemmon should be allowed

to preside over this case despite her possible financial interest

in it. It is true that the Supreme Court has recognized a “rule of

necessity,” whereby judges can handle cases in which they have a

personal interest if “the case cannot be heard otherwise.” United

States v. Will, 449 U.S. 200, 214 (1980). Yet Tramonte has made an

insufficient showing to entitle herself to invoke the rule. Until

Tramonte demonstrates that every judge available to her is a

potential class member, we must enforce § 455(b) by its strict

terms. The hair trigger of “any financial interest” may be unwise

and may produce results difficult to defend. Its unforgiving bite

was the creation of Congress. And relaxation of the rule of

financial interest must come from that body.

IV.

We VACATE the order remanding this case to state court and

REMAND to the district court for proceedings consistent with this

opinion.

VACATED AND REMANDED.