Opinion ID: 164278
Heading Depth: 2
Heading Rank: 1

Heading: The claims against Clarkson and Slowey

Text: 11 Albert argues the district court erred when it dismissed the claims against Clarkson and Slowey. Albert's argument raises two issues. First, because the district court's analysis of the claims against Clarkson and Slowey was in the context of Albert's motion to remand the case to state court, Albert's argument is necessarily an attack on the district court's fraudulent joinder analysis. As discussed below, this court need not address whether the district court's denial of the motion to remand was proper because an alternative basis for federal jurisdiction existed at the time the district court rendered judgment. Second, Albert's arguments also attack the district court's decision to dismiss her claims against Clarkson and Slowey on the merits. Because the district court's dismissal of these claims took place in the context of a fraudulent joinder analysis, a jurisdictional inquiry, we conclude that the district court should not have dismissed the claims with prejudice.
12 This court has jurisdiction over a denial of a motion to remand to state court when coupled with the appeal of a final judgment. Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072, 1076 (10th Cir.1999)(quotation omitted). Albert argues that the district court's fraudulent joinder analysis is flawed because the court failed to resolve whether she could state a claim for interference with prospective contractual relations between herself and Smith's. Even assuming that Albert is correct, however, this court will not reverse the district court's denial of the motion to remand. Indeed, a remand to a state court would be improper because the district court thereafter had federal question jurisdiction by virtue of the ADA claim. 13 In Caterpillar Inc. v. Lewis, the Supreme Court discussed the impact of jurisdictional defects at the time of removal on the subject matter jurisdiction of the trial court. 519 U.S. 61, 64, 117 S.Ct. 467, 136 L.Ed.2d 437 (1996). In that case, although the suit was removed on the basis of diversity jurisdiction, at the time of removal there was not complete diversity among the parties. Id. at 67, 117 S.Ct. 467. By the time final judgment was rendered, however, the jurisdictional defect had been cured. Id. The Supreme Court held that remanding the case to state court after final judgment would impose an exorbitant cost on our dual court system, a cost incompatible with the fair and unprotracted administration of justice. Id. at 77, 117 S.Ct. 467. 14 Were this court to conclude that the district court's decision on the merits of Albert's claims should be affirmed, the holding in Caterpillar would obviate the need to address any attack on the denial of the motion to remand. As discussed below, however, we have concluded that the district court's ruling on Albert's ADA claim must be reversed. Thus, further consideration of the order denying remand is required. In Huffman v. Saul Holdings Ltd. Partnership this court remanded a case to state court after reversing the district court's ruling on the merits, despite the cure of an earlier jurisdictional defect. 194 F.3d at 1084. We noted that the judicial efficiency rationale of Caterpillar does not apply when the district court is reversed on the merits. Id. at 1080. After reversal, no judgment on the merits remains and there is no reason to refrain from ordering a remand to state court on the basis of a defect in removal procedure. Id. 15 The district court in Huffman, however, had jurisdiction based only on diversity. Thus, any proceedings after reversal were limited to questions of state law, whether in federal or state court. The situation here is quite different. After the district court denied Albert's motion to remand, she chose to amend her complaint to add a claim under the ADA, giving the district court federal question jurisdiction. 16 The posture of this case is similar to that in Akin v. General Electric Co., 156 F.3d 1030 (10th Cir.1998). The plaintiffs in Akin filed a motion to remand, arguing some of the defendants could not have properly consented to removal. Id. at 1036. The district court denied the plaintiffs' motion to remand. Id. The plaintiffs then added federal claims against those defendants, thus giving the district court jurisdiction. Id. The plaintiffs challenged the denial of the motion to remand on appeal. Id. This court held that once plaintiff decided to take advantage of his involuntary presence in federal court to add a federal claim to his complaint he was bound to remain there. Id. (quotation omitted). 17 The rationale of Akin applies with equal force to this case. As the plaintiffs did in Akin, Albert affirmatively utilized the federal forum for her own purposes after the district court denied her motion to remand. Indeed, it is Albert's ADA claim which merits reversal of the district court's decision. Unlike Huffman, the claims remaining after appeal in this case are not state law claims. The efficiency concerns of Caterpillar, therefore, are implicated in this case despite this court's conclusion that the district court should be reversed because Albert's ADA claim destines this case to remain in federal court. 18 We recognize that at least two circuits have held that the amendment of a complaint to add federal question claims did not doom a challenge to the denial of a motion to remand. See King v. Marriott Int'l Inc., 337 F.3d 421, 426 (4th Cir.2003); Waste Control Specialists, LLC v. Envirocare of Tx., Inc., 199 F.3d 781, 787 (5th Cir.2000). Two concerns were central to these decisions. First, the finality and efficiency concerns of Caterpillar were not present in either case. See King, 337 F.3d at 426; Waste Control Specialists, 199 F.3d at 787. Second, in each case the amendment of the complaint was narrow adding the one and only claim the district court suggested [the plaintiff] had. Waste Control Specialists, 199 F.3d at 787 n. 5; King, 337 F.3d at 426 (noting that the amendment made by the plaintiff simply made explicit the federal claim which the district court held was implied in the complaint). 19 Those circumstances are not present in this case. Because Albert amended her complaint to include the ADA claim, the efficiency concerns of Caterpillar are indeed present here. Furthermore, the district court's decision did not imply that Albert's only viable claim was the federal ADA claim. Indeed, the court's denial of the motion to remand left intact Albert's claims under the NMHRA and Albert amended her complaint to add claims wholly different from those eliminated by denial of the motion to remand. Therefore, as we did in Akin, we hold that under the circumstances of this case, Albert cannot voluntarily invoke, and then disavow, federal jurisdiction. Akin, 156 F.3d at 1036; cf. Waste Control Specialists, 199 F.3d at 787 n. 5 (discussing the difference between the narrow amendment in that case and a studied decision to take advantage of the forum in another case). Accordingly, Albert cannot challenge the district court's decision to deny her motion to remand by attacking the district court's fraudulent joinder analysis.
20 The district court denied the motion to remand and dismissed Clarkson and Slowey from the suit without further comment. 1 Because the district court's conclusion was reached in the context of the denial of the motion to remand, we conclude the district court should have dismissed the claims without prejudice to Albert's refiling the claims before another court. 2 21 On the motion for remand, the district court was confronted with a question of subject matter jurisdiction because it could only retain jurisdiction if the claims against Clarkson and Slowey were dismissed. Dodd v. Fawcett Publ'ns, Inc., 329 F.2d 82, 83 (10th Cir.1964). Once it determined that Clarkson and Slowey were fraudulently joined, the district court had no jurisdiction to resolve the merits of the claims against them. In cases where the district court has determined that it lacks jurisdiction, dismissal of a claim must be without prejudice. 3 See Martinez v. Richardson, 472 F.2d 1121, 1126 (10th Cir. 1973). Similarly, we hold that the dismissal of the claims against Clarkson and Slowey should have been without prejudice to refiling before another court. 22 Because it is not necessary to determine if Albert could have stated a claim for interference of contract we deny Albert's request to certify to the New Mexico Supreme Court the question of whether New Mexico law recognizes a cause of action by an at-will employee for interference with prospective contractual relations. 23