Court Opinion

ID: 2994369
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:14:18.452218+00
Date Added: 2024-06-11T15:03:12.493515
License: Public Domain

In the
United States Court of Appeals
For the Seventh Circuit

No. 98-3888

FREDERICK A. HURLEY
and CHRISTINE A. HURLEY,

Plaintiffs-Appellants,

v.

MOTOR COACH INDUSTRIES, INCORPORATED,

Defendant-Appellee.

Appeal from the United States District Court
for the Southern District of Illinois.
No. 95-169-CJP--Clifford J. Proud, Magistrate Judge.

Argued September 16, 1999--Decided July 25, 2000

  Before RIPPLE, MANION, and Diane P. Wood, Circuit
Judges.

  Diane P. Wood, Circuit Judge. While driving a
Greyhound bus from St. Louis to Columbus, Ohio on
February 25, 1993, Fred Hurley was involved in a
serious accident with a jack-knifed double
trailer. Hurley himself suffered severe lower
body injuries in the collision, which collapsed
the front wall of the bus. The bus that Hurley
was driving was equipped only with a standard two
point seat belt. It had neither an airbag nor any
structural enhancements that would provide
additional protection to the driver in the event
of a high speed crash like the one in which he
was involved. Hurley believes that these flaws
make the bus he was driving unreasonably
dangerous and, consequently, render the bus’s
manufacturer, Motor Coach Industries, liable for
his injuries.

  He and his wife (whose loss of consortium
claims are entirely dependent on his success in
this litigation) thus decided to sue Motor Coach,
as well as Consolidated Freightways (the
operators of the trailers that his bus hit), Road
Systems, Inc. (the makers of the trailers that
Hurley struck), and Pines Trailer Corporation
(another trailer manufacturer). Hurley began in
Illinois state court, but Consolidated
Freightways removed the action to the District
Court for the Southern District of Illinois on
diversity grounds. After the removal, Hurley
settled his claims against Consolidated
Freightways and Road Systems and dismissed Pines
under Fed. R. Civ. P. 41(a). Except as they
relate to a jurisdictional problem that we
address below, Hurley’s claims against these
parties are not at issue in this appeal. The
parties agreed to submit their case to a
magistrate judge, as 28 U.S.C. sec. 636(c)
permits. Finding that Hurley’s case was preempted
by the federal crashworthiness standard,
Magistrate Judge Proud dismissed the action; this
appeal followed.

I

  Before we discuss the merits of Hurley’s
appeal, we must address a potential
jurisdictional problem. Hurley’s original suit
involved four defendants--Motor Coach,
Consolidated Freightways, Road Systems, and Pines
Trailer. For jurisdictional purposes, the Hurleys
are citizens of Arkansas. Motor Coach is a
Delaware corporation with its principal place of
business in Arizona. Consolidated Freightways is
also a Delaware corporation, but its principal
place of business is Oregon. Road Systems is a
California corporation and its principal place of
business is there, too. Finally, Pines Trailer is
an Illinois corporation with its principal place
of business in Illinois. Complete diversity,
which is required for jurisdiction under 28
U.S.C. sec. 1332, therefore exists between the
Hurleys and all defendants. (Given the severity
of Hurley’s injuries, nobody is contesting the
adequacy of the amount in controversy.)

  Not every diversity case qualifies for removal,
however. For cases that start out in state court,
where it is the defendant who wants the federal
forum, there is an additional hurdle to clear
before successfully reaching federal court. Under
28 U.S.C. sec. 1441(b), a non-federal question
case "shall be removable only if none of the
parties in interest properly joined and served as
defendants is a citizen of the State in which
such action is brought." This rule, sometimes
called the "forum defendant" rule, means that
Pines’s presence in the case, if proper, would
normally keep the case in state court. We say
"normally" because in the typical case, a
plaintiff who is about to see her chosen court
slip away will object to removal if there is an
in-state defendant, and thereby secure a speedy
return to state court.

  That did not happen in this case. After the
defendants filed their removal petition, Hurley
did nothing. Since 28 U.S.C. sec. 1447(c) gives
plaintiffs only 30 days to object to removal,
Motor Coach argues that Hurley has waived any
objection to removal. Of course, waiver is
possible only if the forum defendant rule is
nonjurisdictional; true jurisdictional flaws are
nonwaivable and can be raised at any time. See,
e.g., Ruhrgas AG v. Marathon Oil Co., 526 U.S.
574, 583 (1999) ("subject-matter delineations
must be policed by the courts on their own
initiative even at the highest level"). Section
1447(c) spells out this fundamental rule for
removed cases, where it states specifically that
"[i]f at any time before final judgment it
appears that the district court lacks subject
matter jurisdiction, the case shall be remanded."
Justice Kennedy explained the bedrock importance
of the rule requiring courts to notice
jurisdictional defects at any time in United
States Catholic Conference v. Abortion Rights
Mobilization, Inc., 487 U.S. 72 (1988):

The distinction between subject-matter
jurisdiction and waivable defenses is not a mere
nicety of legal metaphysics. It rests instead on
the central principle of a free society that
courts have finite bounds of authority, some of
constitutional origin, which exist to protect
citizens from the very wrong asserted here, the
excessive use of judicial power. The courts, no
less than the political branches of the
government, must respect the limits of their
authority.

Id. at 77.

  We must decide, therefore, whether the forum
defendant rule is jurisdictional, in the sense we
have been using the term, or if it is of a lesser
status. That question has been bouncing around
the federal courts of appeals for more than 75
years, yet oddly enough it remains unresolved in
this circuit. LaMotte v. Roundy’s, Inc., 27 F.3d
314, 316 n.3 (7th Cir. 1994). The overwhelming
weight of authority, however, is on the
"nonjurisdictional" side of the debate. Compare
Korea Exch. Bank v. Trackwise Sales Corp., 66
F.3d 46, 50 (3d Cir. 1995) (nonjurisdictional);
In re Shell Oil Co., 932 F.2d 1518, 1522 (5th
Cir. 1992); Farm Constr. Serv. v. Fudge, 831 F.2d
18, 21-22 (1st Cir. 1987); 428 F.2d 880, 882 (2d
Cir. 1970) (Friendly, J.) (nonjurisdictional);
Bailey v. Texas Co., 47 F.2d 153, 155 (2d Cir.
1931) (L. Hand, J.) (nonjurisdictional); Hanley-
Mack Co. v. Godchaux Sugar Co., 2 F.2d 435, 437
(6th Cir. 1924) (nonjurisdictional) with Hurt v.
Dow Chemical Co., 963 F.2d 1142, 1145-46 (8th
Cir. 1992) (jurisdictional). See also Snapper,
Inc. v. Redan, 171 F.3d 1249, 1258 (11th Cir.
1999) (interpreting 1996 statutory changes as
resolving the conflict and making the forum
defendant rule waivable).

  A number of reasons persuade us that the
majority rule is the correct one. First, the
theme of several recent Supreme Court decisions
that have considered curable defects in diversity
jurisdiction has been to find that as long as the
court’s jurisdiction is proper at the time of
trial and judgment, the case need not be
dismissed because of an earlier jurisdictional
problem. This was the precise holding of
Caterpillar, Inc. v. Lewis, 519 U.S. 61 (1996),
where the question was whether a lack of complete
diversity at the time of removal required
dismissal, even though all claims concerning the
nondiverse defendant were settled and that party
was dismissed before the trial began. The Court
held that the answer was no, explaining that "the
jurisdictional defect was cured, i.e., complete
diversity was established before the trial
commenced. . . . But a statutory flaw--
Caterpillar’s failure to meet the sec. 1441(a)
requirement that the case be fit for federal
adjudication at the time the removal petition is
filed--remained in the unerasable history of the
case." 519 U.S. at 73 (emphasis in original).
Particularly in light of the strong interests in
finality, efficiency, and economy that attach to
a completed trial, the Court found that the
plaintiff’s opportunity to raise objections
within the 30 days afforded by sec. 1447(c) was
sufficient to protect his interests.

  Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S.
826 (1989), took the same general approach to a
different problem with diversity jurisdiction. In
Newman-Green, indeed, the problem was more
severe: the case had proceeded to judgment in the
district court while an individual whose presence
spoiled complete diversity remained a party. The
defect in jurisdiction was noticed only at the
court of appeals level. The Supreme Court held
that Rule 21 of the Federal Rules of Civil
Procedure allows the courts of appeals (in
addition to the district courts) to dismiss a
dispensable party whose presence spoils statutory
diversity jurisdiction. Once again, therefore,
the note the Court struck is that the last chance
for ensuring that jurisdiction is proper occurs
as late as the final judgment in the case.

  The situation we face is different, and in many
ways less troublesome, than the problem the Court
encountered in Caterpillar and Newman-Green. If
Hurley’s case had been filed in the first
instance in federal court, jurisdiction under
sec. 1332 would have been clear. Or, if Hurley
had originally filed a state court action against
Motor Coach, Consolidated, and Road Systems,
those defendants could have removed the case to
federal court since none was an in-state
defendant. Once in federal court, Hurley could
have filed an amended complaint adding Pines, if
it turned out that Pines might have been
responsible for his injuries. In short, the case
as it arrived in federal court met every
requirement for federal jurisdiction: it simply
took the wrong path, in a sense, because there
was an in-state defendant. This, we think, is
more a matter of removal procedure, and hence
waivable, than a matter of jurisdiction.

  The policy behind the forum defendant rule also
supports the nonjurisdictional characterization.
The rule is designed to preserve the plaintiff’s
choice of a (state) forum, under circumstances
where it is arguably less urgent to provide a
federal forum to prevent prejudice against an
out-of-state party. After removal, if the
plaintiff wants to remain in state court, she can
file a timely motion for remand. Under the
circumstances, it seems that the only purpose
that would be served by declaring the forum
defendant rule jurisdictional would be to
preserve for plaintiffs rights that the
plaintiffs themselves failed to assert. For these
reasons, we join the longstanding line of
authority that holds that the forum defendant
rule is nonjurisdictional. Hurley thus had only
30 days to object to removal based on the
presence of Pines in the case (which did not last
long anyway, as it turned out that Pines had not
built the trailers in question). Since there were
no other potential flaws with the district
court’s diversity jurisdiction, we now turn to
the merits of the appeal.

II

  Hurley’s claim against Motor Coach is an
Illinois products liability action. In order to
show that Motor Coach’s product was unreasonably
dangerous, he had to present an alternative
design that is "economical, practical, and
effective." Baltus v. Weaver Division of Kiddie
& Co., Inc., 557 N.E.2d 580, 586 (Ill. App. Ct.
1990). Hurley’s experts produced a design that
had four basic components: a knee bolster, a
three point seat belt, an airbag, and, most
controversially, a steel cage (similar to a roll
cage on a convertible) that would surround the
driver’s area. Additionally, the design called
for the removal of the front row of passenger
seats in order to create a crumple zone,
presumably for the protection of the passengers
on the bus.

  Motor Coach argued to the court below that
there are three reasons that Hurley’s design is
insufficient to get his claims to a jury. First,
it maintained that his design is not economical,
practical, or effective because it will be too
expensive and, in any event, the steel cage will
subject the driver to crushing deceleration in a
front-end collision. Next, it contested the
qualifications of Hurley’s experts under the
standard articulated in Daubert v. Merrell Dow
Pharmaceuticals, 509 U.S. 579 (1993), and Kumho
Tire, Ltd. v. Carmichael, 526 U.S. 137 (1999).
Finally, it argued that because Hurley’s design
forecloses a manufacturer’s choice between seat
belts and airbags, it is preempted by the
National Highway Transportation and Safety
Board’s (NHTSA) Federal Motor Vehicle Safety
Standard 208 (FMVSS 208), 49 C.F.R. sec. 571.208.
The district court’s summary judgment in favor of
Motor Coach was based solely on the preemption
theory.

  Specifically, the district court found that
Hurley’s claim is preempted by FMVSS 208, which
is the federal crashworthiness standard. The
Illinois products liability cases dealing with
alternative designs suggest that there is more
than one way of showing that a product as
designed by the defendant was unreasonably
dangerous, although one possibility is to prove
that an "economical, practical, and effective"
alternative design would be safer. Baltus, 557
N.E.2d at 585. Hurley, however, has put all of
his eggs in the "alternative design" basket. As
a practical matter, his theory would require
manufacturers selling buses in Illinois to
incorporate his proposed steel cage, crumple
zone, airbag, and three point seat belt, lest
they face liability for selling an uncrashworthy
vehicle.

  Hurley’s theory is remarkably close to the one
the Supreme Court rejected in Geier v. American
Honda Motor Co., 120 S. Ct. 1913, 1922 (2000). In
Geier, the Court had to decide whether FMVSS 208
and the National Traffic and Motor Vehicle Safety
Act of 1966 (NTMVS), 15 U.S.C. sec. 1381 et seq.,
preempted a state common-law tort action in which
the plaintiff claimed that an auto manufacturer
who was in compliance with the federal standard
could nonetheless be held liable for failing to
equip its cars with airbags. The Court held that
the Act’s express preemption provision did not
preempt the suit, but that ordinary preemption
principles continue to apply to this area. Under
those principles, it found that the lawsuit
actually conflicted with FMVSS 208 and hence the
statute, and it could not go forward.

  Aside from the fact that Hurley’s claim
concerns buses and Geier’s claim concerned cars,
it is hard to see any significant difference
between the two situations. The applicable
standard for buses like the one that Hurley was
driving is found at 49 C.F.R. sec. 571.208
S4.4.3.1; see also National Transportation Safety
Board Factual Report of Highway Accident
Investigation, CRH-93-F-H018 at 4 (Hurley’s bus
was manufactured in 1992; its gross vehicle
weight was approximately 28,200 pounds.). The
regulatory section provides that "[e]ach bus with
a gross vehicle weight rating of more than 10,000
pounds shall comply with the requirements of
S4.4.2.1 or S4.4.2.2." That "or" is critical,
since S4.4.2.1 calls for a "complete passenger
protection system" for the driver; it must comply
with crash protection requirements found in S5 of
FMVSS 208. On the other hand, S4.4.2.2 requires
only a seat belt assembly; it, too, is subject to
guidelines, but what is important for our case is
that it does not require an airbag or a three
point seat belt, as Hurley’s design does. Nobody
doubts, and indeed Hurley argued in his brief,
that under his theory the manufacturer loses the
choice between two point seat belts and the
comprehensive system that his engineers have
designed. Motor Coach’s argument is thus a fairly
straightforward one--because federal law gives
bus manufacturers a choice as to the driver
protection systems installed in a particular bus,
an Illinois tort suit that rests on a theory that
forecloses that choice is preempted.

  Geier confirms Motor Coach’s theory that a
state lawsuit that forecloses an option left open
by FMVSS 208 is in fact preempted. In Geier, the
Court traced the history of FMVSS 208 and
concluded that Congress and the Department of
Transportation expressed a preference for leaving
to manufacturers the choice between airbags and
other types of safety devices (at least for the
period in time during which the plaintiff’s car
was manufactured). Geier noted the controversy
over the efficacy and utilization of airbags and
seatbelts and concluded that FMVSS 208
"deliberately sought variety" by leaving the
choice of passenger protection system up to
manufacturers. Geier, 120 S. Ct. at 1924.

  One particular aspect of Geier’s discussion of
FMVSS 208 is especially relevant here. One of the
major problems with which the Department of
Transportation needed to deal when formulating
standards for passenger cars is a strong aversion
among the driving public to seatbelts. Id. at
1923-24 (recalling the "fiasco" that resulted
when automakers installed systems that prevented
drivers from starting their cars unless seatbelts
were buckled). NHTSA found that this problem was
even more acute among heavy vehicle operators.
See 53 Fed. Reg. 25336, 25338 (July 6, 1988)
(noting that seat belt use among heavy truck
drivers is far below the national average for all
vehicles). The commentary accompanying the final
rules indicates that even the details of seat
belt design--such as the retractor mechanism,
mounting position, and buckle releases--were
hotly debated during the rulemaking process. See
id. at 25339-41. Consequently, NHTSA’s decision
to leave the manufacturers of heavy buses with
the option of using a two point seat belt that
met regulatory standards is quite understandable
as a way of promoting safety by encouraging
drivers to use the safety equipment that
manufacturers install. But Hurley’s proposal
unequivocally requires a three point seat belt,
a requirement that could reduce utilization and
thereby undermine FMVSS 208’s safety objectives.
Perhaps the design would not in fact reduce
seatbelt utilization, but that is not the point.
The point is that, as in Geier, the decision to
leave options open to bus manufacturers was made
with specific policy objectives in mind. Hurley’s
suit, if successful, would undermine that policy
objective and is therefore preempted.

  Even before Geier, our own case law would have
led us to the same result. See Gracia v. Volvo
Europa Truck, N.V., 112 F.3d 291 (7th Cir. 1997).
The arguments Hurley offered to distinguish
Gracia are the same as those he would raise to
avoid Geier, and so we address them briefly. In
his view, FMVSS 208 does not speak to his
particular problem. He maintains that his theory
of uncrashworthiness is limited to the ability of
the bus to protect the driver in high profile
impacts (i.e. impacts with trucks or other large
vehicles where the point of collision is above
the bumper). We are unpersuaded by this
distinction. The ability to withstand high
profile impacts is one aspect of the general
topic of crashworthiness that FMVSS 208
addresses. Otherwise, the option that both Geier
and Gracia preserve for manufacturers would be
eviscerated by the particulars of the crash in
question. If a vehicle meets the basic
crashworthiness standards of FMVSS 208, the
after-the-fact details of the plaintiff’s
particular injuries do not, and cannot, matter.
As Geier (and Gracia) held, a state-law tort
action that forecloses an option left open to the
manufacturer is preempted under FMVSS 208. The
only qualification is the one recognized in
Geier--if there are "special design related
circumstance[s] concerning a particular type of
[vehicle]," then a manufacturer’s own design
decisions may foreclose one or more of the
choices left open by the federal standards.
Geier, 120 S. Ct. at 1927-28. So, for example, if
a plaintiff showed that the design particulars of
her car made airbags the only viable option, then
FMVSS 208 would not foreclose the case. This
loophole is of no use to Hurley, however; he has
pointed to nothing about the design of this
particular bus that makes it different from the
average "bus with a gross vehicle weight rating
of more than 10,000 pounds." 49 C.F.R. sec.
571.208 S4.4.3.1.

III

  We conclude that the Supreme Court’s opinion in
Geier governs Hurley’s case and compels the
conclusion that when a Federal Motor Vehicle
Safety Standard leaves a manufacturer with a
choice of safety device options, a state suit
that depends on foreclosing one or more of those
options is preempted. Hurley’s proposed design,
with three point seat belts and airbags, would
preclude a bus manufacturer from exercising the
"[s]econd option" contained in S4.4.2.2. The
history of the safety requirements for large
buses like the one Hurley was driving indicates
that these options were important in the overall
safety regime created by FMVSS 208. His suit
interferes with these federal policy choices.
Under Geier, it is preempted, and we thus Affirm
the judgment of the district court.