Court Opinion

ID: 3217367
Source: CourtListenerOpinion
Date Created: 2016-06-27 21:00:46.660026+00
Date Added: 2024-06-11T09:36:26.581215
License: Public Domain

Not for Publication in West's Federal Reporter

          United States Court of Appeals
                      For the First Circuit

No. 15-1609

   UNIVERSAL TRUCK & EQUIPMENT COMPANY, INC.; NEW LONDON MINING
       MANUFACTURING & PROCESSING, LLC; NICHOLAS E. CAMBIO,
 individually and as Trustee of the Nicholas E. Cambio, Roney A.
    Malafronte and Vincent A. Cambio Trust; VINCENT A. CAMBIO,

                      Plaintiffs, Appellants,

                                    v.

  CATERPILLAR, INC.; CATERPILLAR FINANCIAL SERVICE CORPORATION,

                      Defendants, Appellees,

  W. FRANK BLOUNI; JOHN R. BRAZIL; DANIEL M. DICKINSON; JOHN T.
 DILLON; EUGENE V. FIFE; GAIL D. FOSLER; JUAN GALLARDO; DAVID R.
  GOODE; PETER A. MAGOWAN; WILLIAM A. OSBORN; JAMES W.L. OWENS;
 CHARLES D. POWELL; EDWARD B. BUST, JR.; SUSAN C. SCHWAB; JOSHUA
      I. SMITH; KENT ADAMS; JIM DUENSING; PETER D'AGOSTINO;
                     SOUTHWORTH-MILTON, INC.,

                              Defendants.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF RHODE ISLAND

          [Hon. William E. Smith, U.S. District Judge]

                                 Before

                 Torruella, Lipez, and Thompson,
                         Circuit Judges.
     Richard G. Riendeau, for appellants.
     A. Neil Hartzell, with whom LeClairRyan, PC was on brief, for
appellees.

                          June 27, 2016
            THOMPSON, Circuit Judge.

                                 Stage Setting

            Today's case involves a routine commercial-collection

matter gone awry.    The parties know the facts — some of which are

recounted     elsewhere,     see     Universal    Truck    &    Equip.     Co.    v.

Southworth–Milton, Inc., 765 F.3d 103, 105-07 (1st Cir. 2014)

("Universal I," from now on) — so a simple summary suffices.

            Plaintiff      New     London   entered   into      an   installment

contract with Defendant Caterpillar Financial to buy 22 pieces of

heavy equipment for about $3.4 million.            The remaining Plaintiffs

listed in our caption signed personal guarantees of New London's

obligations.     New London later defaulted on its payments.                     But

Caterpillar     Financial        agreed     to    renegotiate        the    terms.

Unfortunately, New London defaulted on those terms too.

            Things   eventually       turned     litigious,     unsurprisingly.

Sprinting to Rhode Island state court, Plaintiffs sued Caterpillar

Financial, Caterpillar, Inc., Southworth (a Caterpillar-equipment

dealer),    individual     members     of   Caterpillar,       Inc.'s    board    of

directors, as well as an individual employee — Peter D'Agostino —

of Southworth.    Plaintiffs' complaint alleged claims for breach of

contract and related wrongs.              All Plaintiffs are Rhode Island

citizens.    And all Defendants are citizens of other states — all,

                                      - 3 -
that is, except Defendant D'Agostino, who is a Rhode Island

citizen.

            Defendants Caterpillar Financial and Southworth later

counterclaimed for (among other things) breach of contract.         The

individual Defendants — including Defendant D'Agostino — moved to

dismiss the claims against them.      And the state court granted the

motion.

            Before a partial final judgment could enter, see R.I.

Super. Ct. R. Civ. P. 54(b), Defendants Caterpillar Financial,

Caterpillar, Inc., and Southworth removed the case to federal court

on diversity grounds.        These corporate Defendants argued that

diversity    arose   after   the   state   court   dismissed   Defendant

D'Agostino from the case.      They also argued that they had timely

removed the case because they had filed the removal notice within

30 days of the state court's dismissal order.

            Unpersuaded, Plaintiffs filed a remand motion, arguing

that removal was improper because Defendant D'Agostino's dismissal

had not "occurred as a result of" Plaintiffs' "voluntary action"

and the dismissal order "had not become final" at the time of

removal.    Defendants countered that Plaintiffs' claims against

Defendant D'Agostino had no reasonable chance of success under

state law — Plaintiffs had "fraudulently joined" him to defeat

removal (the argument continued) and so the judge should disregard

                                   - 4 -
him for purposes of determining diversity.                    Plaintiffs disputed

the     fraudulent-joinder            charge,      insisting     that     Defendant

D'Agostino's joinder "had nothing to do with his citizenship or

any intent" on Plaintiffs' part "to thwart removal."                          Agreeing

with Defendants' fraudulent-joinder thesis, the district judge

denied Plaintiffs' remand motion, see Universal I, 765 F.3d at 107

—   "there   is   not    and    was    not    a   colorable    claim    against   the

Defendant, D'Agostino," the judge stressed in his oral ruling,

"and therefore there was diversity and removal to this [c]ourt was

appropriate."

             After   discovery,         all     Defendants     moved    for    summary

judgment on Plaintiffs' claims.               Defendants Caterpillar Financial

and     Southworth      also    moved     for     summary     judgment    on     their

counterclaims.       In a detailed and thoughtful order, the judge

granted Defendants' motion.              Deeming Plaintiffs' claims against

Southworth frivolous, the judge awarded Southworth its attorney

fees.     The judge later entered a partial final judgment "for

Defendant Southworth and against all Plaintiffs."                       See Fed. R.

Civ. P. 54(b). Issues concerning damages for Caterpillar Financial

and attorney fees for Caterpillar Financial and Caterpillar, Inc.

remained unresolved at that time.

             Plaintiffs        appealed       against   Defendant        Southworth,

challenging the judge's remand denial, grant of summary judgment,

                                         - 5 -
and attorney-fees award.     After oral argument here but before our

decision, Plaintiffs asked the district judge to reconsider his

remand ruling, arguing for the first time — some three years after

the judge's original ruling — that Defendants' failure to raise

their   fraudulent-joinder    theory    within     30    days        of    receiving

service of the state-court complaint (as opposed to 30 days after

Defendant D'Agostino's dismissal) made their removal improper.

Opposing      Plaintiffs'    reconsideration            effort,           Defendants

Caterpillar      Financial   and     Caterpillar,        Inc.        argued     that

Plaintiffs' appeal divested the district court of jurisdiction to

act on the motion.     They also argued that their "position is and

continues to be" that Plaintiffs' fraudulent joinder of Defendant

D'Agostino barred remand to state court.

           The    district   judge     did   not    take        on    Plaintiffs'

reconsideration motion until after our Universal I decision came

down — a decision that affirmed the judge's original order denying

remand, as well as his summary-judgment and attorney-fees rulings

for Defendant Southworth.          See 765 F.3d at 105.              We will have

more to say about Universal I in just a bit.               Anyway, the judge

ended up denying Plaintiffs' reconsideration motion, noting that

he had orally denied their original remand motion after "adopting

Defendants' fraudulent joinder theory" and that Universal I's

affirmance of his earlier remand ruling required him to deny the

                                   - 6 -
reconsideration request.           And after concluding that "Plaintiffs'

claims presented no justiciable issues of law or fact and exhibited

bad faith," the judge entered a judgment against Plaintiffs and in

favor    of     Defendants   —     awarding     Defendant   Caterpillar,     Inc.

$68,181.89 in attorney fees and costs (relying "on either [the

court's]      inherent   power     or   Rhode   Island   law")   and   Defendant

Caterpillar Financial $2,553,203.50 in damages plus $235,192.97 in

attorney fees and costs (finding an entitlement to fees and costs

under the agreement).             The judge held Plaintiffs "jointly and

severally liable" for the judgments.

              Which takes us to the present, with Plaintiffs arguing

that the judge triply erred:            Giving us a sense of déjà vu, they

contend — as they did in Universal I — that the judge stumbled by

not remanding the case to state court.1             Next they argue that the

judge blundered by granting Caterpillar Financial and Caterpillar,

Inc. summary judgment on all claims.             And finally they argue that

the     judge    slipped     by    awarding      Caterpillar     Financial    and

1 We read Plaintiffs' brief as contesting the judge's original
remand denial, not his denial of the reconsideration motion. But
even if we are wrong about that, Plaintiffs would gain nothing.
And that is because, as Defendants note, Plaintiffs based their
reconsideration argument on a new theory — that Defendants botched
matters by not raising the fraudulent-joinder theory within 30
days of service — and "a party may not, on a motion for
reconsideration, advance a new argument that could (and should)
have been presented prior to the district court's original ruling."
Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003).
                                        - 7 -
Caterpillar, Inc. attorney fees.         For our part, however, we see no

reason to undo what the judge did.

                              Remand Ruling

            A defendant may remove a civil case from state to federal

court only if the federal court has "original jurisdiction" over

the action, see Universal I, 765 F.3d at 108-09 — for example, if

the parties are of diverse citizenship and the stakes exceed

$75,000, see McKenna v. Wells Fargo Bank, N.A., 693 F.3d 207, 211-

12 (1st Cir. 2012).      A defendant looking to remove a case must

file a notice of removal within 30 days of receiving a copy of the

initial pleading.     See Universal I, 765 F.3d at 108.           But if the

case is not removable from the get-go (because of, say, a lack of

complete diversity among the parties), the defendant must file the

removal    notice   within   30   days   of   when   the   case   "become[s]

removable" — provided the case is less than one year old.            See id.

(quoting 28 U.S.C. § 1446(b)(3)).          A case may "become removable"

in the diversity context if "through service or otherwise . . . of

a copy of an amended pleading, motion, order or other paper . . .

it may first be ascertained that" the parties' citizenship is

diverse.    28 U.S.C. § 1446(b)(3).2

2 As we said in Universal I, "[t]he parties now apparently agree
that the original asserted grounds for removal — the dismissal of
D'Agostino — was not proper because the state court decision was
not final in the sense that it was not voluntary, and still subject
to review on appeal." 764 F.3d at 108. So we did not then and do
                               - 8 -
          Trying yet again to get us to kibosh the judge's remand

ruling, Plaintiffs offer a kitchen-sink's worth of arguments,

though their contentions basically turn on a common theme — namely,

that Defendants waited too long to remove this action, so the judge

should have remanded the case back to state court.          But Universal

I knocks the legs out from under their theory.

          There,    we   held   that   these   same    Plaintiffs   had   no

"reasonable possibility" of succeeding against the non-diverse

defendant, Defendant D'Agostino — they had thrown him in, we said,

only to defeat diversity jurisdiction.         Id.    And this "fraudulent

joinder" — a theory Defendants argued below, which the judge

"agree[d]" with — was obvious on the face of Plaintiffs' state-

court complaint.    Id. at 107, 108.      So, we added, Defendants knew

(or should have known) from the case's beginning that they could

remove the suit to federal court under diversity jurisdiction.

See id. at 108.    And that means they had to remove the case within

30 days of service. See id. They did not. See id. But Plaintiffs

had "raised no objection" below about "the timeliness of a removal

based on fraudulent joinder."      Id. at 107.       In other words, while

"[D]efendants failed to remove this lawsuit due to fraudulent

not now address whether the 30-day clock begins running on a state
court's yet-to-be-appealed or unappealed dismissal of a diversity-
destroying party.
                                  - 9 -
joinder in a timely manner, . . . [P]laintiffs never argued" to

the district judge that Defendants' "fraudulent joinder theory was

untimely."    Id. at 109-10.         Noting that the 30-day-time limit "is

not jurisdictional" and thus can be "waive[d]" if not seasonably

raised, we found that Plaintiffs' silence below on this fraudulent-

joinder issue constitutes a waiver.              Id. at 110, 111.      And with

that, we affirmed the judge's decision not to remand the removed

case to state court.        Id. at 111, 112.

             At    oral   argument    in   the   present   appeal,   Plaintiffs

candidly conceded that Universal I specifically rejected the very

claims they make here about the removal's (supposed) untimeliness.

They just think that Universal I does not bind us — it is not "law

of the case" — basically because (as they see it) the panel there

got two things wrong:        first, they say the panel wrongly concluded

that they had "never argued that fraudulent joinder was untimely";

and second, they claim the panel wrongly thought that the district

judge denied the remand motion based on a finding of fraudulent

joinder.

             The    law-of-the-case        doctrine    "binds    a    successor

appellate panel in a second appeal in the same case to honor fully

the original decision."        United States v. Matthews, 643 F.3d 9, 13

(1st Cir. 2011) (internal quotation marks omitted).                  Of course,

like most judicial doctrines, this one has its exceptions — though

                                      - 10 -
the list is "short" and "narrowly cabined," see United States v.

Rivera-Martinez, 931 F.2d 148, 151 (1st Cir. 1991), only covering

situations     involving   "exceptional      circumstances,"   see    Negrón-

Almeda v. Santiago, 579 F.3d 45, 51 (1st Cir. 2009).           An important

exception (the one Plaintiffs try to invoke) provides that a

litigant can avoid the doctrine's "application . . . by showing

that    the    earlier   decision   is    blatantly   erroneous      and,   if

uncorrected, will work a miscarriage of justice," see Matthews,
643 F.3d at 14 — a hard-to-satisfy standard that requires us to

have    "a definite and firm conviction that a prior ruling on a

material matter is unreasonable or obviously wrong, and resulted

in prejudice," see United States v. Moran, 393 F.3d 1, 8 (1st Cir.

2004) (internal quotation marks omitted).

              Moving from the general to the specific, we find that

this exception offers Plaintiffs no refuge. Take their first claim

of blatant error — that we wrongly concluded in Universal I that

they had "never argued that the fraudulent joinder theory was

untimely":      Hoping to give their claim an aura of plausibility,

Plaintiffs point out that they had said in their memo supporting

their remand bid that "Defendants failed to" remove the case

"within 30 days of" the case's "initiation . . . in state court."

True.    But a review of Plaintiffs' remand papers shows they did

not argue there (as they do here) that Defendants failed to timely

                                    - 11 -
assert their fraudulent-joinder theory.   See Universal I, 765 F.3d

at 110.   So their opening blatant-error claim misfires.

           The same is true of their second blatant-error claim —

that we wrongly concluded in Universal I that the judge had

rebuffed their remand bid on fraudulent-joinder grounds:      Recall

that in opposing the remand motion, Defendants raised a fraudulent-

joinder theory premised on Plaintiffs' offering no state-law basis

for recovery against Defendant D'Agostino.    Well, in words that

echoed Defendants' argument, the judge — in delivering an oral

decision denying Plaintiffs' remand motion — held that Plaintiffs

had no "colorable claim" against Defendant D'Agostino.     On top of

that, in rejecting Plaintiffs' reconsideration motion, the judge

made it crystal clear that he had indeed "adopt[ed] Defendants'

fraudulent joinder theory" in spurning Plaintiffs' remand motion.

And given this record, we cannot say that Universal I blatantly

erred in describing fraudulent joinder as the basis for the judge's

remand denial.

           Because Plaintiffs have not satisfied the blatant-error

step, we need not consider whether they can satisfy the prejudice

step.3    What this means is that the law-of-the-case doctrine

3  Plaintiffs also vaguely accuse the Universal I panel of
"condon[ing]" what it calls Defendants' "'fraudulent joinder by
hindsight' tactic." But Plaintiffs say this only in the "summary
of the argument" section to their reply brief — the body of that
brief's argument section does not discuss how the panel's supposed
                              - 12 -
applies here, not the narrow exception that Plaintiffs seek to

exploit.   So Plaintiffs' assault on the judge's remand ruling goes

nowhere.

              Summary-Judgment and Attorney-Fee Rulings

            Less need be said about Plaintiffs' challenges to the

judge's    summary-judgment    and    attorney-fee      rulings.      When    a

district judge pens a cogent, well-reasoned decision, we appellate

judges should resist the urge to put matters into our own words.

See, e.g., Moses v. Mele, 711 F.3d 213, 215-16 (1st Cir. 2013)

(noting    that   because   "starting   from   scratch     and     building   a

rationale from the ground up is sometimes an extravagant waste of

judicial resources," we have long held that when a lower-court

judge   "accurately   takes   the    measure   of   a   case,    persuasively

explains its reasoning, and reaches a correct result, it serves no

useful purpose for a reviewing court to write at length in placing

its seal of approval on the decision below"); deBenedictis v.

Brady-Zell (In re Brady-Zell), 756 F.3d 69, 71 (1st Cir. 2014)

(similar). Because this is such an instance, we affirm the judge's

"condon[ing]" brings them within the longed-for exception to the
law of the case.    Consequently we need say no more about that
subject. See, e.g., United States v. Trinidad-Acosta, 773 F.3d
298, 310 n.5 (1st Cir. 2014) (deeming waived arguments alluded to
in the brief's summary-of-the-argument section but not developed
elsewhere).
                                    - 13 -
summary-judgment and attorney-fee rulings for substantially the

reasons outlined in his persuasive decisions.    And that is that.

                             Final Words

          Having   fully   considered   Plaintiffs'   many   arguments

(including some not mentioned above, because they deserve no

discussion), we let the judge's decisions stand.

               Affirmed.

                               - 14 -