Court Opinion

ID: 168228
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:19:46+00
Date Added: 2024-06-11T17:24:56.584381
License: Public Domain

F I L E D
                                                               United States Court of Appeals
                                                                       Tenth Circuit
                      UNITED STATES CO URT O F APPEALS
                                                                    October 11, 2006
                                  TENTH CIRCUIT                   Elisabeth A. Shumaker
                                                                      Clerk of Court

 R ON N ER AD ,

          Plaintiff - Appellee,
                                                        No. 05-6128
 v.                                              (D.C. No. CIV-04-1674-T)
                                                       (W .D. Okla.)
 ASTRAZENECA
 PHARM ACEUTICALS, IN C.;
 TIM OTH Y SYDNES,

          Defendants - Appellants.

                              OR D ER AND JUDGM ENT *

Before KELLY, HOL LOW A Y, and M cCO NNELL, Circuit Judges. **

      Defendant AstraZeneca Pharmaceuticals, Inc., appeals from the district

court’s order remanding this case to Oklahoma state court. W e conclude that w e

lack appellate jurisdiction to review the remand order, and we dismiss the appeal.

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. This court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      **
         After examining the briefs and the appellate record, this three-judge
panel has determined unanimously that oral argument would not be of material
assistance in the determination of this appeal. See Fed. R. App. P. 34(a); 10th
Cir. R. 34.1(G). The cause is therefore ordered submitted without oral argument.
                                     Background

      On November 15, 2004, Plaintiff Ron Nerad filed a complaint in Oklahoma

state court alleging products liability, fraud and misrepresentation claims against

Defendant AstraZeneca and its drug sales representative, Defendant Timothy

Sydnes. These claims arose from injuries M r. Nerad allegedly received from

using the drug Crestor.

      AstraZeneca removed the matter to federal court. M r. Nerad promptly

moved for remand, asserting without dispute that both he and M r. Sydnes w ere

citizens of Oklahoma. AstraZeneca maintained that M r. Sydnes had been

fraudulently joined, and it opposed the remand on the ground that the only proper

parties to the action–itself and M r. Nerad–were diverse.

      On M arch 11, 2005, the district court granted M r. Nerad’s motion for

remand. Aplt. App. at 49-53. In a ruling not contested in this appeal, the district

court held that M r. Sydnes was fraudulently joined to the products liability claim.

However, it also determined that M r. Sydnes was properly joined to the fraud and

misrepresentation claims. AstraZeneca argued that M r. Nerad failed to plead

those claims with sufficient particularity to satisfy Fed. R. Civ. P. 9(b), but the

court concluded that “[e]ven if the court were to determine that the claims are

deficient in this regard, the court would authorize [Nerad] to file an amended

complaint to include sufficient particularity.” A plt. App. at 52. Finally, the court

rejected AstraZeneca’s contention that M r. Nerad could not prevail on his claims

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because he had no evidence that he or his physician ever had direct contact with

M r. Sydnes. Aplt. App. at 52-53.

      Based on these rulings, the court concluded that AstraZeneca had failed to

carry its “heavy” burden of demonstrating fraudulent joinder. Thus, the court

held that it lacked subject matter jurisdiction because M r. Nerad and M r. Sydnes

were not diverse, and it remanded the case to state court. This appeal followed.

                                     Discussion

      The threshold question we must answ er is whether this court is permitted to

review the district court’s remand order. Under 28 U.S.C. § 1447(d), “[a]n order

remanding a case to the State court from which it was removed is not review able

on appeal or otherwise . . . .” However, this prohibition is not as broad as it

seems: “§ 1447(d) must be read in pari materia w ith § 1447(c), so that only

remands based on grounds specified in § 1447(c) are immune from review under §

1447(d).” Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995).

Therefore, when “a district court’s remand is based on a timely raised defect in

removal procedure or on a lack of subject-matter jurisdiction–the grounds of

remand recognized by § 1447(c)–a court of appeals lacks jurisdiction to entertain

an appeal of the remand order under § 1447(d).” Id. at 127-28. This remains true

for “all remand orders issued pursuant to § 1447(c), whether erroneous or

not . . . .” Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 343 (1976).

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      Accordingly, this court can review a remand order only if it had a basis

outside of § 1447(c). “In order to evaluate the reviewability of the district court’s

remand order[], we must independently review the record to determine the actual

grounds upon which the district court believed it was empow ered to remand.”

Dalrymple v. Grand River D am Auth., 145 F.3d 1180, 1184 (10th Cir. 1998).

      The district court held that regardless of w hether the pleadings were

technically deficient under Fed. R. Civ. P. 9(b), they could easily be amended,

and amendment would be allowed as a matter of course. Thus, the review ability

of the remand order turns on whether the district court concluded that it lacked

jurisdiction at the outset, or whether it determined that it initially had jurisdiction

but would lose jurisdiction once the pleadings were amended. If the former, the

remand order is not reviewable. See Things Remembered, 516 U.S. at 127-28. If

the latter, the remand w as not pursuant to § 1447(c), and review is possible. See,

e.g., Poore v. American-Amicable Life Ins. Co., 218 F.3d 1287, 1291 (11th Cir.

2000) (“[E]vents occurring after removal . . . do not oust the district court’s

jurisdiction.”); Trans Penn W ax Corp. v. M cCandless, 50 F.3d 217, 223 (3rd Cir.

1995) (“[A] remand only falls under § 1447(c) if the removal itself was

jurisdictionally improper, not if the defect arose after removal.”).

      The allegations of fraudulent joinder complicate our analysis. W hile a

court normally evaluates the propriety of a removal by determining whether the

allegations on the face of the complaint satisfy the jurisdictional requirements,

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fraudulent joinder claims are assertions that the pleadings are deceptive. Thus, in

cases where fraudulent joinder is claimed, we have directed courts to “pierce the

pleadings, consider the entire record, and determine the basis of joinder by any

means available.” D odd v. Faw cett Publ’ns, Inc., 329 F.2d 82, 85 (10th Cir.

1964) (citations omitted). In so doing, the court must decide whether there is a

reasonable basis to believe the plaintiff might succeed in at least one claim

against the non-diverse defendant. See Badon v. RJR Nabisco, Inc., 224 F.3d
382, 393 (5th Cir. 2000). A “reasonable basis” means just that: the claim need

not be a sure-thing, but it must have a basis in the alleged facts and the applicable

law .

        W e have previously indicated that “a fraudulent joinder analysis [is] a

jurisdictional inquiry.” Albert v. Smith’s Food & Drug Ctrs., Inc., 356 F.3d 1242,

1247 (10th Cir. 2004). Although we have not addressed the question in the

context of whether a remand order based on a finding of fraudulent joinder is

reviewable, our sister circuits agree that such orders are not reviewable. As the

Fifth Circuit explained:

        The district court ruled on an argument put before it that directly
        implicated the subject matter jurisdiction of that court. The court
        explicitly held “that the joinder of the tribe is not fraudulent, and that
        the stateless status of the tribe therefore destroys complete diversity,
        and along with it, this Court’s diversity jurisdiction.” The
        accompanying remand falls directly within § 1447(c). Consequently,
        pursuant to § 1447(d), we lack jurisdiction to review the order of
        remand.

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Victor v. Grand Casino-Coushatta, 359 F.3d 782, 784-85 (5th Cir. 2004) (per

curiam); see also Hernandez v. Seminole County, 334 F.3d 1233 (11th Cir. 2003);

Garbie v. DaimlerCrysler Corp., 211 F.3d 407 (7th Cir. 2000).

      This rationale is consistent with Dalrymple, where we considered whether

we could review a remand order premised on a lack of federal question

jurisdiction. The plaintiffs had brought a class-action law suit against a state

agency, which removed the case to federal court based on alleged federal claims

and defenses. In declining review , we reasoned that:

       The remand orders at issue clearly do not reflect the typical
       nonjurisdictional determination involving a discretionary remand of
       supplementary or pendent claims, venue, abstention, comity, or the
       waiver of opportunity to challenge a procedurally irregular removal.
       Instead, the orders address key issues directly related to whether the
       district court could have exercised subject matter jurisdiction over
       the cases–the presence of a federal question on the face of the
       plaintiffs’ complaints, and/or the presence of a federal question in
       the form of a colorable federal immunity defense.

Dalrymple, 145 F.2d at 1185.

      Likewise, the order in this case addressed key issues related to whether the

district court had subject-matter jurisdiction. The pleadings on their face

reflected a lack of complete diversity. In the hope of convincing the court that it

had jurisdiction, AstraZeneca invited it to “pierce the pleadings, consider the

entire record, and determine the basis of joinder by any means available.” Dodd,
329 F.2d at 85 (internal citations omitted). Although the court considered

whether future amendments might allow M r. Nerad to state his claims w ith

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sufficient particularity to satisfy Fed. R. Civ. P. 9(b), it did so only in order to

determine whether there was a “possibility that the non-diverse party could be

liable to the plaintiff in state court.” Aplt. App. at 50. This was a jurisdictional

inquiry. As w e read the order, the court determined that success was reasonably

possible at the time of removal because, although the plaintiff might be required

to amend his complaint, that amendment would be allowed as a matter of course.

      Therefore, we conclude that the district court remanded based on its

conclusion that it lacked subject-matter jurisdiction at the time of removal. The

remand w as thus ordered pursuant to § 1447(c), and we are precluded from

review ing it by § 1447(d). A ccordingly, the appeal is DISM ISSED.

                                         Entered for the Court

                                         Paul J. Kelly, Jr.
                                         Circuit Judge

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