Court Opinion

ID: 8898616
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:35:22.547003+00
Date Added: 2024-06-11T17:07:40.287046
License: Public Domain

JAMES HUNTER, III, Circuit Judge
(dissenting):
I respectfully dissent from the majority’s conclusion (part “I”) that the district judge acted properly in refusing to remand plaintiff's action(s)1 to the state court. In my *138view, the majority’s result is not required by either the holding or the language of St Paul Mercury Indemnity Co. v. Red Cab Co., 303 U.S. 283, 58 S.Ct. 586, 82 L.Ed. 845 (1938), the case relied on.2 The contrary result is supported by related principles governing our original diversity jurisdiction as well as by commonsense ideas of fairness and orderly process.
In St. Paul Mercury, the Court was asked to review3 a decision that
although, at the time of removal of a cause from a state court, the complaint disclosed an amount in controversy requisite to the federal court’s jurisdiction, a subsequent amendment, reducing the sum claimed to substantially less than that amount, necessitates remand to the state eourt.
Id., 303 U.S. at 284, 58 S.Ct. at 588. The Court’s unanimous decision that such an amendment after removal could not oust the district court’s jurisdiction establishes that the action of the appellant here in filing state court complaints alleging “in excess of $3000” could not affect jurisdiction if the district court had previously acquired jurisdiction on the basis of the praecipes alleging in excess of $10,000. The correctness of the district court’s treatment of that issue is therefore beyond question, and in fact appellant has not claimed otherwise in this court.
At the same time, it should be clear from the quotation above that the St Paul Mercury holding did not cover the situation in which it is alleged that a remand is required on the ground that the original complaint (or, in this case, praecipe) failed to place in controversy an amount in excess of $10,000. Nevertheless, the majority interprets language in that opinion as establishing a rule that, in removal cases, the question of whether or not the amount actually in controversy meets the jurisdictional requirement is forever foreclosed if the original documents are not insufficient on their face. The ground stated is that “generally the right of removal is decided by the pleadings, viewed as of the time when the petition for removal is filed” (Majority opinion at p. 7, quoting from C. Wright, Federal Courts 134 (2d ed. 1970), and “events occurring subsequent to removal which reduce the amount recoverable . do not oust the district court’s jurisdiction once it has attached.” (Majority opinion at p. 135, quoting from St Paul Mercury, 303 U.S. at 293, 58 S.Ct. at 586.) Once again, I do not believe that the quoted language necessarily precludes a later conclusion by the district court, based on matters not appearing in the original documents, that jurisdiction did not in fact attach.
The right of removal may indeed, as a practical matter, be decided initially by the pleadings, since in many eases the only “record” at the time of the “decision” will be the plaintiff’s complaint (or praecipe) and the defendant’s petition for removal. This should not lead to the conclusion that the court cannot consider, sua sponte or on plaintiff’s motion to remand, subsequent developments in the record. If it were so, 28 U.S.C. § 1447(c), providing that
[i]f at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall remand the case . . . ,
would be rendered almost meaningless; it would provide only for those cases in which the district'judge, reviewing his removal decision on the same record, i. e., the plead*139ings and the petition for removal, concluded that he had erred. It is much more reasonable to conclude that the district judge is not only permitted but- required to carry out the directive of § 1447(c) in the light of the developing record after removal.4
Appellant did not seek to rely (solely) on “events occurring subsequent to removal which reduce the amount recoverable.” He sought only to have considered by the trial court matters which would shed light on the question of whether the action, as of the time of removal, actually comprised matters in controversy in excess of $10,000. In other words, appellant did not attempt to defeat or oust jurisdiction, but rather attempted to prove that jurisdiction had never existed.
There are strong policy considerations why any ambiguity in the dictum of St. Paul Mercury and the language of § 1447(c) should be resolved in favor of an interpretation which mandates a continuing review of the current record to determine whether the action was properly removed. It is well established that in original diversity suits the district court is not bound as to the jurisdictional amount by the allegations of the complaint, but rather must dismiss at any point in the proceedings where it appears “to a legal certainty” that the claims were really for less than the jurisdictional amount. Nelson v. Keefer, 451 F.2d 289 (3d Cir. 1971) (affirming dismissal based on information adduced during pretrial proceedings).5 The majority’s analysis would thus create a significant and, in my view, unwarranted common law exception to the general rule that the removal jurisdiction of the district court is co-extensive with its original jurisdiction. E. g., Boston & Montana Consolidated Copper and Silver Mining Co. v. Montana Ore Purchasing Co., 188 U.S. 632, 640, 23 S.Ct. 434, 47 L.Ed. 626 (1903); 28 U.S.C. § 1441(a);6 C. Wright, Federal Courts 130-31 (2d ed. 1970).
In addition, the majority’s conclusion offers a plaintiff and a defendant (of diverse citizenship) who both wish to litigate in federal court a method for circumventing the restrictions which Congress and the courts have placed on the original diversity jurisdiction of the district courts. Where such litigants recognize that a complaint can be drawn which, on its face, appears to place in controversy the jurisdictional amount, but which, after further proceedings, will be exposed as inadequate to invoke federal court jurisdiction, they will be permitted, under the majority’s analysis, to secure by the “back door” of removal what they could not secure by the “front door” of original jurisdiction. I cannot believe that this is what either Congress or the St. Paul Mercury Court intended.
The majority admits that the application of its rule to the present facts “seem[s] anomalous” (Majority opinion at p. 134), *140and that the appellant’s position “has certain visceral appeal.” (Id. at 136). A brief re-statement of the prior proceedings will demonstrate that both statements are fully justified. Plaintiff first sought a federal forum, filing an original diversity action. On motion of the defendant, the district judge, after taking evidence, granted summary judgment for defendant on the ground that plaintiff had secured prior satisfaction of his claim. Albright v. R. J. Reynolds Tobacco Co., 350 F.Supp. 341, 344-49 (W.D.Pa.1972). However, the opinion went on to hold, also on the motion of defendant (Brief of Appellee at p. 18), that it was clear “to a legal certainty” that the claim did not place in controversy the jurisdictionally required amount. Id. at 349-52. This court affirmed, specifying that the affirmance was based on the jurisdictional ground. Albright v. R. J. Reynolds Tobacco Co., 485 F.2d 678 (3d Cir. 1973), as modified, 3d Cir. No. 72-2105, Nov. 23, 1973, cert. denied, 416 U.S. 951, 94 S.Ct. 1961, 40 L.Ed.2d 301 (1974). Appellant, bowing to the inevitable, then sought to pursue his claim in state court — a claim which appellee conceded was identical to that proffered in federal court. Opinion of August 6,1974, p. 119a; Brief of Appellee at pp. 3, 19. Nevertheless, appellee removed, seeking to invoke the federal court jurisdiction it had once shunned. The reason(s)7 for appellant’s resistance to this move are understandable; in federal court he would be before the same district judge who had already expressed the (unnecessary) opinion that appellant’s cause was not meritorious. Nevertheless, the district court exercised jurisdiction over the case and disposed of it once and for all, albeit on a ground other than that stated in its earlier opinion. It would be difficult to explain to appellant why he should not feel that he has been subjected to a “catch 22.” (See appellant’s Brief at p. 8).
In sum, I believe that the law is that in a removal case, just as in an original case, jurisdiction is to be determined as of the time the action first reaches the district court, but that the court can and indeed must reassess jurisdiction as the case proceeds. While the court is not to consider events (e. g., change in parties’ citizenship, Morgan’s Heirs v. Morgan, 15 U.S. (2 Wheat) 290, 4 L.Ed. 242 (1817) (original jurisdiction)) occurring after filing or removal, it must consider any light that material subsequently submitted sheds on the jurisdictional “facts” that existed at the time of filing or removal, e. g., the “facts” establishing that the requisite amount was in controversy.
There is then no need to “engraft . an exception to cover the particular facts of this case.” (Majority opinion at p. 136). The prior court determination to which appellant called attention in support of its motion to remand is just one of various types of “evidence” which might be submitted to prove whether or not the jurisdictional amount was actually in controversy.8 On the facts of this case, a reversal is required. Although the district judge held that he was not bound by his earlier opinion (or this court’s affirmance thereof) (opinion of August 6, 1974, p. 120a), the cases he cites hold only that a jurisdictional dismissal does not bar a subsequent adjudication if the jurisdictional defect is cured. E. g., Smith v. Pittsburgh Gage and Supply Co., 464 F.2d 870 (3d Cir. 1972). Since the par*141ties have stipulated that the removed cause raised the identical claim previously held jurisdictionally insufficient, the appellant cannot be found to have cured the defect which caused the earlier dismissal. Luker v. Nelson, 341 F.Supp. 111, 114 (N.D.Ill. 1972), also cited by the district court, states “[t]he general rule” that “a determination of lack of jurisdiction will be deemed judicially conclusive in a subsequent suit on the same cause of action as to the precise issue of jurisdiction previously ruled upon. See American Surety Co. v. Baldwin, 287 U.S. 156, 166, 53 S.Ct. 98, 77 L.Ed. 231 .. . (1932).”
Without expressing any opinion as to whether the district court and the majority have properly decided the state-law statute of limitations question, I respectfully submit that the merits (or lack thereof) of appellant’s claim cannot be used to support the district court’s refusal to remand. If, as I would hold, the district court was required to remand for lack of jurisdiction, neither that court nor this court has any power to decide on any aspect of the underlying cause of action. Metcalf v. Watertown, 128 U.S. 586, 587, 9 S.Ct. 173, 32 L.Ed. 543 (1888) (statute of limitations). While it may be that “[t]he only real question is whether this claim will be dismissed as time-barred by the federal court or the state courts” (majority opinion at p. 136), that evaluation would not make the question any less “real” or any less important. “[I]t is federal policy to strictly construe removal statutes and to limit the removal jurisdiction of the federal courts. The eases are legion.” Witherow v. Firestone Tire and Rubber Co., 530 F.2d 160, 168-169, 3d Cir., No. 75-1514, filed Jan. 26, 1976.
The judgment appealed from should be vacated and the case remanded to the district court with directions to remand to the Court of Common Pleas of Allegheny County, Pennsylvania.

. Two state court actions were initially involved. See majority opinion at pp. 133-134, supra.
These were consolidated after removal to district court. Opinion and Order of Aug. 6, 1974, p. 122a.

. The second opinion of the district court dealing with the remand issue, dated March 6, 1975, relies also on Hatridge v. Aetna Casualty & Surety Co., 415 F.2d 809 (8th Cir. 1969), and American Universal Insurance Co. v. Kruse, 306 F.2d 661 (9th Cir. 1962). See p. 131a. Neither case is directly on point, although each opinion quotes the language from St. Paul Mercury which is discussed below. To the extent that it is relevant, I believe that Hatridge, in which the court affirmed a refusal to remand even though the complaint claimed less than $10,000 supports reversal here.

. It may be noted that the respondent conceded that the decision below was in error.

. It may be that this is the view of § 1447(c) that the district judge took. At the close of his first opinion (August 6, 1974) denying the motion to remand, he noted that “this disposition is not a final determination of the question of jurisdiction,” quoting § 1447(c) (p. 121a). The district judge reaffirmed his refusal to remand in his opinion of March 6, 1975, in which he also granted summary judgment for defendant (pp. 125-32a). It may therefore be that my disagreement with the district judge is much narrower than my disagreement with the majority opinion, in that the former goes only to the question of the weight to be given to the prior jurisdictional dismissal. See the transcripts of oral arguments on motions to remand, pp. 34-82a.

. This, of course, is exactly the procedure we approved in our first hearing of this case, Albright v. R. J. Reynolds Tobacco Co., 485 F.2d 678 (3d Cir. 1973), as modified, 3d Cir., No. 72-2105, Nov. 23, 1973, cert. denied, 416 U.S. 951, 94 S.Ct. 1961, 40 L.Ed.2d 301 (1974). The district judge based his dismissal on “extensive discovery, production of evidence, pre-trial narratives and argument of counsel.” Opinion of March 6, 1975, p. 131a.

. 28 U.S.C. § 1441: Actions Removable Generally.
(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a state court of which the district courts of the United States have original jurisdiction, may be removed. .
The aspects in which removal jurisdiction is, by statute, made broader than original jurisdiction are collected in 1 J. Moore, Federal Practice 662 (2d ed.). None is applicable here.

. Appellant also claimed that the district judge was biased against his claim, and sought his disqualification. When the district judge declined to step aside, appellant sought a writ of mandamus, which was denied by this court on October 31, 1974 (No. 74-2088), and by the Supreme Court on January 27, 1975 (No. 74-723).

. If it were necessary to find an “exception” to cover the peculiar facts of this case, it would be unnecessary to look further than St. Paul Mercury. In footnote 23, immediately following the text cited by the majority, the Court cited two cases in which the federal courts remanded after it appeared at trial that the jurisdictional amount had not actually been in controversy, and concluded that the remands “may have been justified by the conviction that the defendant when it removed knew that the amount involved was too little to give jurisdiction.” 303 U.S. at 292-93, 58 S.Ct. at 592. Certainly the facts here are within that type of “bad faith” rationale.