Court Opinion

ID: 769868
Source: CourtListenerOpinion
Date Created: 2012-04-18 10:23:56+00
Date Added: 2024-06-11T17:55:46.127668
License: Public Domain

222 F.3d 377 (7th Cir. 2000)
FREDERICK A. HURLEY  and CHRISTINE A. HURLEY, Plaintiffs-Appellants,v.MOTOR COACH INDUSTRIES, INCORPORATED, Defendant-Appellee.
No. 98-3888
In the  United States Court of Appeals  For the Seventh Circuit
Argued September 16, 1999Decided July 25, 2000Rehearing and Rehearing En Banc Denied Aug. 31, 2000

Appeal from the United States District Court for the Southern District of Illinois.  No. 95-169-CJP--Clifford J. Proud, Magistrate Judge.
Before RIPPLE, MANION, and Diane P. Wood, Circuit  Judges.
Diane P. Wood, Circuit Judge.

1
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.

2
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.

3
* 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.)

4
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.

5
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):

6
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.

7
Id. at 77.

8
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).

9
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.

10
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.

11
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.

12
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

13
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.

14
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.

15
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.

16
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.

17
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.

18
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.

19
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.

20
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

21
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.