In re Ford Motor Co.

• Decision Date: 21 August 2009
• Docket Number: No. 09-50109.,09-50109.
• Citation: 580 F.3d 308
• Parties: In re: FORD MOTOR CO., a Delaware Corporation; Bridgestone/Firestone North American Tire LLC, the Successor to Bridgestone/Firestone, Inc., Petitioners.
• Court: U.S. Court of Appeals — Fifth Circuit

580 F.3d 308

In re: FORD MOTOR CO., a Delaware Corporation; Bridgestone/Firestone North American Tire LLC, the Successor to Bridgestone/Firestone, Inc., Petitioners.

No. 09-50109.

United States Court of Appeals, Fifth Circuit.

August 21, 2009.

Wade Crosnoe (argued), Michael W. Eady, Thompson, Coe, Cousins & Irons, L.L.P., Craig Alan Morgan, Austin, TX, for Ford Motor Co.

Phillip B. Dye, Jr., Knox D. Nunnally, Sandra Garza Rodriguez, Vinson & Elkins, L.L.P., Houston, TX, Craig Alan Morgan, Austin, TX, for Bridgestone/Firestone North American Tire LLC.

John M. Merritt (argued), Merritt & Associates, P.C., Oklahoma City, OK, for Plaintiffs-Respondents.

Petition for Writ of Mandamus to the United States District Court for the Western District of Texas.

Before SMITH, STEWART and SOUTHWICK, Circuit Judges.

JERRY E. SMITH, Circuit Judge:

Ford Motor Company ("Ford") and Bridgestone/Firestone North American Tire LLC ("Firestone")¹ requested that the district court reconsider a pretrial forum non conveniens ("FNC") motion that had been denied by a multidistrict litigation ("MDL") court. The district court declined the request, so petitioners seek a writ of mandamus. We grant the writ.

I.

Plaintiffs are several Mexican citizens who were injured in Mexico in vehicle accidents involving Ford sport utility vehicles and Firestone tires. They sued Petitioners in Val Verde County, Texas, state court, and petitioners removed to federal court in the Western District of Texas (sometimes referred to as the "Western District"). The case was transferred, under 28 U.S.C. § 1407, to the MDL court in the Southern District of Indiana, which had been established to deal with the more than 700 similar cases against Ford and Firestone.² See In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Action, 305 F.Supp.2d 927, 929 (S.D.Ind.2004). At about the same time that plaintiffs filed this suit, another case, Manez, involving similar circumstances, was also transferred to the MDL court.

Before considering the plaintiff's case, the MDL court examined the merits of a FNC motion in Manez. Petitioners (who were also the defendants in Manez) filed the FNC motion, claiming that Mexico was an available—and more appropriate—forum. The defendants "stipulated that they [would] submit to personal jurisdiction in Mexico." Id. at 932. The court stated, relying on Fifth Circuit precedent, that "[n]umerous cases have held Mexico to be an adequate forum for tort litigation involving American-made products, despite differences in Mexican and U.S. substantive and procedural law." Id. (citing Gonzalez v. Chrysler Corp., 301 F.3d 377, 379-83 (5th Cir.2002)). The MDL court granted the FNC motion in Manez. Id. at 939.

The Manez plaintiffs appealed to the Seventh Circuit Court of Appeals, as is proper under MDL procedure. See In re Bridgestone/Firestone, Inc., 420 F.3d 702 (7th Cir.2005). On appeal, the court noted that the district court's FNC decision was "quite reasonable" and said that "this case looks like an easy candidate for a straightforward affirmance." Id. at 704-05. The court then noted, however, that there was a "wrinkle" that prevented the easy affirmance: two ex parte Mexican court decisions that stated the case could not be tried in Mexican courts. Id. at 705. The court noted that it had "substantial misgivings about the plaintiffs' actions" in submitting the orders but held that it did "not have an adequate record to assess whether the plaintiffs' actions were taken in good faith." Id. at 706. It remanded for the MDL district court "thoroughly [to] explore the circumstances" surrounding the Mexican decisions. Id.

On remand, the district court "conducted an evidentiary hearing to thoroughly explore the circumstances surrounding the [Mexican] courts' decisions." In re Bridgestone/Firestone, Inc. Tires Prods. Liab. Litig., 470 F.Supp.2d 917, 919 (S.D.Ind.2006). The court concluded that in seeking the Mexican dismissal order, "the attorneys for Plaintiffs acted with the clear purpose of having the case dismissed[] and, in seeking that result, manipulated the process to insure that the dismissal would be based on a particular reason that was calculated to improve the chances of the dismissal being sustained on appeal." Id. at 920. Specifically, it noted e-mails between attorneys discussing how one Mexican judge "confirmed that she will throw out the suit according to what we planned." Id. at 925. The MDL court dismissed the case on FNC grounds, and the decision was not appealed. The MDL court later sanctioned the Manez plaintiffs' expert witness, Dr. Leonel Pereznieto, noting that he was "the apparent mastermind behind these frauds on the U.S. and Mexican courts." In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 470 F.Supp.2d 931, 933 (S.D.Ind.2006).³

After that dismissal, the MDL court asked all parties to show cause why their cases should not be dismissed. Plaintiffs did not initially respond, but another plaintiff did submit a reply. Petitioners responded to that reply and specifically asked that plaintiffs' case be dismissed.

Plaintiffs then filed a response, insisting that Mexico was not an available forum. Filed with the response were several dismissal orders, obtained ex parte from Mexican courts, that allegedly claimed that foreign defendants cannot be sued in Mexico for tort cases, even if they submit to jurisdiction there.⁴

The MDL court agreed with plaintiffs that Mexico is not an available forum; it denied petitioners' motion to dismiss. The court then ordered a conditional return of the case to the Western District.

Petitioners filed a motion for reconsideration, an alternative motion to certify the issue for interlocutory appeal to the Seventh Circuit, and an objection to the conditional remand order. Plaintiffs opposed all the motions; the MDL court did not rule on any of them before the MDL panel returned the case to the Western District. Six weeks after that occurred, the MDL court dismissed all of the motions as moot.

After the case had been returned to the Western District, Petitioners again filed a motion for reconsideration of the MDL court's FNC decision. They submitted new evidence regarding the ex parte dismissal orders, allegedly showing that they had been fraudulently obtained. Judge Hudspeth of the Western District denied the motion, opining that "[w]hen a civil action has been through the MDL process and has been remanded ... the pretrial rulings made by the transferee court should be reconsidered, if at all, under only the most extraordinary circumstances. To do so would go a long way toward defeating the entire purposes of the MDL process." (citing Winkler v. Eli Lilly & Co., 101 F.3d 1196, 1202 n. 5 (7th Cir.1996); In re Food Lion, Inc., 73 F.3d 528, 531-32 (4th Cir.1996)). Judge Hudspeth expressed his view that such extraordinary circumstances are not present in this case and that he believed that the petitioners did not actually want to have their case tried in Mexico but only wanted to delay the trial. Also, he denied an interlocutory appeal to this court because, in his opinion, this was a delay tactic. Petitioners ask us to grant mandamus on the FNC issue.

II.

The issue—whether we can grant mandamus on a district court's refusal to reconsider a pretrial MDL decision—is one of first impression in this circuit. We examine the question in two parts. First, we see whether the district court improperly denied the motion for reconsideration. If we decide that the district court did err, we next look to see whether we can properly grant mandamus in the procedural posture of Judge Hudspeth's denial of reconsideration.

A.

We begin by addressing how MDL transferor courts review the pretrial determinations of transferee MDL courts.⁵ We have not established a standard for review of this question, though we note that authorities are unanimous that some deference must be given to the transferee court's decisions.

[I]t would be improper to permit a transferor judge to overturn orders of a transferee judge even though error in the latter might result in reversal of the final judgment of the transferor court. If transferor judges were permitted to upset rulings of transferee judges, the result would be an undermining of the purpose and usefulness of transfer under [28 U.S.C. §] 1407 for coordinated or consolidated pretrial proceedings because those proceedings would then lack the finality (at the trial court level) requisite to the convenience of witnesses and parties and to efficient conduct of actions.[⁶]

That view is nothing short of a bright-line rule that a transferor court cannot overrule a transferee court. Several courts have cited this maxim.⁷

Other commentators and courts, however, have rejected a bright-line approach and instead have advocated only substantial deference to the transferee court. "The general rules are not surprising: deference to the decisions reached by the prior judge and jurisdiction or authority to modify those rulings. This is particularly true for rulings which the transferee court could have itself modified." MULTIDISTRICT LITIGATION MANUAL § 10:17. "It would vitiate much of the purpose of consolidating litigation if, after remand, parties could simply re-visit the transferee court's pre-trial rulings, and force the common defendant to deal piecemeal with once-collective matters." Winkler v. Eli Lilly & Co., 101 F.3d 1196, 1202 n. 5 (7th Cir.1996).

Instead of promoting general deference, others have stated that the "law of the case" should apply where a transferor court is deciding whether to overturn the decision of a transferee court. "Although the transferor judge has the power to vacate or modify rulings made by the transferee judge, subject to comity and `law of the case' considerations, doing so in the absence of a significant change of circumstances would frustrate the purposes of centralized pretrial proceedings." MANUAL FOR COMPLEX LITIGATION §...