In re Rolls Royce Corp.

• Decision Date: 30 December 2014
• Docket Number: No. 14–30510.,14–30510.
• Citation: 775 F.3d 671
• Parties: In re ROLLS ROYCE CORPORATION, Petitioner.
• Court: U.S. Court of Appeals — Fifth Circuit

775 F.3d 671

In re ROLLS ROYCE CORPORATION, Petitioner.

No. 14–30510.

United States Court of Appeals, Fifth Circuit.

Dec. 30, 2014.

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Kevin Richard Tully, Walter Nicholas Dietzen, Howard Carter Marshall, Esq., Attorney, Christovich & Kearney, L.L.P., New Orleans, LA, for Petitioner.

Steven Dominic Sanfelippo, Rose Walker, L.L.P., Dallas, TX, Beth Abramson, Paul Maury Sterbcow, Esq., General Attorney, Lewis, Kullman, Sterbcow & Abramson, New Orleans, LA, for Petroleum Helicopters, Incorporated.

Kenneth Hugh Laborde, Esq., Trial Attorney Daniel Gibbons Rauh, Attorney Gieger, Laborde & Laperouse, L.L.C. New Orleans, LA Brendan Patrick Doherty, Esq. Gieger, Laborde & Laperouse, L.L.C. Houston, LA for Apical Industries, Incorporated and Offshore Helicopter Support Services, Incorporated.

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

Before HIGGINBOTHAM, JONES, and PRADO, Circuit Judges.

Opinion

PATRICK E. HIGGINBOTHAM, Circuit Judge:

This mandamus petition brings the question of who—the parties or the court—determines in which judicial district a civil action is to proceed. In Atlantic Marine Construction Company,¹ the Supreme Court held that when all parties have entered into a forum selection contract, that contract controls, except in exceptional circumstances, and the district court must transfer the action to the agreed-upon district.² Here, we must address a related issue—what should a district court do when some, but not all, litigants are subject to a forum selection clause, and one of the parties to the clause files a motion to sever and transfer its claims to the forum chosen in the contract.

Faced with this situation, the district court refused to sever and transfer the party claiming the benefit of the forum selection clause. We respectfully disagree, persuaded that on these facts the forum

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selection contract must be enforced and GRANT the petition for mandamus.

I.

The underlying litigation concerns the liability stemming from a helicopter crash in the Gulf of Mexico. A Bell 407 helicopter owned by Petroleum Helicopters, Inc. (“PHI”) allegedly suffered a failure of its number two engine bearing, forcing the pilot to make an emergency landing in the Gulf. During the landing, the pilot inflated the helicopter's skid-mounted emergency pontoon floats, which were designed to keep the helicopter from sinking. While the pontoon bags worked long enough to allow a safe evacuation of passengers and crew, one of the pontoons eventually failed, and the helicopter flipped, rendering the aircraft a total loss.

PHI brought suit in Louisiana state court against three parties: (1) Rolls Royce Corporation (“Rolls Royce”), which designed and manufactured the engine bearing, (2) Apical Industries, Inc. (“Apical”), which designed, manufactured, and sold the pontoon flotation system, and (3) Offshore Helicopter Support Services, Inc. (“OHS”), which repaired and reworked the float system before the crash. The defendants timely removed on the basis of diversity jurisdiction.

Once in federal court, Rolls Royce moved to sever PHI's claims against the company, and to transfer those claims to the Southern District of Indiana.³ It relied on a forum selection clause in a warranty to which the engine bearing was subject, which stated, in relevant part:

Any controversy or claim arising out of or relating to this Limited Warranty or breach thereof shall be litigated only in the Circuit or Superior Courts of Marion County, Indiana or of the United States District Court for the Southern District of Indiana, Indianapolis Division. In connection with the foregoing, the Purchaser consents to the jurisdiction and venue of such courts and expressly waives any claims or defenses of lack of jurisdiction or proper venue by such courts.

Apical and OHS, neither of whom were subject to a forum selection clause, opposed the severance and transfer, as did PHI.

The district court denied the motion.⁴ First, it determined that the entire action could not be transferred to Indiana.⁵ Second, the court turned to the issue of

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whether severance under Federal Rule of Civil Procedure (“Rule”) 21 was warranted. The court articulated five factors that district courts had used in analyzing a severance motion, and concluded that each weighed against severance.⁶ As a result, there was no basis for a transfer.⁷ Finally, the district court considered whether the Supreme Court's decision in Atlantic Marine mandated transfer. It held that it did not. The district court determined that key difference between this case and Atlantic Marine was that not all parties to the litigation had signed a forum selection contract. Reading Atlantic Marine to mandate severance and transfer of the party to the contract, the district court reasoned, “would not further the Supreme Court's stated goal in Atlantic Marine of not disrupting the expectations of parties who bargained for litigation in a particular forum but would, instead, potentially inconvenience and prejudice parties having absolutely no relationship to a forum-selection clause they had no part in conferring.”⁸

Following the denial of its severance-and-transfer motion, Rolls Royce petitioned this court for mandamus relief.⁹

II.

A writ of mandamus is an “extraordinary remedy,”¹⁰ and may only issue if three criteria are met:

First, the party seeking issuance of the writ [must] have no other adequate means to attain the relief he desires, a condition designed to ensure that the writ will not be used as a substitute for the regular appeals process. Second, the petitioner must satisfy the burden of showing that [his] right to issuance of the writ is clear and indisputable. Third, even if the first two prerequisites have been met, the issuing court, in the exercise of its discretion, must be satisfied that the writ is appropriate under the circumstances.¹¹

“These hurdles, however demanding, are not insuperable.”¹² We consider each in turn.

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A.

First, Rolls Royce must show that mandamus is its exclusive vehicle to seek relief. It does. Our court, in accord with our sister circuits, has held “mandamus is an appropriate means of testing a district court's [section] 1404(a) ruling.”¹³ Other means for review are unavailable. Rolls Royce cannot appeal an adverse final judgment under 28 U.S.C. § 1391, because it “would not been able to show that it would have won the case,” had the action been litigated in its desired forum.¹⁴ While the Supreme Court has crafted a narrow exception to the final order doctrine, termed the “collateral order doctrine” or “Cohen exception,”¹⁵ we have previously held that transfer orders do not fall within the scope of this doctrine.¹⁶ Nor can Rolls Royce bring an interlocutory appeal under 28 U.S.C. § 1292(b), as our circuit precedent forecloses reviews of transfer orders under that statute.¹⁷ Apical and OHS argue otherwise, saying that certification is available, because the district court's order contained a cognizable “controlling question of law.”¹⁸ We have, though, squarely rejected this conclusion, holding that “[t]he Congressional policy against piecemeal appeals, as expressed in the final judgment rule, to which [section] 1292(b) is a narrow exception, is eroded by permitting review of exercise of the judge's discretion under [section] 1404(a) as a ‘controlling question of law.’ ”¹⁹

There is one complication—the district court did not rule on a transfer motion, but a joint transfer and severance motion. While we have previously held that the denial of a standalone Rule 21 severance motion can be challenged through an appeal of a final judgment,²⁰ we believe that the combination of transfer and severance inquiries dictates a different response. As the Federal Circuit, addressing whether mandamus was available to review the denial of a transfer and severance motion, concluded:

With regard to the ‘no other means' requirement, there is no meaningful distinction between a petitioner's seeking review of an order denying transfer because the district court clearly abused its discretion in applying the [section] 1404(a) factors and a petitioner's seeking review of an order denying a motion to transfer because the district court clearly

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abused its discretion by not severing the claims as a predicate to determining whether to transfer. In either case, a defendant would not have an adequate remedy for an improper failure to transfer or sever....²¹

We agree. Because the transfer order is unreviewable except through mandamus, and because the severance inquiry is, as will be discussed later, inextricably linked to the transfer analysis, we conclude that there are no other means for review of the district court's order but through mandamus.

B.

We turn now to whether Rolls...