Hernandez v. Brakegate, Ltd.

• Decision Date: 19 September 1991
• Docket Number: No. 91-2665,91-2665
• Citation: 942 F.2d 1223
• Parties: Juan HERNANDEZ and Guadelupe Hernandez, Plaintiffs-Appellees, v. BRAKEGATE, LTD., et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1223

942 F.2d 1223

Juan HERNANDEZ and Guadelupe Hernandez, Plaintiffs-Appellees, v. BRAKEGATE, LTD., et al., Defendants-Appellants.

No. 91-2665.

United States Court of Appeals, Seventh Circuit.

Submitted Aug. 21, 1991.

Decided Sept. 19, 1991.

James R. Wylder, James G. Walker, Bloomington, Ill., for Juan Hernandez and Guadelupe Hernandez.

J. Timothy Eaton, Theodore E. Harman, Coffield, Ungaretti, Harris & Slavin, Chicago, Ill., Donald M. Craven, James C. Craven, Springfield, Ill., for Grefco Inc. and Gen. Refractories Co.

Michael J. Kelly, Margaret S. Garvey, Freeborn & Peters, Chicago, Ill., for Manville Settlement Trust Personal Injury and Manville Corp. Asbestos Disease Compensation Fund.

Francis A. Citera, David L. Doyle, Pope & John, Chicago, Ill., for Wedron Silica Co.

Before BAUER, Chief Judge, and COFFEY and EASTERBROOK, Circuit Judges.

EASTERBROOK, Circuit Judge.

Juan and Guadelupe Hernandez filed suit in state court, under state law, seeking damages for injuries they attribute to asbestos. Lack of complete diversity frustrated defendants who wished to remove the case to federal court. Just as trial appeared imminent, two of the defendants (Grefco, Inc., and General Refractories Co., collectively "Grefco") removed the case anyway, claiming that developments in the Manville bankruptcy made this proceeding "related to" the Manville case. "Related" proceedings may be removed under 28 U.S.C. § 1452(a). It had become clear, Grefco asserted, that the plaintiffs would not recover from Manville, concentrating liability on other parties, which could obtain nothing from Manville by way of contribution or indemnity outside of the bankruptcy proceeding. Grefco accordingly wanted this case (and five others) brought under the Manville umbrella.

Back to state court!, the district judge directed. The federal court concluded that none of the six removed cases is "related to" the Manville bankruptcy, because none potentially affects the size of the Manville estate or its distribution among creditors. Pacor, Inc. v. Higgins, 743 F.2d 984, 994-96 (3d Cir.1984). See also Pettibone Corp. v. Easley, 935 F.2d 120, 122-23 (7th Cir.1991); In re Xonics, Inc., 813 F.2d 127, 130-32 (7th Cir.1987); In re Chicago, Rock Island & Pacific R.R., 794 F.2d 1182, 1186-87 (7th Cir.1986). Grefco filed a notice of appeal and asked for a stay pending appeal. At our request, the district judge stated that he had denied the application on two accounts: (1) the case is not removable, so there is no probability of success on appeal; and (2) the order is not appealable, so there is no proceeding to which a stay could pend. As the second of these grounds is correct, we not only deny the motion for a stay but also dismiss the appeal for want of jurisdiction.

Grefco's quest for appellate resolution encounters two statutes designed to prevent review of remand orders. First there is 28 U.S.C. § 1447(d), which provides:

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1443 of this title shall be reviewable by appeal or otherwise.

Grefco did not remove this case under § 1443, which deals with civil rights cases. As if § 1447(d) were not enough, the section authorizing bankruptcy removals also bars appellate review The court to which such claim or cause of action is removed may remand such claim or cause of action on any equitable ground. An order entered under this subsection remanding a claim or cause of action, or a decision to not remand, is not reviewable by appeal or otherwise by the court of appeals under section 158(d), 1291, or 1292 of this title or by the Supreme Court of the United States under section 1254 of this title.

28 U.S.C. § 1452(b). Section 1447(d) bars review, the Supreme Court has held, of remands under § 1447(c), which instructs district judges to remand cases in the event of procedural defects or want of jurisdiction. Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976); Gravitt v. Southwestern Bell Telephone Co., 430 U.S. 723, 97 S.Ct. 1439, 52 L.Ed.2d 1 (1977); cf. Carnegie-Mellon University v. Cohill, 484 U.S. 343, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988); J.O. v. Alton Community Unit School District 11, 909 F.2d 267, 269-71 (7th Cir.1990); Rothner v. Chicago, 879 F.2d 1402 (7th Cir.1989). Section 1447(c) does not authorize "equitable" remands, to which, the Court held, § 1447(d) does not apply. Section 1452(b) does authorize such remands, and also bars appellate review of them. That, you would think, covers the waterfront.

Pacor held not. The third circuit first concluded that § 1447(d) is inapplicable to removals under § 1452, a single-subject statute that the court thought displaced the general terms of §§ 1441-51. 743 F.2d at 990-92. Next Pacor held that the bar in § 1452(b) itself does not apply because it governs only remands under "this subsection", which authorizes remand "on any equitable ground." A remand for want of subject-matter jurisdiction is not an "equitable ground" and so does not activate the preclusion of the next sentence. 743 F.2d at 992-93. The fifth circuit was unimpressed by this two-step and disagreed with Pacor. Sykes v. Texas Air Corp., 834 F.2d 488, 490 (5th Cir.1987) ("The Pacor analysis turns on a sort of semantic crack in the statute rather than a sound appreciation of the strong congressional policy against review of remand orders."). Much as we admire ingenuity, we agree with Sykes that Pacor was clever rather than correct. Even the third circuit appears to be having second thoughts. In re TMI Litigation Cases Consolidated II, 940 F.2d 832, 838-39 n. 4 (3d Cir.1991) (declining to extend approach of Pacor beyond § 1452).

Sections 1447 and 1452 belong to Chapter 89 of Title 28. Nothing in text or structure suggests that the general provisions of § 1447 are inapplicable to cases removed under § 1452, any more than they would fall away for removals under § 1442 (federal officers), § 1442a (members of armed forces), or other statutes authorizing removal. To the contrary, § 1452 relies on other provisions in Chapter 89, which specify the time and procedure for removal. All § 1452(a) does is describe a class of removable cases; it does not say or imply, for example, that removal may occur without the signed petition required by § 1446(a) or after the time specified by § 1446(b). If § 1452(b) indeed identifies the only basis of remand, and if as Pacor held lack of subject-matter jurisdiction is not an "equitable" ground, then there is no statutory authority to remand cases removed without jurisdiction. They would have to be dismissed outright. If filed again in state court, they could be removed again, followed by dismissal. Defendants could immunize themselves from legal process, a most unlikely outcome of § 1452. The statute authorizing remand for want of jurisdiction is § 1447(c), and § 1447(d) bars review of such remands. Both the Supreme Court, United States v. Rice, 327 U.S. 742, 66 S.Ct. 835, 90 L.Ed. 982 (1946), and this court, Resolution Trust Corp. v. Lightfoot, 938 F.2d 65 (7th Cir.1991), have held that authorization to remove cases arising out of a particular subject does not imply inapplicability of the general provisions concerning removal. Section 1452 is not an exception to this rule. Compare FSLIC v. Frumenti Development Corp., 857 F.2d 665 (9th Cir.1988) (the FSLIC's special removal statute, 12 U.S.C. § 1730(k)(1), does not make § 1447(d) inapplicable), and In...