Ariail Drug Co., Inc. v. Recomm Intern. Display, Inc., 96-6570

• Citation: 122 F.3d 930
• Decision Date: 03 September 1997
• Docket Number: No. 96-6570,96-6570
• Parties: 11 Fla. L. Weekly Fed. C 511 ARIAIL DRUG CO., INC., Dunlap Drug Co., Jane N. Douthit, DVM, d.b.a. Paw Prints Animal Clinic, each suing individually and on behalf of a class of similarly situated persons as herein described, Plaintiffs-Appellees, William Larry Martin, suing individually and on behalf of a class of similarly situated persons as herein described, d.b.a. Trinity Discount Drugs, Plaintiff-Counter- Defendant-Appellee, v. RECOMM INTERNATIONAL DISPLAY, INC., etc., et al., Defendants, Lease Partners Corp., Lease Partners Inc., Finova Capital Corp., Republic Leasing Co., each individually and as representatives of a defendant class of leasing and lease/financing companies similarly situated and which acted in concert or conspiracy with Defendant Recomm, Defendants-Appellants, Colonial Pacific Leasing Corp., individually and as representatives of a defendant class of leasing and lease/financing companies similarly situated and which acted in concert or conspiracy with defendant Recomm, Defendant-Counter-Claimant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)

Page 930

122 F.3d 930

11 Fla. L. Weekly Fed. C 511

ARIAIL DRUG CO., INC., Dunlap Drug Co., Jane N. Douthit,

DVM, d.b.a. Paw Prints Animal Clinic, each suing

individually and on behalf of a class of similarly situated

persons as herein described, Plaintiffs-Appellees,

William Larry Martin, suing individually and on behalf of a

class of similarly situated persons as herein

described, d.b.a. Trinity Discount

Drugs, Plaintiff-Counter- Defendant-Appellee, v. RECOMM INTERNATIONAL DISPLAY, INC., etc., et al., Defendants,

Lease Partners Corp., Lease Partners Inc., Finova Capital

Corp., Republic Leasing Co., each individually and as

representatives of a defendant class of leasing and

lease/financing companies similarly situated and which acted

in concert or conspiracy with Defendant Recomm, Defendants-Appellants,

Colonial Pacific Leasing Corp., individually and as

representatives of a defendant class of leasing and

lease/financing companies similarly situated and which acted

in concert or conspiracy with defendant Recomm,

Defendant-Counter-Claimant-Appellant.

No. 96-6570.

United States Court of Appeals, Eleventh Circuit.

Sept. 3, 1997.

James E. Ferguson, III, Wallace, Jordan, Ratliff & Brandt, LLC, Charles B. Campbell, Birmingham, AL, for Lease Partners Corp. & Lease Partners, Inc.

Susan S. Wagner, Berkowitz, Lefkovits, Isom & Kushner, Birmingham, AL, for Republic Leasing Co., Inc.

Maibeth J. Porter, Maynard, Cooper & Gale, P.C., Birmingham, AL, for Finova Capital Corp.

Lee H. Zell, Balch & Bingham, Birmingham, AL, for Colonial Pacific Leasing.

Samuel B. Isaacson, Katten, Muchin & Zavis, Chicago, IL, for Finova Capital Corp.

James R. Safley, Robins, Kaplan, Miller & Ciresi, Minneapolis, MN, for Colonial Pacific Leasing Corp.

Vincent T. Borst, Alex Darcy, Askounis & Borst, P.C., Chicago, IL, for Lease Partners Corp. & Lease Partners, Inc.

Julianne Farnsworth, McNair Law Firm, P.A., Columbia, SC, Ellen E. Henderson, Birmingham, AL, for Republic Leasing Co.

J. Michael Rediker, Thomas L. Krebs, Patricia D. Goodman, Ritchie & Rediker, LLC, Birmingham, AL, for Appellees.

Appeal from the United States District Court for the Northern District of Alabama.

Before ANDERSON and COX, Circuit Judges, and ALARCON ^*, Senior Circuit Judge.

COX, Circuit Judge:

I. Introduction

Defendants appeal the district court's order remanding this action to state court. Because we conclude that we do not have jurisdiction to review the order, we dismiss this appeal.

II. Background

Plaintiffs, three pharmacies and a veterinarian, leased electronic display boards from defendants, four leasing and financing companies. These display boards flashed electronic messages and advertisements encouraging customers to purchase additional products while they waited for their prescriptions to be filled or pets to be treated. The leasing companies purchased the boards from Recomm Operations, Inc., ("Recomm"), and plaintiffs entered into an advertising agreement with Recomm regarding message time. Recomm filed a Chapter 11 bankruptcy petition in the United States Bankruptcy Court for the Middle District of Florida before this action was commenced.

The plaintiffs originally filed this putative class action in the Circuit Court for Jefferson County, Alabama, alleging various claims related to the leasing agreements. Although originally named as a defendant in this action, Recomm was voluntarily dismissed by the plaintiffs.

The complaint asserts state law fraud claims and state law negligence claims as well as claims under the Alabama Declaratory Judgment Act, Ala. Code § 6-6-220 (1975), the Securities and Exchange Act of 1933, 15 U.S.C. §§ 77a-77aa, and the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968.

Defendants filed notices of removal to the United States District Court for the Northern District of Alabama, alleging diversity jurisdiction, federal question jurisdiction, and bankruptcy jurisdiction. Plaintiffs moved to remand. In response, defendants moved the district court to stay proceedings until the Judicial Panel on Multidistrict Litigation acted on defendants' motion to transfer the case pursuant to 28 U.S.C. § 1407. The district court denied the motion to stay and remanded the entire action to state court.

Because the district court's grounds for remand are of central importance to our jurisdiction, we outline the district court's memorandum opinion in some detail. First, the district court addressed defendants' contention that removal was proper under 28 U.S.C. §§ 1334 and 1452 ¹ because the action was "related" to Recomm's bankruptcy proceedings. The court rejected this contention because it concluded that "[n]o significant connection between the case at bar and Recomm's bankruptcy has been shown." (R.2-25 at 5.) Second, the court found that § 77v(a) of the Securities and Exchange Act of 1933 prohibited removal. That section states: "No case arising under this subchapter and brought in any State court of competent jurisdiction shall be removed to any court of the United States." 15 U.S.C. § 77v(a). Next, the district court seems to have concluded that it lacked removal jurisdiction over the RICO claims, or that they should be remanded for other statutory or equitable reasons.

The district court further stated that even "if it were deemed to have [bankruptcy] jurisdiction under 28 U.S.C. § 1334 then abstention would be appropriate in the interest of justice and in the interest of comity with and respect for state law under § 1334(c)." ² (R.2-25 at 8.) In addition, the court stated that even if it had bankruptcy jurisdiction under § 1334, it would nonetheless remand the case on equitable grounds under § 1452(b). ³ The court cited as one of these equitable grounds for remand the fact that this case would be subject to transfer to a district court outside Alabama by the Judicial Panel on Multidistrict Litigation if the case remained in federal court.

Defendants appeal the district court's remand order. Additionally, they seek review of the district court's denial of their motion to stay.

III. Issues on Appeal and Contentions of the Parties

We must decide whether we have jurisdiction to review the district court's remand order. Defendants contend that we do. They maintain that 28 U.S.C. § 1447(d) does not prohibit review because the district court remanded in order to avoid a transfer by the Judicial Panel on Multidistrict Litigation, a ground for remand not authorized by § 1447(c).

Plaintiffs contend that we do not have jurisdiction. They maintain that remand was predicated on statutory grounds. Plaintiffs further assert that § 1452(b) expressly allows remand on equitable grounds when removal is based on bankruptcy jurisdiction and that that same section prevents appellate review of such a remand. IV. Discussion

At the outset, we must address the question of whether an appeal via 28 U.S.C. § 1291 ⁴--as opposed to a petition for writ of mandamus--is the proper avenue for seeking review of a remand order.

The Supreme Court has recently answered that question by holding that, in the absence of an affirmative bar to appellate review, review of remand orders may be obtained by appeal under § 1291. See Quackenbush v. Allstate Ins. Co., 517 U.S.706, ---- - ----, 116 S.Ct. 1712, 1718-20, 135 L.Ed.2d 1 (1996). The Court based this holding on two independent grounds. First, the Court reasoned that a remand order was "final" for § 1291 purposes because it puts litigants "effectively out of court." Id. at ---, 116 S.Ct. at 1719. Second, the Court reasoned that a remand order is appealable under the collateral order doctrine "in that it conclusively determines an issue that is separate from the merits." Id. Consequently, our prior cases holding that the proper way to challenge a remand is by petition for writ of mandamus, not by appeal, see Loftin v. Rush, 767 F.2d 800, 802 n. 3 (11th Cir.1985), are no longer viable. See Lufkin v. McCallum, 956 F.2d 1104, 1107 (11th Cir.1992) ("A panel of this Court may decline to follow a decision of a prior panel if such action is necessary in order to give full effect to an intervening decision of the Supreme Court of the United States."). Thus, defendants have opened the § 1291 door to appellate review.

The threshold to the federal appellate courthouse, however, is in this case blocked by more than one door. Two other jurisdictional limits bar our review of the district court's remand order--namely, 28 U.S.C. § 1447(d) and § 1452(b). First, 28 U.S.C. § 1447(d) states in relevant part: "An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise...." This ban on review includes only reasons for remand mentioned in § 1447(c). Things Remembered, Inc. v. Petrarca, 516 U.S. 124, ----, 116 S.Ct. 494, 497, 133 L.Ed.2d 461 (1995) (citing Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 345-46, 96 S.Ct. 584, 590-91, 46 L.Ed.2d 542 (1976)). See also Quackenbush, 517 U.S. at ----, 116 S.Ct. at 1718. Title 28 U.S.C. § 1447(c) provides in relevant part:

(c) A motion to remand the case on the basis of any defect [other than lack of subject matter jurisdiction] must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.

Consequently, this court lacks jurisdiction to review remand orders in which the district court premises remand on either lack of subject matter jurisdiction or procedural defects in removal. See Things Remembered, 516 U.S. at ----, 116 S.Ct. at 497.

The district court concluded that it lacked removal jurisdiction over this case. First, the district court concluded that §§ 1334 and 1452 does not confer removal jurisdiction because the action is not "related" to Recomm's bankruptcy proceedings. Likewise, the court concluded that § 77v(a)...