Carney v. BIC Corp., 95-3163

• Decision Date: 07 August 1996
• Docket Number: No. 95-3163,95-3163
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: Robert CARNEY; Sheila Carney, Appellees, v. BIC CORPORATION, Appellant.

Page 629

88 F.3d 629

Robert CARNEY; Sheila Carney, Appellees, v. BIC CORPORATION, Appellant.

No. 95-3163.

United States Court of Appeals,

Eighth Circuit.

Submitted April 10, 1996.

Decided July 8, 1996.

Rehearing and Suggestion for Rehearing En Banc Denied Aug. 7, 1996.

Hal O. Carroll, Detroit, MI, argued (Thomas Peters, Detroit, MI and Daniel E. Wilke, Clayton, MO, on the brief), for appellant.

Daniel R. Brown, Kansas City, MO, argued (Paul L. Redfearn, on the brief), for appellee.

Before McMILLIAN and FAGG, Circuit Judges, and BURNS, ^* District Judge.

McMILLIAN, Circuit Judge.

BIC Corporation (BIC) appeals from a final order entered in the United States District Court ¹ for the Eastern District of Missouri remanding to Missouri state court for want of federal jurisdiction the products liability action brought by Robert Carney and Sheila Carney, husband and wife (collectively plaintiffs) against BIC. Carney v. BIC Corp., No. 4:95CV417-DJS (E.D.Mo. July 14, 1995) (Order). For reversal, BIC argues that the district court erred in holding that it lacked removal jurisdiction to entertain plaintiffs' action after the stipulated dismissal of defendant Clifford Massie, d/b/a Massie One Stop (Massie), pursuant to Mo.Rev.Stat. § 537.762. For the reasons discussed below, we dismiss the appeal pursuant to 28 U.S.C. § 1447(d) for lack of jurisdiction.

I. Background

The underlying facts are not in dispute. Plaintiffs' two-year-old son died on January 30, 1992, because of injuries sustained while attempting to use a butane lighter manufactured by BIC. On July 28, 1994, plaintiffs filed the present wrongful death and personal injury action in the Circuit Court of the city of St. Louis against BIC and Massie, a commercial retailer who had sold the lighter to plaintiffs. BIC is incorporated in New York and has its principal place of business in Connecticut. At the time the present action was commenced, however, plaintiffs and Massie were residents of the State of Missouri. Therefore, diversity of citizenship did not exist between the parties when plaintiffs filed their complaint against BIC and Massie.

On January 11, 1995, Massie filed a motion seeking dismissal from plaintiffs' complaint pursuant to Mo.Rev.Stat. § 537.762 (1987). ² As required by § 537.762(3), Massie's motion to dismiss was accompanied by an affidavit stating that he was aware of no facts or circumstances supporting his liability other than his status as a seller in the stream of commerce. On February 23, 1995, plaintiffs and Massie entered into a stipulation of dismissal, which provided that Massie "shall remain a party to this action only for the purposes of venue and jurisdiction as provided in ... § 537.762(6) (1987)." App. 71.

On March 3, 1995, BIC removed the present case to the United States District Court for the Eastern District of Missouri, alleging that the stipulated dismissal of Massie had created diversity of citizenship between the parties. Upon motion by plaintiffs, the district court entered an order remanding the case to the Circuit Court of the City of St. Louis on July 14, 1995. This appeal followed. ³

II. Discussion

The district court determined that a remand order was appropriate in the present case because the dismissal of Massie did not create removal jurisdiction based upon the diversity of the parties. In reaching this conclusion, the district court noted that the stipulation of dismissal expressly stated that Massie would remain a party to the action for the purpose of venue and jurisdiction, in accordance with § 537.762(6). The district court also held that § 537.762 was not, as BIC argued, an "impermissible attempt by state law to defeat removal jurisdiction." Slip op. at 2.

On appeal, BIC contends that the district court erred in remanding the present action to Missouri state court, because (1) § 537.762 does not apply where a co-defendant is dismissed by stipulation rather than by order and (2) § 537.762 was never intended to affect federal diversity jurisdiction, or alternatively, the statute is invalid to the extent that it limits diversity jurisdiction. We may not address the merits, however, unless we determine that we have jurisdiction to review the district court's remand order. Title 28 U.S.C. § 1447(d) provides that, with the exception of civil rights case, "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." In Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 346, 96 S.Ct. 584, 590, 46 L.Ed.2d 542 (1976) (Thermtron ), the Supreme Court clarified that "only remand orders issued under § 1447(c) ⁴ and invoking the grounds specified therein ... are immune from review under § 1447(d)". Id. In Thermtron, the district court had remanded an otherwise proper diversity action solely because of its crowded docket. Concluding that the district court had exceeded its statutorily defined power by remanding the case on a basis not specified in § 1447(c), the Supreme Court held that a writ of mandamus was the appropriate remedy to compel the district court to entertain the action. Id. at 352-53, 96 S.Ct. at 593-95.

BIC contends that the present case falls within the Thermtron exception because the district court's remand order was not based upon a ground specified in 28 U.S.C. § 1447(c)--i.e., the lack of subject matter jurisdiction--but rather, was premised upon Mo.Rev.Stat. § 537.762(6), which provides that retailers who have been dismissed from products liability actions on the basis that their liability stems solely from their status as sellers in the stream of commerce shall remain defendants for purposes of venue and jurisdiction. In addition to Thermtron, BIC relies on Karl Koch Erecting Co. v. New York Convention Center Dev. Corp., 838 F.2d 656, 658-59 (2d Cir.1988) (Karl Koch ). In Karl Koch, the Second Circuit held that a remand order based on the district court's interpretation of a forum selection clause was reviewable because the district court had gone beyond the jurisdictional determination and made a decision affecting the merits of the case. See id. (reasoning that the policy underlying 28 U.S.C. § 1447(d)--preventing protracted litigation of jurisdictional questions--was inapplicable to remand orders based upon interpretation of forum selection clause); see also Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 277 (9th Cir.1984) (holding that remand order based on enforceability of forum selection clause was reviewable).

In response, plaintiffs argue that 28 U.S.C. § 1447(d) forecloses review of the remand order, because the order was based upon the district court's determination that, in light of Mo.Rev.Stat. § 537.762(6), it lacked removal jurisdiction to entertain plaintiffs' action. Plaintiffs also maintain that the present case more closely resembles Hansen v. Blue Cross, 891 F.2d 1384, 1388 (9th Cir.1989) (Hansen ), than Karl Koch. In Hansen, the Ninth Circuit held unreviewable a remand order based upon the district court's determination that the insurance plan at issue was not subject to ERISA. Id. The Ninth Circuit reasoned that the remand order did not fall within the Thermtron exception because "[t]he district court's decision that Hansen's plan was not subject to ERISA, rather than being apart from the question of subject matter jurisdiction, was necessary to determine whether such jurisdiction existed." Id. Plaintiffs argue that the reasoning of Hansen also applies in the present case. We agree and hold that the district court's remand order is not reviewable on appeal.

We are bound by the general rule of non-reviewability of remand orders set forth in 28 U.S.C. § 1447(d). The remand order in the present case does not come within the Thermtron exception, because it was based on a ground specified in 28 U.S.C. § 1447(c)--the district court's determination that it lacked subject matter jurisdiction to hear the action. After noting that the stipulated dismissal provided that, in accordance with Mo.Rev.Stat. § 537.762(6), Massie would remain a party in the action for purposes of venue and jurisdiction, the district court concluded that the dismissal of Massie did not create removal jurisdiction based upon diversity of citizenship and remanded the present case to Missouri state court. Thus, the remand order was based solely upon the district court's conclusion that removal jurisdiction did not exist. Although the district court applied Mo.Rev.Stat. § 537.762(6) in reaching this conclusion, its consideration of § 537.762(6) was in no way separate from the jurisdictional determination. Therefore, the present case is distinguishable from Karl Koch, in which the remand order at issue was based upon a matter...