In re Carefirst of Maryland, Inc.

• Decision Date: 25 September 2002
• Docket Number: No. 01-1964.,No. 01-1973.,01-1964.,01-1973.
• Citation: 305 F.3d 253
• Parties: In re CAREFIRST OF MARYLAND, INCORPORATED, d/b/a Carefirst Blue Cross/Blue Shield, Petitioner. Carefirst of Maryland, Incorporated, d/b/a Carefirst Blue Cross/Blue Shield, Plaintiff-Appellant, v. Carefirst Urgent Care Center, LLC, d/b/a Carefirst; Hardin Memorial Hospital, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

305 F.3d 253

In re CAREFIRST OF MARYLAND, INCORPORATED, d/b/a Carefirst Blue Cross/Blue Shield, Petitioner Carefirst of Maryland, Incorporated, d/b/a Carefirst Blue Cross/Blue Shield, Plaintiff-Appellant, v. Carefirst Urgent Care Center, LLC, d/b/a Carefirst; Hardin Memorial Hospital, Defendants-Appellees.

No. 01-1964.

No. 01-1973.

United States Court of Appeals, Fourth Circuit.

Argued May 8, 2002.

Decided September 25, 2002.

ARGUED:

Ruth Mae Finch, Stephens, Davis, Miller & Mosher, L.L.P., Washington, DC, for Appellant. John William Scruton, Stites & Harbison, P.L.L.C., Louisville, Kentucky, for Appellees.

ON BRIEF:

Barth X. deRosa, Christopher M. Collins, Stephens, Davis, Miller & Mosher, L.L.P., Washington, DC, for Appellants.

Before WIDENER, WILLIAMS, and TRAXLER, Circuit Judges.

Appeal dismissed and petition for mandamus denied by published opinion. Judge TRAXLER wrote the majority opinion, in which Judge WILLIAMS joined. Judge WIDENER wrote a dissenting opinion.

OPINION

TRAXLER, Circuit Judge.

Carefirst of Maryland, Inc. ("Carefirst") brought this action in Maryland district court asserting claims of trademark infringement, dilution, and unfair competition against Hardin Memorial Hospital and Carefirst Urgent Care Center, LLC (together, the "defendants"). After allowing limited discovery into the defendants' contacts with the state of Maryland, the district court concluded that it lacked personal jurisdiction over the defendants, and, pursuant to 28 U.S.C.A. § 1631 (West 1994),¹ transferred the case to federal district court in Kentucky, where the defendants are located. Carefirst appeals the transfer order, contending that the Maryland court could properly exercise personal jurisdiction over the defendants. We dismiss the appeal as interlocutory.

I.

Subject to certain exceptions not applicable here, the appellate jurisdiction of this court extends only to appeals from "final decisions" of the district courts. 28 U.S.C.A. § 1291 (West 1993); see TechnoSteel, LLC v. Beers Constr. Co., 271 F.3d 151, 154 (4th Cir.2001). Generally speaking, an order is "final" within the meaning of section 1291 if it "ends the litigation on the merits and leaves nothing for the court to do but execute the judgment." Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945). The transfer order here obviously does not meet this standard—the transfer did not terminate the litigation, but instead ensured that Carefirst remained in court, free to pursue its claims. See Stelly v. Employers Nat'l Ins. Co., 431 F.2d 1251, 1254 (5th Cir.1970) (per curiam) (noting that after a transfer, the plaintiff "is still in the federal court although in a different room. The district court's order rather than having the effect of precluding [the plaintiff] from further prosecuting his lawsuit, guarantees that [the plaintiff] will have his day in court.").

Nonetheless, some orders addressing issues collateral to the merits are sufficiently final to warrant immediate review. Accordingly, through what is generally referred to as the "collateral order doctrine," the Supreme Court has construed section 1291 to permit appeals from "a narrow class of decisions that do not terminate the litigation, but must, in the interest of achieving a healthy legal system, nonetheless be treated as final." Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994) (citation and internal quotation marks omitted). That narrow class of immediately appealable collateral orders "includes only decisions that are conclusive, that resolve important questions separate from the merits, and that are effectively unreviewable on appeal from the final judgment in the underlying action." Swint v. Chambers County Comm'n, 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995); see Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). The question, then, is whether the transfer order in this case satisfies the requirements of the collateral order doctrine.

II.

A.

Before we tackle the collateral order question, it is helpful to consider the treatment of transfer orders made pursuant to other statutory provisions. Section 1404(a) authorizes inter-district or interdivision transfers "[f]or the convenience of parties and witnesses, in the interest of justice," 28 U.S.C.A. § 1404(a) (West 1993), while section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought," 28 U.S.C.A. § 1406(a) (West 1993). Although its language suggests otherwise, section 1406(a) has been interpreted to authorize transfers in cases where venue is proper but personal jurisdiction is lacking or some other impediment exists that would prevent the action from going forward in that district. See Porter v. Groat, 840 F.2d 255, 258 (4th Cir.1988) ("[W]e adopt as the rule in this circuit the reading of § 1406(a) that authorizes the transfer of a case to any district, which would have had venue if the case were originally brought there, for any reason which constitutes an impediment to a decision on the merits in the transferor district but would not be an impediment in the transferee district."); Martin v. Stokes, 623 F.2d 469, 474 (6th Cir.1980) (Section 1406(a) "provides the basis for any transfer made for the purpose of avoiding an obstacle to adjudication on the merits in the district court where the action was originally brought. That defect may be either improper venue or lack of personal jurisdiction."); see also Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962) (concluding that a district court lacking personal jurisdiction over a defendant may transfer the case under section 1406(a)).

Courts have consistently held that transfer orders under sections 1404(a) and 1406(a) do not satisfy the requirements of the collateral order doctrine. See, e.g., TechnoSteel, 271 F.3d at 154 (stating that section 1404(a) transfer order is not immediately appealable); Gower v. Lehman, 799 F.2d 925, 927 (4th Cir.1986) (explaining that orders transferring cases under section 1404(a) or 1406(a) are not immediately appealable); Carteret Sav. Bank v. Shushan, 919 F.2d 225, 230 (3d Cir.1990) (holding that section 1406(a) transfer for lack of personal jurisdiction was not an appealable collateral order); 15 Charles Alan Wright et al., Federal Practice & Procedure § 3827 (2d ed. 1986) ("An order of transfer under Section 1406(a) is interlocutory and not appealable...."); id. § 3855 ("It is entirely settled that an order granting or denying a motion to transfer under 28 U.S.C.A. § 1404(a) is interlocutory and not immediately appealable...."). And there is good reason for not allowing immediate appeals of transfer orders — "it will be highly unfortunate if the result of an attempted procedural improvement is to subject parties to two law suits: first, prolonged litigation to determine the place where a case is to be tried; and, second, the merits of the alleged cause of action itself." Ellicott Mach. Corp. v. Modern Welding Co., 502 F.2d 178, 181 (4th Cir. 1974) (internal quotation marks omitted).

Because of the broad construction given section 1406(a), the district court in this case could have transferred the case to Kentucky under that section instead of section 1631. If the transfer had been pursuant to section 1406(a), then there would be little doubt that the order was not immediately appealable. The question, then, is whether there is any reason for transfers effectuated under 28 U.S.C.A. § 1631 to be treated differently.

Most circuits considering this question have concluded that section 1631 transfer orders are not immediately appealable. See Brinar v. Williamson, 245 F.3d 515, 517-18 (5th Cir.2001); FDIC v. McGlamery, 74 F.3d 218, 221-22 (10th Cir.1996); Ukiah Adventist Hosp. v. FTC, 981 F.2d 543, 546-48 (D.C.Cir.1992); Alimenta (USA), Inc. v. Lyng, 872 F.2d 382, 383-85 (11th Cir.1989). However, in a case involving the lack of subject matter jurisdiction, this court has concluded that a section 1631 transfer order was immediately appealable. See Gower v. Lehman, 799 F.2d 925 (4th Cir.1986).

The plaintiff in Gower was discharged by the Navy and sought administrative review of the discharge decision. When that failed, Gower (the plaintiff) filed an action in district court challenging the discharge and seeking reinstatement. The district court concluded that because the remedies sought by Gower included back pay, the amount in controversy exceeded $10,000, thus bringing the case within the exclusive jurisdiction of the Court of Claims. Relying on section 1631, the district court transferred the case to the Court of Claims. See id. at 926. On appeal, this court held that the transfer order was appealable under the collateral order doctrine:

The order conclusively resolves the issue of the district court's jurisdiction. The issue of the district court's jurisdiction is entirely separate from the merits. The district court's determination that it lacks jurisdiction cannot be effectively reviewed on appeal to the Federal Circuit from a final judgment in the Claims Court.

Id. at 927 (citation omitted).

Carefirst contends that Gower compels the conclusion that the section 1631 transfer order in this case is an appealable collateral order. The defendants, however, contend that the order in Gower involved a transfer based on the absence of subject matter jurisdiction and that Gower does not answer the question of whether a section 1631 transfer order based on the lack of personal jurisdiction is immediately appealable. We agree with the defendants.²

A careful reading of Gower reveals that its appealability ruling sprang primarily from the court's view that questions...