In Re: FMC Corp. Packaging Sys. Division

• Decision Date: 23 March 2000
• Docket Number: No. 99-5328 and N,Nos. 99-5220,99-5328 and 99-5329,99-5302,No. 99-5220,No. 99-5302,99-5220,99-5328 and N,s. 99-5220
• Citation: 208 F.3d 445
• Parties: (3rd Cir. 2000) IN RE: FMC CORPORATION PACKAGING SYSTEMS DIVISION, Petitioner in IN RE: MEDTRONIC, INC. Petitioner in MARY ANNE NELSON; MICHAEL NELSON v. MEDTRONIC INC.; SYNCHROMED; "A" DOE, "B" DOE, "C" DOE, "D" DOE, "E" DOE, "F " DOE, "G" DOE, "H" DOE, "I" DOE, "J" DOE, "K" DOE, AND "L" DOE, (fictitious names actual names being unknown) Medtronic, Inc., Appellant ino. 99-5329
• Court: U.S. Court of Appeals — Third Circuit

Page 445

208 F.3d 445 (3rd Cir. 2000)

IN RE: FMC CORPORATION PACKAGING SYSTEMS DIVISION, Petitioner in No. 99-5220

IN RE: MEDTRONIC, INC. Petitioner in No. 99-5302

MARY ANNE NELSON; MICHAEL NELSON v. MEDTRONIC INC.; SYNCHROMED; "A" DOE, "B" DOE, "C" DOE, "D" DOE, "E" DOE, "F " DOE, "G" DOE, "H" DOE, "I" DOE, "J" DOE, "K" DOE, AND "L" DOE, (fictitious names actual names being unknown)

Medtronic, Inc., Appellant in No. 99-5328 and No. 99-5329

Nos. 99-5220, 99-5302, 99-5328 and 99-5329

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Argued February 1, 2000

Filed March 23, 2000

Appeal from the United States District Court for the District of New Jersey District Judge: Honorable Alfred J. Lechner, Jr. (D.C. Civ. No. 98-cv-05762),(D.C. Civ. No. 99-00818)(D.C. No. 99-cv-00818)

Wayne A. Graver, Esquire (Argued) Richard J. Sexton, Esquire Lavin, Coleman, O'Neil, Ricci, Finarelli & Gray 8000 Midlantic Drive Suite 201 South Mount Laurel, NJ 08054 COUNSEL FOR FMC PACKAGING SYSTEMS DIVISION

John P. Lavelle, Jr., Esquire (ARGUED) Hangley, Aronchick, Segal & Pudlin 20 Brace Road, Suite 201 Cherry Hill, NJ 08034 OF COUNSEL: R. Lawrence Purdy, Esquire Mason, Edelman, Borman & Brand 3300 Norwest Center 90 South Seventh Street Minneapolis, MN 55402-4140 COUNSEL FOR MEDTRONIC, INC.

John F. McLaughlin, Esquire (ARGUED) Philip G. Auerbach, Esquire Auerbach, Melody & Cox 231 Maple Avenue Post Office Box Y Red Bank, NJ 07701 COUNSEL FOR MARY ANNE AND MICHAEL NELSON

Before: MANSMANN, NYGAARD and RENDELL, Circuit Judges.

OPINION FOR THE COURT

MANSMANN, Circuit Judge.

These consolidated appeals require that we clarify our position with respect to the scope of the District Court's authority to remand, sua sponte, cases removed to the federal courts pursuant to the Federal Removal Statute, 28 U.S.C. S 1441 et seq. (the Act). Specifically, we address whether a District Court exceeds its authority under section 1447(c) of the Act when it raises, sua sponte, a procedural defect in the petition for removal and remands the case on that basis. Because we are convinced that such sua sponte action falls outside the scope of section 1447(c), we conclude that the District Court lacked grounds upon which to remand these cases. We will, therefore, reverse the orders of the District Court remanding these actions filed against Medtronic and FMC.

I.

On January 15, 1999 Mary Anne and Michael Nelson filed a personal injury action against Medtronic in the Superior Court of New Jersey. Medtronic received formal service of the summons and complaint on February 8, 1999. On February 24, 1999 Medtronic filed a notice of removal, on diversity grounds, in the United States District Court for the District of New Jersey.

At a status conference held in mid-March, 1999, the District Court, acting sua sponte, announced that it intended to remand the matter to the state court due to a procedural defect in the notice of removal. According to the District Court, the notice of removal was deficient under the terms of 28 U.S.C. S 1446(b)¹ in that it did not contain a specific statement establishing that the matter has been removed "within thirty days from receipt or otherwise." (emphasis added). Counsel for Medtronic noted that the notice of removal stated that Medtronic was served with the summons and complaint on February 8, 1999. Counsel clarified that this service effected Medtronic's first receipt of the complaint. The plaintiffs did not contest this assertion and did not move for remand, although they stated that they did not object. The parties were given the opportunity to brief the issue of remand.

On March 31, 1999, the District Court entered an order remanding the case to the Superior Court of New Jersey. The sole basis for remand was the fact that the notice of appeal failed explicitly to negate the possibility that Medtronic had received notice of the action through informal service of the initial pleading prior to the date of formal service.² In ordering the remand, the District Court relied on the holding in Michetti Pipe Stringing, Inc. v. Murphy Bros., Inc., 125 F.3d 1396, 1398 (11th Cir.), cert. granted, 119 S.Ct. 401 (1998). There, the Court of Appeals held that the period for removal begins to run when a defendant receives a copy of the initial pleading through any means, not strictly formal service of process. Medtronic appealed the remand order on April 30, 1999.

Days after entry of the remand order, the Supreme Court reversed the decision of the Court of Appeals in Michetti, holding that "a named defendant's time to remove is triggered by simultaneous service of the summons and complaint, or receipt of the complaint, `through service or otherwise,' after and apart from service of the summons, but not by mere receipt of the complaint unattended by any formal service." Michetti Pipe Stringing, Inc. v. Murphy Bros., Inc., 526 U.S. 344, 119 S. Ct. 1322, 1324 (quoting 28 U.S.C. S 1446(b)) (emphasis added). This decision made clear that the procedural defect identified by the District Court in Medtronic's petition for removal is not, in fact, a procedural defect.

On April 10, 1999, Medtronic filed in the District Court a motion to withdraw the order of remand in light of the Supreme Court's decision in Michetti. In an order dated April 14, 1999, the District Court denied the motion, stating that it no longer had jurisdiction to withdraw the remand order and that, in any event, the decision in Michetti did not apply retroactively to the order. Medtronic appealed from the District Court's order denying the motion to withdraw.

Due to uncertainty as to the appropriate mechanism for appellate review, Medtronic, in an abundance of caution, also filed a petition for a writ of mandamus compelling the District Court to withdraw or reverse its remand order. This petition was consolidated with both of Medtronic's appeals and with the writ of mandamus filed by FMC. Medtronic contends that: 1) a procedural defect in the notice of removal must be raised in a motion by a party, not by the District Court; 2) the order of remand, even if authorized by statute, was not timely filed; and 3) because the Supreme Court decision in Michetti established that the defect which the District Court identified in Medtronic's petition for removal is not to be considered a defect, the motion to withdraw the remand should have been granted. In its petition, FMC argues solely that where it clarified for the District Court that diversity existed and that the petition for removal was timely filed, the District Court should not have remanded the action.³ Because our holding with respect to the District Court's authority to raise, sua sponte, a procedural defect in the removal petition is alone a sufficient ground upon which to reverse the orders of remand, we need not and do not reach any other issue.

II.

We address first our jurisdiction to review the remand orders entered by the District Court. The threshold jurisdictional issue cannot be separated from the merits of the defendants' challenge; our analysis of the relevant statutory provisions both supports our jurisdiction and compels our conclusion that the District Court exceeded its authority in entering the remand orders.

A comprehensive statutory scheme addresses removal of state court actions to federal court. 28 U.S.C.SS 14411452. We highlight certain provisions of that scheme and relevant caselaw in order to provide context for resolution of the issue before us.

28 U.S.C. S 1441(a) provides that:

Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court . . . embracing the place where such action is pending.

Section 1446 sets forth the procedure for removing a case to federal court, and section 1441 delineates procedures to be followed after an action has been removed. Section 1447(c) reads in part, as follows:

A motion to remand the case on the basis of any defect in removal procedure 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.⁴

Section 1447(d), which addresses the reviewability of orders to remand, narrowly limits our authority by providing that, except for civil rights cases removed pursuant to 28 U.S.C. S 1443: "[a]n order remanding a case to the state court from which it was removed is not reviewable on appeal or otherwise. . . ." In imposing this bar, Congress intended to make the remand order of a District Court final in order to avoid delay associated with appellate review of decisions to remand. In furtherance of this policy, section 1447(d) was interpreted, until 1976, to preclude review of all remand orders, regardless of the reason underlying the decision to remand.

In 1976, the Supreme Court's decision in Thermtron Prod., Inc. v. Hermansdorfer, 423 U.S. 336 (1976), clarified that the section 1447(d) bar operates to preclude review of only those remand orders issued pursuant to section 1447(c). The Court held that these two sections must be construed together and that "only remand orders issued under S 1447(c) and invoking the grounds specified therein . . . are immune from review under S 1447(d). Id. at 346. Thermtron thus made clear that the seemingly unequivocal language of section 1447(d) may, in some circumstances, give way to permit appellate consideration of certain categories of remand orders. One such category includes remand orders issued outside the authority granted to District Courts under section 1447(c). For reasons explained herein, we find that the District Court exceeded its authority under 1447(c) when it acted sua sponte to remand these cases. Accordingly, our review of these remand orders is...