Roy v. Canadian Pac. Ry. Co. (In re Lac-Mégantic Train Derailment Litig.)

• Decision Date: 02 June 2021
• Docket Number: No. 17-1108,17-1108
• Citation: 999 F.3d 72
• Parties: IN RE: LAC-MÉGANTIC TRAIN DERAILMENT LITIGATION Annick Roy, as special administrator of the estate of Jean-Guy Veilleux, deceased, individually and as next friend of minor, F.R.V., ET AL., Plaintiffs, Appellants, v. Canadian Pacific Railway Company, Defendant, Appellee, Soo Line Railroad Company, d/b/a Canadian Pacific Railway; Delaware and Hudson Railroad Company Inc., d/b/a Canadian Pacific Railway; Dakota Minnesota and Eastern Railroad Corporation, d/b/a Canadian Pacific Railway; and Canadian Pacific Railway Limited, Putative Defendants.
• Court: U.S. Court of Appeals — First Circuit

999 F.3d 72

IN RE: LAC-MÉGANTIC TRAIN DERAILMENT LITIGATIONAnnick Roy, as special administrator of the estate of Jean-Guy Veilleux, deceased, individually and as next friend of minor, F.R.V., ET AL., Plaintiffs, Appellants,

v. Canadian Pacific Railway Company, Defendant, Appellee,Soo Line Railroad Company, d/b/a Canadian Pacific Railway; Delaware and Hudson Railroad Company Inc., d/b/a Canadian Pacific Railway; Dakota Minnesota and Eastern Railroad Corporation, d/b/a Canadian Pacific Railway; and Canadian Pacific Railway Limited, Putative Defendants.

No. 17-1108

United States Court of Appeals, First Circuit.

June 2, 2021

Matthew W.H. Wessler, Washington, DC, with whom Gregory A. Beck, North Canton, OH, Larkin Turner, Gupta Wessler PLLC, Ted A. Meyers, Peter J. Flowers, Craig D. Brown, Meyers & Flowers LLC, St. Charles, IL, Jason C. Webster, The Webster Law Firm, Houston, TX, Mitchell A. Toups, and Weller, Green, Toups & Terrell, LLP were on brief, for appellants.

Paul J. Hemming, with whom Leah Ceee O. Boomsma, Taft Stettinius & Hollister LLP, Minneapolis, MN, Mark F. Rosenberg, New York, NY, and Sullivan & Cromwell LLP were on brief, for appellee.

Before Lynch and Selya, Circuit Judges, and Katzmann,^* Judge.

SELYA, Circuit Judge.

This appeal requires us to decide, as a matter of first impression in this circuit, whether the Federal Rules of Bankruptcy Procedure (the Bankruptcy Rules) or the Federal Rules of Civil Procedure (the Civil Rules) govern cases that have come within the federal district court's jurisdiction as cases "related to" a pending bankruptcy proceeding. 28 U.S.C. § 1334(b). We conclude, as have the relative handful of other courts of appeals that have addressed the question, that the Bankruptcy Rules control.

This conclusion has a domino effect and, when put into context, determines the outcome of this appeal. Under Bankruptcy Rule 9023, the plaintiffs' motion for reconsideration was late and, thus, did not stop the accrual of the appeal period. In the absence of tolling, the plaintiffs' ensuing notice of appeal was untimely and, therefore, their appeal must be dismissed for want of appellate jurisdiction. The tale follows.

I

We sketch the relevant facts and travel of the case. The plaintiffs who are appellants here, listed in Appendix A, brought thirty-nine separate suits against a number of defendants in the wake of a tragic derailment and explosion in Lac-Mégantic, Canada, which caused many deaths, extensive personal injuries, and large-scale property damage. For present purposes, it suffices to say that in June of 2013, a Canadian refinery arranged for a transnational shipment of crude oil from North Dakota; a number of railroad companies participated in the shipment of the purchased oil across the midwestern United States and into Canada; responsibility for the rail cars in which the oil was transported was eventually assumed by Montreal, Maine and Atlantic Railway (MMA); and the derailment occurred on July 6, 2013 (on MMA's watch).¹

MMA sought the protection of the bankruptcy court in the District of Maine. In and out of Maine, lawsuits proliferated. These civil actions were instituted in several different jurisdictions. The plaintiffs' wrongful death suits were filed in state courts in Illinois and Texas. In due course, they were removed to federal district courts, some pursuant to 28 U.S.C. § 1334(b) and some pursuant to 28 U.S.C. § 1332(a).

Defendant-appellee Canadian Pacific Railway Company (Canadian Pacific) was not among the defendants originally named in the plaintiffs' initial suits. The plaintiffs subsequently joined Canadian Pacific — allegedly a connecting carrier — as an additional defendant. Canadian Pacific has consistently maintained that it was not properly served with process in these actions.

In February of 2016, the plaintiffs — along with MMA's trustee in bankruptcy — petitioned the United States District Court for the District of Maine for an order transferring the cases to that district pursuant to 28 U.S.C. § 157(b)(5), which allows a district court having jurisdiction over a bankruptcy proceeding to order the transfer to it of any "personal injury tort and wrongful death claims" related to the bankruptcy proceeding. The court below concluded that transfer was appropriate and later centralized all of the plaintiffs' suits in the District of Maine. The court then created an omnibus docket captioned "In Re Lac-Mégantic Train Derailment Litigation," which became an umbrella docket for a wide swath of third-party claims (including the plaintiffs' suits).

After further jousting (not relevant here), the plaintiffs sought dismissal of their claims against all of the named defendants except Canadian Pacific. The district court granted this request pursuant to a settlement agreement that was part of MMA's plan of liquidation, which the district court had confirmed on November 18, 2015. See In re Montreal Me. & Atl. Ry., Ltd., No. 1:15-mc-329, 2015 WL 7302223 (D. Me. Nov. 18, 2015) ; see also In re Montreal Me. & Atl. Ry., Ltd., Bk. No. 13-10670, 2015 WL 7431192 (Bankr. D. Me. Oct. 9, 2015) (recommending approval of plan of liquidation). This left Canadian Pacific as the lone defendant in the plaintiffs' suits.

Canadian Pacific moved to dismiss the plaintiffs' consolidated complaint, asserting (among other things) lack of in personam jurisdiction, insufficient service of process, and forum non conveniens. The plaintiffs countered by moving for leave to file a second amended complaint, see Fed. R. Civ. P. 15(a), in which they sought to add as defendants several Canadian Pacific subsidiaries based in the United States, including Soo Line Railroad Company (Soo Line). On September 28, 2016, the district court granted Canadian Pacific's motion to dismiss on jurisdictional grounds and denied the plaintiffs' motion to amend. The court denied all other pending motions as moot and entered final judgment in favor of Canadian Pacific.

On October 26, 2016 — twenty-eight days after the district court entered final judgment for Canadian Pacific — the plaintiffs moved for reconsideration in the district court of the denial of their motion to file an amended complaint. See Fed. R. Civ. P. 59(e). They annexed a proposed "Revised Second Amended Complaint" that sought, as relevant here, to substitute Soo Line for Canadian Pacific as the party defendant. Canadian Pacific opposed the motion on a number of grounds, including timeliness. With respect to that ground, it argued that the Bankruptcy Rules controlled and that, therefore, the motion for reconsideration came too late. See Fed. R. Bank. P. 9023 (allowing a fourteen-day window for motions for reconsideration). In a margin order, the district court summarily denied reconsideration.

On January 19, 2017, the plaintiffs filed this notice of appeal, purporting to challenge the denial of the motion for leave to amend. Roughly three months later, Canadian Pacific filed a motion for summary disposition under First Circuit Local Rule 27.0(c), arguing that the plaintiffs' untimely motion for reconsideration lacked tolling effect and, thus, rendered the appeal untimely. The plaintiffs opposed this motion. On February 6, 2019, we denied the motion and set a briefing schedule. Oral arguments were heard on March 3, 2021.

II

In this venue, the plaintiffs argue that we have appellate jurisdiction and maintain that the district court abused its discretion when it denied their motion for leave to amend the complaint. Canadian Pacific, though, continues to press a threshold issue: it contends that we lack appellate jurisdiction because the plaintiffs' notice of appeal was untimely. This contention is premised on two interlocking assertions. To begin, Canadian Pacific asserts that the plaintiffs' motion for reconsideration, which was made outside the fourteen-day window prescribed by the Bankruptcy Rules for such motions, see Fed. R. Bank. P. 9023, did not toll the running of the appeal period, see Fed. R. App. P. 4(a) (specifying that in civil cases not involving the United States, notices of appeal must be filed within thirty days after the entry of judgment). Building on this foundation, Canadian Pacific asserts that the plaintiffs' notice of appeal, which was filed more than three months after the entry of final judgment and which did not enjoy the benefit of tolling, was untimely. We agree that the plaintiffs are unable to cross this threshold and, thus, our inquiry stops there.

We need not tarry. Federal courts are courts of limited jurisdiction and, in the absence of jurisdiction, a federal court is "powerless to act." Am. Fiber & Finishing, Inc. v. Tyco Healthcare Grp., 362 F.3d 136, 138 (1st Cir. 2004). It follows that we must rigorously patrol the boundaries of our appellate jurisdiction. See Commonwealth Sch., Inc. v. Commonwealth Acad. Holdings LLC, 994 F.3d 77, 82 (1st Cir. 2021) ; Whitfield v. Mun. of Fajardo, 564 F.3d 40, 44 (1st Cir. 2009). If we find jurisdiction lacking, that is the end of the matter.

Here, the existence of appellate jurisdiction turns principally on the answer to the following question: do the Bankruptcy Rules or the Civil Rules govern the procedures in a case over which a federal court exercises section 1334(b) jurisdiction as one "related to" a pending bankruptcy proceeding? This question is outcome-determinative because even though the two sets of rules are congruent in many respects, they sometimes differ. One such difference is crucial here: the Bankruptcy Rules only allow fourteen days for the filing of a motion to reconsider, see Fed. R. Bank. P. 9023, whereas the Civil Rules allow twenty-eight days for that purpose, see Fed. R. Civ. P. 59(e). And under either set of rules, only a timely motion for reconsideration tolls the running of the appeal period. See Fed. R. Bank. P. 8002(b)(1)(B) ; Fed. R. App. P. 4(a)(4)(A)(iv) ; see also García-Velázquez v. Frito Lay Snacks Caribbean, 358 F.3d 6, 9 (1st Cir. 2004) ("An untimely ...