U.S. v. Michalson

• Decision Date: 27 August 2001
• Docket Number: No. 99-60754,99-60754
• Citation: U.S. v. Michalson, 264 F.3d 470 (5th Cir. 2001)
• Parties: (5th Cir. 2001) LOUIS DOLEAC, Deceased, by Lilah Joyce Doleac his Widow, as Personal Representative, Plaintiff-Appellee, UNITED STATES OF AMERICA, Intervenor, v. ARNE MICHALSON, Etc.; ET AL., Defendants, ARNE MICHALSON, M.D., Defendant-Appellant
• Court: U.S. Court of Appeals — Fifth Circuit

Page 470

264 F.3d 470 (5th Cir. 2001)

LOUIS DOLEAC, Deceased, by Lilah Joyce Doleac his Widow, as Personal Representative, Plaintiff-Appellee, UNITED STATES OF AMERICA, Intervenor, v. ARNE MICHALSON, Etc.; ET AL., Defendants, ARNE MICHALSON, M.D., Defendant-Appellant.

No. 99-60754

UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT

August 27, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeal from the United States District Court for the Southern District of Mississippi

Before GARWOOD, HALL,¹ and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE:

For this appeal, the threshold issue is our jurisdiction vel non to consider the district court's permitting an amendment joining a party, which resulted in both the destruction of diversity of citizenship and the remand of the action to state court. On the one hand, if we have jurisdiction, we must consider whether allowing the amendment was proper. On the other hand, if jurisdiction is lacking, we must consider the constitutionality of 28 U.S.C. § 1447(d)'s preclusion of our review. (Section 1447(d) bars review of remand orders except in certain civil rights cases.) Because we lack jurisdiction and § 1447(d) is constitutional, the appeal is DISMISSED.

I.

In November 1998, Lilah Joyce Doleac filed this wrongful death action in state court, claiming Dr. Arne Michalson was negligent in failing to discover an aneurysm while reviewing an MRI of her husband, Louis Doleac. Several years after the MRI, Mr. Doleac died of complications arising from the aneurysm.

In addition to Dr. Michalson, the original complaint listed as defendants "John Does A, B, C and D", identified as

parties to this action whose identities are unknown at this time, ... [who are] other health care providers or persons ... which at any time undertook ... or had a duty to provide medical care or services to the Plaintiff and whose negligence ... and/or accountable conduct caused or contributed to the Plaintiff's damages and injuries as alleged herein.

When the action was filed, Dr. Michalson was a citizen of Idaho; Plaintiff, of Mississippi. Therefore, that December, Dr. Michalson removed this action to federal court on the basis of diversity of citizenship. 28 U.S.C. §§ 1332, 1441, 1446. The day after removal, the magistrate judge issued an order concerning the fictitious parties.

[A q]uestion appears regarding subject matter jurisdiction.... Plaintiff shall file [a] remand motion bringing jurisdictional concerns to issue or identify, if possible, some of [the] John Doe medical defendants, most of whom would seem to be residents of this state as was the removing defendant when this alleged negligent act[] occurred. Under certain circumstances, [a] case can be remanded when [a] necessary defendant[] sued under [a] ficti[ti]ous name is identified to be non-diverse even though John Doe defendants [are] disregarded for original removal purposes pursuant to [the] 1988 Act[, 28 U.S.C. § 1441(a)].

(Emphasis added.) The court stayed discovery pending remand vel non.

Plaintiff moved to remand in January 1999, asserting that removal was improper "due to the existence of as yet unidentified John Does [sic] Defendants, which are, upon information and belief, resident citizens ... of Mississippi" and requesting limited discovery to determine the identity of those defendants.

Five months later, in June 1999, Plaintiff moved to amend her complaint to add as a co-defendant Gulf Coast Imaging, P.A. (GCI), a citizen of Mississippi. Plaintiff alleged that Dr. Michalson had acted under GCI's direction and supervision and that its employees assisted him in reading the films at issue and/or in completing the report. The putative amended complaint named as defendants Dr. Michalson, GCI, and John Does A through F. (As discussed infra, the parties dispute whether GCI was substituted for a John Doe defendant or added as a new party.)

In considering whether to allow the amendment to add a non-diverse party whose inclusion would destroy diversity and thereby divest the court of jurisdiction, the district court considered four factors it gleaned from Hensgens v. Deere & Co.:

(1) the extent to which the purpose of the amendment is to defeat federal jurisdiction,

(2) whether plaintiff has been dilatory in asking for amendment,

(3) whether plaintiff will be significantly injured if amendment is not allowed, and

(4) any other factors bearing on the equities.

Doleac v. Michalson, No. 1:98-CV-553-BrR (S.D. Miss. 28 Sept. 1999) (unpublished) (emphasis added) (citing Hensgens v. Deere & Co., 833 F.2d 1179, 1182 (5th Cir. 1987), cert. denied, 493 U.S. 851 (1989)). The Hensgens factors guide the court in whether to allow an amendment to add a "nondiverse nonindispensable party". Hensgens, 833 F.2d at 1182. The district court concluded: Plaintiff had a reason to seek GCI's joinder, independent of a desire to remand, in that it was another potential source of funds to satisfy a damages award; because the time-lapse between the court's December order and the motion to amend was inexplicably lengthy, Plaintiff had been dilatory; denial of the amendment would significantly injure Plaintiff by forcing her to undergo the delay and expense of trying in two courts what was essentially the same action; and other factors bearing on the equities included the interest in judicial economy, Plaintiff's choice of a non-federal forum, and the stage of the proceedings. In a single order, the district court: (1) ruled joinder was warranted; and (2) because the amendment destroyed diversity, remanded the action to state court, quoting 28 U.S.C. § 1447(c) ("[i]f at any time before final judgment it appears that [it] lacks subject matter jurisdiction").

II.

Dr. Michalson maintains we have jurisdiction to review the order which allowed the amendment and then remanded, asserting that the amendment is both separable and, under the collateral order doctrine, appealable. Notwithstanding the facial simplicity of this issue, the precedent addressing our jurisdiction is complex. In addition to asserting we have jurisdiction, Dr. Michalson contends: the district court erred in failing to apply 28 U.S.C. § 1441(a) (John Doe defendants ignored for purposes of removal); and, if the order is reviewable, the district court abused its discretion in allowing the amendment.² In the alternative, he contests the constitutionality of § 1447(d), which precludes appellate review when the remand is for lack of subject matter jurisdiction.³ (Pursuant to 28 U.S.C. § 2403, the United States was permitted to intervene to defend the constitutionality of § 1447(d).)

A.

The parties dispute whether GCI was substituted for one of the John Does or added under Federal Rule of Civil Procedure 19. Although Doleac stated that the motion to amend under Rule 15(a) was in response to the magistrate judge's suggestion that Doleac attempt to identify the John Does, the district court treated the amendment as a joinder under Rules 15, 20, and 21 (not Rule 19), and the amended complaint names as defendants Dr. Michalson, GCI, and John Does A-F (i.e., the John Does in the original complaint all reappear in the amended complaint⁴).

1.

Dr. Michalson asserts that, if GCI was substituted for a John Doe defendant, § 1441(a) precludes consideration of its citizenship. We disagree. Even assuming GCI was so substituted (rather than added as a new party), its presence destroyed diversity and defeated subject matter jurisdiction.

Section 1441(a) states: "For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded". 28 U.S.C. § 1441(a). Section 1447(e) allows joinder and remand to state court if, after removal, "the plaintiff seeks to join additional defendants whose joinder would destroy subject matter jurisdiction". 28 U.S.C. § 1447(e).

Dr. Michalson admits that, under a traditional view of case law, and pursuant to §§ 1447(c) and (e) and 1332(c), the action could not remain in federal court after the addition of GCI. Nevertheless, he contends that § 1441(a)'s "plain language" applies even after a John Doe defendant has been identified. He distinguishes the identification of a John Doe from the situation covered by § 1447(e), explaining that a John Doe is not an "additional" party but rather one that has been present from the beginning of the case. Although the district court did not cite § 1447(e), it followed its procedure: allowing joinder, finding it lacked subject matter jurisdiction, and then remanding.

Whether § 1441(a) continues to apply to parties substituted for John Doe defendants is an issue of first impression in our circuit. In Casas Office Machines, Inc. v. Mita Copystar America, Inc., the First Circuit rejected a claim distinguishing the application of § 1441(a) and § 1447(e) to amendments. 42 F.3d 668, 674 (1st Cir. 1995) (concluding "§ 1447(e) applies also to the identification of fictitious defendants after removal"). In Casas, the plaintiff, post-removal, replaced fictitious defendants with two named defendants, whose presence destroyed diversity. Id. at 670. (The defendants did not bring the lack of diversity to the district court's attention and challenged jurisdiction for the first time on appeal. Id. Unlike the case at hand, because there was no remand order, the issue of the appellate court's jurisdiction over the district court's order was not present in Casas.) The First Circuit summarized the issue as "whether this substitution [of named defendants for fictitious defendants], which unquestionably destroyed complete diversity, also defeated federal subject matter jurisdiction". Id. at 673. Casas began by distinguishing Freeport-McMoRan, which, in considering substitution under Federal Rule of Civil Procedure 25 (substitution because of death, incompetency, transfer of interest, or public official's separation from office), held diversity jurisdiction is established...