The Lawletter Vol 41, No 3
In order to keep cases from ping-ponging between state and federal court, the federal removal statutes prohibit appellate review of remand orders. See In re La Providencia Dev. Corp., 406 F.2d 251, 252 (1st Cir. 1969) ("The action must not ricochet back and forth depending upon the most recent determination of a federal court."). In particular, 28 U.S.C. § 1447(d) provides that, with the exception of certain cases involving federal officers or civil rights, "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d) (emphasis added). Does the "or otherwise" language prevent review by a district court of its own remand order under Rule 60(b)(3)? That was the question addressed by the U.S. Court of Appeals for the Fourth Circuit, sitting en banc, in Barlow v. Colgate Palmolive Co., 772 F.3d 1001 (4th Cir. 2014) (en banc).
In Barlow, two individuals separately sued Colgate-Palmolive Company and other companies in Maryland state court, alleging that each of the defendants' products had exposed them to asbestos. Even though the plaintiffs joined in-state defendants, Colgate removed the two cases to federal court on the basis of diversity of citizenship. Colgate asserted that the in-state defendants had been fraudulently joined, pointing to discovery responses indicating that the plaintiffs did not intend to pursue a claim against any defendant other than Colgate. The plaintiffs then moved to remand the cases to state court. In their motions, the plaintiffs' counsel represented that there was some circumstantial evidence to suggest exposure to asbestos at the hands of the nondiverse defendants. Based on counsel's representations, the district court judges (Judges Nickerson and Quarles) remanded the cases to state court. Shortly after returning to state court, however, the plaintiffs represented in another filing, contrary to what they had represented to the federal judges to defeat the remand motions, that they were alleging exposure only to asbestos-containing products manufactured by Colgate. At a hearing on the plaintiffs' motion, the state court judge told the plaintiffs' counsel, "I can't believe you actually told Judge Nickerson and Judge Quarles one thing and tell me another." The judge then asked plaintiffs' counsel, "It is a one-defendant case, right?" to which counsel answered, "Yes." Id. at 1006.
Colgate then returned to federal court and moved for sanctions under Rule 11 of the Federal Rules of Civil Procedure and for vacatur of the remand orders under Rule 60(b)(3), which permits a court to relieve a party from a final order based on "fraud . . . , misrepresentation, or misconduct by an opposing party." Fed. R. Civ. P. 60(b)(3). Reversing the decision of the district court, the Fourth Circuit held that § 1447(d) does not limit a court's authority to provide relief from a fraudulently obtained remand order under Rule 60(b)(3). 772 F.3d at 1010. Finding the distinction "not merely semantic," the court noted that the plain language of § 1447(d) "prohibits 'reviewing' an order, but it does not prohibit 'vacating' an order as permitted by Rule 60(b)(3)." Id. The court also reasoned that vacatur under those circumstances did not involve a "review" (that is, a reconsideration) of the merits of the remand order but was instead "based on a collateral consideration—Colgate's allegation that the remand orders were procured through attorney misconduct." Id. at 1010-11.
The Fourth Circuit acknowledged that its decision was in conflict with unpublished decisions in three other circuits, but it found those "non-binding" opinions to be unpersuasive. As a result, the issue is one that may have to be resolved at some point by the U.S. Supreme Court.