Federal Circuits, 6th Cir. (July 25, 2001)
Docket number: 99-1922
Permanent Link:
http://vlex.com/vid/vogel-navigant-jonathan-ledecky-platt-36302527
Id. vLex: VLEX-36302527
Click here to download this article in graphic format (Acrobat Reader)

U.S. Court of Appeals for the 3rd Cir. - Trans Penn Wax Corporation; Astor Wax Corporation; Abi Corporation, Petitioners v. Michael Mccandless; Benjamin Reynolds; Bradley Pearson; Brian Patterson; Jerry Snyder and John E. Bulkley, Respondents Maurice B. Cohill, Jr., Nominal Respondent, 50 F.3d 217 (3rd Cir. 1995) Petitioners v. Michael Mccandless; Benjamin Reynolds; Bradley Pearson; Brian Patterson; Jerry Snyder and John E. Bulkley, Respondents Maurice B. Cohill, Jr., Nominal Respondent
U.S. Court of Appeals for the 6th Cir. - Amer Maritime v. Marine Engineers (6th Cir. 2007)
U.S. Court of Appeals for the 6th Cir. - Feathers v. Willamette Indus (6th Cir. 2006)
Richard A. Glaser, Rock A. Wood, Quadiru W. Kent, Dickinson & Wright, Grand Rapids, MI, for Plaintiffs-Appellees.
Matthew Wilkins, David A. Gardney, Butzel Long, Detroit, MI, David P. Donovan, WILMER, CUTLER & PICKERING, Washington, D.C., Wiley E. Mayne, HOLLAND & HART, Denver, Colorado, John C. Keeney, Jr., Kelleen McGinnis Scott, Daniel D. Barnhizer, HOGAN & HARTSON, Washington, D.C., for Appellants.Before: SILER, MOORE, and CLAY, Circuit Judges.OPINIONSILER, Circuit Judge.Defendants, U.S. Office Products ("USOP"), Navigant International, Inc. ("Navigant"), Jonathan Ledecky, Thomas Morgan, Donald Platt, and Mark Director, seek review of a magistrate judge's order remanding a suit filed against them by plaintiffs, Gregory Vogel and Charles Cox, to state court. They contend that remand motions are dispositive motions and, as such, can only be granted by a district court. The district court held that remand motions can be issued by magistrate judges because they are nondispositive and, therefore, that it was precluded from reviewing the magistrate judge's remand order. We reverse and remand.I. BackgroundIn January 1999, Vogel and Cox filed suit against USOP, a supplier of office products; Navigant, a corporation formed by USOP; and Ledecky, Morgan, Platt, and Director, executive officers of USOP, in Michigan state court. Plaintiffs were stockholders in two businesses that were sold to USOP and, as a result of those sales, filed suit against defendants alleging fraud, misrepresentation, civil conspiracy, and violation of the Michigan Uniform Securities Act. Suits comprised of identical claims were brought by other individuals against the defendants in several other states ("other suits"). The other suits have since been removed to federal court, consolidated by the Judicial Panel on Multidistrict Litigation, and transferred to the U.S. District Court for the District of Columbia for pretrial proceedings.Individual defendants were served with copies of the complaint at different times and, pursuant to 28 U.S.C. 1441 and 1446, defendants filed several different notices to remove the case from state to federal court on the ground that original federal court jurisdiction existed under 28 U.S.C. 1332. USOP and Navigant were served with copies of the complaint on February 16, 1999, while Ledecky, Morgan, Platt, and Director were served between March 5, 1999 and March 12, 1999.On February 18, 1999, USOP filed a notice to remove the case from a Michigan state court to the United States District Court for the Western District of Michigan. USOP's removal notice stated that Navigant joined in its removal. On March 22, 1999, plaintiffs filed a motion to remand the case to state court because USOP did not effect a proper removal -- Navigant did not sign USOP's removal notice. On March 29, 1999, Ledecky and Morgan filed separate removal notices, which were joined by all other defendants. Morgan did not join in Ledecky's notice. Clerical error in the district court clerk's office prevented Morgan's removal notice from being docketed or placed in the appropriate case file.The district court assigned the case to Magistrate Judge Doyle Rowland. On April 19, 1999, he issued an opinion and order pursuant to the plaintiffs' motion for order of remand. Because Morgan's timely removal notice was not properly docketed, the magistrate judge was unaware of that notice and remanded the case to a Michigan state court on the ground that Morgan had not joined all other defendants in removing the case to federal court. He correctly observed that, pursuant to 28 U.S.C. 1446(a), all defendants must timely remove in order for removal to be valid in a multi-defendant action ("unanimity"). The magistrate judge's order did not inform defendants of their right to file objections to his remand with the district court. Just two days after the magistrate judge issued his remand order, the district court clerk sent a certified copy of that order to a Michigan state court.Believing that they had met the unanimity requirement for removal despite the magistrate judge's order, defendants notified him that Morgan had timely filed a notice of removal. They presented him with a copy of the original removal notice filed by Morgan on March 29, 1999. The copy was time-stamped by the clerk's office, indicating that it had indeed been submitted to the court clerk on March 29, 1999. There is no dispute that Morgan filed that removal notice.Defendants also took steps to effect a second removal. On April 28, 1999, Morgan filed a second notice of removal, in which he asked the district court to equitably toll the thirty-day time limit for removal because the court's clerical error prevented prior removal. The second notice of removal was joined by all other defendants and was filed under the same docket number, 5:99-CV-29 ("CV-29"), as the case disposed of by the magistrate judge in his April 19, 1999 remand order. On May 10, 1999, plaintiffs filed a second motion to remand.The district court assigned a new docket number, 4:99-CV-57 ("CV- 57"), to defendants' second removal notice and the case was again assigned to Magistrate Judge Rowland. In a May 24, 1999 opinion captioned for case CV-57, the magistrate judge nonetheless considered the merits of his original April 1999 remand order in case CV-29. In that opinion, he acknowledged that Morgan had timely filed a removal notice on March 29, 1999 and stated that, because that notice was never docketed or placed into the proper court file, he was unaware of that notice when he originally remanded the case. The opinion contained two relevant sections of analysis. The first section stated that, although his first opinion and order were incorrect, he could not review them because a) a final remand order is a nondispositive order that a magistrate judge has the authority to enter and b) final remand orders are not reviewable under 28 U.S.C. 1447(d). The second section stated that Morgan's second removal notice was untimely and denied equitable tolling.Then, the magistrate judge granted plaintiffs' second motion for remand and ordered the district court clerk to "withhold certification and mailing of this decision to the state court" for three days to allow the parties to appeal his decision. In a May 27, 1999 document captioned with the docket numbers from both the first and second removal actions, CV-29 and CV-57, defendants filed "Objections to or, in the Alternative, Appeal from Magistrate Judge's Decisions on Remand" with the district court.In response to the defendants' objections/appeal, the district court issued one opinion and two orders. See Vogel v. U.S. Office Prod. Co., 56 F. Supp.2d 859 (W.D. Mich. 1999). It acknowledged that Morgan filed a timely notice of removal on March 29, 1999 and that, but for "an error of the Court's Clerk," the case would have been properly removed. Id. at 861. The opinion evaluated the a) reviewability of the magistrate judge's original April 1999 remand order (CV-29) and b) defendants' ability to remove the case a second time (CV-57). It held that it could not review the magistrate judge's remand in case CV-29 because a magistrate judge possesses the authority to issue a final remand order. Id. at 863-64. Title 28 U.S.C. 1447(d) precludes review of a final remand order, and certification of a remand order to a state court divests a federal court of jurisdiction. See id. at 864. The district court entered an order dismissing the defendants' "Objections to or, in the Alternative, Appeal from the Magistrate Judge's Decisions on Remand" in case CV-29.In regard to defendants' second removal attempt, case CV-57, the district court held that defendants were entitled to equitable tolling of the thirty-day time limit for removal and, thus, recognized their second removal notice. In August 1999, it granted plaintiffs' request to certify an interlocutory appeal of its decision to toll the time limit for removal. After the district court certified the interlocutory appeal, the Judicial Panel on Multidistrict Litigation ordered that case number CV-57 be transferred to the U.S. District Court for the District of Columbia for consolidation of pretrial proceedings. Case CV-29 was never transferred.Plaintiffs unsuccessfully petitioned this court for leave to file an interlocutory appeal in CV-57. Denying plaintiffs' petition, we stated that Sixth Circuit jurisdiction over any appeal in CV-57 was doubtful because that case had already been transferred to the U.S. District Court for the District of Columbia. See In re Vogel & Cox, No. 99-0113 (6th Cir. September 24, 1999) (order denying leave to appeal an interlocutory order issued by the district court). But assuming that we did have jurisdiction, we declined to grant leave to appeal because an immediate appeal was not likely to advance the ultimate termination of litigation. See Id. After it received case CV-57, the U.S. District Court for the District of Columbia recertified plaintiffs' petition for interlocutory appeal to the D.C. Circuit. In October 2000, the D.C. Circuit denied the petition for interlocutory appeal because the appeal in this case, CV-29, was still pending before this court. See Vogel v. U.S. Office Products Co., et al., No. 00-7038, 2000 WL 1683498 (D.C. Cir. Oct. 26, 2000).II. Bankruptcy FilingOn March 5, 2001, USOP filed a voluntary bankruptcy petition in the United States Bankruptcy Court for the District of Delaware. The filing of a voluntary bankruptcy petition operates as a stay on the "continuation... of a judicial proceeding against the debtor." See 11 U.S.C. 362(a)(1). Therefore, this appeal is stayed as to USOP, but not as to any other defendant, pending action by the bankruptcy court that lifts the automatic stay or concludes the bankruptcy case. See id.; In re Arbitration Between Barbier & Shearson Lehman Hutton Inc., 943 F.2d 249, 250 (2d Cir.1991) (staying appeal because appellant filed bankruptcy petition). USOP should notify this court when the bankruptcy stay is lifted or the bankruptcy case has concluded.III. DiscussionDefendants appeal the district court decision that it could not review the magistrate judge's April 1999 remand order in case CV-29. To decide their appeal, this court must resolve a) whether a remand motion is a dispositive or nondispositive motion and b) given our conclusion that a remand motion is dispositive, whether district courts have jurisdiction to review magistrate-issued remand orders and whether we have jurisdiction to consider this appeal. Because the issues presented involve questions of law, our review is de novo. See, e.g., Trepel v. Roadway Express, Inc., 194 F.3d 708, 712 (6th Cir. 1999).a. Nondispositive v. Dispositive MotionsAs an initial matter, we must decide whether a remand motion is nondispositive and governed by 28 U.S.C. 636(b)(1)(A) and Fed. R. Civ. P. 72(a), or dispositive and governed by 28 U.S.C. 636 (b)(1)(B) and Fed. R. Civ. P. 72(b). Whether a remand motion is nondispositive or dispositive is an issue of first instance in this court. In relevant part, 28 U.S.C. 636(b)(1) reads: (A) a judge may designate a magistrate to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant, to suppress evidence in a criminal case, to dismiss or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate's order is clearly erroneous or contrary to law. (B) a judge may also designate a magistrate to conduct hearings, including evidentiary hearings, and to submit to a judge of the court proposed findings of fact and recommendations for the disposition, by a judge of the court, of any motion excepted in subparagraph (A), of applications for posttrial relief made by individuals convicted of criminal offenses and of prisoner petitions challenging conditions of confinement. (C) the magistrate shall file his proposed findings and recommendations under subparagraph (B) with the court and a copy shall forthwith be mailed to all parties.Within ten days after being served with a copy, any party may serve and file written objections to such proposed findings and recommendations as provided by rules of court. A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate. The judge may also receive further evidence or recommit the matter to the magistrate with instructions.Pretrial matters that a magistrate judge is precluded from "determining" pursuant to § 636(b)(1)(A) are called "dispositive" because they are "dispositive of a claim or defense of a party." Fed. R. Civ. P. 72. In determining whether a particular motion is dispositive, this court undertakes functional analysis of the motion's potential effect on litigation. The list of dispositive motions contained in § 636(b)(1)(A) is nonexhaustive, and unlisted motions that are functionally equivalent to those listed in § 636(b)(1)(A) are also dispositive. See Callier v. Gray, 167 F.3d 977, 981 (6th Cir. 1999) (holding that a motion for default judgment is dispositive because it is "substantially similar to several of the listed motions"); Massey v. City of Ferndale, 7 F.3d 506, 509-10 (6th Cir. 1993) (holding that a motion for Rule 37 sanctions is dispositive); Vitols v. Citizens Banking Co., 984 F.2d 168, 169-70 (6th Cir. 1993) (holding that a motion to certify a district court order for interlocutory appeal is dispositive); Bennett v. General Caster Serv., 976 F.2d 995, 997 (6th Cir. 1992) (holding that a motion for Rule 11 sanctions is dispositive); United States Fid. & Guar. Co. v. Thomas Solvent Co., 955 F.2d 1085 (6th Cir. 1992) (holding that because a motion to realign parties would either destroy or preserve diversity jurisdiction, motions to realign are dispositive); Woods v. Dahlberg, 894 F.2d 187, 187-88 (6th Cir. 1990) (holding that a motion to proceed in forma pauperis is dispositive because it is the functional equivalent of an involuntary dismissal).If a motion is dispositive, a magistrate judge may issue only proposed findings and recommended dispositions in response to that motion. See 28 U.S.C. 636(b)(1)(B). Only a district court judge can issue a dispositive order. Id. After being served with a copy of a magistrate judge's recommended disposition, a party has ten days within which to file objections with the district court. See 28 U.S.C. 636(b)(1)(C). A district court judge "shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." Id. Where a party is "informed by the magistrate that objections must be filed within ten days" and no objections are filed, further appeal is generally waived. United States v. Walters, 638 F.2d 947, 950 (6th Cir. 1981). But where a party files objections after ten days, a district court can still consider them. See, e.g., Patterson v. Mintzes, 717 F.2d 284, 286 (6th Cir. 1983).Only in cases where parties consent to a magistrate judge's exercise of plenary jurisdiction, may the magistrate judge issue effective rulings on all matters, including dispositive motions. See 28 U.S.C. 636(c)(1). But no consent was granted here. And, if a motion is nondispositive, a magistrate judge, without the consent of the parties, has the power to enter orders which do not dispose of the case. See Fed. R. Civ. P. 72. The district court can reconsider a magistrate judge's nondispositive order "where it has been shown that the magistrate judge's order is clearly erroneous or contrary to law." 28 U.S.C. 636(b)(1)(A). Appeals from a magistrate judge's nondispositive order must also be made within ten days. See Fed R. Civ. P. 72(a).While this court has not previously considered whether remand orders are dispositive, others have. Courts that have held that a remand motion is dispositive have based their decisions on the proposition that a remand motion has the same functional effect as dispositive motions enumerated in § 636(b)(1)(A). The only two circuit courts to directly address the issue in published opinions, the Third and Tenth Circuits, have held that a remand motion is dispositive, see First Union Mortgage Corp. v. Smith, 229 F.3d 992 (10th Cir. 2000); In re U.S. Healthcare, 159 F.3d 142 (3d Cir. 1998), and the Supreme Court has suggested that a remand motion is functionally indistinguishable from a dispositive motion listed in § 636(b)(1)(A). See Quackenbush v. Allstate Ins. Co.,Try vLex for FREE for 3 days
Access legal information from United States including:
Try vLex without any commitment for 3 days and see why you need it.
3
days of Free Access