Phoenix Container, L.P., and Yasar Samarah v. Ken Sokoloff

In the
United States Court of Appeals
For the Seventh Circuit
No. 00-1466
Phoenix Container, L.P.,
and Yasar Samarah,
Plaintiffs-Appellees,
v.
Ken Sokoloff, et al.,
Defendants.
Appeal of:
James Florio
Appeal from the United States District Court
for the Northern District of Illinois, Eastern
Division.
No. 99 C 6630--Robert W. Gettleman, Judge.
Argued November 30, 2000--Decided December 18,
2000
Before Flaum, Chief Judge, and Easterbrook
and Rovner, Circuit Judges.
Easterbrook, Circuit Judge. Exactly 30
days after being served with process in a
suit filed in state court, James Florio
filed a notice of removal, asserting that
complete diversity of citizenship among
the parties brought the case within
federal jurisdiction. See 28 U.S.C.
sec.sec. 1332, 1441(a). All defendants
joined Florio’s notice, an essential
step. See Hanrick v. Hanrick, 153 U.S.
192 (1894); Torrence v. Shedd, 144 U.S.
527 (1892). This created a potential
problem, however, because the other
defendants were no longer entitled to
remove the action. "The notice of removal
of a civil action or proceeding shall be
filed within thirty days after the
receipt by the defendant, through service
or otherwise, of a copy of the initial
pleading setting forth the claim for
relief upon which such action or

-- 1 of 5 --

proceeding is based". 28 U.S.C.
sec.1446(b). Several defendants had been
served with process before Florio, so
their entitlement to remove had expired
by the time Florio filed a notice of
removal. The district court held that,
unless every defendant is entitled to
remove, then no defendant is entitled to
remove. This application of the "first-
served defendant rule" led the judge to
remand the proceedings to state court. 83
F. Supp. 2d 928 (N.D. Ill. 2000).
Florio has filed this appeal to argue
that the "first-served defendant rule" is
incompatible with sec.1446(b). Florio
reads "receipt by the defendant" to mean
"receipt by the removing defendant"
rather than "receipt by any defendant",
for the latter dispenses with the
definite article. On Florio’s reading
only the removing defendant need meet the
time requirement, though all defendants
still must agree to the federal forum. He
also relies on the holding of Murphy
Brothers, Inc. v. Michetti Pipe
Stringing, Inc., 526 U.S. 344 (1999),
that "receipt . . . through service or
otherwise" means receipt through formal
service, and not otherwise. If receipt
"otherwise" sufficed, the Court
concluded, a defendant’s time to remove
could expire before he became a party.
Just so, Florio insists, with the first-
served defendant rule, which could--and
here did--extinguish a defendant’s right
to remove before he became a party.
After Quackenbush v. Allstate Insurance
Co., 517 U.S. 706, 714-15 (1996), appeal
(rather than mandamus) is the right way
to contest remand orders. See Benson v.
SI Handling Systems, Inc., 188 F.3d 780
(7th Cir. 1999). Nonetheless, "[a]n order
remanding a case to the State court from
which it was removed is not reviewable on
appeal or otherwise, except that an order
remanding a case to the State court from
which it was removed pursuant to section
1443 of this title shall be reviewable by
appeal or otherwise." 28 U.S.C.
sec.1447(d). Florio did not remove under
sec.1443, which covers civil rights
cases, so a straightforward reading of
sec.1447(d) forecloses his effort to get
appellate review. Yet just as the Court
refused in Murphy Brothers to read
sec.1446(b) literally, so it has declined
to read sec.1447(d) literally. A series
of cases beginning with Thermtron

-- 2 of 5 --

Products, Inc. v. Hermansdorfer, 423 U.S.
336 (1976), and culminating in Things
Remembered, Inc. v. Petrarca, 516 U.S.
124 (1995), had produced this conclusion:
sec.1447(d) must be read in pari materia
with sec.1447(c), so that only remands
based on grounds specified in sec.1447(c)
are immune from review under sec.1447(d).
As long as a district court’s remand is
based on a timely raised defect in
removal procedure or on lack of subject-
matter jurisdiction--the grounds for
remand recognized by sec.1447(c)--a court
of appeals lacks jurisdiction to
entertain an appeal of the remand order
under sec.1447(d).
516 U.S. at 127-28 (citation omitted). A
remand based on a conclusion that removal
was untimely is "based on a . . . defect
in removal procedure"; sec.1446 specifies
removal procedures, and timeliness is a
statutory condition of removal. Things
Remembered held that a remand order is
not reviewable by the court of appeals
when the remand is "on grounds of
untimely removal, precisely the type of
removal defect contemplated by
sec.1447(c)." 516 U.S. at 128 (footnote
omitted).
Section 1447(d), as construed in Things
Remembered, requires us to dismiss
Florio’s appeal. Here, just as in Things
Remembered, the district judge remanded a
proceeding on the statutory ground that
removal had been untimely. Florio
insists, however, that this case is
different because the district judge used
extra-statutory criteria to determine
timeliness. Instead of sticking with the
language of sec.1446(b), the district
judge relied on two additional rules: the
principle that removal is proper only if
all defendants join the notice, and the
supposed corollary (essential to the
first-served defendant rule) that one
defendant may join another’s notice only
if the joining defendant is eligible to
remove on its own. Neither the all-
defendants rule nor the first-served-
defendant corollary can be found in
sec.1446(b), which means, Florio
concludes, that the case has not been
remanded on a statutory ground, making
appellate review available.
This is a nice try--close enough to
require denial of appellees’ request for

-- 3 of 5 --

sanctions under Fed. R. App. P. 38--but
no cigar. Section 1446(b) is not self-
contained. No part of the judicial code
is. All statutes depend for their meaning
on external norms. Section 1446(b) uses
words such as "filed" and "days" and
"service" that can be understood only by
reference to other sources of law. What
it means to "file" a document recently
required decision by the Supreme Court.
See Artuz v. Bennett, 121 S. Ct. 361
(2000). Does "day" mean "calendar day" or
"business day"? What happens when the
court is closed (for the weekend or a
holiday) on the last day of the 30-day
period? What does "service" mean (the
subject of Murphy Brothers)? To say that
any resort to understandings and legal
propositions that can’t be found within
the four corners of sec.1446 precludes
application of sec.1447(d) would be to
make the latter statute useless.
Gravitt v. Southwestern Bell Telephone
Co., 430 U.S. 723 (1977), illustrates how
sec.1447(d) works in conjunction with
judicial glosses. Asserting diversity of
citizenship, defendants removed a suit to
federal court. Plaintiff filed a motion
to remand, contending that diversity was
not complete--and "complete diversity"
(no plaintiff may have the same
citizenship as any defendant) is the
reading Strawbridge v. Curtiss, 7 U.S. (3
Cranch) 267 (1806), gave to the
requirements of what is now 28 U.S.C.
sec.1332(a). Plaintiff’s argument had one
more wrinkle. To go by criteria such as
the corporate defendants’ states of
incorporation, which can be ascertained
from public records, the complete-
diversity requirement was satisfied.
Nonetheless, plaintiff asserted, the
federal court should disregard one
defendant’s actual state of incorporation
and principal place of business, because
in an earlier suit a lawyer for that
corporation had filed an affidavit
averring that the corporation was a
citizen of Texas, the same state as the
plaintiff. Applying a doctrine known as
judicial estoppel, the district judge
held that the affidavit bound the
corporation in a later suit, precluding
it from establishing its actual place of
incorporation and principal place of
business. Strawbridge’s requirement of
complete diversity plus the doctrine of
judicial estoppel led to a remand order.
The court of appeals deemed judicial

-- 4 of 5 --

estoppel unavailable and issued a writ of
mandamus. In re Southwestern Bell
Telephone Co., 535 F.2d 859 (5th Cir.
1976), 542 F.2d 297 (en banc). But the
Supreme Court unanimously reversed,
holding that sec.1447(d) barred appellate
review because the district court’s
bottom line was that the parties were not
of diverse citizenship, a statutory
ground of remand. Gravitt demonstrates
that a court of appeals must look at the
reason for remand rather than the
reasoning supporting that decision. See
also In re Amoco Petroleum Additives Co.,
964 F.2d 706, 711-13 (7th Cir. 1992).
Otherwise sec.1447(d) would amount to
little more than a caution against
reversing decisions that are not
erroneous. Unless it blocks inquiry into
the question whether the decision was
erroneous, sec.1447(d) serves no
function. Gravitt shows that a remand
made erroneous by improper application of
legal principles that influence
application of sec.1446 is nonetheless
conclusive.
For reasons mentioned in this opinion’s
second paragraph, the soundness of the
district judge’s decision is
questionable. But that was no less true
in Gravitt. In the end, this remand was
based on a conclusion that the notice of
removal was untimely, and such a decision
is not reviewable by a court of appeals.
Florio’s appeal is dismissed under
sec.1447(d).

-- 5 of 5 --