Bailey v. Minnesota Life Insurance Company

Filing 40

MEMORANDUM OPINION & ORDER: It is ORDERED the Defendant's 33 MOTION for Reconsideration of 31 Memorandum Opinion & Order and MOTION for Oral Argument are DENIED. It is FURTHER ORDERED that the Defendant's 38 MOTION for Extension of Time to File a Notice of Appeal is DENIED AS MOOT. Signed by Judge Jennifer B Coffman on May 18, 2009. (AWD) cc: COR,6CCA

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF KENTUCKY CENTRAL DIVISION LEX INGTON

CIV IL ACTION NO. 07-196-JBC RHODA BAILEY, V. M EM ORANDUM OPINION AND ORDER DEFENDANT. PLAINTIFF,

M INNESOTA LIFE INSURANCE COMPANY, ***********

This matter is before the court on the defendant' s motion f or reconsideration of t he court' s memorandum opinion and order entered on March 24, 2009; motion for oral argument [R. 33]; and motion to extend time for filing a notice of appeal [R. 39]. The court, having review ed the record and being otherw ise sufficiently advised, w ill deny the motions for reconsideration and oral argument and deny as moot the motion t o extend time. I. Background On May 27, 2008, the plaintiff moved to remand this action to Montgomery Circuit Court. In response to the plaint if f ' s motion, the defendant, for the first time in this lit igat ion, raised the issue of diversity jurisdiction, and, five days after the plaint if f ' s motion became ripe, moved for leave to amend its notice of removal. The court denied the defendant' s motion to amend the notice of removal and granted the plaint if f ' s motion to remand in a memorandum opinion and order entered on March 24, 2 0 0 9 , and the next day, the clerk of court mailed a certified copy of that order to the M ont gom ery Circuit Court. Then, on March 27, 2009, t he defendant moved for

reconsiderat ion. II. Analysis The court lacks jurisdiction to reconsider its prior orders in this matter because t he case has been remanded to state court. While the Sixth Circuit has issued

num erous opinions concerning w het her it has jurisdiction to review a district court' s order of remand on appeal, it has not definitively ruled on w het her a district court may reconsider its ow n remand order. How ev er, the Sixth Circuit has " st rongly suggested t hat § 1447(d) precludes a district court from review ing its ow n remand order by w ay of FED. R. CIV. P. 59." Gibson v. Amer. Mining Ins. Co., No. 08-118-ART, 2008 WL 4 8 5 8 3 9 6 , at * 1 (E.D.Ky. Nov. 7, 2008); see also 16 Moore' s Federal Practice, § 1 0 7 . 4 2 (Matthew Bender 3d ed.) (The language of § 1447(d) " has been universally const rued to preclude not only appellate review but also reconsideration by the district court . " ). Under 28 U.S.C. § 1447(d), " [ a] n order remanding a case t o the State court f rom w hic h it w as removed is not review able on appeal or otherw ise . . . ." This prov ision applies only t o cases remanded under 28 U.S.C. § 1447(c). Things

Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995) (" [ O] nly remands based on grounds specified in § 1447(c) are immune from review under § 1447(d)." ). Because t he court remanded the instant action for lack of subject-matter jurisdiction, w hich is list ed explicitly in § 1447(c), the court is divested of jurisdiction and cannot reconsider it s order. Ev en though § 1447(d) typically prevents federal courts from review ing remand 2

orders under § 1447(c), the substantive-decision exception permits such a review w hen the order is " based on a substantive decision on the merits of a collateral issue as opposed to just matters of jurisdiction." Anusbigian v. Trugreen/Chemlaw n, Inc., 7 2 F.3d 1253, 1256 (6th Cir. 1996) (quoting Regis Associates v. Rank Hotels (M anagem ent ) Ltd., 894 F.2d 193, 194-95 (6th Cir. 1990)); see also Waco v. United St at es Fidelity & Guar. Co., 293 U.S. 140, 143 (1934); Baldridge v. Kentucky-Ohio Transp. , Inc., 983 F.2d 1341, 1343-49 (6t h Cir. 1993). In the instant action, the court determined that ERISA did not completely preempt the plaintiff' s claims even t hough it did not use that exact language in its order of remand. 1 Because the court' s conclusion that ERISA has not complet ely preempted the plaintiff' s claims is " necessarily related to the question of jurisdiction," the substantive-decision exception does not apply, and the court lacks jurisdiction to reconsider its order. Anusbigian, 72 F. 3 d at 1256-57 (citing Baldridge, 983 F.2d at 1343-49). 2 Lik ew ise, the court lacks jurisdiction to review its order denying the defendant' s m ot ion for leave to amend the notice of removal. While § 1447(d) prevents the court f rom reconsidering its remand order, reconsideration of the order denying leave to am end the notice of removal is improper since the court no longer has jurisdiction over

In the remand order, the court held that " t his action does not ` arise under' ERISA . " R. 31 at 16. Because the remand order w as purely jurisdictional, it w ill have no preclusiv e effect on the state court' s consideration of the substantive preemption def ense. See Baldridge, 983 F.2d at 1346 (discussing Solley v. First National Bank of Commerce, 923 F.2d 406, 409 (5th Cir. 1991)). 3
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t he case. Once a federal court remands an action to st at e court, the federal court loses jurisdiction over all matters related to the action except for certain " c ollat eral m at t ers, such as costs, fees, and sanct ions. " 16 Moore' s Federal Practice at §

1 0 7 . 4 3 ; see also 16 Moore' s Federal Practice at § 107.41(3)(a)(iii) (citing Stallw ort h v . Greater Cleveland Reg' l Transit Auth., 105 F.3d 252, 254-257 (6th Cir. 1997)). A motion for leave to amend the notice of removal is not such a collateral matter. Thus, the court has no authority to reconsider its order denying the defendant' s motion t o amend. In addition, reconsideration of the motion for leave to amend the notice of rem ov al w ould be futile since the instant action already has been remanded to state court . Assuming, f or t he sake of argument, that the court granted the motion to reconsider and permitted the defendant to amend the notice of removal, the court still w ould lack the authority to reverse it s remand order and return the case to federal c o ur t . The defendant contends that the court' s denial of leave to amend the notice of rem ov al converts the remand order from one based on lack of subject-mat t er jurisdic t ion to one based on a procedural defect. In Corporate Management Advisors, Inc. v. Artjen Complexus, Inc., No. 08-14606, 2009 U.S. App. LEXIS 5134 (11th Cir. M ar. 11, 2009), t he Eleventh Circuit found that the matter actually w as remanded because of a procedural defect even though the district court stated that the remand w as based on a lack of subject-matter jurisdiction. The district court remanded the m at t er, w hic h had been removed based on diversity jurisdiction, because the defendant f ailed to allege the citizenship of the parties in the notice of removal. The Eleventh 4

Circuit held that " t he district court erred by remanding this case on jurisdictional grounds w hen faced solely w it h a procedural defect in t he removal process" and direct ed the district court to grant the defendant leave to amend the notice of removal. Id. at * 8 . Unlike Corporate Management Advisors, Inc., the instant action w as not rem anded based on a procedural defect. Minnesota Life removed this matter on the basis of federal-question jurisdiction, not diversity jurisdiction. In fact, the defendant did not raise the possibility of diversity jurisdiction until after the parties concluded discov ery on the issue of ERISA coverage and the plaintiff' s lengthy motion to remand w as fully briefed. Minnesota Life' s failure to include diversity jurisdiction in the notice of removal and the court' s subsequent remand for lack of federal-question jurisdiction does not constitute a procedural defect. The court merely refused to allow the

def endant to change its ground for removal one year after the action w as removed f rom state court. Last ly , even if t he court had jurisdiction to review its previous orders in this m at t er, reconsideration w ould be inappropriate. A motion to reconsider is treated as a motion to alter or amend judgment under Rule 59(e) of the Federal Rules of Civil Procedure. Inge v. Rock Fin. Corp., 281 F.3d 613, 617 (6th Cir. 2002). A Rule 59(e) m ot ion may be granted w here there is a clear error of law , new ly discovered evidence, an intervening change of law , or to prevent manifest injustice. GenCorp, Inc. v. Am. Int ' l Underw rit ers, 178 F.3d 804, 834 (6th Cir. 1999). Reargument is not an

appropriat e purpose for a motion to reconsider. See Davenport v. Corrections Corp. 5

of America, No. 05-CV-86-HRW, 2005 WL 2456241, at * 1 (E.D.Ky. Oct. 4, 2005). In its motion for reconsideration, the defendant fails to assert any new ly discov ered evidence, intervening change in controlling law , or manifest injustice. W hile the defendant contends that the court erred, its motion for reconsideration " is not hing but a request for the court to revisit the same issues previously reject ed. " Unit ed States v. Titterington, No. CR. 2-20165, 2003 WL 23924932, at * 2 (W.D. Tenn. May 22, 2003) (quoting United States v. West, No. 01-40122-01, 2002 WL 1 3 3 4 8 7 0 , at * 1 (D. Kan. May 9, 2002)). Because the defendant is merely attempting t o reargue the original motions, the motion for reconsideration must be denied. Helton v . ACS Group, 964 F.Supp. 1175, 1182 (E.D. Tenn. 1997) (" m ot ions to reconsider are not at the disposal of parties w ho w ant to " rehash" old arguments" ). The court construed the defendant' s motion f or reconsideration as a motion to alt er or amend under Rule 59 of the Federal Rules of Civil Procedure. Thus, according t o the Federal Rules of Appellate Procedure, the parties have thirty days from the date of entry of this order to file a notice of appeal. FED. R. APP. P. 4(a)(1)(A) and

4 (a)(4 )(A )(iv ). Since the Federal Rules automatically extend the time for filing notices of appeal w hen a party makes a Rule 59 motion, the defendant' s motion to extend t im e for filing a notice of appeal [R. 39] is unnecessary. III. Conclusion Accordingly, IT IS ORDERED that the defendant' s motion for reconsideration of the court' s m em orandum opinion and order entered on March 24, 2009, and motion for oral 6

argum ent [R. 33] are DENIED. IT IS FURTHER ORDERED that the defendant' s motion to extend time for filing not ice of appeal [R. 39] is DENIED AS MOOT.

Signed on May 18, 2009

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