FLORES v. PREDCO SERVICES CORP et al
Filing
26
OPINION. Signed by Judge Renee Marie Bumb on 7/29/2011. (TH, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
LUIS BELTRAN FLORES,
Plaintiff,
Civil No. 10-1320 RMB/AMD
v.
PREDCO SERVICES CORP., et al.,
OPINION
Defendants.
Appearances:
James A. Barry, Esquire
Dubois, Sheehan, Hamilton, Levin & Weissman, LLC
511 Cooper Street
Camden, New Jersey 08102
Attorney for Plaintiff
Kevin G. Dronson, Esquire
Kent & McBride, PC
1040 Kings Highway North, Suite 403
Cherry Hill, New 08034 Jersey
Attorney for Defendants
BUMB, United States District Judge:
I.
Introduction
Defendants, DVCC Services Corporation (“DVCC”), formerly
known as--and Defendants contend improperly pled as--Predco
Services Corporation,1 and McElroy Machine & Manufacturing
Company, Inc. (“MMMC”), improperly pled as McElroy Machine
1
The Court thus adopts the entity name DVCC.
1
Manufacturing Company, ask the Court to reconsider its Opinion
and Order denying Defendants’ Motion to Dismiss.2
For the
following reasons, the Court denies the motion.
II.
Background
The Court laid out the relevant factual history in its
previous opinion, and need not do so at length here.
relevant facts are not in dispute.
The
Plaintiff was employed as a
seaman on a ship engaged in commercial shrimping on the Gulf of
Mexico.
On or about January 26, 2006, Plaintiff’s dominant,
right arm was torn off above the elbow while the ship was in
Texas waters.
On January 3, 2007, Plaintiff filed suit in Texas
state court3 against several defendants who are no longer part of
this litigation, including McElroy Catchot Winch Company
(“McElroy Catchot”).4
Plaintiff later amended the complaint to
add DVCC and MMMC, the parties now seeking relief from this
Court.
Plaintiff stated claims against DVCC and MMMC for
2
Plaintiff filed no opposition to Defendants’ request for
reconsideration. The Court will not speculate as to why
Plaintiff failed to do so. The Court simply concludes that
Plaintiff’s failure in this respect, when weighed against his
otherwise diligent litigation before this Court and the Texas
court, does not cause the Court to reconsider applying the
doctrine of equitable tolling.
3
Because Plaintiff, a seaman, brought suit under the Jones
Act against his employer, Plaintiff was required to file in the
district of his employer’s residence or principal office, here,
Texas. See 46 U.S.C. § 30104(b).
4
Plaintiff voluntarily dismissed his claims against McElroy
Catchot at oral argument on Defendants’ Motion to Dismiss.
2
products liability, negligence, misrepresentation and gross
negligence.
McElroy Catchot, DVCC and MMMC all filed special appearances
and motions to dismiss before the Texas state court, arguing that
the court lacked personal jurisdiction over these entities.
On
May 14, 2008, the state court held a hearing on the motions to
dismiss.
This Court has not been provided with a transcript of
this hearing.
On August 7, 2008, without a written opinion, the
state court denied the motions to dismiss filed by MMMC and DVCC.
On August 24, 2008, again without a written opinion, the state
court granted McElroy Catchot’s motion to dismiss.5
Defendants MMMC and DVCC filed an interlocutory appeal from
the state court’s order on August 29, 2008.
Approximately one
and one-half years after the state court denied Defendants’
motions to dismiss, and after the parties had already engaged in
discovery, the Texas Appeals Court reversed the trial court,
finding that the Texas courts lacked jurisdiction over MMMC and
DVCC.
See McElroy Mach. & Mfg. Co. v. Flores, 2010 Tex. App.
5
Defendants raise the fact that on November 8, 2008, the
state court denied a motion to dismiss based on lack of personal
jurisdiction filed by the entity Coastal Marine, a defendant not
before this Court. The Texas Appeals Court, however, vacated the
trial court’s ruling, and on remand another trial court concluded
that it lacked personal jurisdiction over Coastal Marine. As the
Court found in its previous opinion, a reasonable inference can
be drawn that the state court arrived at different conclusions
for its jurisdiction over different defendants because the court
conducted an analysis as to each, albeit erroneously.
3
LEXIS 970 (Tex. App. Feb. 11, 2010).
Plaintiff filed a motion
for rehearing on February 25, 2010, which the Court of Appeals
denied on March 18, 2010.
On March 12, 2010, after the appeals court had issued its
opinion, but before deciding the motion for rehearing, Plaintiff
filed his Complaint before this Court.
See Dkt. Ent. 1.6
Defendants responded with a motion to dismiss, arguing that the
limitations period barred Plaintiff’s claims.
Defendants now ask
the Court to reconsider its ruling denying this motion.7
6
Plaintiff’s Complaint is no model of clarity. Indeed, he
appears to have copied large swaths from his Texas complaint and
pasted them into the Complaint filed here. Compare Def. Motion
to Dismiss Br. Ex. C with Dkt. Ent. 1.
In the instant Complaint, Plaintiff asserted several bases
for this Court’s jurisdiction. Plaintiff’s assertion that
diversity jurisdiction exists “because Plaintiff and Defendants
are citizens of different states and the amount in controversy
exceeds $75,000, including interests and costs” is not disputed.
Plaintiff asserts several tort claims against Defendants,
including claims for products liability, negligence, gross
negligence and misrepresentation. Defendants correctly classify
these claims as “maritime tort claims,” arguing for application
of the three-year limitations period stated in 46 U.S.C. § 30106.
Plaintiff’s Complaint also asserts jurisdiction pursuant to
the Jones Act, specifically 46 U.S.C. § 30104, formerly cited as
46 U.S.C. § 688. Plaintiff’s Complaint, however, no longer
states a claim against his employer. Nonetheless, the same
statute of limitations period applies to both Jones Act claims
and maritime tort claims pursuant to 46 U.S.C. § 30106. See,
e.g., Jones v. Tidewater Marine, LLC, 262 Fed. Appx. 646, 648
(5th Cir. 2008) (citing 46 U.S.C. § 30106)(“The pertinent
statutes of limitations provide that claims under the Jones Act
and general maritime law are time-barred unless commenced ‘within
three years from the day the cause of action [arose].’”).
7
After this Court denied Defendants’ motion to dismiss,
Plaintiff, who is a claimant in a bankruptcy action before the
Southern District of Texas, filed a motion with the United States
4
III. Standard
Motions for reconsideration are not expressly recognized in
the Federal Rules of Civil Procedure.
United States v.
Compaction Sys. Corp., 88 F.Supp.2d 339, 345 (D.N.J. 1999).
Generally, a motion for reconsideration is treated as a motion to
alter or amend judgment under Fed.R.Civ.P. 59(e), or as a motion
for relief from judgment or order under Fed.R.Civ.P. 60(b).
Id.
In the District of New Jersey, Local Civil Rule 7.1(i) governs
motions for reconsideration.
Agostino v. Quest Diagnostics,
Inc., 2010 U.S. Dist. LEXIS 135310, at *14-15 (D.N.J. Dec. 22,
2010)(citing Bryan v. Shah, 351 F.Supp.2d 295, 297 (D.N.J.2005)).
Local Rule 7.1(i) creates a procedure by which a court may
reconsider its decision upon a showing that dispositive factual
matters or controlling decisions of law were overlooked by the
court in reaching its prior decision.”
Id. (citing Bryan, 351
F.Supp.2d at 297).
The “purpose of a motion for reconsideration is to correct
manifest errors of law or fact or to present newly discovered
evidence.”
Harsco Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d Cir.
1985) (internal citation omitted).
granted only sparingly.
Reconsideration is to be
United States v. Jones, 158 F.R.D. 309,
Judicial Panel on Multidistrict Litigation to consolidate these
actions and transfer the matter to the Southern District of
Texas. See Dkt. Ent. 24. The Court was notified that the Panel
denied Plaintiff’s motion on June 1, 2011. See id.
5
314 (D.N.J. 1994).
Such motions “may not be used to relitigate
old matters, or to raise arguments or present evidence that could
have been raised prior to the entry of judgment.”
NL Indus.,
Inc. v. Commercial Union Ins. Co., 935 F. Supp. 513, 515-16
(D.N.J. 1996) (internal citation omitted).
Third Circuit
jurisprudence dictates that a Rule 7.1(i) motion may be granted
only if:
(1) there has been an intervening change in the
controlling law; (2) evidence not available when the Court issued
the subject order has become available; or (3) it is necessary to
correct a clear error of law or fact to prevent manifest
injustice.
Max’s Seafood Café v. Quinteros, 176 F.3d 669, 677
(3d Cir. 1999) (citing North River Ins. Co. v. CIGNA Reinsurance
Co., 52 F.3d 1194, 1218 (3d Cir. 1995)); Agostino, 2010 U.S.
Dist. LEXIS 135310, at *15-16.
IV.
Analysis
Defendants argue that the Court should reconsider applying
the doctrine of equitable tolling to Plaintiff’s claims for three
reasons:
(1) the Court overlooked case law holding that
equitable tolling should not apply where a plaintiff originally
filed suit in a court that lacked competent jurisdiction; (2) the
Court erred in concluding that the Texas trial court’s decision
that it had personal jurisdiction over Defendants provided a
reasonable basis for Plaintiff’s belief that he had filed suit in
a court of competent jurisdiction; and (3) the Court overlooked
6
Plaintiff’s failure to take adequate steps to protect his rights
once the operative facts relevant to the personal jurisdiction
issue were known to Plaintiff.
The Court considers each
argument.
A.
“A State Court of Competent Jurisdiction”
The heart of this dispute arises from the language used in
Burnett v. New York Central Railroad Company, where the Supreme
Court concluded that a plaintiff’s initial filing “in a state
court of competent jurisdiction,” that was later dismissed
because of improper venue, operated to toll the Federal
Employers’ Liability Act (“FELA”) limitations period.
424, 428 (1965).
380 U.S.
Defendants argue vigorously that Plaintiff
failed to file in a court of “competent jurisdiction” because the
Texas Appeals Court held that Texas courts lacked personal
jurisdiction over Defendants.8
Thus, Plaintiff’s timely filing
in Texas state court cannot serve to toll the three-year
limitations period applicable here.
Defendants further argue
that the Court overlooked case law supporting this position,
although conceding that “there is an inconsistency in application
of the principle of equitable tolling in the United States
District Courts....”
Def. Br. at 3.
8
The Court disagrees that it
Defendants make no argument that the limitations period
applicable here is jurisdictional or that the doctrine of
equitable tolling is otherwise unavailable to Plaintiff. Rather,
Defendants argue that the facts presented do not warrant
application of the doctrine.
7
overlooked controlling authority; the cases identified by
Defendants are distinguishable from, and even contrary to,
Defendants’ position.
Defendants rely on the Fifth Circuit’s decision in United
States for Use and Benefit of Harvey Gulf International Marine,
Inc. v. Maryland Casualty Co., where the Fifth Circuit held that
an otherwise timely filed complaint in state court did not toll a
limitations period where federal courts enjoyed exclusive
jurisdiction over the claim asserted.
Cir. 1978).
573 F.2d 245, 247 (5th
In Harvey Gulf, the plaintiff asserted a Miller Act
claim, pursuant to 40 U.S.C. § 3133, formerly 40 U.S.C. § 270b,
which has a one-year statute of limitations.
see 40 U.S.C. § 3133(b)(4).
573 F.2d at 247;
The Fifth Circuit noted, however,
that “[t]hose circuits that have considered the question have
uniformly regarded the one-year filing requirement as a
jurisdictional limitation on the substantive rights conferred by
the Miller Act.”
Id. (citing United States for the Use of
Celanese Coatings Co. v. Gullard, 504 F.2d 466 (9th Cir. 1974);
United States for the Use and Benefit of General Dynamics Corp.
v. Home Indemnity Co., 489 F.2d 1004 (7th Cir. 1973); United
States for the Use and Benefit of Statham Instruments, Inc. v.
Western Casualty & Surety Co., 359 F.2d 521 (6th Cir. 1966);
United States for the Use of Soda v. Montgomery, 253 F.2d 509 (3d
Cir. 1958)).
Limitations periods that are considered
8
jurisdictional are not subject to tolling principles.
See Miller
v. N.J. State Dept. of Corrs., 145 F.3d 616, 617-18 (3d Cir.
1998); see also Holland v. Florida, 130 S.Ct. 2549, 2560
(2010)(quoting Irwin v. Dep’t of Veterans Affairs, 498 U.S. 89,
95-96 (1990)) (“a nonjurisdictional federal statute of
limitations is normally subject to a ‘rebuttable presumption’ in
favor ‘of equitable tolling.’”).
Thus, while the Fifth Circuit surmised in dicta that not
applying the doctrine of equitable tolling was “consonant with
the thesis that, because the right is federal in nature, the
filing of suit in a non-federal jurisdiction does not toll the
statute,” the Circuit Court was not presented with the question
presented here.
Harvey Gulf, 573 F.2d at 247.
Here, pursuant to
the savings-to-suitors clause, the Texas state courts had subject
matter jurisdiction over Plaintiff’s maritime tort claims.
See
28 U.S.C. § 1333; Offshore Logistics, Inc. v. Tallentire, 477
U.S. 207, 221-223 (1986) (“...the ‘saving to suitors’ clause
allows state courts to entertain in personam maritime causes of
action, but in such cases the extent to which state law may be
used to remedy maritime injuries is constrained by a so-called
‘reverse-Erie’ doctrine which requires that the substantive
remedies afforded by the States conform to governing federal
maritime standards.”).
This case is unlike Harvey Gulf, where
the plaintiff filed a complaint before a state court that lacked
9
subject matter jurisdiction.
The Court simply does not find
Harvey Gulf helpful in resolving the issue presented here:
whether tolling should apply where a state trial court held that
it was a court of competent jurisdiction and an appeals court
later disagreed.
Defendants also urge the Court to consider precedent in the
Eleventh Circuit.
The Court finds these cases distinguishable
from, and even helpful to, Plaintiff’s case.
In Booth v. Carnival Corporation, the Eleventh Circuit
affirmed the district court’s holding “that the limitation period
was subject to equitable tolling during the pendency of the
plaintiff’s parallel suit in a state court of competent
jurisdiction.”
522 F.3d 1148, 1149 (11th Cir. 2008).
In Booth,
the plaintiff estate filed a wrongful death action in state court
before the contractual limitation period on the decedent’s cruise
ticket expired.
Id.
The plaintiff also filed an identical
action in federal district court after the limitations period
expired, which the district court administratively terminated
pending the outcome in state court.
Id. at 1149-50.
Carnival
moved to dismiss in state court, arguing application of a federal
forum selection clause, but the trial court held that Carnival
had waived the venue issue.
Id. at 1150.
The appellate court
reversed, dismissing the state court action and causing the
federal suit to be reopened.
Id.
10
The district court then
rejected Carnival’s argument for dismissal based on the
expiration of the contractual limitations period.
Id.
Upon
review, the Eleventh Circuit affirmed “[b]ecause the state court
possessed subject matter jurisdiction over Booth’s claim, and
because the state court dismissed the claim merely on grounds of
improper venue,” further noting that “Booth’s filing and diligent
prosecution of his state-court suit suffices to equitably toll
the contractual limitation period in his federal suit.”
Id.
Indeed, although Defendants argue for a different outcome,
the facts presented in Booth are closely analogous to those
presented here.
In both cases, the plaintiffs filed timely suits
in state court.
And in both cases, the trial court concluded
that it was a “court of competent jurisdiction,” only to be
reversed on appeal.
Defendants would argue, of course, that the
key distinction between the cases is that the plaintiff in Booth
filed a protective suit in federal court, something Plaintiff did
not do here.
But the Court is reluctant to hold that a
plaintiff, who is diligently litigating his case with the
imprimatur of the trial court, should be required to file a
parallel, protective suit in federal court, subject to
administrative termination, just in case an appellate court
should reverse the trial court’s finding of jurisdiction.9
9
And
The Court is mindful that the Eleventh Circuit noted that
the plaintiff in Booth filed a protective federal suit four
months after Carnival raised the improper venue objection,
11
to the extent that Defendants seek to distinguish Booth as
involving a dismissal based on improper venue, as opposed to
dismissal based on lack of personal jurisdiction, the Court does
not find this distinction dispositive of the tolling issue.
Rather, like this Court, the Eleventh Circuit considered that
“Booth initially timely filed suit in a state court of competent
jurisdiction.”
Id. at 1152 (emphasis added).
And Plaintiff
here, like his counterpart in Booth, “in no way slept on his
claims.”
Id.
Like the plaintiff in Booth, who presumably moved to re-open
his federal action upon the dismissal of the state court action,
Plaintiff filed suit in this District within a matter of days
after his state court dismissal.
Defendants were well aware of
Plaintiff’s claims within the applicable limitations period.
id.
See
Thus, “[t]he underlying policy of repose, reflected in
the...limitation period, and designed to assure fairness to
[Defendants], is not violated by equitable tolling in this case.
To the contrary, the interests of justice are best served here,
as in Burnett, by allowing the parties’ to resolve [Plaintiff’s]
claims on the merits.”
Id.
Upon careful review of the unique
history of this case, this Court reaches the same conclusion.
again, something Plaintiff did not do here. See Booth, 522 F.3d
at 1153. But given that the selection clause in Booth designated
a federal forum, dismissal seems to have been far more certain in
that case than this one, whose ultimate disposition required an
analysis of Defendants’ contacts with the forum state.
12
Nothing in Hairston v. Travelers Cas. & Sur. Co., 232 F.3d
1348 (11th Cir. 2000), or Jackson v. Astrue, 506 F.3d 1349 (11th
Cir. 2007), cases decided by the Eleventh Circuit before Booth,
causes this Court to reach a different conclusion.
Like in
Harvey Gulf, the court in Hairston held that tolling did not
apply where the plaintiff’s timely filed state action was
dismissed because federal courts held exclusive jurisdiction over
claims brought pursuant to National Flood Insurance Program.
See
232 F.3d at 1353.
Similarly, in Jackson, the plaintiff sought to challenge the
denial of her application for social security by filing a pro se
complaint in state court.
506 F.3d at 1352.
The state court
dismissed for lack of subject matter jurisdiction.
Id.
By the
time the plaintiff had re-filed in federal court, the limitations
period had expired.
The Eleventh Circuit affirmed the District
Court’s grant of a motion to dismiss the complaint as untimely,
finding no “extraordinary circumstances” to justify tolling.
at 1358.
Id.
Key to the Circuit’s decision was not only that the
plaintiff could show no affirmative misconduct on the part of the
defendant Commissioner, but that plaintiff “was clearly notified
that she was obligated to commence suit in federal district
court.
And to the extent she filed suit in a state court, that
court was without jurisdiction to entertain her claim.”
Id.
Here, Plaintiff was not obligated to file in federal court.
13
He filed in Texas because his employer resided there, see 46
U.S.C. § 30104(b), and later joined other parties, including
Defendants. But given the Texas trial court’s finding that
jurisdiction was proper, and unlike the exclusive jurisdiction
cases discussed above, Plaintiff here received no clear
indication that he was litigating in the wrong court.
Indeed,
akin to the Booth plaintiff, Plaintiff here obtained a court
ruling confirming his belief that he was before a court of
competent jurisdiction.
Defendants also identify Schachter v. Curnard Line Limited,
as supporting their position.
Dec. 31, 2009).
2009 U.S. Lexis 122017 (S.D.Fl.
There the plaintiff filed suit in state court
prior to expiration of the applicable limitations period.
*3.
Id. at
The state court dismissed, citing the forum selection clause
on the plaintiff’s passenger ticket.
Id.
The plaintiff then
“sat on his rights for eight months following the dismissal of
his suit in state court.”
Id. at *7.
This fact led the Court to
conclude that “[p]laintiff has not pursued his rights with the
proper diligence exhibited by the plaintiffs in Booth and
Burnett, and the policy of repose would be undermined were
[p]laintiff allowed to revive his claim....”
Id.
Here, in stark
contrast, Plaintiff filed suit within days of his state court
dismissal.
Moreover, Defendants were not only well aware of
Plaintiff’s claims, they were actively litigating the case within
14
the limitations period.
Finally, Defendants rely on Schor v. Hope, Civ. No. 91-0443,
1992 U.S. Dist. LEXIS 1083 (E.D. Pa. Feb. 4, 1992), as supporting
dismissal.
There the plaintiff filed a timely suit in the
District of New Jersey, which the Court dismissed for lack of
personal jurisdiction.
Id. at *1.
The plaintiff then filed an
action in the Eastern District of Pennsylvania after the
limitations period had expired.
Id.
at *1-2.
As this Court
recognized in its dismissal opinion, the Schor Court rejected the
plaintiff’s tolling argument, noting important distinctions
between a dismissal based on improper venue and that for lack of
personal jurisdiction:
Schor’s filing in New Jersey was not adequate to lead to a
final judgment without issuance of new initial process.
Dismissal for lack of personal jurisdiction is not the same
as dismissal for improper venue. Schor argues that
considerations of justice can outweigh the policies behind a
firm statute of limitations, and that this is especially
true where plaintiff “brings his action within the statutory
period in a court which due to a procedural technicality
lacks power to hear the claim.” Pl. Sur-reply Brief at 4.
The court is not convinced that lack of personal
jurisdiction over a party is merely a “procedural
technicality.” The concept of personal jurisdiction is a
fundamental part of due process which Rohner Ryan has not
waived.
Id. at *6-7.
However, the Schor Court also relied on policy
considerations specifically relevant to federal securities law,
including that “[t]he legislative history in [the Securities
Exchange Act of] 1934 makes it pellucid that Congress included
15
statutes of repose because of fear that lingering liabilities
would disrupt normal business and facilitate false claims.
It
was understood that the three-year rule was to be absolute.”
Id.
at *7 (quoting In re Data Access Sys. Secs. Litig., 843 F.2d
1537, 1546 (3d Cir. 1988)).
The Schor Court further acknowledged
that “the Supreme Court clearly rejected the application of the
doctrine of equitable tolling to § 10(b) claims.”
Id. at *8
(citing Lampf, Pleva, Lipkind, et al. v. Gilbertson, 501 U.S.
350, 363 (1991)).
Similar policy concerns do not bar application of equitable
tolling here.
Rather, as the Third Circuit concluded in Island
Insteel Systems, Inc. v. Waters, the policy considerations
relevant here favor tolling.
296 F.3d 200, 217 (3d Cir. 2002).
Applying Virgin Islands law, the Circuit Court held that the
limitations period for a second action, filed after a dismissal
on personal jurisdiction grounds, may be tolled when:
(1) the first action gave the defendant timely notice of
plaintiff's claim; (2) the lapse of time between the first
and second actions will not prejudice the defendant; and (3)
the plaintiff prosecuted the first action in good faith and
diligently filed the second action.
Id. at 204-05.
The Court found that this test “avoids the
unfairness that would occur if a plaintiff who diligently and
mistakenly prosecuted his claim in a court that lacked personal
jurisdiction were barred under the statute of limitations from
promptly refiling in a proper jurisdiction.”
16
Id. at 217.
This
Court sees no reason why this same test should not apply to
maritime tort claims.
Plaintiff’s original action gave
Defendants timely notice of the claims asserted.
Defendants have
not argued, and the Court does not find, that the lapse of time
between the first and second actions will prejudice Defendants.
And as the Court previously held, the record does not support any
finding that Plaintiff prosecuted his first action in bad faith
or lacked diligence in pursuing his claims in this Court.
Thus, to the extent Defendants argue that due process
considerations, arising from the Texas court’s lack of personal
jurisdiction over Defendants, should prevent application of the
tolling doctrine, the Court is not persuaded.
Defendants sought,
and won, their remedy on this issue in Texas.
The question
before this Court is whether the circumstances Plaintiff
confronted were sufficiently inequitable to mandate tolling the
limitations period.
The Court concludes that, given the unique
procedural history here, Plaintiff timely asserted his claims
mistakenly in the wrong forum.
See Hedges v. United States, 404
F.3d 744, 751 (3d Cir. 2005)
B.
Timely Asserted in the Wrong Forum
Defendants fault the Court for failing to conduct a legal
and factual analysis, independent of that conducted by the Texas
trial court, to determine whether there was a legally recognized
basis for jurisdiction over Defendants in Texas.
17
Def. Br. at 4-
5.
Defendants contend that had the Court undergone this
exercise, the Court would inevitably have concluded that
Plaintiff’s initial filing in state court was unreasonable.
Id.
The Court simply does not agree that the issue presented here
requires this Court to conduct essentially a de novo review of a
state court’s decision, particularly where the state appellate
court has already performed this function.10
10
Even if the Court were to usurp the Texas Appeals Court’s
role, and consider the “reasonableness” of the state court’s
decision, such a review would not be possible on this record.
The parties produced no transcript from the trial court’s hearing
on the personal jurisdiction issue. Nor did the trial court
issue an opinion articulating its reasons for finding Defendants
amenable to suit in Texas.
Moreover, this Court acknowledges the long line of cases
establishing that federal district courts lack jurisdiction over
actions essentially seeking review of state court judgments.
See, e.g., Great Western Mining & Mineral Co. v. Fox Rothschild
LLP, 615 F.3d 159, 165 (3d Cir. 2010)(citing Rooker v. Fidelity
Trust Co., 263 U.S. 413 (1923); District of Columbia Court of
Appeals v. Feldman, 460 U.S. 462 (1983)) (noting that the RookerFeldman doctrine “established the principle that federal district
courts lack jurisdiction over suits that are essentially appeals
from state-court judgments”). The Court finds this limiting
principle somewhat applicable here, to the extent that Defendants
ask this Court to consider the reasonableness of the Texas trial
court’s holding, rather than the conduct of the litigants
themselves.
Thus, the Court is not persuaded by Defendants’ argument
that “there is simply no record which would allow this court to
conclude that the Texas trial court’s decision, was in fact based
on the appropriate standard.” Def. Br. at 5. Nor is the Court
persuaded by the fact that the trial court reached different
conclusions as to whether it had personal jurisdiction over
different defendants, even though Defendants contend that such a
decision was based on identical facts. Id. Defendants pursued,
and won, their remedy in the Texas Appeals Court. The only
question here is whether Plaintiff carried his burden of
establishing that tolling is appropriate. The Court concludes
that he has.
18
Rather, when determining whether a particular set of facts
warrant application of the equitable tolling doctrine, courts
consider the conduct of the parties:
Equitable tolling applies when a plaintiff has “been
prevented from filing in a timely manner due to sufficiently
inequitable circumstances.” Seitzinger v. Reading Hosp. &
Med. Ctr., 165 F.3d 236, 240 (3d Cir. 1999).
This occurs
“(1) where the defendant has actively misled the plaintiff
respecting the plaintiff's cause of action; (2) where the
plaintiff in some extraordinary way has been prevented from
asserting his or her rights; or (3) where the plaintiff has
timely asserted his or her rights mistakenly in the wrong
forum.” See [Robinson v. Dalton, 107 F.3d 1018, 1022 (3d
Cir. 1997)] (applying this test in a Title VII action
against the Government). The plaintiff, however, must
“exercise due diligence in preserving his claim.” Irwin,
498 U.S. at 96.
Hedges, 404 F.3d at 751 (footnote omitted).
The Court concluded
that Plaintiff met the third prong of this test.
The Court
further concluded that Plaintiff exercised due diligence by
filing his action in this Court within days of the state court
dismissal.
In contrast to Defendants’ argument concerning the
reasonableness of the trial court’s decision, Defendants’
argument that Plaintiff was on clear notice that he faced a
personal jurisdiction problem is more troubling.
Defendants
rightly point out that, prior to the expiration of the
limitations period, Plaintiff was on notice of Defendants’
position that their contacts with Texas were insufficient to
establish personal jurisdiction.
Defendants argue, more
specifically, however, that Plaintiff knew that Defendants’
19
“contact with the State of Texas was limited to the sale of deck
machinery to one Texas distributor.
There was absolutely no
allegation made by plaintiff, and no evidence to suggest, that
the products sold to this one distributor were involved in
plaintiff’s accident.”
Def. Br. at 7.
Defendants further argue
that “plaintiff did not at any time present any legal authority
which would support a finding of general jurisdiction...where a
party’s contact with the forum state represented less than one
percent of that corporation’s sales.”
Id.
But as the Court noted in its dismissal opinion, it is
simply difficult to conclude that Plaintiff acted unreasonably,
or otherwise lacked any legal basis for filing in Texas, where a
Texas court concluded that it did have jurisdiction over
Plaintiff’s claim.11
Although the Appeals Court eventually
reversed, only then can Plaintiff be said to be on clear notice
that he mistakenly filed in the wrong forum.12
Certainly, given
11
Defendants also cite Plaintiff’s position that the Court
should disregard in personam jurisdiction when considering
maritime claims as evidence of his unreasonableness. As the
Court made plain at oral argument on this issue, the Court
considers Plaintiff’s argument totally lacking merit. The Court
is also not persuaded that Plaintiff’s untenable position affects
the Court’s disposition on tolling.
12
Defendants also argue that Plaintiff must have been on
notice that his claim was subject to dismissal when Defendants
filed their Notice of Appeal in August 2008. Had Plaintiff done
so, his claim would have been timely. Certainly, as this Court
has held, filing a protective suit would have been prudent. But
the Court does not find that Plaintiff acted unreasonably by not
filing a separate action, given that at least one court, albeit
20
that the Texas court agreed that jurisdiction did exist over
Defendants, Plaintiff had less notice that he was in the wrong
forum than did the plaintiff in Burnett, “who filed in Ohio
despite the state’s venue provisions, which established that
venue could not properly lie in any Ohio county.”
Booth, 522
F.3d at 1148 (citing 380 U.S. 424).
Similarly, in Walck v. Discavage, the court concluded that
the plaintiff acted reasonably by filing in Maryland state court
despite Maryland’s lack of jurisdiction over the defendant, such
that tolling the limitations period was appropriate.
88, 91 (E.D. Pa. 1990).
741 F.Supp.
Noting that the accident at issue
occurred on the Delaware/Maryland border, the Walck court
considered that “the lack of jurisdiction in Maryland was not
certain.”
Id. at 91.
Defendants aver that this Court’s reliance
on Walck is misplaced, arguing that the facts here clearly
demonstrated that Texas lacked jurisdiction over Defendants.
But
again, the Court is left with the dilemma of a Texas trial court
initially finding jurisdiction appropriate in Texas and an
appeals court later finding jurisdiction lacking.
Given this
uncertainty, and despite Defendants’ adamance that their contacts
erroneously, agreed that Defendants’ were amenable to
jurisdiction in Texas. See, e.g., Pabon v. Mahanoy, --- F.3d --, 2011 U.S. App. LEXIS 14255, at *45 (3d Cir. July 12, 2011)
(quoting Holland v. Florida, 130 S.Ct. 2549, 2565 (2010))(“[t]he
diligence required for equitable tolling purposes is ‘reasonable
diligence,’ ... not ‘maximum feasible diligence.’”).
21
with Texas bore no relationship to the operative facts of this
litigation, which Plaintiff vigorously disputed, the Court cannot
conclude that Plaintiff bore an unreasonable belief that
jurisdiction existed in Texas.
See Walck, 741 F.Supp. at 91
(quoting Fox v. Eaton Corp., 615 F.2d 716, 719 (6th Cir.
1980))(“‘tolling is appropriate’ even when filed in a court
lacking jurisdiction, when ‘there exists a reasonable legal
theory for invoking the jurisdiction of that court.’”).
At heart, the wrong that the Defendants identify is the
violation of their due process rights, given Defendants’ minimal
contacts with Texas.
Defendants appropriately pursued their
proper remedy through the Texas Appeals Court.
But during this
time period, not only were Defendants aware of Plaintiff’s
allegations, they were actively litigating his claims.
Thus,
despite the lengthy procedural history of this case, Defendants
would not be forced to litigate stale claims.
As articulated in
Booth, where Defendants are made well aware of Plaintiff’s claims
within the limitations period, the policy of repose is not
violated.
The balance of equities here tips in Plaintiff’s
favor.
C.
Due Diligence
Defendants further argue that the Court overlooked
Plaintiff’s failure to take adequate steps to protect his rights
once the operative facts relevant to the personal jurisdiction,
22
which were known to Plaintiff in early 2008.
To support their
position, Defendants rely on Irwin, where the Supreme Court held
that “the principles of equitable tolling ...do not extend to
what is at best a garden variety claim of excusable neglect.”
498 U.S. at 96.
In short, Defendants argue that Plaintiff’s lack
of foresight regarding dismissal of his complaint on personal
jurisdiction grounds is akin to excusable neglect.
does not agree.
The Court
The facts here more closely mirror those in
Burnett; Plaintiff here failed to file his action in federal
court “not because he was disinterested, but solely because he
felt that his state action was sufficient.”
380 U.S. at 429.
Upon receiving clear direction from the Texas Appeals Court that
he had filed in the wrong forum, Plaintiff promptly filed in a
court of competent, undisputed jurisdiction.13
See, e.g., Pabon,
2011 U.S. App. LEXIS 14255, at *45 (noting that equitable tolling
requires “reasonable diligence,” not “maximum feasible
diligence”).
The Court simply does not agree that its acknowledgment that
a more prudent plaintiff would have filed a protective suit in a
court of competent jurisdiction prior to the expiration of the
limitations period compels a finding that Plaintiff lacked
13
Moreover, as noted in this Court’s previous opinion,
Plaintiff did not wait until he had exhausted all avenues of
appellate relief before he filed in this Court. He filed his
complaint in this court prior to resolution of his motion for
rehearing.
23
diligence.
Indeed, after this Court issued its Opinion, the
Third Circuit voiced the same concerns.
App. LEXIS 14255, at *45.
See Pabon, 2011 U.S.
To the contrary, the record reflects
that both parties have actively litigated this case.
Plaintiff
filed suit in this Court within one month of his dismissal from
state court.
The Court finds that Plaintiff acted with due
diligence, thus preserving his claims.
D.
Certification Pursuant to 28 U.S.C. § 1292(b)
Defendants urge the Court to certify its Order for immediate
appeal pursuant to 28 U.S.C. § 1292(b).
three criteria” for certification:
This section “imposes
“[t]the order must (1)
involve a ‘controlling question of law,’ (2) offer ‘substantial
ground for difference of opinion’ as to its correctness, and (3)
if appealed immediately ‘materially advance the ultimate
termination of the litigation.’”
496 F.2d 747, 754 (3d Cir. 1974).
Katz v. Carte Blanche Corp.,
The Court’s decision to
certify an order is completely discretionary, “even if the
criteria are present.”
Bachowski v. Usery, 545 F.2d 363, 368 (3d
Cir. 1976), overruled in part on other grounds, Local No. 82
Furniture & Piano Moving v. Crowley, 467 U.S. 526 (1984).
Indeed, certification “should be sparingly applied,” issuing
“only in exceptional cases where an intermediate appeal may avoid
protracted and expensive litigation and is not intended to open
the floodgates to a vast number of appeals from interlocutory
24
orders in ordinary litigation.”
Milbert v. Bison Laboratories,
Inc., 260 F.2d 431, 433 (3d Cir. 1958).
Defendants urge the Court to certify its March 11, 2011
Order, arguing that the Third Circuit has not yet ruled with
regard to whether equitable tolling is available “under these
circumstances.”
Def. Br. at 16.
Defendants bear the heavy
burden "of persuading the court that exceptional circumstances
exist that justify a departure from the basic policy of
postponing appellate review until after the entry of final
judgment."
Krishanthi v. Rajaratnam, Civ. No. 09-05395, 2011
U.S. Dist. LEXIS 53470, at *9 (D.N.J. May 18, 2011)(quoting
Morgan v. Ford Motor Co., 06-1080, 2007 U.S. Dist. LEXIS 5455, at
*20 (D.N.J. Jan. 25, 2007)).
“In the Third Circuit, a controlling issue of law is one
that if erroneously decided, would result in reversible error on
final appeal.”
In re Schering-Plough Corp., Civ. No. 08-0397,
2010 U.S. Dist. LEXIS 61397, at *12 (D.N.J. June 21, 2010)
(quoting Schnelling v. KPMG LLP, Civ. No. 05-3756, 2006 U.S.
Dist. LEXIS 34915, at *6 (D.N.J. May 31, 2006)).
Said
differently, the issue must be “one that is ‘serious to the
conduct of the litigation, either practically or legally ...
[a]nd on the practical level, saving of time of the district
court and of expense to the litigants.’”
Smith v. Honeywell
Intern. Inc., Civ. No. 10-3345, 2011 U.S. Dist. LEXIS 51854, at
25
*7 (D.N.J. May 13, 2011)(quoting P. Schoenfeld Asset Mgmt. LLC v.
Cendant Corp., 161 F.Supp.2d 355, 358 (D.N.J. 2001) (citations
omitted)).
Certainly, the equitable tolling issue presented here
is a difficult question which, if erroneously decided, could
result in reversible error.
But application of equitable tolling does not involve a pure
legal question; it presents a mixed question of law and fact.
See In re Community Bank of Northern Virginia, 622 F.3d 275,
293-94 (3d Cir. 2010) (recognizing that application of equitable
tolling as to putative class members’ claims presented “an
individual question of law and fact”); Haley v. Hendricks, 83
Fed.Appx. 452, 454
n.2 (3d Cir. 2003)(“We note that the issue of
whether a court should equitably toll an AEDPA statute of
limitations is not a pure question of law.”).
As the Third
Circuit articulated in Becton Dickinson & Co. v. Wolckenhauer,
when considering tolling, courts must resolve “two distinct
questions: [c]an the time limitation in [the applicable statute]
be equitably tolled and, if so, do the facts of this case give
rise to a situation in which the time limitation in [the statute]
should be equitably tolled?”
215 F.3d 340, 341 n.1 (3d Cir.
2000).
Defendants have never argued that the applicable statute
here, 46 U.S.C. § 30106, cannot be equitably tolled.
Defendants conceded this issue.
Indeed,
See Flores v. Predco Services
26
Corp., Civ. No. 10-1320, 2011 U.S. Dist. LEXIS 25588, at *11
(D.N.J. Mar. 11, 2011).
Rather, this dispute centers on whether
tolling should apply under the peculiar circumstances here, i.e.,
where an appellate court reverses a trial court’s determination
that personal jurisdiction exists over a defendant.
To resolve
this question, inevitably, the Court must engage in some level of
fact-finding.
Surely, this is why “[a]pplication of th[e]
equitable tolling doctrine, like most equitable doctrines, is
committed to the discretion of the district court in the first
instance.”
Island Insteel Sys., Inc., 296 F.3d at 205.
Thus, given the infusion of fact-finding in the legal
question presented here, the Court finds certification
inappropriate.
“Section 1292(b) was not designed to secure
appellate review of ‘factual matters' or of the application of
the acknowledged law to the facts of a particular case, matters
which are within the sound discretion of the trial court.”
Steel
Partners II, L.P. v. Aronson, Civ. No. 05-1983, 2006 U.S. Dist.
LEXIS 92772, at *6 (D.N.J. 2006) (quoting Hulmes v. Honda Motor
Co. Ltd., 936 F.Supp. 195, 210 (D.N.J. 1996)); see also
Krishanthi, 2011 U.S. Dist. LEXIS 53470, at *10 (declining to
certify where defendants “challenge the sufficiency of the facts
alleged, and the application of the legal standard to the facts
at issue; thus, Defendants' argument by necessity involves an
interplay of facts and law, and such matters are within the
27
discretion of this Court.”).
Defendants’ argument that tolling
is not available under the “circumstances” here necessarily
involves an element of fact finding by the district court.
The
Court thus concludes that Defendants have failed to establish
that the issue here “exclusively concerns [a] controlling
question[] of law.”
Krishanthi, 2011 U.S. Dist. LEXIS 53470, at
*10.
The Court further questions Defendants’ representation that
there is a substantial difference in opinion on the tolling
issue.
As discussed, supra, the Court finds the Fifth and
Eleventh Circuit precedent cited by Defendants are clearly
distinguishable from the issue presented here.
Moreover, the
Third Circuit has addressed the question of tolling in the
context of a dismissal based on lack of personal jurisdiction,
albeit not in the context of maritime law.
See Island Insteel,
296 F.3d at 204-05.
In closing, the Court recognizes that an appeal at this
stage could materially advance the litigation.14
See Litgo New
Jersey, Inc. v. Martin, Civ. No. 06–2891, 2011 U.S. Dist. LEXIS
31869, at *15 (D.N.J. Mar. 25, 2011)(“A § 1292(b) certification
materially advances the ultimate termination of the litigation
14
The Court notes that the parties engaged in some discovery
while litigating in Texas. It is not clear at this stage,
however, how much more discovery would be necessary before
Plaintiff’s claims could be resolved on their merits.
28
where the interlocutory appeal eliminates: (1) the need for
trial; (2) complex issues that would complicate the trial; or (3)
issues that would make discovery more costly or burdensome.”).
But given the inherent factual nature of the equitable tolling
inquiry, the Court declines to certify its Order for immediate
appeal.
IV.
Conclusion
Upon careful reconsideration, the Court holds that Plaintiff
shall be permitted to prosecute the within action.
Thus, for the
foregoing reasons, the Defendants’ motion for reconsideration is
denied.
The Court further declines to certify its March 11, 2011
Order for immediate appeal pursuant to 28 U.S.C. § 1292(b).
s/Renée Marie Bumb
RENÉE MARIE BUMB
United States District Judge
Dated: July 29, 2011
29
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