LEWIS et al v. LYCOMING et al
MEMORANDUM AND/OR OPINION. SIGNED BY HONORABLE HARVEY BARTLE, III ON 5/9/12. 5/9/12 ENTERED AND COPIES E-MAILED.(kw, )
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
PAMELA LEWIS, et al.
LYCOMING, et al.
May 9, 2012
Before the court is the motion of plaintiffs to
collaterally estop defendant Avco Corporation ("Avco") from
relitigating a determination as to its principal place of
business for purposes of diversity jurisdiction.
Plaintiffs Pamela Lewis, individually and as personal
representative of the estate of Steven Edward Lewis, deceased,
and Keith Whitehead and John Wroblewski as co-personal
representatives of the estate of Philip Charles Gray, deceased,
have filed this diversity action for wrongful death against
eleven defendants including Avco.1
The claims arise out of a
helicopter crash in England in 2009.
Plaintiffs originally brought this action in the Court
of Common Pleas of Philadelphia County.
The defendants removed
it to this court on the ground that the action is between
1. The remaining defendants are: Lycoming, Textron, Inc.,
Textron Systems Corporation, Precision Airmotive LLC, Precision
Airmotive Corporation, Schweizer Aircraft Corporation, Schweizer
Holdings, Inc., Sikorsky Aircraft Corporation, United
Technologies Corporation, and Champion Aerospace LLC.
citizens of a state and citizens or subjects of a foreign state
under 28 U.S.C. § 1332(a)(2).
The complaint alleges that the
plaintiffs and the decedents whose estates they represent are or
were citizens of the United Kingdom.
It is undisputed that none
of the defendants is a citizen of the United Kingdom or any other
Plaintiffs then moved to remand the action to the
Court of Common Pleas.
They maintain that Avco's principal place
of business is in Pennsylvania under the "nerve center" test
enunciated in Hertz Corp. v. Friend, 139 S. Ct. 1181 (2010), and
therefore removal was improper under 28 U.S.C. § 1441(b)(2).
That statutory section reads:
A civil action otherwise removable solely on
the basis of the jurisdiction under section
1332(a) of this title may not be removed if
any of the parties in interest properly
joined and served as defendants is a citizen
of the State in which such action is brought.
The court ordered limited discovery on the issue of Avco's
principal place of business, and briefing on this issue is still
Following the filing of their motion to remand and
while it is still pending, plaintiffs filed the present motion to
collaterally estop Avco from relitigating the determination of
Pennsylvania as its principal place of business on the ground
that the issue has now been decided in Agostini v. Piper Aircraft
Corp., No. 11-7172, 2012 WL 646025 (E.D. Pa. Feb. 29, 2012).
Agostini, another judge in this court recently held that Avco did
not meet its burden in demonstrating that its principal place of
business was outside of Pennsylvania under Hertz Corp. and
granted the motion of the plaintiffs to remand the case to state
court for lack of jurisdiction.
Collateral estoppel, now generally known as issue
preclusion, prevents a party from relitigating an issue that was
litigated against that party in an earlier action.
Hosiery Co., Inc. v. Shore, 439 U.S. 322, 326 (1979).
federal law the requirements of the doctrine are that:
(1) the issue decided in the prior
adjudication must be identical to the one
presented in the later action, (2) there must
be a final judgment on the merits and (3) the
party against whom the doctrine is asserted
must have been a party or in privity with a
party to the prior adjudication and have had
a full and fair opportunity to litigate the
issue in question in the prior action.
Seborowski v. Pittsburgh Press Co., 188 F.3d 163, 169 (3d Cir.
Under 28 U.S.C. § 1447(d), "[a]n order remanding a case
to the State court from which it was removed is not reviewable on
appeal or otherwise...."
The question presented by this motion
is whether an unappealable order to remand an action to the state
court has the finality required by the second element of the
issue preclusion test.
The Restatement (Second) of Judgments provides:
Although an issue is actually litigated and
determined by a valid and final judgment, and
the determination is essential to the
judgment, relitigation of the issue in a
subsequent action between the parties is not
precluded [when] [t]he party against whom
preclusion is sought could not, as a matter
of law, have obtained review of the judgment
in the initial action.
Restatement (Second) of Judgments § 28(1).
Although this section
of the Restatement clearly advises against applying issue
preclusion to unappealable orders for remand, such as the remand
order in Agostini, our Court of Appeals has not had occasion to
rule on this specific question.
In one line of cases, it has
determined that finality for purposes of issue preclusion "does
not require the entry of a judgment final in the sense of being
Burlington N. R.R. v. Hyundai Merch. Marine Co., 63
F.3d 1227, 1233 n.8 (3d Cir. 1995) (citing In re Brown, 951 F.2d
564, 569 (3d Cir. 1991) and Dyndul v. Dyndul, 620 F.2d 409, 412
n.8 (3d Cir. 1980)).2
It has further stated that issue
preclusion instead applies "whenever an action is sufficiently
firm to be accorded conclusive effect."
In Dyndul, it noted
that finality "may mean little more than that the litigation of a
particular issue has reached such a stage that a court sees no
really good reason for permitting it to be litigated again."
F.2d at 412 n.8.
None of these cases, as noted above, involved
jurisdictional issues previously litigated in a motion to remand.
2. None of the parties disputes that the federal law of issue
preclusion should be applied here because "federal law determines
the preclusive effect of federal orders on a question of federal
law." Nutter v. Monongahela Power Co., 4 F.3d 319, 321 (4th Cir.
1993) (citations omitted). Burlington, 63 F.3d at 1233 n.8,
determined the federal law of issue preclusion, although it cited
In re Brown, 951 F.2d at 569, which applied New Jersey law, and
Dyndul, 620 F.2d at 412 n.8, which applied the law of the Virgin
In a more recent case, our Court of Appeals followed
these earlier precedents in determining that a state jury's
damages verdict in a bifurcated trial had the requisite finality
for issue preclusion where the case was settled before a
While not before it for decision, the
court specifically noted in a footnote that "some courts have
applied section 28(1) [of the Restatement (Second) of Judgments]
to '[a] District Court's jurisdictional findings incident to
remand' because remand orders are wholly unappealable as a matter
of law under 28 U.S.C. § 1447(d)."
See Greenleaf v. Garlock,
Inc., 174 F.3d 352, 361 n.6 (3d Cir. 1999) (citing Nutter v.
Monongahela Power Co., 4 F.3d 319, 322 (4th Cir. 1993); Southern
Leasing Corp. v. Tufts, 804 P.2d 1321, 1323 (Ariz. Ct. App.
Other circuits have reached the same conclusion.
e.g., Health Cost Controls, Inc. v. Washington, 187 F.3d 703,
708-09 (7th Cir. 1999); Winters v. Diamond Shamrock Chem. Co.,
149 F.3d 387, 395 (5th Cir. 1998).
We agree with those decisions
and § 28(1) of the Restatement (Second) of Judgments that a
remand order does not have the requisite finality for issue
preclusion to apply.
Finally, there is an additional reason why issue
preclusion is inappropriate in the type of situation now before
The location of a corporation's principal place of
business, that is, its nerve center, may change over time.
diversity purposes, we must determine the principal place of
business of a corporation at the time the complaint is filed.
S. Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group
Ltd., 181 F.3d 410, 414 n.2 (3d Cir. 1999).
Simply because a
company's principal place of business may have been in a
particular state when an earlier action was instituted does not
necessarily mean it remained in that state when the complaint in
a later case is filed.
Accordingly, we will deny the motion of the plaintiffs
to collaterally estop Avco from relitigating the determination of
Pennsylvania as its principal place of business.
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