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Carr v. American Red Cross

filed: March 4, 1994.

PATRICK CARR APPELLEE
v.
AMERICAN RED CROSS; OSTEOPATHIC MEDICAL CENTER OF PHILADELPHIA OSTEOPATHIC MEDICAL CENTER OF PHILADELPHIA APPELLANT OSTEOPATHIC MEDICAL CENTER OF PHILADELPHIA, PETITIONER V. PATRICK CARR AND AMERICAN RED CROSS, RESPONDENTS AND THE HONORABLE STEWART DALZELL, DISTRICT JUDGE, UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA NOMINAL RESPONDENT



Petition for Writ of Mandamus to the United States District Court for the Eastern District of Pennsylvania. Appeal from the United States District Court for the Eastern District of Pennsylvania. (D.C. Civil No. 92-04035). (D.C. No. 92-04035).

Before: Roth, Lewis, and Garth, Circuit Judges.

Author: Garth

Opinion OF THE COURT

GARTH, Circuit Judge :

This case comes to us on appeal (No. 93-1392) from, and on petition for writ of mandamus (93-1450) to, the United States District Court for the Eastern District of Pennsylvania. Defendant and petitioner, Osteopathic Medical Center of Philadelphia ("Osteopathic"), asks us to review an order of the district court granting plaintiff-Patrick Carr's ("Carr") motion to dismiss Osteopathic's co-defendant, American Red Cross ("Red Cross"), from Carr's personal injury suit. Carr's motion also sought a remand of the action to the Philadelphia County Court of Common Pleas for lack of subject matter jurisdiction. Osteopathic's appeal and petition require us, once again, to address the scope of 28 U.S.C. § 1447(d), with its prohibition of appellate review of a district court's order of remand issued pursuant to 28 U.S.C. § 1447(c).*fn1

We hold that the district court could not deprive Osteopathic of its right to appeal from the district court's order dismissing Red Cross. Because of that holding, and our analysis of the reviewability of remand orders pursuant to 1447(d), we also hold that we may review the district court's order remanding the proceeding to the state court. In conjunction with these holdings, we conclude that the district court erred in dismissing Red Cross as a party to the Carr action and thereby dismissing the Osteopathic cross-claim.

Thus, we will reverse the district court's order dismissing Red Cross and will direct that the district court reinstate Red Cross as a party to the action, and reinstate Osteopathic's cross-claim against Red Cross. We also will direct the district court to take all appropriate actions, after it has reinstated Red Cross, to vacate its order of remand and, consistent with this opinion, to conduct further proceedings in federal court.

I

On September 10, 1990, Carr initiated a personal injury suit in the Court of Common Pleas of Philadelphia County to recover damages from Red Cross and Osteopathic as a result of an H.I.V.-infected blood transfusion Carr had received during a July 1984 operation at the Osteopathic Medical Center. Red Cross invoked its federal charter and filed a timely notice of removal to the United States District Court for the Eastern District of Pennsylvania. On November 1, 1990, the district court, acting sua sponte, remanded the case to the Court of Common Pleas, rejecting Red Cross' contention that its charter automatically conferred federal jurisdiction over civil actions to which Red Cross is a party.

After remand, Carr filed an amended complaint. Osteopathic answered the amended complaint and asserted a cross-claim for contribution and indemnity against Red Cross.*fn2

On July 10, 1992, following the Supreme Court's decision in American Red Cross v. S.G., ___ U.S. ___, 120 L. Ed. 2d 201, 112 S. Ct. 2465 (1992), which held that the Red Cross charter confers federal jurisdiction over civil cases to which Red Cross is a party, Red Cross once again removed the proceeding to the district court.*fn3

On February 5, 1993, Carr moved to dismiss Red Cross and to remand the case again to the Court of Common Pleas. Carr contended that the district court no longer had jurisdiction as the result of a joint tortfeasor release Carr gave Red Cross on January 25, 1993, in settlement of Carr's claims against Red Cross.

On February 22, 1993, the district court Judge granted Carr's motions to dismiss and remand, reasoning that federal subject matter jurisdiction no longer existed after Red Cross entered into a release with Carr and that, pursuant to 28 U.S.C. § 1367(c), he would not exercise any residual supplemental jurisdiction over Carr's claim against Osteopathic.*fn4

After having moved for reconsideration of the district court's February 22 order, which the district court denied on April 22, 1993, Osteopathic filed a timely notice of appeal.*fn5 On May 12, 1993, Osteopathic filed a petition for writ of mandamus directing District Court Judge Dalzell, inter alia, to vacate his February 22 order. We consolidated these matters by order dated May 26, 1993.

II

Although Carr contests the finality of the district court's February 22 order for purposes of review,*fn6 Osteopathic argues that the district court's dismissal order is reviewable as a "collateral final order."

Relying on City of Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 55 S. Ct. 6, 79 L. Ed. 244 (1934), we have embraced the principle that a district court cannot prevent appellate review of a final collateral order by contemporaneously remanding a case to state court. Powers v. Southland Corp., 4 F.3d 223, 226 (3d Cir. 1993); Aliota v. Graham, 984 F.2d 1350, 1353 (3d Cir. 1993). Such an order, however, must satisfy two separate jurisdictional requirements. First, it must avoid the bar to appellate review in 28 U.S.C. § 1447(d). Second, it must satisfy the finality requirement of 28 U.S.C. § 1291.

A.

In City of Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 143, 79 L. Ed. 244, 55 S. Ct. 6 (1934), the Supreme Court held that 28 U.S.C. § 1447(d) did not bar appellate review of a collateral order that led to remand where the order, "in logic and in fact," preceded that of remand. We recently held in Powers v. Southland Corp., 4 F.3d 223 (3d Cir. 1993), that for a collateral order to come under the City of Waco rule, the order must be both logically precedent to, and separable from, the remand decision.

If the court looks to an issue for the purpose of determining subject matter jurisdiction, the issue is not separable because it cannot be said to have preceded the remand decision "in logic and in fact." City of Waco, 293 U.S. at 143 (emphasis added). If, however, as in City of Waco, the issue has independent relevance in adjudging the rights of the parties (i.e., relevance beyond determining the existence of federal subject matter jurisdiction), the decision is separable and falls within the reasoning of City of Waco -- even if it also happens to have an incidental effect on the court's jurisdiction.

4 F.3d at 228 (3d Cir. 1993).

Inasmuch as the order of dismissal in the present case arose out of Carr's release of Red Cross from tortfeasor liability, the underlying dismissal order clearly had independent relevance in adjudging the rights of all three parties involved in this action. That is, the ramifications of the dismissal order impacted on more than the issue of federal subject matter jurisdiction alone.

Consequently, we conclude that the district court's order dismissing Red Cross is separable from the subsequent order of remand. Therefore, appellate review of the dismissal order is not barred by 28 U.S.C. § 1447(d). Accord Aliota v. Graham, 984 F.2d at 1353 (3d Cir. 1993) (holding question of resubstitution separate from question of remand and, thus, reviewable on appeal).

B.

We also conclude that the district court's February 22 order of dismissal is final, within the meaning of 28 U.S.C. § 1291.

We have recognized that, in general, "[a] 'final decision' is one that 'ends the litigation on the merits and leaves nothing for the court to do but execute the judgment.'" Praxis Properties, Inc. v. Colonial Savings Bank, S.L.A., 947 F.2d 49, 54 n.5 (3d Cir. 1991), quoting Catlin v. United States, 324 U.S. 229, 233, 89 L. Ed. 911, 65 S. Ct. 631 (1945). We also have recognized an exception to this rule, the so-called "collateral final order doctrine." Van Cauwenberghe v. Biard, 486 U.S. 517, 522, 100 L. Ed. 2d 517, 108 S. Ct. 1945 (1988). We believe that the district court's order of dismissal was "final" under the collateral final order doctrine, as well as under traditional finality analysis.

1.

Under Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 93 L. Ed. 1528, 69 S. Ct. 1221 (1949), and its progeny, for an order to come under the collateral final order doctrine it "must conclusively determine the disputed question, resolve an important issue completely separate from the merits of the action, and be effectively unreviewable on appeal from a final judgment." Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 57 L. Ed. 2d 351, 98 S. Ct. 2454 (1978). "If the order at issue fails to satisfy any one of the above requirements, it is not appealable under the collateral-order exception to ยง 1291." Gulfstream Aerospace Corp. v. Mayacamas ...


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