The opinion of the court was delivered by: LIFLAND
Defendant International Business Machines ("IBM") appeals
a magistrate's October 25, 1995 Letter-Opinion and Order remanding this action to the New Jersey Superior Court. It argues that the remand constituted legal error because original jurisdiction inhered in this Court, rendering the action properly removable pursuant to 28 U.S.C. § 1441(a). The plaintiffs respond that this Court lacks jurisdiction to review the order and, in the alternative, that the Court should affirm the decision as legally correct. Both parties also debate whether a remand order is dispositive or nondispositive, and the relevant standards of district court review that attach under each view. For reasons more fully developed below, the Court holds that remand orders are nondispositive. It further holds that the Court may not review the magistrate's decision since a certified copy of the Order of Remand has been sent to the Superior Court, stripping this Court of jurisdiction to enter orders binding upon the parties.
On July 7, 1995, plaintiffs filed this tort suit in the Superior Court of New Jersey, Middlesex County, Law Division. Defendant IBM timely removed the action, asserting that federal subject matter jurisdiction existed since the parties were completely diverse and the amount in controversy exceeded $ 50,000. See 28 U.S.C. §§ 1332 and 1441. After plaintiffs moved to remand the case to state court, the magistrate issued a Letter-Opinion and Order granting plaintiffs' motion on October 25, 1995. Reasoning that the Complaint was devoid of any reliable information as to the "worth" of the action, the magistrate held that diversity jurisdiction did not exist because § 1332's amount in controversy requirement was not clearly satisfied. The case was remanded with the understanding that IBM could remove it again if subsequent proceedings reveal that the amount in controversy indeed exceeds $ 50,000. See October 25, 1995 Letter-Opinion and Order at 3.
Cognizant of the dictates of Article III, which require that only judges with tenure and salary protection conduct core judicial business, Congress has precluded magistrates from issuing orders that "determine with finality the duties of the parties." N.L.R.B. v. Frazier, 966 F.2d 812 (3d Cir. 1992). The Magistrates Act permits a magistrate to issue nondispositive pretrial orders but denies authority to issue the dispositive orders specifically enumerated therein.
[A] judge may designate a magistrate to hear and determine any pretrial matter pending before the court, except a motion for injunctive relief, for judgment on the pleadings, for summary judgment, to dismiss or quash an indictment or information made by the defendant or to permit maintenance of a class action, to dismiss for failure to state a claim upon which relief can be granted, and to involuntarily dismiss an action. A judge of the court may reconsider any pretrial matter under this subparagraph (A) where it has been shown that the magistrate's order is clearly erroneous or contrary to law. 28 U.S.C. § 636(b)(1)(A).
By designation of a district judge, however, a magistrate may conduct evidentiary hearings and submit to the judge "proposed findings of fact and recommendations" for disposition of any dispositive motion. See 28 U.S.C. § 636(b)(1)(B). Within ten days after receiving a copy of the magistrate's report and recommendation, a party may file written objections which the court considers in a de novo review of the magistrate's recommendation. See 28 U.S.C. § 636(b)(1)(C). Thus, whether remand orders are considered dispositive or nondispositive has important implications for the standard of review applied by the district court, assuming of course that review does not contravene the removal statute. If they are dispositive, the district court reviews the determination de novo. If remand orders are nondispositive, the reviewing court applies a relaxed clearly erroneous or legal error standard. See Unauthorized Practice of Law Committee, 979 F.2d 11, 12-13 (1st Cir. 1992); Fed. R. Civ. P. 72(a); Local Rule 40(A)(1).
Are Remand Orders Dispositive?
District courts within this district have disagreed about whether remand orders are dispositive or nondispositive. Compare North Jersey Sav. & Loan Ass'n v. Fidelity & Deposit Co., 125 F.R.D. 96 (D.N.J. 1988) (Judge Wolin concluding that remand orders are nondispositive) and Hitachi Cable America, Inc. v. Wines, LEXIS GENFED Library, DISTRICT File, 1986 WL 2135 (D.N.J.) (then District Judge Sarokin noting that remand orders are nondispositive) with Giangola v. Walt Disney World Company, 753 F. Supp. 148 (D.N.J. 1990) (Judge Debevoise holding that remand orders are dispositive and therefore magistrates may only issue reports and recommendations). An order of remand clearly is not one of the dispositive orders specifically enumerated in 28 U.S.C. § 636(b)(1)(A), a factor essential to Judge Wolin's decision that remand orders are nondispositive and therefore properly issued by magistrate judges. See North Jersey Sav. & Loan, 125 F.R.D. at 98. Judge Debevoise, in contrast, viewed remands as involuntary dismissals, compelling the conclusion that such orders are dispositive and beyond the statutory and constitutional power of magistrate judges.
This Court, joining the majority of district courts that have addressed this question, concludes that remand motions are nondispositive and can be determined by a magistrate judge by final order. See, e.g., North Jersey Sav. & Loan Ass'n, 125 F.R.D. at 98; MacLeod v. Dalkon Shield Claimants Trust, 886 F. Supp. 16, 18 (D.Or. 1995); Vaquillas Ranch Co., Ltd. v. Texaco Exploration and Production, Inc., 844 F. Supp. 1156 (S.D.Tex. 1994); Banbury v. Omnitrition Intern., Inc., 818 F. Supp. 276, 279 (D.Minn. 1993); City of Jackson, Miss. v. Lakeland Lounge of Jackson, Inc., 147 F.R.D. 122, 124 (S.D.Miss. 1993); Holt v. Tonawanda Coke Corp., 802 F. Supp. 866, 868 (W.D.N.Y. 1991); McDonough v. Blue Cross of Northeastern Pennsylvania, 131 F.R.D. 467 (W.D.Pa. 1990). But see Giangola, 753 F. Supp. at 152; Long v. Lockheed Missiles and Space Co., Inc., 783 F. Supp. 249, 250 (D.S.C. 1992). That remand orders are not specifically mentioned in § 636(b)(1)(A) is relevant (although not critical) to the Court's analysis. More important is the fact that remands merely transfer the action to a different forum rather than finally resolving the substantive rights and obligations of the parties.
This analysis accords with the Third Circuit's approach to the dispositive/nondispositive characterization problem generally, an approach that examines the nature of the matter decided rather than looking solely at the literal language of the statute. See N.L.R.B., 966 F.2d at 817 (deciding that an order to quash a subpoena in that case was dispositive because "it determined with finality the duties of the parties"). Accordingly, this Court believes that Giangola would have been decided differently ...