The District Court Lacks Power To Remand To State Court Based On A Procedural Defect That Has Been Waived
PETTITT v. THE BOEING COMPANY (May 17, 2010)
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In the spring of 2007, a Boeing 737 crashed in Cameroon -- all those aboard died. A few years later, six lawsuits were filed relating to the accident in Cook County Circuit Court. All six suits were removed to federal court pursuant to the Multiparty, Multiforum Trial Jurisdiction Act (MMTJA). Three of the six suits have since been dismissed. The other three were assigned to three different district court judges. In one of those cases, Boeing moved for a reassignment and consolidation of the case to the judge with the lowest numbered case, pursuant to local rule. Instead of ruling on the motion, however, the court on its own remanded the case to state court. The basis for his remand was the fact that not all the defendants had consented to the removal. Boeing appeals.
In their opinion, Circuit Judges Cudahy and Kanne and District Judge Darrah vacated and remanded. The Court first addressed its jurisdiction, since a remand order under § 1447 (c), as this is, is generally not appealable. The Court clarified that, although it cannot review the propriety of such an order, it can determine whether a court possessed the actual power to do what it did. Here, in fact, it concluded that the court had no such power. Any defect in the removal was a procedural defect -- and procedural defects are waived if not raised by motion within 30 days of removal. The district court has no power, on its own, to remand after the passage of the 30 days. As an aside, the Court noted the absence of any procedural defect. Acknowledging that removal generally requires the consent of all defendants, the Court stated that removal under the MMTJA does not require all defendants' consent.
Star Insurance Company ("Star") and its co-plaintiffs registered a $2.4 million judgment in the Northern District of Illinois and began proceedings to collect it. Star also brought a separate action to pierce the corporate veil of defendants Risk Marketing and Cebcor Service Corp. In the collection proceedings, Star sought to set aside fraudulent transfers, to enjoin the disposition of assets, to appoint a receiver and to dissolve the corporate defendants. Instead of responding to Star’s requests, the defendants moved to consolidate the enforcement proceedings with the action to pierce the corporate veil. On August 31, 2007, the court enjoined the disposition of transferred assets and ordered the individual defendants to turn over certain assets in their possession. It also denied their motion to consolidate. On October 19, the court granted Star’s motion for judicial dissolution and the appointment of a receiver. On January 23, 2008 the court entered judgment for $2.4 million against the individual defendants. The defendants appeal the lower court's orders of August 31 and January 23.