Removal jurisdiction and the All Writs Act.

• Author: Hoffman, Lonny Sheinkopf

INTRODUCTION

On February 5, 1998, United States Districtjudge Samuel B. Kent denied the plaintiffs' motion to remand in Chance v. Sullivan,(1) ruling that the All Writs Act(2) could serve as an independent basis for removal where the plaintiffs' state claims threatened to interfere with a prior federal order.(3) This decision should be remarkable to most students of federal civil procedure, since the complaint did not raise a federal question and there was no diversity of citizenship between the parties. Yet, in making the determination that the All Writs Act could be used to remove an otherwise unremovable case, Judge Kent added his voice to a small but growing chorus of federal circuit and district court judges who have upheld use of this extraordinary writ for this extraordinary purpose.

Although the All Writs Act traces its lineage back to the Judiciary Act of 1789,(4) for nearly two hundred years no court ever relied on [sections] 1651(a) to ground its jurisdiction over a case removed from state to federal court. Indeed, the most common use of the statute has been in mandamus proceedings, in which the All Writs Act underlies the court's appellate jurisdiction.(5) Congress also authorized district courts to invoke [sections] 1651(a),(6) but it was not until 1988 that a court first approved use of the All Writs Act as an independent basis for removal.(7) Thereafter, the number of federal district and circuit courts grounding removal in the All Writs Act has grown rapidly.(8) In the last decade, approximately thirty federal courts have considered, and at least twenty have approved, use of the All Writs Act as an independent basis for removal, principally on the premise that resort to the All Writs Act was necessary to protect or preserve a prior federal judgment. Viewed in historical context, in which no court ever considered [sections] 1651(a) as removal authority for almost two hundred years, the evidence suggests that these "little clouds" may be bringing a "flood's downpour."(9)

To date, literature regarding this expanded use of the All Writs Act as a source of removal jurisdiction is scarce.(10) This Article, however, undertakes a critical examination of the use of the All Writs Act as removal authority and reaches two chief conclusions. First, the All Writs Act was not intended to serve as an independent basis of jurisdiction over a case removed from state to federal court. Like its much younger sister, the Supplemental Jurisdiction Statute,(11) the All Writs Act is not a source of original jurisdiction.(12) Federal courts are courts of limited jurisdiction because they cannot assume jurisdiction over a particular controversy unless it comes within Article III of the Constitution and a specific statute permits them to exercise jurisdiction.(13) However, Congress has never authorized such an expansive grant of jurisdiction to the federal courts through the All Writs Act.(14) Consequently, broadening removal jurisdiction in this fashion expands district court original jurisdiction beyond the maximum limits currently authorized by Congress.(15)

The second primary conclusion of this Article is that the expansive use of the All Writs Act as a source of removal jurisdiction interferes with the balance of state and federal relations in a manner which neither Congress nor the Supreme Court has approved or likely would approve. Congress and the Court have promulgated legal rules and judicial doctrines, respectively, which must be considered when a federal judgment is implicated in subsequent state proceedings.(16) Courts and litigants must turn to these different legal rules and judicial doctrines to answer whether and when federal intervention is appropriate to protect and effectuate the prior federal judgment. For instance, the doctrine of res judicata is one principal method by which a prior federal judgment is protected in subsequent state actions and may obviate the need for federal intervention into state court proceedings.

Of course, these legal authorities do not represent a single, cohesive or collective unit: they were enacted and promulgated at different times and not always for the same purposes. As a result, judicial application of these disparate legal rules and judicial doctrines may not--indeed, frequently will not--reveal a clear-cut choice for deference or for interference. Judicial expansion of the All Writs Act as an independent removal authority may be explained, in large part, by the Court's and Congress's inability to articulate coherent, consistent guidelines to assess when federal intervention is appropriate and when it is not. Moreover, there is certainly not universal agreement over how each of these authorities should be applied. In effect, disagreement exists over how much freedom the state courts should possess to render decisions that may impact on federal law and federal judgments.(17) Notwithstanding such difficulties and doctrinal shortcomings, these are the legal authorities to which courts and litigants must turn to answer whether and when federal intervention is appropriate.

In Part III, I attempt to demonstrate that when removal of a state case on the authority of the All Writs Act is upheld, the federal court has interfered in state proceedings without reference to, and possibly in defiance of, the existing legal rules and judicial doctrines promulgated by Congress and the Court. Through this examination, I seek to reestablish that [sections] 1651(a) is only a general statutory enabling power to the federal courts and that, properly applied, the All Writs Act should be invoked not as a source of removal authority but, in appropriate cases only, to support a federal court's issuance of injunctive or other similar relief. In this manner, the All Writs Act will work in concert with existing procedural alternatives for protecting federal judgments and will lend congruity to, and minimize disharmony between, federal and state systems.

1. USE OF THE ALL WRITS ACT AS A BASIS FOR REMOVAL

   In Chance v. Sullivan, a group of plaintiffs brought suit in Texas state court against the counsel who had previously represented them in a mass toxic tort chemical contamination case.(18) Judge Kent had also presided over the mass tort action, known as the Phillips case, and had approved a settlement in the case which finally disposed of the protracted litigation.(19) After the settlement was reached, twenty-two of the nearly two hundred original Phillips plaintiffs (all of whom had already "signed releases and received settlement checks"(20)) brought suit in Texas state district court against their former lawyers.(21) The plaintiffs alleged, among other things, that their former counsel had misrepresented the actual settlement value.(22) Specifically, the plaintiffs alleged that their former counsel had failed to disclose that certain expenses had been deducted from the full settlement fund,(23) that expert fees had been improperly overstated, that there had been other improper distributions from the proceeds, and that counsel had wrongfully "padded or inflated their out-of-pocket expenses."(24)

   The defendants removed the case pursuant to 28 U.S.C. [sections] 1441, asserting that "federal question jurisdiction exists under 28 U.S.C. [sections] 1331."(25) The court denied the plaintiffs' motion to remand on two grounds. First, the court found removal proper because "the state claims are inescapably infused with the overriding federal concerns that were the basis of [the] Plaintiffs' causes of action in Phillips."(26) This notion that the common law ancillary jurisdiction doctrine may serve as a basis for exercising removal jurisdiction could be considered novel enough.(27) The court found a second, independent ground for removal in the All Writs Act.(28) Relying on one Second Circuit decision that approved removal on the basis of [sections] 1651(a),(29) the court held that it was authorized "under the All Writs Act, to exercise subject matter jurisdiction over the claims presented in this case which call into question the propriety of a settlement approved in an Order of the Court."(30) Judge Kent's decision was not appealed.

   On more than thirty occasions since 1988, federal district and circuit courts have confronted whether to uphold removal of a state case on the basis of the All Writs Act as an independent source of removal authority. Nearly every court which has considered this question has concluded that the All Writs Act may serve as an independent basis for removal jurisdiction,(31) although in a number of these cases remand was granted after it was determined that removal was unwarranted on the particular facts of the case.(32) Only three district courts(33) and one circuit court of appeals(34) by reported decisions have found that the All Writs Act is not capable of supporting removal under any circumstances. Presently, the First, Fourth, Fifth, and D.C. Circuits, as well as the Supreme Court, have not addressed the issue.(35) Judge Kent in Chance called upon [sections] 1651(a) to perform an unusual function, but he was neither the first nor is he likely to be the last to uphold a defendant's removal of a state case on the authority of the All Writs Act.(36)

   In this Part, I examine some of these cases in which [sections] 1651(a) has been allowed as removal authority. An examination of this area reveals that there are predominately two distinct but related strains of cases in which courts have relied on the All Writs Act to approve a defendant's removal of a state case:

   Type I. A subsequently filed state court suit threatens to interfere with a prior federal judgment; or

   Type II. A prior federal judgment has preclusive effect on subsequently filed state court claims.

   Some cases, of course, may fall within both types. For example, in Type II cases, the subsequent suit is often also considered a threat to the prior federal judgment. In contrast, most Type I cases are...