The Old Bait and Switch: the Fourth Circuit Declined to Vacate a Remand Order as a Sanction Under Rule 60(b)(3) in Barlow v. Colgate Palmolive Co

• Publication year: 2022

48 Creighton L. Rev. 145. THE OLD BAIT AND SWITCH: THE FOURTH CIRCUIT DECLINED TO VACATE A REMAND ORDER AS A SANCTION UNDER RULE 60(B)(3) IN BARLOW V. COLGATE PALMOLIVE CO

THE OLD BAIT AND SWITCH: THE FOURTH CIRCUIT DECLINED TO VACATE A REMAND ORDER AS A SANCTION UNDER RULE 60(B)(3) IN BARLOW V. COLGATE PALMOLIVE CO.

Spencer R. Murphy(fn*)

I. INTRODUCTION

In Barlow v. Colgate Palmolive Co.,(fn1) the United States Court of Appeals for the Fourth Circuit determined that a lack of diversity jurisdiction prevented the court from reviewing a remand order on ap-peal.(fn2) The court specifically referred to 28 U.S.C. § 1447, which generally prevents a court from reviewing remand orders.(fn3) There are exceptions to this rule, but no exception exists when a case is remanded for a lack of subject matter jurisdiction.(fn4) However, the Fourth Circuit did not have to review the merits of the remand order for the lack of subject matter jurisdiction, and instead could have vacated the remand order as a sanction under Rule 60(b)(3) of the Federal Rules of Civil Procedure.(fn5)

Joyce Barlow and Clare Mosko (collectively "Barlow") brought separate claims against Colgate-Palmolive Co. ("Colgate") and other defendant corporations in the Circuit Court for Baltimore City.(fn6) Both parties originally alleged that Colgate's line of makeup products contained asbestos and ultimately caused cancer.(fn7) Many named defendants were not diverse parties; however, Colgate removed the case to the United States District Court for the District of Maryland claiming that diversity jurisdiction existed because Barlow fraudulently joined non-diverse parties to the action.(fn8) The district court found that Barlow had at least a glimmer of hope against these non-diverse parties and remanded the case to state court.(fn9) Upon remand, Barlow changed their argument and stated that they did not have any claims against any party besides Colgate.(fn10) Colgate subsequently appealed to the district court, asking it to vacate its remand order.(fn11) The district court denied Colgate's motion, and the Fourth Circuit affirmed the district court's ruling reiterating the 28 U.S.C. § 1447 prohibition against reviewing remand orders.(fn12)

This Note will first set out the facts and holding in Barlow v. Colgate Palmolive Co.(fn13) It will then review the Fourth Circuit's holding that remand orders are not reviewable on appeal or otherwise, as provided in the case of In re Lowe(fn14) and in accordance with 28 U.S.C. § 1447.(fn15) The Note will then discuss Willy v. Coastal Corp.,(fn16) where the United States Supreme Court allowed sanctions under Rule 11 of the Federal Rules of Civil Procedure ("Rule 11") even after finding a lack of subject matter jurisdiction.(fn17) This Note will then discuss the United States Court of Appeals for the Eleventh Circuit's holding in Aquamar, S.A. v. Del Monte Fresh Produce N.A., Inc.,(fn18) where the court vacated a remand order on issues collateral to the merits of the remand order.(fn19) This Note will also present the test established by the Fourth Circuit in Square Construction Co. v. Washington Metropolitan Area Transit Authority(fn20) for applying Rule 60(b)(3) sanc-tions.(fn21) The Note will argue that the Fourth Circuit failed to allow vacatur as a sanction under Rule 60(b)(3) in Barlow.(fn22) Finally, the Note will set forth that the court also failed to apply an appropriate sanction against Barlow's attorneys as provided in Rule 11.(fn23)

II. FACTS AND HOLDING

In Barlow v. Colgate Palmolive Co.,(fn24) two plaintiffs brought separate claims against Colgate Palmolive Co. ("Colgate") and other corporations in Maryland state court.(fn25) Colgate removed these claims to federal court on the basis of diversity of citizenship despite the fact that the plaintiffs had joined non-diverse parties.(fn26) The United States District Court for the District of Maryland remanded both cases, finding a lack of diversity of citizenship, despite Colgate's claim that Barlow fraudulently joined non-diverse parties.(fn27) On remand, the plaintiffs requested the claims to be consolidated into one case because they only had a claim against Colgate.(fn28)

Joyce Barlow (a citizen of Maryland) and Clare Mosko (a citizen of Florida) were both diagnosed with malignant mesothelioma lung can-cer.(fn29) Barlow and Mosko (collectively "Barlow") originally brought separate lawsuits in the Circuit Court for Baltimore City against many defendant corporations, including Colgate.(fn30) Barlow alleged that Colgate exposed each of them to asbestos through Colgate's Cashmere Bouquet talcum powder ("Cashmere") used in makeup prod-ucts.(fn31) Colgate removed the action to the United States District Court for the District of Maryland before discovery ended and in compliance with 28 U.S.C. § 1446.(fn32) Colgate claimed that the proper parties were completely diverse and that Barlow had fraudulently joined non-diverse defendants to prevent the action from remaining in federal court.(fn33) Colgate claimed that Barlow fraudulently joined these non-diverse defendants to prevent the case from being heard in federal court arguing Barlow failed to provide any specific evidence as to why they joined the other Maryland defendant corporations.(fn34) Colgate had the burden to prove that subject matter jurisdiction existed because it was the removing party.(fn35) When the removing party claims fraudulent joinder, a federal court can retain jurisdiction and dismiss the unnecessary parties, if the court finds in favor of the removing party.(fn36) Colgate had the burden to prove that Barlow could not show any cause of action against the non-diverse parties.(fn37)

The United States District Court for the District of Maryland remanded the case to state court after finding that Colgate did not meet the required burden in both cases because the court determined there was at least a glimmer of hope against the non-diverse defendants.(fn38) However, upon remand, Barlow moved to consolidate both cases and stated, explicitly to the state court judge, that the only claim they were pursuing was against Colgate and not against the other non-diverse parties.(fn39) This statement led Colgate to move for vacatur of the remand order in the district court.(fn40) The district court denied this motion because the plain language of 28 U.S.C. § 1447(d) does not allow a federal court to review remand orders on appeal.(fn41)

Colgate then appealed the district court's denial of vacatur to the United States Court of Appeals for the Fourth Circuit.(fn42) Colgate claimed the district court had the authority to strike the remand orders as a sanction pursuant to Rules 11 and 60(b)(3) of the Federal Rules of Civil Procedure.(fn43) The Fourth Circuit disagreed with Colgate and affirmed the district court's remand to state court.(fn44) The Fourth Circuit agreed with the district court's reasoning that 28 U.S.C. § 1447(d) prohibits courts from reviewing a case that has been remanded to state court.(fn45) Colgate asserted that the district court could have vacated the remand order and did not have to review the remand order because a review delves into the merits of the case, and Colgate was asking the district court to look into matters collateral to the merits of the case.(fn46) The Fourth Circuit disagreed with Colgate's argument for three reasons.(fn47) First, it stated that there was no legislative intent to create an exception to 28 U.S.C. § 1447(d) for attorney mis-conduct.(fn48) Second, the Fourth Circuit disagreed that the district court could vacate the remand order as a sanction under Rule 11 or Rule 60(b)(3) without reviewing the remand order.(fn49) Finally, the court asserted that the cases Colgate relied upon to illustrate that vacatur is separate from a review were not controlling.(fn50)

Judge Floyd wrote a dissenting opinion advocating for the grant of vacatur of the remand order and reversal of the district court's rul-ing.(fn51) He asserted that the district court had jurisdiction to hear Colgate's Rule 11 and Rule 60(b)(3) motions.(fn52) In his dissenting opinion, Judge Floyd discussed the poor manner in which Barlow's attorneys handled the case and how their statements in state court, upon remand, showed misconduct.(fn53) After remand, Barlow's attorney's statements and actions disturbed the state court judge when the judge confronted them with making different assertions as to which parties their claims maintained a glimmer of hope.(fn54)

Judge Floyd reasoned that the court had jurisdiction to apply Rule 11 sanctions against Barlow's attorneys because the United States Supreme Court previously allowed Rule 11 sanctions, even after finding that there was a lack of subject matter jurisdiction.(fn55) However, Judge Floyd also stated that vacatur would not be an appro-priate sanction under Rule 11.(fn56) Floyd then considered Colgate's Rule 60(b)(3) motion and determined that he would have found that the district court had jurisdiction to hear the motion because it would not have been a review of the remand orders.(fn57) After reasoning that the court had jurisdiction to hear the Rule 60(b)(3) motion, he stated that vacatur would have been appropriate.(fn58) Judge Floyd reasoned that vacatur would be appropriate after applying the Square Construction Co. v. Washington Metropolitan Area Transit Authority(fn59) three-pron gtest.(fn60)

III. BACKGROUND

A. IN...