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rejecting as "speculative" the argument that discovery and pre-trial proceedings in the state court would be "wasted" if the remand order is reversed
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Civ. No. 04-3220 (RHK/AJB).
April 6, 2005
Collin P. Dobrovolny and Bryan L. Van Grinsven, McGee, Hankla, Backes Dobrovolny, PC, Minot, North Dakota, for Plaintiffs.
Timothy R. Thornton, Scott G. Knudson, and Kevin M. Decker, Briggs and Morgan, Minneapolis, Minnesota, for Defendants.
MEMORANDUM OPINION AND ORDER
Introduction
Once again, this Court is called upon to enter the fray in the above-entitled action. This case (and thirty other "related" cases) arises out of injuries sustained by the release of liquefied anhydrous ammonia after a train derailment in North Dakota. After the plaintiffs filed an Amended Complaint containing no federal claims, the Court remanded this case to Minnesota state court on March 9, 2005. Before the Court is Defendants' Motion to Stay Remand Pending Appeal. For the reasons set forth below, the Court will deny the Motion.
See Exhibit A (attached).
Background
Plaintiffs in this case are Tom and Nanette Lundeen, both individually and on behalf of Molly and Michael Lundeen (collectively, the "Lundeens"). Defendants are Canadian Pacific Railway Company, Canadian Pacific Limited, Canadian Pacific Railway Limited, and Soo Line Railroad Company (collectively, "CPR").
In June 2004, the Lundeens sued CPR in Minnesota state court. Among their original claims, they alleged that "CPR violated applicable state law . . . as well as United States law, resulting in the release of hazardous substances and which amount to contamination, pollution, unauthorized release of hazardous material and other violations of applicable `environmental laws'. . . ." (Compl. Count Three ¶ V (emphasis added).)
In July 2004, CPR removed the case to this Court based upon federal question jurisdiction. In August 2004, the Lundeens filed their first remand motion on the ground that no federal question jurisdiction existed. This Court denied that motion, finding that the face of the complaint — specifically, the reference to "United States law" — stated a federal question. Lundeen v. Canadian Pacific Ry. Co., 342 F. Supp. 2d 826, 829 (D. Minn. 2004).
In November 2004, the Lundeens moved to amend their complaint to delete the federal claim and, in the alternative, to voluntarily dismiss that claim. (See Doc. Nos. 26, 29.) At the same time, they filed a motion, conditioned upon amendment of the complaint or voluntary dismissal of the federal claim, to remand to state court. (See Doc. No. 33.)
In January 2005, Magistrate Judge Boylan granted the Lundeens' motion to amend and determined that the motion to dismiss was moot. (Doc. No. 54.) CPR did not appeal the magistrate judge's decision to the undersigned, as permitted under Federal Rule of Civil Procedure 72(a) and Local Rule 72.1(b)(2). In February 2005, the Lundeens filed their Amended Complaint. (Doc. No. 55.) The reference to "United States law," which had formed the basis for federal question jurisdiction, was deleted.
On March 9, 2005, the Court granted the Lundeens' second remand motion (the "Remand Order"). (Doc. No. 68.) Remand was warranted under the standards articulated in Carnegie-Mellon University v. Cohill, 484 U.S. 343 (1988), as well as under 28 U.S.C. § 1367(c), because only state law issues remained in the case after the Amended Complaint was filed. (Id.)
On March 25, 2005, CPR filed a Notice of Appeal of the Remand Order and the magistrate judge's order granting the motion to amend. (Doc. No. 71.) It also filed a Motion to Stay Remand Pending Appeal. (Doc. No. 72.) It seeks a stay as a matter of right under Rule 62(d) of the Federal Rules of Civil Procedure and, alternatively, a discretionary stay under Rule 8(a)(1) of the Federal Rules of Appellate Procedure. (Id.)
Not having appealed the magistrate judge's order to the undersigned, it is questionable whether CPR can appeal that order to the Eighth Circuit. Rule 72(a) provides that "[w]ithin 10 days after being served with a copy of the magistrate judge's order, a party may serve and file objections to the order; a party may not thereafter assign as error a defect in the magistrate judge's order to which objection was not timely made." Fed.R.Civ.P. 72(a); see Continental Cas. Co. v. Dominick D'Andrea, Inc., 150 F.3d 245, 252 (3d Cir. 1998); Pagano v. Frank, 983 F.2d 343, 346 (1st Cir. 1993).
Analysis
I. Rule 62(d) Stay
Rule 62(d) provides:
When an appeal is taken the appellant by giving a supersedeas bond may obtain a stay subject to the exceptions contained in subdivision (a) of this rule. The bond may be given at or after the time of filing the notice of appeal or of procuring the order allowing the appeal, as the case may be. The stay is effective when the supersedeas bond is approved by the court.
Rule 62(a) provides that unless otherwise ordered, "an interlocutory or final judgment in an action for an injunction or in a receivership action, or a judgment or order directing an accounting in an action for infringement of letters patent, shall not be stayed."
Fed.R.Civ.P. 62(d) (footnote added). The posting of a bond protects the prevailing party from the risk of an uncollectible judgment and compensates him for delay in receiving his money.See NLRB v. Westphal, 859 F.2d 818, 819 (9th Cir. 1988);Donovan v. Fall River Foundry Co., 696 F.2d 524, 526 (7th Cir. 1982).
Granting a stay pending appeal in cases involving non-monetary judgments, however, has proven to be an "ill-suited remedy." 12 James Wm. Moore et al., Moore's Federal Practice § 62.03[3][b] (3d ed. 2004); see Omnioffices, Inc. v. Kaidanow, 201 F. Supp. 2d 41, 43 (D.D.C. 2002). "Courts have restricted the application of Rule 62(d)'s automatic stay to judgments for money because a bond may not adequately compensate a non-appealing party for loss incurred as a result of the stay of a non-money judgment." Hebert v. Exxon Corp., 953 F.2d 936, 938 (5th Cir. 1992) (citing Westphal and Donovan and noting that application of Rule 62(d) turns on whether the judgment is monetary or non-monetary); see Westphal, 859 F.2d at 819 (holding Rule 62(d) did not operate to stay an order directing compliance with NLRB subpoenas); Donovan, 696 F.2d at 526-27 (holding appellant not entitled under Rule 62(d) to stay order permitting OSHA inspection); Omnioffices, 201 F. Supp. 2d at 44 (stating that Westphal and Donovan "reasoned that Rule 62(d) does not apply to non-monetary judgments since posting bond is meaningless when it does not protect the rights of the non-moving party"); Yankton Sioux Tribe v. Southern Missouri Waste Management Dist., 926 F. Supp. 888, 890 (D.S.D. 1996) (stating that "Rule 62(d) is applied only to a monetary judgment or its equivalent").
In this case, there is no dispute that the order from which CPR seeks a stay is not a money judgment — it is a remand order. As such, the Court finds no support for granting a stay under Rule 62(d). See Perez v. Massachusetts Gen. Hosp., 193 F.R.D. 43, 45 (D.P.R. 2000) ("The language of Rule 62(d) plainly does not fit a situation where the order sought to be stayed is a remand."); City of New Orleans v. Nat'l Serv. Cleaning Corp., 1997 WL 5915, at *1 (E.D. La. Jan. 6, 1997) (holding that automatic stay under Rule 62(d) was unavailable for appeal of remand order). CPR's reliance upon Peterson v. United States, 2000 WL 1909806 (D. Minn. Oct. 5, 2000) and Enterprise Leasing Co. v. Metropolitan Airports Commission, 193 F.R.D. 641 (D. Minn. 2000) is misplaced because neither case dealt with a motion to stay a remand order. Accordingly, the Court will deny CPR's Rule 62(d) motion for a stay pending appeal. II. Rule 8(a)(1) Stay
Notwithstanding the unavailability of a stay under Rule 62(d), CPR does not adequately address whether this Court has the authority to enjoin the state court proceeding. CPR argues that this Court can order the state court to stay its proceedings under the "in aid of . . . jurisdiction" exception to the Anti-Injunction Act. (See Mem. in Supp. at 5.) The Court disagrees. The Anti-Injunction Act provides that a "court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments." 28 U.S.C. § 2283. The "in aid of . . . jurisdiction" exception does not apply here because it operates only when a state court proceeding threatens to dispose of property that forms the basis for federal in rem jurisdiction.See Phillips v. Charles Schreiner Bank; 894 F.2d 127, 131-32 (5th Cir. 1990); In re Fed. Skywalk Cases, 680 F.2d 1175, 1181-83 (8th Cir. 1982). Furthermore, even if the exception applied, the Court is not required to issue an injunction under the Act. See Chick Kam Choo v. Exxon Corp., 486 U.S. 140, 151 (1988).
Rule 8(a)(1) of the Federal Rules of Appellate Procedure provides:
A party must ordinarily move first in the district court for the following relief:
(A) a stay of the judgment or order of a district court pending appeal;
(B) approval of a supersedeas bond; or
(C) an order suspending, modifying, restoring, or granting an injunction while an appeal is pending.
Fed.R.App.P. 8(a)(1). The party seeking a stay pending appeal must show (1) that it is likely to succeed on the merits; (2) that it will suffer irreparable injury unless the stay is granted; (3) that no substantial harm will come to other interested parties; and (4) that the stay will do no harm to the public interest. See Fargo Women's Health Org. v. Schafer, 18 F.3d 526, 538 (8th Cir. 1994); James River Flood Control Ass'n v. Watt, 680 F.2d 543, 544 (8th Cir. 1982).
In this case, CPR has failed to show that it is likely to succeed on the merits. The Court's decision not to exercise supplemental jurisdiction over the Lundeens' state law claims was discretionary, see Cohill, 484 U.S. at 357, and CPR has demonstrated no abuse of discretion. While CPR rehashes its forum manipulation argument, the Court has previously found no such manipulation occurred that would prohibit remand. Additionally, CPR has not shown that it will suffer irreparable injury should a stay not be granted. Although it asserts that discovery and other pretrial proceedings in state court would be "wasted" if the Remand Order is reversed (Mem. in Supp. at 8), this concern is speculative and there is no indication that the fruits of those efforts cannot be used in federal court should the case return. Finally, CPR has also failed to show that the Lundeens will suffer no substantial harm if a stay is issued. Accordingly, the Court will deny CPR's Rule 8(a)(1) motion for a stay pending appeal.
Conclusion
Based on the foregoing, and all of the files, records, and proceedings herein, IT IS ORDERED that CPR's Motion to Stay Remand Pending Appeal (Doc. No. 72) is DENIED.Exhibit A
The "related" cases are:Salling, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3221;
Darveaux, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3222;
Schafer, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3223;
Wickman v. Canadian Pacific Railway Co., et al., Civ. No. 04-3224;
Swenson, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3225;
Behnkie, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3282;
Carlson v. Canadian Pacific Railway Co., et al., Civ. No. 04-3283;
Crabbe, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3284;
Dahly, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3286;
Duchsherer, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3287;
Deutsch, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3288;
Flick v. Canadian Pacific Railway Co., et al., Civ. No. 04-3290;
Gleason v. Canadian Pacific Railway Co., et al., Civ. No. 04-3291;
Goerndt v. Canadian Pacific Railway Co., et al., Civ. No. 04-3292;
Gross, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3293;
Just v. Canadian Pacific Railway Co., et al., Civ. No. 04-3294;
Korgel v. Canadian Pacific Railway Co., et al., Civ. No. 04-3295;
McBride, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3296;
Muhlbradt v. Canadian Pacific Railway Co., et al., Civ. No. 04-3297;
Shigley v. Canadian Pacific Railway Co., et al., Civ. No. 04-3298;
Smith, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3299;
Todosichuk v. Canadian Pacific Railway Co., et al., Civ. No. 04-3300;
Hingst v. Canadian Pacific Railway Co., et al., Civ. No. 04-3301;
Freeman, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3303;
Weltzin v. Canadian Pacific Railway Co., et al., Civ. No. 04-3304;
Todd v. Canadian Pacific Railway Co., et al., Civ. No. 04-3305;
Lakoduk v. Canadian Pacific Railway Co., et al., Civ. No. 04-3306;
Westmeyer, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3307;
Slorby v. Canadian Pacific Railway Co., et al., Civ. No. 04-3309; and
Nisbet, et al. v. Canadian Pacific Railway Co., et al., Civ. No. 04-3311.