Heather Isringhausen Gvillo May 5, 2014, 5:33pm

RICHMOND, Va. (Legal Newsline) - A federal appeals judge recently authored a dissent backing a beauty supply manufacturer, arguing the plaintiffs' attorneys acted with misconduct through a legal "ping-pong match" by claiming they had evidence, denying that same evidence and then claiming it again when the statements best suited their cause.

In a dissenting opinion, Judge Henry Franklin Floyd supported Colgate Palmolive Company's request for sanctions and review in a consolidated case where two women allegedly exposed to asbestos through beauty products claimed possible further exposure in order to have the case remanded, and later denied those same additional exposures for joinder purposes.

"Under this disquieting logic, the majority would also claim that a person 'fails' to compute the circumference of a circle when that person is not provided with the circle's radius or diameter or the value of pi," Floyd said. "This simply cannot be the law, should not be the law, and is not the law."

The case was argued on March 19 and decided on April 30 when the published opinion was issued. Judge Andre M. Davis delivered the majority opinion with Judge Max. O. Cogburn of the Western District of North Carolina, who was sitting by designation, joining.

The majority affirmed the decision of the district court, stating the court lacked jurisdiction to revisit its remand orders.

Davis explained that the federal removal statute "immunizes from review - appellate or otherwise - any order remanding to state court a case removed to federal court."

Plaintiffs Joyce Barlow and Clara G. Mosko separately sued Colgate Palmolive Company in a Maryland state court alleging they developed asbestos-related injuries from Colgate's Cashmere Bouquet line of powder makeup products.

The Law Offices of Peter G. Angelos in Baltimore represents each plaintiff.

Colgate removed each case to U.S. District Court for the District of Maryland in Baltimore on the basis of diversity of citizenship, because Colgate is a citizen of Delaware and New York.

It also asserted fraudulent joinder as to the named in-state defendants, alleging evidence suggested the plaintiffs did not intend to pursue a claim against any other defendants.

Following removal, Barlow and Mosko's lawyers moved to remand the cases, arguing they did, in fact, have viable claims against non-diverse defendants.

The district court granted the motion to remand, finding that even though Colgate's products were the primary alleged asbestos exposure, the plaintiffs still offered more than a "glimmer of hope" that they could identify other defendants in the cases.

Mosko said she may have been exposed to asbestos while working in the Department of Agriculture building for 28 years and her case was remanded in September 2012 by Judge William D. Quarles.

Barlow said she may have been exposed to asbestos through RMR Corporation and her case was remanded in November 2012 by Judge William Nickerson.

Just eight days after the cases were remanded, the plaintiffs jointly requested to sever their cases from a consolidated trial group with a trial scheduled to begin on March 12, 2013. Instead, they sought to consolidate their cases with two other asbestos-related cases in a separate trial group.

Colgate opposed, saying the lawsuits should proceed separately because their additional possible asbestos exposures are "so different that Colgate could not receive a fair trial in a consolidated proceeding."

In response to Colgate's opposition, the two women contradicted their previous claims that there were possible additional exposures.

After arguing there was a "glimmer of hope" that other exposures existed in order to have their case remanded, the plaintiffs altered their allegations by claiming exposure to Colgate's products only.

"In short, there is absolutely no evidence to indicate or even suggest that the plaintiffs were exposed to asbestos in any form other than Cashmere Bouquet," plaintiffs' counsel stated.

Davis wrote that the plaintiffs' counsel did a "180-degree departure" from statements they made after the cases were removed to federal court.

Stemming from the plaintiffs' contention that the case was just a one-defendant case, Glynn - who was presiding over the case in state court - asked the plaintiffs if their "glimmer of hope" disappeared upon remand to state court

Calling the case a "bait-and-switch" situation, Davis wrote that the worst part is "the respective district court judges based their remand decisions precisely on counsel's factual misrepresentations."

Colgate then moved the district court to vacate the remand order as a sanction, seeking relief pursuant to Rule 11. It asked the court to sanction the plaintiffs' attorneys by imposing monetary penalties and referring them to the state bar.

However, the district court denied Colgate's motion to vacate, stating reconsideration of the remand order is prohibited by the removal statute.

Colgate appealed, stating the court erred by ruling that it did not have the authority to consider whether the claimants' counsel committed misconduct and whether their conduct warranted relief.

Davis wrote that the federal removal statute typically prohibits review of orders remanding removed cases in an effort to cut off costly and prolonged jurisdictional litigation, but it does have some exceptions.

Exceptions to the rule include cases that are not based on a lack of subject matter jurisdiction or a defect of removal procedure.

Colgate's case does not fall under the relief of those exceptions, Davis stated.

He added that Colgate is trying to get the court to look at the merits rather than the procedural correctness.

Colgate raised the issue of whether the district court should impose a sanction against the attorneys due to their alleged misconduct, arguing that its request is unrelated to the merits of the remand order.

But Davis said Colgate's claims are flawed.

"First, creating an attorney-misconduct exception to the prohibition on review of remand orders would be contrary to Congress' intent, as evidenced by the text and underlying policy goals of the federal statute," he wrote.

He explained that the district court only has "one shot, right or wrong," to determine if a removed case should be remanded.

"Second, Colgate's argument that it is not seeking 'review' is simply incorrect because its request necessarily requires a merits review of the remand orders," Davis added.

He explained that Colgate's argument can be simplified to claims that the plaintiffs' fraudulent joinder was hidden, allowing them to deceive the district court into remanding. But he adds that this issue has already been litigated.

"Colgate had its chance to prove fraudulent joinder," Davis wrote. "It failed. It does not get a second try with an improved record."

However, the Fourth Circuit found that Colgate's case differs from the cited cases because it attacks the district court's analysis of the merits of the remand, seeking reconsideration of merits with a "complete" record.

"The bottom line is that if Congress wanted to carve out an attorney-misconduct exception to the prohibition on review of remand orders, it would have done so," Davis stated.

In Floyd's dissent, he agreed with the majority that the court cannot vacate the remand orders, thus returning the lawsuit to the district court; but he argued that doesn't mean remedy isn't available.

He began by explaining that the remedy Colgate sought did not dictate the court's jurisdiction.

"It is wrong for the majority to leapfrog over the antecedent question only to look back and claim that the district court lacked jurisdiction to consider the relief sought in Colgate's motion because of the very relief sought in Colgate's motion. This bootstrapping approach is, quite simply, not the law," Floyd argued.

Floyd disagreed with the majority's contention that no other court has approached Colgate's argument, claiming every federal court has agreed district courts retain jurisdiction to impose sanctions.

Floyd included several pages of case examples where courts have approved sanctions, calling the list "appetizers" for the cases the Supreme Court has spoken on regarding sanctions ordered after a case has been dismissed and when a district court was without jurisdiction in the first instance.

Floyd also addressed the majority's argument that Colgate attempted to draw them in on the merits, saying Colgate never argued that remand was wrong according to the facts presented to the district court at that specific time.

Instead, Colgate argued that the plaintiffs' counsel's representations were not a truthful portrayal of the actual facts. In light of this, it attacked the manner by which the attorneys secured the remand orders, not the merits or correctness of the remand orders themselves.

In other words, Colgate was requesting the court to review the counsel's conduct, not the remand orders.

"This court clarifies that Rule 60 does not pertain to the merits of a judgment, order, or proceeding, but rather ensures the integrity of the manner by which such ruling was procured," Floyd explained.

As for the merits, Floyd argues the appeals court did in fact have the ability to rule on the merits of Colgate's motion even if the district court did not.

He explained that because plaintiff counsel's statements were made subsequent to remand and were made by separate attorneys in different situations, the district court recognized "sharp conflict" between the statements but were unconvinced that the conduct was sanctionable.

However, he contended that the statements were actually made by the district court after the merits of the issue had been fully presented and argued.

Floyd argued that while the cases can't be returned to district court, the appeals court can compensate Colgate for its accumulated attorneys' fees and costs as a result of the plaintiffs' "shifty positions."

Floyd wrote that the constant shifting of positions to support the plaintiffs' needs is unacceptable.

"This ping-pong match must come to an end," he added.

"The fact that the statements were made in different contexts is precisely what makes the misconduct so egregious - one would not expect a party to even attempt such a blatant about-face before the same judge; but plaintiffs' counsel knew that it was making the post-remand statements before a different judge and in a different forum. When this is the case, the consistency of a party's position must be at its pinnacle to ensure the fair adjudication of claims based on prior rulings that impacted those same claims. To not order sanctions on these facts would be an abuse of a district court's discretion," Floyd continued.

Floyd expressed disappointment over the decision that a movant failed to makes its case when the opposing party concealed the information that would have allowed the movant to remove the case to the proper forum.

"If honesty in the judicial system means anything, it means proceeding with candor before the tribunal, which plaintiffs' counsel did not do during the removal proceedings. Whatever prolonging of this litigation vacatur of the remand orders might cause, Barlow and Mosko have only their own lawyers to blame. And the truth is well worth the delay," Floyd wrote.

From Legal Newsline: Reach Heather Isringhausen Gvillo at asbestos@legalnewsline.com

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