[00:00:01] Speaker 04:
All right.

[00:00:01] Speaker 04:
Good afternoon, everyone.

[00:00:02] Speaker 04:
We'll proceed to hear argument in the only case on calendar for this special session, which is 23-55556 Thomas Evans versus CEMEX Construction Materials Specific LLC et al.

[00:00:19] Speaker 04:
And we'll hear first from Mr. Burns.

[00:00:24] Speaker 00:
Thank you, Your Honor.

[00:00:25] Speaker 00:
And I just want to take this moment to thank the panel very much, as well as the courtroom deputy and all the court staff for continuing this argument, given the extenuating circumstances from a couple of weeks ago.

[00:00:35] Speaker 00:
May it please the court, my name is Patrick Burns and I represent the appellants.

[00:00:38] Speaker 00:
At this time, I'd like to reserve two minutes of my time for rebuttal.

[00:00:43] Speaker 00:
Here, the trial court committed two errors in denying the motion to remand, and I want to start with the first.

[00:00:48] Speaker 00:
The district court made a determination that Appellant CCMP's agreement in 2020 that it would agree not to remove the case precluded Appellant CEMEX Inc's removal.

[00:01:00] Speaker 00:
But that conclusion fails to recognize that these are two separate defendants, and Congress and this court have provided that when a defendant initially fails to exercise the removal right, it does not prevent a later search.

[00:01:12] Speaker 04:
The first thing we have to settle here is our jurisdiction.

[00:01:15] Speaker 04:
So can you start off by addressing why the jurisdictional bar of 1447D does not prevent us from exercising jurisdiction over your appeal?

[00:01:26] Speaker 00:
Yes, Your Honor.

[00:01:27] Speaker 00:
This court has jurisdiction because the Supreme Court has clarified that Section 1447D's bar on reviewability only applies to the grounds listed in 1447C and thus reviews only precluded where the district court's order is based on either a lack of subject matter jurisdiction or procedural defect.

[00:01:45] Speaker 00:
That was the Supreme Court's Thermitron decision.

[00:01:48] Speaker 00:
So ultimately, the issue here is whether the district court's remand was based on a procedural defect.

[00:01:53] Speaker 00:
And the answer to that is no.

[00:01:54] Speaker 04:
Well, what do you make of the change in the language in at the

[00:02:00] Speaker 04:
between ThermTron and some of the other Supreme Court decisions.

[00:02:07] Speaker 04:
C got changed from saying a motion to remand the case on the basis of any defect in removal procedure was changed to a motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction.

[00:02:22] Speaker 04:
And do you read CAM?

[00:02:24] Speaker 04:
Our decision in CAM is saying that that change in wording had no effect at all.

[00:02:30] Speaker 00:
Correct, or maybe no effect in this case as applied to this case or as applied in CAM.

[00:02:35] Speaker 00:
So perhaps there was some kind of broadening when the procedural was removed to include other types of defects, but CAM makes very clear that a contractual waiver based on something like a forum selection clause is not a defect.

[00:02:49] Speaker 00:
And even though the word procedural was removed, CAM of course post-states that.

[00:02:54] Speaker 00:
And so CAM's conclusions apply equally here.

[00:02:56] Speaker 00:
In fact, that case is directly on point because

[00:02:59] Speaker 00:
There, a forum selection clause was the reason that the defendant could not remove, and here it's the same thing.

[00:03:06] Speaker 00:
The District Court's order first notes that it was unclear whether CCMP is precluded from agreeing to a later served defendant's removal.

[00:03:14] Speaker 00:
It then says,

[00:03:15] Speaker 00:
that it then says that based on the contract, it precludes any kind of exercise of the removal right.

[00:03:21] Speaker 04:
But a contractual waiver is not a defect, whether procedural or otherwise.

[00:03:31] Speaker 04:
Worm Selection Clause operates outside of the various requirements for removal specified in 1441 to 1453.

[00:03:39] Speaker 04:
Whereas here, this contractual issue seems to operate inside of the requirements in the sense that it voids the consent.

[00:03:52] Speaker 00:
Not exactly, Your Honor, because the district court's order doesn't analyze it that way.

[00:03:56] Speaker 00:
The district court even does not even address lack of unanimous consent, except in a footnote it refers to it.

[00:04:02] Speaker 00:
But really what the district court concludes here is it says, the intent of the parties in their emails seems to be to prevent removing generally.

[00:04:10] Speaker 00:
That's not a lack of unanimous consent.

[00:04:12] Speaker 00:
That's a contractual waiver and a substantive right, and that's a substantive issue.

[00:04:16] Speaker 03:
Well, it is a lack of unanimous consent because the party that entered into that agreement is the party that can't give the unanimous approval.

[00:04:26] Speaker 03:
I mean, I understand what the district court said in the subsequent denial of stay, but I don't really follow the logic of how that's not a procedural defect in removal.

[00:04:38] Speaker 03:
It obviously is.

[00:04:41] Speaker 03:
You don't have unanimous consent.

[00:04:43] Speaker 00:
Your honor, that's where we end up with lack of unanimous consent.

[00:04:46] Speaker 00:
However, the basis for it is a substantive issue, which allows this court to review.

[00:04:50] Speaker 00:
One of the cases that's on point here is the Russell Corp case from the 11th Circuit, which is actually a case Evans relies on for the merits.

[00:04:57] Speaker 00:
But on the jurisdictional point, it's directly applicable here.

[00:05:00] Speaker 00:
What it says there is the district court found that the unanimity requirement was not met only after it had interpreted the service of suit clause, which was the clause preventing removal.

[00:05:10] Speaker 00:
The court then goes on to say, in essence, the court made a substantive determination of a contractual provision which was external to the removal process.

[00:05:19] Speaker 00:
So ultimately, though we do end up at a lack of unanimous consent, ultimately, this reviewability is not precluded here because this basis, the district court's basis based in contract and contractual waiver, which is a substantive right, abandonment of a substantive right, that's all external to the removal process.

[00:05:36] Speaker 00:
So perhaps this case would be different, Your Honor,

[00:05:40] Speaker 00:
There was some kind of procedural problem with the lack of unanimous consent.

[00:05:43] Speaker 00:
Maybe one defendant didn't provide consent within the time limit, something along those lines, or there was some other kind of defect.

[00:05:50] Speaker 00:
But when the basis is a substantive contract that the district court concludes precludes removal or precludes consent, that should not be considered a defect under CAM.

[00:06:01] Speaker 00:
or under any of these cases.

[00:06:03] Speaker 01:
Under our power acts, don't we have to be deferential to the district court's characterization of the remand that as long as it's colorable, we must defer to it?

[00:06:15] Speaker 00:
Correct, Your Honor.

[00:06:16] Speaker 00:
As long as it's colorable, this Court looks to the District Court's basis for remand.

[00:06:21] Speaker 00:
And here, the District Court not only analyzed this as a contractual waiver case, not a lack of unanimous consent, but then in its subsequent order on whether it had jurisdiction to recall and issue the state, it specifically said that it had jurisdiction because this is not about a procedural defect in Section 1447C.

[00:06:41] Speaker 01:
And can we look at that second order?

[00:06:43] Speaker 01:
Because that second order was a remand.

[00:06:45] Speaker 01:
I mean, or should we limit it to the original remand order?

[00:06:50] Speaker 00:
Yeah.

[00:06:51] Speaker 00:
I apologize, Your Honor.

[00:06:52] Speaker 00:
You should look to the original remand order.

[00:06:54] Speaker 00:
I'm just noting that the district court clearly said later in a subsequent order that it was clarifying this is not about a defect in Section 1447C.

[00:07:02] Speaker 00:
But the district court's order here clearly analyzed this under contractual waiver.

[00:07:10] Speaker 00:
It says, allowing CEMEX to consent to removal would therefore undercut its contract with Evans.

[00:07:14] Speaker 00:
And so this isn't any kind of defect.

[00:07:16] Speaker 00:
This is a substantive right.

[00:07:17] Speaker 00:
It's external to the removal process, the removal procedure.

[00:07:20] Speaker 00:
And therefore, this court should not be barred from reviewing the remand order below.

[00:07:26] Speaker 03:
If we'd follow that logic, does it lead us to any different ultimate result?

[00:07:33] Speaker 00:
Your Honor, if you follow the logic of the fact that this Court has reviewability, then... Well, it seems to me if the premise of... You're arguing it's not a procedural defect.

[00:07:44] Speaker 03:
The District Court based its conclusion on this contractual agreement between the parties.

[00:07:52] Speaker 03:
If we assume, okay, that's the basis for the District Court's agreement and the District Court was correct about that, is the end result any different?

[00:08:02] Speaker 00:
The end result will be that this court has jurisdiction to consider.

[00:08:05] Speaker 03:
To say that you lose on the merits of the argument rather than on the jurisdiction of the argument.

[00:08:10] Speaker 03:
That's what I'm saying is the ultimate result different.

[00:08:12] Speaker 00:
I understand, Your Honor.

[00:08:13] Speaker 00:
No, it doesn't affect the merits because we contend that the district court, though that was its colorable conclusion, that it was not right in analyzing that as a case of waiver.

[00:08:22] Speaker 00:
Why?

[00:08:24] Speaker 00:
Well, first, a waiver of a statutory right in this circuit has long been recognized that it has to be clear and unmistakable.

[00:08:30] Speaker 03:
This is a contractual agreement between two parties.

[00:08:33] Speaker 03:
I'm not sure that I understand that the waiver context is one that fits here.

[00:08:40] Speaker 03:
So I think that's an issue you're going to have to deal with.

[00:08:42] Speaker 03:
And it seems to me the contract's pretty straightforward.

[00:08:46] Speaker 03:
It's hard to see how the expectations of the parties are going to be realized through your interpretation of it or the interpretation you're offering to us.

[00:08:56] Speaker 00:
Well, Your Honor, the key part here is that Congress amended the statute, Section 1446, in 2012.

[00:09:01] Speaker 00:
And when it did so, it specifically allowed there to be a distinction between the right to initiate the removal and the right to consent to removal.

[00:09:10] Speaker 00:
And this Court, even before that amendment, had held the same in Despino.

[00:09:14] Speaker 03:
So because there are two separate- You're telling me the reasonable expectations of the parties were what you just described, that it was fine with your colleague

[00:09:25] Speaker 03:
that you couldn't remove the case, but they had no objection whatsoever to you agreeing to some other party removing the case.

[00:09:33] Speaker 03:
Really?

[00:09:34] Speaker 03:
I mean, it seems to me that's a pretty unlikely interpretation of the contract and certainly doesn't reflect the expectation of Evans.

[00:09:42] Speaker 00:
Your honor, the key law in this circuit is that it has to be about the party's intent and expectation at the time the contract was made.

[00:09:49] Speaker 00:
At the time this email was reached, the disagreement was reached in December 2020.

[00:09:53] Speaker 00:
The fact of the matter is CEMEX Inc.

[00:09:55] Speaker 00:
was not in the case.

[00:09:56] Speaker 00:
There was no issue about another defendant coming into the case.

[00:09:59] Speaker 00:
And the idea that CCMP would have waived its right in perpetuity

[00:10:03] Speaker 00:
to ever consent to a later-served defendant's removal.

[00:10:06] Speaker 00:
When another defendant comes in the case, it completely changes the nature of the case.

[00:10:09] Speaker 03:
It might completely... What's the relationship between the two SEMEX entities?

[00:10:14] Speaker 00:
Your Honor, the SEMEX, Inc., the later-served defendant is the parent corporation, but they are distinct entities.

[00:10:21] Speaker 03:
As the district court found, they... But they are... Is it a wholly-owned subsidiary?

[00:10:27] Speaker 00:
Yes, Your Honor.

[00:10:28] Speaker 03:
So let's go back to the expectations of Evans

[00:10:31] Speaker 03:
Why in heaven's name would Evans agree to this contract if it was understood that if an additional fully owned, or I guess this is the parent, if the parent which fully owns the originally named defendant comes into the case, then suddenly removing the case to federal court is back on the table?

[00:10:52] Speaker 00:
What makes that a logical interpretation on the part of Evans?

[00:10:56] Speaker 00:
Well, Your Honor, Evans is the plaintiff here.

[00:10:58] Speaker 00:
He has the right to name any party he wants.

[00:10:59] Speaker 00:
At the time he made this agreement, he had only named CCMP as a defendant.

[00:11:03] Speaker 00:
Actually, no.

[00:11:04] Speaker 00:
That's not true.

[00:11:05] Speaker 03:
The reason we're here is that your client wanted to get Mr. whose name I don't recall offhand out of the case.

[00:11:14] Speaker 03:
And that's how this agreement was generated.

[00:11:17] Speaker 03:
And so they were in the court.

[00:11:19] Speaker 03:
They wanted to be in.

[00:11:22] Speaker 03:
accepted your request to drop the CEO out on the understanding that his naming is what kept it in state court.

[00:11:30] Speaker 03:
It makes no sense to me to think that they would have expected, but it's going to be okay if another CEMEX entity comes into the case.

[00:11:37] Speaker 03:
We don't care then.

[00:11:38] Speaker 03:
We'll let you go to federal court.

[00:11:40] Speaker 03:
I do not see any logic in that whatsoever and why we should expect that's the reasonable expectation of the parties in this context is

[00:11:48] Speaker 03:
has baffled me and I'm waiting for a better explanation of me was why it makes any sense.

[00:11:53] Speaker 00:
Your honor, this was two years later with a completely new defendant and the calculus had changed.

[00:11:58] Speaker 00:
As you noted, the exchange was agreement to drop Mr. Lopez.

[00:12:01] Speaker 03:
You obviously know that the plaintiff wants to remain in state court.

[00:12:07] Speaker 03:
That's why they've been fighting this issue for heaven knows how many months now.

[00:12:11] Speaker 03:
So why should we think that

[00:12:14] Speaker 03:
their desire to be in state court when this whole thing started somehow would have changed because the parent company got named.

[00:12:21] Speaker 03:
So at that point on, it's OK with them under this agreement to go to federal court.

[00:12:26] Speaker 03:
It is obviously not OK.

[00:12:28] Speaker 03:
That's why they've been fighting it.

[00:12:29] Speaker 03:
So why should we think that's a reasonable expectation?

[00:12:32] Speaker 00:
Well, Your Honor, first, Your Honor is completely focused on the plaintiff here, but the contract has to have a meeting of the minds, and there was definitely no expectation on behalf of CCMP.

[00:12:41] Speaker 00:
In fact, a lot of cases like this... You got what you wanted.

[00:12:46] Speaker 03:
The CEO was dropped out of the case, and now you're prepared to say your expectation should dictate what the plaintiff wanted, which is to stay in state court.

[00:12:56] Speaker 00:
Is that it?

[00:12:57] Speaker 00:
The plaintiff got what he wanted because there was no exercise of the removal right.

[00:13:03] Speaker 00:
Congress in this court has made very clear that that right is separate from it.

[00:13:06] Speaker 00:
In the Montana versus Tallinn case, there was 13 years removed from when the first defendant didn't exercise a removal right.

[00:13:13] Speaker 00:
in 2004 and then in 2017 after several appeals it comes back the calculus changes then they want access to the federal forum and the courts there said that congress has allowed that later defendant to exercise that right there's nothing in this agreement that would support that the right to consent to a later served defendant was there that would be drafting that would be putting inserting language into the contract or the emails that just doesn't exist

[00:13:35] Speaker 00:
And especially under the court's own standards, which put the burden on Evans, specifically that a waiver has to be clear and unmistakable when it's waiving a statutory right, or that waiver of a constitutional right has to be knowing and voluntary.

[00:13:50] Speaker 00:
There's no indication here that CCMP was agreeing to waive something if its parent corporation was going to come into the case.

[00:13:58] Speaker 04:
All right.

[00:13:58] Speaker 04:
Counselor, did you want to save time for rebuttal?

[00:14:00] Speaker 00:
Yes, Your Honor.

[00:14:01] Speaker 00:
Thank you.

[00:14:01] Speaker 04:
Okay.

[00:14:02] Speaker 04:
All right.

[00:14:03] Speaker 04:
Then we'll hear now from Mr. LeCour.

[00:14:07] Speaker 04:
Did I pronounce that correctly?

[00:14:09] Speaker 02:
Yes.

[00:14:10] Speaker 02:
And if it's OK, I would like to reserve three minutes for rebuttal.

[00:14:13] Speaker 02:
You don't have rebuttal.

[00:14:14] Speaker 02:
I don't have rebuttal.

[00:14:15] Speaker 02:
Oh, I'm so sorry.

[00:14:17] Speaker 02:
Good afternoon, Your Honors, and may it please the court, Jonathan La Cour, counsel for the appellee respondent, Thomas Evans, in the matter before you.

[00:14:24] Speaker 02:
We intend to address two issues that the court has asked us to subsequently address.

[00:14:28] Speaker 02:
The first is the review, whether this court has the jurisdiction under 1447 to review the remand order within the district court.

[00:14:37] Speaker 02:
And secondly, if review is permissible, whether the court erred in finding that a remand was appropriate given the circumstances in this case.

[00:14:46] Speaker 02:
as it relates to the review.

[00:14:48] Speaker 02:
The matter that you have before you builds upon the prior rulings related to 1447 in orders in Pellaport, a 1984 case, Power X, a 2007 case, and Waco from way back in 1934.

[00:15:03] Speaker 02:
It's important to understand what these cases each stand for.

[00:15:07] Speaker 02:
The Power X stands for the ideal that a party may not have a remand order reviewed in an appellate court as a litigation tactic

[00:15:14] Speaker 02:
where one, it would increase the burden on the courts just like your honorable court, and two, prevent the parties from proceeding substantively with their case.

[00:15:22] Speaker 02:
And that is exactly, unfortunately, what is happening here.

[00:15:26] Speaker 04:
How is there a defect in removal procedure that would trigger the bar of 1447D when the removal paper states very clearly

[00:15:39] Speaker 04:
I'm looking at ER 185, defendant semics, construction material specific LLC consents to the removal of this action.

[00:15:48] Speaker 04:
So the statutory requirement for removal procedure is satisfied.

[00:15:54] Speaker 04:
How is the bar of D still implicated even though it's not a statutory defect?

[00:16:01] Speaker 02:
Yes, Your Honor, and I appreciate you posing that question.

[00:16:04] Speaker 02:
There was an agreement between the parties where the defendants, the appellants in this case, reached out to us asking us to remove or dismiss an individual defendant.

[00:16:14] Speaker 02:
And out of that agreement, what the agreement between the parties was that they would not remove at that time and that Mr. Lopez would be available as if he were a party as it relates to discovery.

[00:16:28] Speaker 02:
When there was a removal, that party, CMAX Construction Materials, could not have consented to the removal.

[00:16:37] Speaker 02:
And for that reason, that creates a procedural defect.

[00:16:41] Speaker 02:
Had they had the ability to consent to that, there would not have been a procedural defect.

[00:16:48] Speaker 02:
And that is exactly what the issue really is here.

[00:16:51] Speaker 02:
Because there is a procedural defect, the court lacks the subject matter jurisdiction and a remand would be appropriate.

[00:16:58] Speaker 02:
Although it didn't expressly state that in those exact words, that is the effect and that is how we have arrived here.

[00:17:05] Speaker 02:
And if that is the case, we believe that the review of this, that this court has not provided the authority to review that remand.

[00:17:15] Speaker 02:
But even if we assume that there was an opportunity for the review, we believe that the substantive factors within this case would lead this court to believe that the remand was appropriate.

[00:17:31] Speaker 02:
As I mentioned earlier,

[00:17:33] Speaker 02:
The way that the agreement came about was the defendants, the appellants in this case, contacting us to dismiss an individual defendant.

[00:17:43] Speaker 02:
It wasn't exactly the CEO.

[00:17:45] Speaker 02:
It was a head of part of the organization that was part and parcel of a hostile work environment and discrimination claim.

[00:17:52] Speaker 02:
That individual is core to the case.

[00:17:55] Speaker 02:
And so the reasons why we wanted to keep him into the case and why it was appropriate is because he's going to be a necessary party and the court has determined that he may have individual liability through those causes of action.

[00:18:08] Speaker 02:
It was the defendant who said, we will ask that you dismiss that individual.

[00:18:14] Speaker 02:
However, you will keep all of the substantive points that you would like in remaining in state court as if you were a party.

[00:18:23] Speaker 02:
The discovery would remain the same.

[00:18:25] Speaker 02:
They would accept service of process for all documents, including trial subpoenas.

[00:18:32] Speaker 02:
They wouldn't remove to federal court.

[00:18:35] Speaker 02:
But what the defendants are then saying is that because we identified, at least in our calculus through the discovery, that CMEX was an alter ego, which is not before you here today, that because CMEX Inc., the parent, a wholly owned subsidiary parent, of the organization that has the same attorneys, has the same corporate office, shares the same officers, has the same human resources department operating from one to the other,

[00:19:06] Speaker 02:
Bringing them on affords them the ability to sidestep our agreement.

[00:19:11] Speaker 02:
And that is what they've done.

[00:19:13] Speaker 02:
Because they believe that that has the ability to sidestep the agreement, I want to bring a hypothetical that this could create a problem for should the court rule, even if they assume that review would be appropriate.

[00:19:27] Speaker 02:
Let's say that there is a company called Disney.

[00:19:30] Speaker 02:
And Disney has a company called Disney Studios.

[00:19:34] Speaker 02:
And Disney Studios contracts with the company for the distribution of a cartoon

[00:19:41] Speaker 02:
Now Disney Studios is entered into that contract, but Disney Inc.

[00:19:45] Speaker 02:
is not.

[00:19:47] Speaker 02:
What defendants are saying would be permissible is Disney Inc.

[00:19:51] Speaker 02:
going around studios and contracting with a separate company to get around that prior agreement.

[00:19:59] Speaker 02:
That would not be permissible in that instance, and that would not be permissible here.

[00:20:03] Speaker 04:
That seems to be very different from what I take to be the issue here.

[00:20:09] Speaker 04:
I mean, the issue here is whether or not the contract which is reflected in this email

[00:20:21] Speaker 04:
when it says that CEMEX will agree to not remove the case to federal court, whether that phrase extends to, agrees not to consent to removal to federal court by someone else who's later added into the case.

[00:20:40] Speaker 04:
That's really the issue here.

[00:20:43] Speaker 04:
So it ultimately comes down to CEMEX's obligations.

[00:20:49] Speaker 02:
Yes, Your Honor.

[00:20:49] Speaker 04:
I was posing- Because if the statute didn't require CEMEX's consent, then I think you'd have a hard time saying that this was a defect in removal procedure.

[00:21:02] Speaker 02:
Right.

[00:21:03] Speaker 02:
To go back to the Disney hypothetical, I was posing a hypothetical with a different agreed upon

[00:21:09] Speaker 02:
But the theory there is the same.

[00:21:13] Speaker 02:
Yes, in this case, we believe that CMAC's construction materials, which is the party that needed to provide the consent for the remand, them not being able to provide that, it is a substantive, it is a defect that- I don't understand your hypothetical.

[00:21:29] Speaker 03:
Is it anything other than applying different names to the parties?

[00:21:33] Speaker 03:
It seems to me you're saying parent and sub.

[00:21:35] Speaker 03:
You're hypothetical.

[00:21:36] Speaker 03:
How is that different from what we have in front of us except the party names are different?

[00:21:41] Speaker 02:
Your Honor, the hypothetical that I posed just attempted to show the way in which the defendants in this case, the appellants, have attempted to use a wholly owned subsidiary and a parent organization to sidestep an agreement between them.

[00:21:57] Speaker 03:
You were the ones that brought in the new party.

[00:21:59] Speaker 03:
And so it's not like it's entirely within their control.

[00:22:02] Speaker 03:
You didn't have to name the parent company.

[00:22:04] Speaker 03:
It's when you did that you got into the current situation.

[00:22:08] Speaker 03:
Let me try a different hypothetical.

[00:22:10] Speaker 03:
Suppose you added a new party, but it was unrelated.

[00:22:13] Speaker 03:
It was General Motors.

[00:22:15] Speaker 03:
God knows why.

[00:22:15] Speaker 03:
But you added General Motors to the case, and General Motors decides to remove.

[00:22:21] Speaker 03:
And there's some corporate stress or whatever between the original defendants, the CEMEX with the longer name, the CEMEX construction materials and General Motors.

[00:22:34] Speaker 03:
So that's the point at which CEMEX construction materials decides that we don't wanna be in state court with them because they're gonna cross claim or whatever else.

[00:22:48] Speaker 03:
Would you continue to say that we lack jurisdiction?

[00:22:52] Speaker 02:
Your Honor, in a situation in which there is a party that is required to consent to a removal, if it is barred from consent, I would believe in a situation.

[00:23:01] Speaker 03:
Well, see, that's where we pause, because Judge Collins posed to you the potential distinction, which is that the contract you have doesn't bar them from consenting, at least not by its literal terms.

[00:23:14] Speaker 03:
It will agree to not remove the case to federal court.

[00:23:18] Speaker 03:
You may have an argument with regard to the removal attempted here because of the relationship between CEMEX and it's, that's the name of both of them, between the original defendant and the parent subsequently brought in.

[00:23:32] Speaker 03:
But if it's an entirely unrelated party, it seems to me the jurisdictional calculation may change.

[00:23:38] Speaker 03:
And that's what I'm trying to elicit from you by posing the hypothetical in this different form.

[00:23:44] Speaker 02:
The calculus might be different in that circumstance if they were not related, but these parties were clearly related.

[00:23:52] Speaker 02:
And by agreeing to that prior agreement not to remove, but having a related party, the parent organization, with the same officers, the same attorneys, then sidestepping it, that is the problem in which the parties find themselves in.

[00:24:10] Speaker 03:
Why did you wind up bringing the parent into the case?

[00:24:13] Speaker 02:
Within a deposition, we ended up finding out that they used the same officers, that the human resources department was the same, that there were emails exchanged back and forth between construction and ink relating to the individual case that we have here, destroying what we believe to be the separateness.

[00:24:33] Speaker 02:
And because of that, we have a polarable argument for alter ego within the organization.

[00:24:38] Speaker 03:
Now, at that same time, does that affect the potential liability of

[00:24:43] Speaker 03:
defendants collectively, or I take it maybe it's collection or something.

[00:24:49] Speaker 03:
I'm trying to figure out why you decided to embark on this path, which has produced this nightmare for everybody.

[00:24:55] Speaker 02:
I appreciate that question, Your Honor, and really a lot of it is discovery.

[00:24:59] Speaker 02:
because there was withholding of discovery because we were not requesting specifically from CMACS, Inc.

[00:25:04] Speaker 02:
And if your honors had the time to go through the laborious discovery issues that were presented here, that really was the problem.

[00:25:14] Speaker 03:
You became a college judge, so we wouldn't have to deal with discovery issues very much.

[00:25:19] Speaker 03:
The problem ultimately became a discovery.

[00:25:22] Speaker 03:
But you had a reason.

[00:25:23] Speaker 03:
That's all I was really trying to elicit, OK?

[00:25:26] Speaker 02:
The problem ultimately became the discovery, the attempt to get discovery.

[00:25:30] Speaker 02:
Unfortunately, there were substantive discovery problems that required the use of a discovery referee.

[00:25:37] Speaker 02:
The cost got so high as it got to $40,000, $20,000 each side.

[00:25:43] Speaker 02:
We ended up in federal court.

[00:25:45] Speaker 02:
It was remanded.

[00:25:46] Speaker 02:
famed a trial lawyer, David D. Robertson, that's when this occurred.

[00:25:50] Speaker 02:
He ended up paying the full amount that was owed.

[00:25:53] Speaker 02:
The court and state court indicated that the amount would be split, I believe, up to $25,000.

[00:25:59] Speaker 02:
And once it became $40,000, we had made a motion with the court to determine what would the cost be, who would bear the cost of the ongoing discovery issues, and what it would cost for the parties to resolve it.

[00:26:14] Speaker 01:
Mr. Clarified.

[00:26:15] Speaker 01:
Trying to see if I understand your answer here.

[00:26:19] Speaker 01:
So is there an issue of, you know, assets in the subsidiary, that's what you brought in the parent, or is there, or is the parent has possession of documents and isn't turning it over on the basis of separate

[00:26:31] Speaker 01:
entities.

[00:26:32] Speaker 01:
What's the, I don't know if I fully understand that yet.

[00:26:35] Speaker 02:
Your Honor, it could be both.

[00:26:37] Speaker 02:
The primary impetus on this was discovery.

[00:26:39] Speaker 02:
However, the construction materials could be an empty shell.

[00:26:44] Speaker 02:
Candidly, I'm not sure, and I haven't gone through the painstaking discovery of trying to determine what the assets

[00:26:50] Speaker 02:
were there, but it could be such that it is a shell where all of the money flows up and there could be a collectability issue.

[00:26:57] Speaker 02:
The primary issue within this case for the reason for bringing them on was what we believe to be the unity and interest in the discovery issues that we were having.

[00:27:06] Speaker 02:
As it relates to what Mr. Burns indicated earlier, he said that one party not timely agreeing to remove would be an applicable procedural defect.

[00:27:15] Speaker 02:
Well, our question that we would pose would be what happens if a party cannot validly consent at all?

[00:27:22] Speaker 02:
Well, then, Mr. Burns would then be conceding that there would be a procedural defect, just as there is here.

[00:27:29] Speaker 02:
And under 1447, that would preclude the review.

[00:27:32] Speaker 01:
What should we do with the court's order on the motion to recall the remand?

[00:27:38] Speaker 01:
I mean, the remand order itself, a little bit vague.

[00:27:40] Speaker 01:
I think it's colorable.

[00:27:43] Speaker 01:
procedural defect, but then in the court's order and the motion to recall the remand, court claims that it wasn't based on procedural defect.

[00:27:51] Speaker 01:
What do we do with that?

[00:27:53] Speaker 01:
Can we consider that in construing with the remand order?

[00:27:56] Speaker 02:
Your honor, I think you take it all into account, but there is a colorable argument based off of the language that was provided with the order that substantive matter jurisdiction is a colorable argument.

[00:28:07] Speaker 02:
And because of the lack of unanimity, there is a procedural defect which would result in remand.

[00:28:13] Speaker 02:
Ultimately, I would ask the same question that was posed earlier.

[00:28:16] Speaker 02:
Is the outcome different?

[00:28:18] Speaker 02:
We don't believe that the outcome should be different based off of whether or not there is review under 1447 or if there is review that the court finds.

[00:28:28] Speaker 02:
And with that, if there's no other questions, I will, I will relinquish my time.

[00:28:33] Speaker 04:
All right.

[00:28:34] Speaker 04:
Thank you, counsel.

[00:28:35] Speaker 04:
We hear the battle now from Mr. Burns.

[00:28:38] Speaker 00:
Thank you, your honor.

[00:28:39] Speaker 00:
First, this notion that the defendant, the appellant CEMEX Inc.

[00:28:43] Speaker 00:
was only added to the case because of discovery is just not true or supported by the record.

[00:28:48] Speaker 00:
This plaintiff is actually a human resources representative.

[00:28:50] Speaker 00:
He understands the corporate structure of these entities and whether it's incompetence or bad faith, the fact of the matter is he controlled the case and he named this entity two years later.

[00:29:00] Speaker 00:
At the time they came to this agreement, not only does the language of the agreement itself, as has been pointed out, not support that there'd be any waiver of the right to consent, but there was no discussion about bringing in any other defendants, not this defendant specifically.

[00:29:12] Speaker 00:
And so the type of tactics this court talked about in just, you know, all apply here.

[00:29:19] Speaker 04:
In that case, the court- I mean, that's all rests on the interpretation that the agreement not to remove to federal court means

[00:29:26] Speaker 04:
the agreement not to file a notice of removal under the statute, as opposed to agree not to shift the case to federal court.

[00:29:36] Speaker 04:
And, you know, the language isn't so clear that it's tied to one specific type of piece of paper referred to under the code either.

[00:29:46] Speaker 00:
Well, Your Honor, Congress has recognized there's two distinct rights.

[00:29:48] Speaker 00:
This Court has recognized there's two.

[00:29:50] Speaker 04:
Well, it's a distinct right in the sense that you get a second window consent.

[00:29:54] Speaker 04:
The fact that you skipped past the 30 days to remove on your own doesn't prevent you from later consenting.

[00:30:02] Speaker 04:
But the question is whether or not the language in this contract would be reasonably read in light of the extrinsic evidence as extending to all

[00:30:16] Speaker 04:
ability of CEMEX construction to shift the case to federal court.

[00:30:21] Speaker 00:
Yes, in your honor, I see my time has elapsed.

[00:30:23] Speaker 04:
As long as we're asking questions, you can keep going.

[00:30:26] Speaker 00:
I agree, Your Honor, but the fact that there are two recognized rights within the statute, within the case law, and the fact that all the agreement says is that CEMEX will agree to not remove the case to federal court.

[00:30:37] Speaker 00:
The fact that CEMEX, Inc.

[00:30:38] Speaker 00:
is not in the case.

[00:30:39] Speaker 00:
There's no discussion of CEMEX, Inc.

[00:30:41] Speaker 00:
There's no disclosure of CEMEX, Inc.

[00:30:42] Speaker 00:
And there was no reason for CCMP to believe that CEMEX, Inc.

[00:30:46] Speaker 00:
would be added, this parent corporation, when CCMP is the regional operator in the Pacific region that would.

[00:30:52] Speaker 00:
you know, have potential liability over the claims plaintiff was making.

[00:30:56] Speaker 00:
There's just no way to read that agreement so broadly as to sort of remove both of these rights.

[00:31:03] Speaker 00:
And I think the court will have to reconcile it with some of its own case law that's not directly on point but talks about how waiver cannot be broad to apply to multiple rights.

[00:31:11] Speaker 00:
For example, in the Ferrari case when

[00:31:13] Speaker 00:
This court clarified that waiver of a specific right to removal as to some claims doesn't mean removal as to other claims.

[00:31:19] Speaker 00:
And there's other doctrines this court has erected about constitutional rights, statutory rights that are waived, making clear that they have to be clear and unmistakable.

[00:31:30] Speaker 00:
It is not clear and unmistakable from this contract that the waiver of the right to consent in perpetuity over any defendant who would ever come in

[00:31:41] Speaker 00:
is what CCMP was agreeing to and to this notion about the two defendants and alter ego, etc.

[00:31:49] Speaker 00:
You know, the fact that opposing counsel conceded if they aren't related, that would be a different case.

[00:31:54] Speaker 00:
Their relation doesn't matter at all here.

[00:31:56] Speaker 00:
In fact, this court has

[00:31:58] Speaker 00:
clarified in the Harris-Ruskey & Co case that a parent sub, even a wholly owned sub, are two distinct entities, and even where they share officers, offices, and are organized similarly, the court held that's not sufficient for alter ego.

[00:32:11] Speaker 00:
And so ultimately here, all the court needs to do is hold that this agreement did not waive CCMP's right in perpetuity into the future when there was no other defendants in the case.

[00:32:22] Speaker 04:
All right.

[00:32:22] Speaker 04:
Thank you, counsel.

[00:32:24] Speaker 04:
Case just argued be submitted and we are adjourned for this session.

[00:32:30] Speaker 04:
This court for this session stands adjourned.