Counsel Must Defend Possible Remand Fraud

(CN) - A federal judge has jurisdiction to consider whether asbestos plaintiffs fraudulently won a remand to state court in their case against Colgate-Palmolive, the en banc 4th Circuit ruled.

Joyce Barlow and Clara Mosko filed separate actions against Colgate-Palmolive Company, claiming that its "Cashmere Bouquet" line of powder makeup products contained asbestos, contributing to their health problems.

Colgate-Palmolive removed the cases to federal court on diversity grounds, but the court remanded the case to state court after plaintiffs' counsel represented that the women both had viable claims against their in-state employers for asbestos exposure.

However, both plaintiffs later admitted that they did not believe that they were exposed to asbestos at any time at their jobs.

In their state court reply brief, plaintiffs said they "allege exposure to asbestos-containing Cashmere Bouquet powder products only and do not allege exposure to any other asbestos, asbestos-containing products or asbestos-containing dust in any other form." (Italics in judgment.)

At the hearing, the state court judge told plaintiffs' counsel, "I can't believe you actually told Judge Nickerson and Judge Quarles one thing and tell me another."

Colgate-Palmolive then moved for relief from plaintiffs' purported misrepresentations, but the judge found that he lacked jurisdiction to vacate his remand orders, because the federal removal statute prohibits review of remand orders. He also declined to impose sanctions on plaintiffs' counsel, because the misrepresentations were "attributable to different attorneys in markedly different litigation contexts."

The en banc 4th Circuit reversed the decision Tuesday, and reinstated federal jurisdiction.

"Nothing in the plain language of § 1447(d) or courts' interpretation thereof bars vacatur of the district court's remand orders if the court determines that such relief is warranted," U.S. Circuit Judge Henry Floyd said, writing for the court. "Although reconsideration is a subspecies of review, vacatur, without revisiting a prior order's merits, is no such cousin or relative."

The Richmond-based appeals court also ordered the trial judge to make specific findings on whether plaintiffs engaged in misconduct, and whether Colgate-Palmolive is entitled to a dismissal of the case against it.

"In making these determinations, the district court should provide more analysis than that included in the orders' dicta, which would be too perfunctory to merit meaningful review," Floyd wrote.

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