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The U.S. Court of Appeals for the Second Circuit has ruled that federal magistrate judges do not have the power to remand cases to state court. Addressing an issue of first impression under the Federal Magistrates Act, a unanimous panel said the decision on whether to remand a case was a “dispositive” matter that must be decided by a district judge, and not a magistrate judge. The decision in Williams v. Beemiller, Inc., 06-4958-cv was written by Judge Chester Straub, who was joined on the panel by Judge Reena Raggi and, sitting by designation, Southern District Judge Sidney Stein. Daniel Williams was injured in a drive-by shooting while playing basketball at his home in Buffalo on Aug. 16, 2003. Alleged gang member Cornell Caldwell later pleaded guilty to first-degree attempted assault in Erie County Court. Mr. Williams and his father, represented by the Brady Center to Prevent Gun Violence and attorneys with Connors & Vilardo in Buffalo, filed suit in state court against firearms maker Beemiller, Inc.; MKS Supply, Inc.; Dayton, Ohio gun dealer Charles Brown; and International Gun-A-Rama, alleging they had negligently sold or distributed the gun used in the shooting. Claiming diversity jurisdiction, Beemiller and Mr. Brown removed the case to federal court under 28 U.S.C. §1441(a)-(b) in 2005. While written consents to removal were filed for MKS and Gun-A-Rama, they were not filed on behalf of other defendants, including Mr. Caldwell and unnamed gun traffickers. The failure to obtain consent from all the defendants led the Williamses to move for remand to state court and seek costs and expenses under 28 U.S.C. §1447(c). Western District Judge William Skretny referred non-dispositive pretrial matters to Magistrate Judge Leslie Foschio. Magistrate Judge Foschio granted the motion to remand and awarded costs after finding the motion was “not dispositive as it resolves only the question of whether there is a proper basis for federal jurisdiction to support removal” and does not go to the merits. But knowing that federal courts were divided on the issue, Magistrate Judge Fosci urged Judge Skretny to treat the ruling as a report and recommendation. Judge Skretny did so and denied the defendants’ objections by ruling that the magistrate judge’s order was neither “clearly erroneous” nor “contrary to law.” The defendants appealed, and the Williamses responded that the circuit was barred by §1447(d) from reviewing an order remanding a case to state court. At the circuit, Judge Straub said that prohibition had to be read in conjunction with §1447(c), which permits review based on a defect in procedure or a lack of subject matter jurisdiction. He added that the circuit had yet to consider whether a “magistrate judge’s order remanding a case to state court for a lack of subject matter jurisdiction should be deemed a remand order properly grounded in §1447(c).” Judge Straub said two circuits, the Third and Sixth, have found that appellate review is not barred in that case. Here, he said, the appeal “does not challenge the merits of the remand order itself” because the defendants were appealing on the grounds that Judge Skretny applied the incorrect standard of review. “As a result, this appeal requires us only to determine the scope of authority of a magistrate judge in this context,” he said. “Because this question does not require review of the merits of the remand order, we conclude that we have jurisdiction over this appeal.” Dispositive Matter The circuit then turned to the question of the magistrate judge’s authority to order a remand. The defendants contended that a remand order could not be considered a mere “pretrial matter” under 28 U.S.C. §636(b)(1)(A) or a “nondispositive matter” under the Federal Rules of Civil Procedure because such an order effectively terminates all proceedings in federal court, Judge Straub said. Section 636(b)(1)(A) allows a district judge to designate a magistrate judge to hear “any pretrial matter” but contains a long list of exceptions, including summary judgment motions or motions to dismiss for failure to state a claim. The statute states that any pretrial matter decided by a magistrate judge may be reconsidered by a district judge where “it has been shown that the magistrate judge’s order is clearly erroneous or contrary to law.” In addition, Judge Straub said, Federal Rule of Civil Procedure 72(a) “requires a district court to consider a party’s timely objections to a magistrate judge’s order deciding a ‘pretrial matter not dispositive of a party’s claim or defense’ and to modify or set aside any part of the orders that is clearly erroneous or is contrary to law.’” He said the Second Circuit has generally avoided interpreting the Federal Magistrates Act narrowly, and that other circuits have focused their inquiry on the “practical effect of the challenged action on the instant litigation.” But Judge Straub said the Second Circuit was now joining the Third, Sixth and Tenth circuits in finding that a remand order is the “functional equivalent” of a motion to dismiss and is thus a “dispositive” matter outside the realm of a magistrate judge’s authority. James W. Grable Jr. of Connors & Vilardo and Jonathan E. Lowy of the Brady Center to Prevent Gun Violence represented the plaintiffs. “My hope had been that the circuit would have strictly construed the language of the statute, but the court sided with three sister circuits that have found that these remand issues are appealable in these circumstances and that the magistrate judge does not have the authority under the act,” said Mr. Grable, Nevertheless, he said he was optimistic that, on remand, Judge Skretny would reach the same result after conducting a more searching de novo review of the magistrate judge’s report and recommendation, in part because there are two grounds on which to remand the case to state court – the lack of consent for removal and a lack of subject matter jurisdiction. Scott C. Allan and John F. Renzulli of the Renzulli Law Firm in White Plains represented Beemiller. Mr. Allan said this was an important issue on which the lower courts needed guidance from the Second Circuit. “There are several benefits to federal courts. A unanimous jury is required and federal discovery is more extensive – we are entitled to obtain expert reports and depositions from plaintiffs’ experts,” he said. Another factor, Mr. Allan said, is the Second Circuit’s decision earlier this month in City of New York v. Beretta, 05-6942. In Beretta, the circuit found that the Protection of Lawful Commerce in Arms Act insulated gun makers from liability for the flow of illegal arms into New York ( NYLJ, May 1, 2008). Mr. Brown was represented by Scott L. Braum and Timothy R. Rudd of Scott L. Braum Associates in Dayton, Ohio, and Thomas J. Drury and Hedwig M. Auletta of Damon & Morey in Buffalo. Jeffrey M. Malsch and Anthony P. Pisciotti of Pisciotti, Malsch & Buckley in Florham Park, N.J., represented MKS Supply, Inc. James J. Duggan and Troy S. Flascher of Lustig & Brown in Buffalo represented International Gun-A-Rama.

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