In Re Southwestern Bell Telephone Company, Americantelephone and Telegraph Company, and C. L. Todd,petitioners, 535 F.2d 859 (5th Cir. 1976)

This mandamus proceeding arises out of a tort action commenced in 1974 in Texas state court against Southwestern Bell Telephone Co. (Southwestern), American Telephone and Telegraph Co. (AT&T), and C. L. Todd, an executive of Southwestern. Plaintiffs alleged a variety of causes of action including defamation, contractual interference, and wrongful death, and they sought $29 million in damages. In May 1975 the plaintiffs filed an amended petition dropping their claims against Todd. At that time defendants removed the action to the United States District Court for the Western District of Texas. The District Judge, in denying plaintiffs' motion to remand, accepted jurisdiction on the basis of diversity of citizenship.¹  He evidently based this ruling on the following factual allegations: Plaintiffs were citizens of Texas, Oklahoma, and Florida. Southwestern was a Missouri corporation with its principal place of business in Missouri; AT&T was a New York corporation with its principal place of business in New York; and Todd was a citizen of Texas. Thus dismissal of Todd created complete diversity in the case, justifying removal under 28 U.S.C. §§ 1332, 1441. At the time plaintiffs did not challenge the citizenship of any party.

About a year later, following extensive discovery and pretrial activity in federal court, plaintiffs unearthed a pleading Southwestern had submitted in an unrelated 1968 suit filed in state court in Harris County, Texas. In that earlier proceeding Southwestern had stated under oath that it was "a corporation, duly organized under and by virtue of the laws of the State of Texas, and domiciled in Dallas, Texas, where it has its principal place of business."²  Plaintiffs in the instant case again moved for a remand, and it was granted. The District Judge invoked the doctrine of judicial estoppel, which he defined by quoting Long v. Knox, 155 Tex. 581, 291 S.W.2d 292, 295 (1956): " '(A) party is estopped merely by the fact of having alleged or admitted in his pleadings in a former proceeding under oath the contrary to the assertion sought to be made.' . . . (I)t is not necessary that the party invoking this doctrine have been a party to the former proceeding." Thus the court, while not actually finding that Southwestern was not a Missouri citizen, held that "under the doctrine of judicial estoppel, Southwestern Bell is estopped to allege its Missouri domicile as a basis for diversity jurisdiction in the instant case." Southwestern now brings this mandamus proceeding to compel the District Judge to retain the case in his court.

As a general rule, a federal district court order remanding a removed case to state court "is not reviewable on appeal or otherwise." 28 U.S.C. § 1447(d). However, the Supreme Court has recently articulated an exception to this principle. In Thermtron Products, Inc. v. Hermansdorfer, --- U.S. ----, 96 S. Ct. 584, 46 L. Ed. 2d 542 (1976), a district judge remanded a removed case because his docket was crowded with high-priority cases that would, in his opinion, unjustly delay plaintiffs' relief if they had to await a trial on the merits in federal court. The Supreme Court held that § 1447(d) did not preclude review in this situation. The Court noted that § 1447(d) had to be construed in conjunction with § 1447(c), which sets forth the only permissible basis for remand: that "the case was removed improvidently and without jurisdiction." Thus, the Court concluded, if a district judge's reason for remanding a case is outside the grounds specified in § 1447(c), as Judge Hermansdorfer's was, the barrier to review in § 1447(d) is also inapplicable, and mandamus is a proper remedy to redress the illegal remand order.

Under Thermtron Products, the question before us is purely a legal one:³  may a district court utilize the doctrine of judicial estoppel as the basis for holding that a case was removed "improvidently and without jurisdiction" within the meaning of § 1447(c)? We answer this question in the negative.

The scope of the federal removal statutes is a matter of federal law. Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 104, 61 S. Ct. 868, 85 L. Ed. 1214 (1941); cf. Mas v. Perry, 489 F.2d 1396, 1399 (CA5), cert. denied, 419 U.S. 842, 95 S. Ct. 74, 42 L. Ed. 2d 70 (1974) (diversity of citizenship is a federal question).⁴  Federal courts deciding federal issues have applied the judicial estoppel doctrine cautiously, usually confining it to circumstances in which the opposing party took action in reliance upon the estopped party's prior stance.⁵  Whatever the scope of the doctrine may be, so far as we have been able to discover it has never been employed to prevent a party from taking advantage of a federal forum when he otherwise meets the statutory requirements of federal jurisdiction. Persons who meet those criteria have a statutory,⁶  and indeed a constitutional,⁷  right to resort to the federal courts. A district court has no authority to negate that right simply because such a person has not observed the consistency in pleading that the forum state may demand.⁸  Judicial estoppel principles cannot conclusively establish jurisdictional facts. If facts come to light casting significant doubt on the power of a federal court to hear a pending case, it must, of course, re-examine its jurisdiction. Southwestern's 1968 pleading has some probative value as evidence that the company is a citizen of Texas. In light of this newly discovered evidence, the District Court should make a suitable inquiry into the question of whether the parties are truly diverse. We do not express a view one way or the other. We only hold that the problem of jurisdiction must be resolved in accordance with the facts as they are, not as Texas jurisprudence concerning estoppel might deem them to be.

A writ of mandamus will issue directing the District Court to vacate its remand order and conduct further proceedings not inconsistent with this opinion.