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McGee v. State Farm Mutual Automobile Insurance Co.

January 14, 2010


The opinion of the court was delivered by: I. Leo Glasser United States Senior District Judge


GLASSER, United States Senior District Judge

The plaintiff John McGee ("McGee") brought an action in New York State Supreme Court against the defendant State Farm Mutual Automobile Insurance Company ("State Farm"), raising a variety of claims under New York state law. State Farm subsequently removed the case to federal court on the basis of this Court's diversity jurisdiction, and McGee moved to remand this case back to state court. This Court denied the motion to remand, and McGee now moves for reconsideration, or, failing that, for clarification of the Court's order. McGee's motion is entirely without merit and, for the reasons stated below, is denied in its entirety.


McGee is a physician residing and practicing in the state of New York. On July 28, 2009, McGee filed a complaint in the Supreme Court of the State of New York, County of Queens, alleging that State Farm, a major provider of automobile insurance, has engaged in a variety of illegal and tortious acts that have the effect of improperly denying payment to physicians who treat patients covered under State Farm insurance policies. On August 18, 2009, State Farm removed the action to this Court on the basis of diversity jurisdiction. On August 31, 2009, McGee filed a motion to remand.*fn1 On November 18, 2009, the Court issued an order denying that motion. On November 25, 2009, McGee filed a motion for reconsideration.*fn2

Subsequently, on December 1, 2009, McGee filed in this Court a notice of appeal to the Second Circuit Court of Appeals.


1. Jurisdiction to Decide this Motion

Before this Court can reach the merits of McGee's motion, it is necessary to first consider the effect of McGee's purported interlocutory appeal on this Court's jurisdiction over the case. Normally, the docketing of a notice of appeal will divest a district court of jurisdiction over the issues encompassed by the appeal. Ryan v. U.S. Lines Co., 303 F.2d 430, 434 (2d Cir. 1962) ("[T]he docketing of an appeal ousts the district court of jurisdiction except insofar as it is reserved to it explicitly by statute or rule."). But this rule is not without exceptions. "The divestiture of jurisdiction rule is . . . not a per se rule. It is a judicially crafted rule rooted in the interest of judicial economy, designed to avoid confusion or waste of time resulting from having the same issues before two courts at the same time." United States v. Rodgers, 101 F.3d 247, 251 (2d Cir. 1996). The interests of judicial economy would not be well served by a rule that forces the district court to stay its proceedings even when there is no statutory basis for an appeal. See id. at 251--52 ("We fail to see any efficiency in allowing a party to halt district court proceedings arbitrarily by filing a plainly unauthorized notice of appeal which confers on this court the power to do nothing but dismiss the appeal."). An appeal of an order denying remand is just such an appeal. Chicago, R.I. & P.R. Co. v. Stude, 346 U.S. 574, 578 (1954) ("Obviously, such an order [denying a motion to remand] is not final and appealable if standing alone."); Fulfree v. Manchester, 112 F.3d 503 (Table), 1996 WL 570238, at *1 (2d Cir. Oct. 4, 1996) ("An order of the district court denying a motion to remand an action to state court is an interlocutory order that is not immediately appealable pursuant to 28 U.S.C. § 1291."). Thus, this Court retains jurisdiction to hear the pending motion for reconsideration.

2. Motion for Reconsideration

A district court will normally grant a motion to amend an order only "to correct a clear error of law or prevent manifest injustice." Munafo v. Metropolitan Transp. Authority, 381 F.3d 99, 105 (2d Cir. 2004). McGee seems to raise two issues on which he apparently contends the Court's rulings amount to such a "clear error" or "manifest injustice." First, he appears to argue that the Court erred in not treating his amended complaint as an amendment as a matter of course under Rule 15(a)(1) of the Federal Rules of Civil Procedure. Second, he argues that the Court failed to credit his belated characterization of the amendment as fixing a "clerical error" and that the Court thus wrongly ruled that he had failed to articulate a permissible motive for the amendment. These arguments will be addressed in turn.

McGee argues in his motion for reconsideration that he filed "his only amended complaint on August 31, 2009." Pl.'s Br. 2 (emphasis in original). McGee further insists that "[a]s the record reflects there has been only ONE (1) amended complaint filed." Id. It is unclear what exactly McGee is complaining about. While it is true that State Farm argued, in opposing the motion to remand, that McGee had in fact filed two separate amended complaints, the Court determined this issue in McGee's favor, and State Farm has not challenged that determination. See Def.'s Br. 4 n.2 ("The Court's opinion indicates that the operative document is the one filed on September 4, 2009."). Furthermore, the Court explicitly treated this amendment as an amendment as a matter of course under Rule 15(a)(1). As the Court stated in its order:

McGee first filed an amended complaint on August 31, 2009, the same date on which he filed his motion to remand. This complaint, however, contains a twenty-five page gap; the missing material includes most of McGee's claims for relief. Another copy of the amended complaint with the missing pages included was filed on September 4, 2009. Both were filed before any responsive pleadings, so this Court will treat the second, corrected ...

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