                      REVISED October 14, 2011

        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT United States Court of Appeals
                                                                    Fifth Circuit

                                                               FILED
                                                           September 12, 2011
                                  No. 10-20736
                                                              Lyle W. Cayce
                                                                   Clerk
PAOLA OVIEDO,

                                            Plaintiff - Appellant
v.

GREGG M. HALLBAUER; RYAN JENNINGS; UNITED STATES OF
AMERICA,

                                            Defendants - Appellees



                Appeal from the United States District Court
                     for the Southern District of Texas


Before SMITH, BENAVIDES, and HAYNES, Circuit Judges.
HAYNES, Circuit Judge:
      Paola Oviedo appeals from the decision of the district court dismissing the
case after (1) refusing to remand her state court medical negligence claim
against two purportedly federally-affiliated doctors, (2) vacating her state court
default judgment, and (3) substituting the United States as the defendant.
      We agree with the appellant that the finality of the state court judgment
at the time of removal made removal improper on these facts. We therefore
VACATE the September 29, 2010 judgment (which incorporates the
                                   No. 10-20736

Memorandum Opinion and Order) and RENDER a judgment of dismissal for
want of jurisdiction in the federal district court.
                          I. Facts & Procedural History
      In April of 2009, Paola Oviedo filed suit in the 9th District Court for
Montgomery County, Texas, against the Conroe Regional Medical Center
(“CRMC”),1 the Sadler Clinic Association (“Sadler”), and two affiliated
physicians, Dr. Gregg Hallbauer and Dr. Ryan Jennings. Oviedo’s petition
alleged claims of negligence resulting in personal injury in the course of her
treatment at CRMC while pregnant.
      Before the state court, Oviedo filed a notice of non-suit without prejudice
as to the claims against Sadler, and Sadler was dismissed from the proceeding.
CRMC answered. Hallbauer and Jennings, the remaining parties, did not
answer, and Oviedo moved for default judgment. The state court granted the
motion on August 31, 2009, and set a hearing on damages. After conducting the
hearing, the state court entered a formal default judgment against Hallbauer
and Jennings on September 14, 2009. The state court’s order entering default
judgment specifically found that Hallbauer and Jennings were properly served
with citation and process as required by Texas law and that the time for each to
file an answer had passed. The court further found that unliquidated damages
in the amount of $700,000 were proper, rendered joint and several judgment
against Halbauer and Jennings, ordered that execution issue, and then recited
that “[t]his judgment is final and disposes of all claims and all parties, and is
appealable.” Of course, it did not, on its face, dispose of all claims and all
parties—Oviedo’s suit against CRMC was very much live and active. The court




      1
        The formally named defendant was CHCA Conroe, L.P.; Oviedo’s petition asserted
that Conroe Regional Medical Center was a d/b/a name of CHCA Conroe, L.P.

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                                        No. 10-20736

remedied this error by entering an order of severance the following day
docketing the suit between Oviedo and CRMC under a separate docket number.2
       On September 29, 2009, the United States, acting on behalf of Jennings
and Hallbauer, filed a timely motion for a new trial seeking to set aside the
default judgment so as to allow the United States to remove the action to federal
court. The United States’ motion contended that Jennings and Hallbauer were
acting as federal employees in the Public Health Service and could only be sued
under the Federal Tort Claims Act (“FTCA”); that Oviedo could not file suit
because she had not exhausted her administrative remedies; and that service of
process was not properly accomplished on Jennings and Hallbauer as federal
employees because Oviedo was required to serve the United States Attorney for
the Southern District of Texas through the procedures of Federal Rule of Civil
Procedure 4(i). The United States did not request a hearing or a written ruling
from the state court. The court never issued a written order on the United
States’ motion for new trial, and it was therefore overruled by operation of law
seventy-five days after the judgment was signed. See TEX. R. CIV. P. 329b(c) (“In
the event an original or amended motion for new trial or a motion to modify,
correct or reform a judgment is not determined by written order signed within


       2
         Under Texas law, the effect of entering the severance order after a judgment that
would otherwise be final but for the presence of the severed party is that the order of severance
becomes the “final order” and the various timetables that run from entry of final judgment run
from the date of the order of severance. See Farmer v. Ben E. Keith Co., 907 S.W.2d 495, 496
(Tex. 1995) (“When a judgment is interlocutory because unadjudicated parties or claims remain
before the court, and when one moves to have such unadjudicated claims or parties removed
by severance, dismissal, or nonsuit, the appellate timetable runs from the signing of a
judgment or order disposing of those claims or parties.”). That is, here, September 15, 2009,
rather than September 14, 2009. The issue is complicated in the present case because the
September 14 judgment by its terms purported to dispose of all parties and contained the
“language of finality” prescribed by the Texas Supreme Court. See Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 206 (Tex. 2001). In any event, the case was clearly resolved with a final
judgment as to Hallbauer and Jennings, the appellants here, on either September 14, 2009,
or September 15, 2009. We need not decide whether the judgment was final on September 14
or only after the severance order because, using the latest date possible (September 15), the
result here is the same.

                                               3
                                   No. 10-20736

seventy-five days after the judgment was signed, it shall be considered overruled
by operation of law on expiration of that period.”). The United States allowed
both the time for filing an appeal, see TEX. R. APP. P. 26.1(a)(1) (allowing ninety
days after judgment to file notice of appeal when motion for new trial is filed),
and the district court’s plenary jurisdiction, see TEX. R. CIV. P. 329b(e) (extending
district court’s plenary jurisdiction to thirty days after motion for new trial is
overruled by operation of law), to expire without filing anything further.
      On February 3, 2010, the United States filed a notice of removal in the
United States District Court for the Southern District of Texas purporting to
remove Oviedo’s state court suit. Apparently unaware of the operation and
effect of Texas Rule 329b, the United States asserted in its notice that “the State
court has taken no action on Defendants’ Motion for New Trial” and that the
matter was still pending before the state court. The United States also asserted
that the state court lacked jurisdiction to hear Oviedo’s claim at all due to
application of the FTCA. Once in federal court, the United States moved to
substitute itself for Hallbauer and Jennings, to set aside the default judgment
entered by the state court, and to dismiss the case for failure to exhaust
administrative remedies.
      Oviedo opposed the motions and moved to remand. In a single order dated
September 29, 2010, disposing of both parties’ motions, the district court granted
the United States’ motions to substitute, to set aside the judgment, and to
dismiss the case without prejudice, and denied Oviedo’s motion to remand.
Oviedo appealed.
                             II. Standard of Review
      We review all the relevant issues on appeal de novo. The district court’s
denial of the motion to remand, the propriety of removal under the various
governing statutes, and the existence of subject-matter jurisdiction here are all
interrelated questions of law subject to de novo review. See Kollar v. United

                                         4
                                       No. 10-20736

Transp. Union, 83 F.3d 124, 125 (5th Cir. 1996); see also Davis v. Dallas Area
Rapid Transit, 383 F.3d 309, 313 (5th Cir. 2004) (“The res judicata effect of a
prior judgment is a question of law that we review de novo.”).
                                      III. Discussion
       The issue presented by this case is, at its core, a simple one: whether the
United States may, under any of the various jurisdictional statutes potentially
applicable here, remove a case to federal court notwithstanding the fact that the
case has completely concluded before the state court. Emphasizing the total
finality of the state case here, we hold that it cannot.
       The United States asserts that removal and federal jurisdiction were
proper under an array of statutes—28 U.S.C. § 1442(a), governing suits against
federal officers; 28 U.S.C. §§ 1346(b) and 2679(d)(2), governing claims made
under the FTCA; and 42 U.S.C. § 233, the Federally Supported Health Care
Assistance Act. The government asserts that these statutes are broad enough
to allow for post-judgment removal in the same manner as the Federal Deposit
Insurance Corporation (“FDIC”)’s removal statute, 12 U.S.C. § 1819(b)(2)(B),
that we construed in In re Meyerland Co., 960 F.2d 512 (5th Cir. 1992) (en banc).
But even assuming arguendo that post-judgment removal can be proper,3 this
case presents a critical distinction that we have never squarely faced: the time
for seeking direct review in the state courts had completely expired when the
government filed its notice of removal.
       It is true that under the broad FDIC statute, we have allowed the removal
of cases from pending state appellate proceedings, see Meyerland, 960 F.2d at
517, from judgments rendered by a state appellate court but still subject to


       3
        Our disposition of this appeal allows us to pretermit the question of whether the scope
of removal under these various statutes is in fact as broad as the United States contends, and
we express no opinion on that point. Cf. Victoria Palms Resort Inc. v. City of Donna, 234 F.
App’x 179, 180 (5th Cir. 2007) (unpublished) (holding that Meyerland and similar cases decided
under § 1819(b)(2)(B) apply only to that statute).

                                              5
                                        No. 10-20736

further appeal, In re 5300 Memorial Investors, Ltd., 973 F.2d 1160, 1162 (5th
Cir. 1992), and from default judgments as to which a motion to set aside was
pending and undecided in the state court, Murray v. Ford Motor Co., 770 F.2d
461, 463 (5th Cir. 1985); Beighley v. FDIC, 868 F.2d 776 (5th Cir. 1989). But in
no case have we ever approved of the removal of a proceeding that had reached
a truly final state court judgment—that is, where the state court judgment was
no longer subject to modification by the rendering court or subject to further
direct appellate review. Indeed, we have repeatedly reserved this very limiting
principle: in Meyerland, we cautioned that “[t]he significant factor . . . is that
state appellate proceedings had not yet been exhausted when removal was
effected.” 960 F.2d at 517 (emphasis in original). While Hallbauer, Jennings,
and the United States never resorted to the appellate process—whether
intentionally or through inadvertence or mistake—state appellate proceedings
were nevertheless “exhausted” within the meaning of Meyerland when the time
to file an appeal expired.4 There is simply no support in our precedent for the
government’s position that a case may be removed to federal court after the state
courts’ jurisdiction has wholly expired.
       In similar circumstances, the Second, Sixth, and Ninth Circuits have
refused to allow removal on grounds of federalism and logic. See Ohio v. Doe,
433 F.3d 502, 507 (6th Cir. 2006) (“We agree with the reasoning of our sister
circuits in ruling that when all that remains of an action is the enforcement of


       4
          The United States’ contention that it could still file a restricted appeal is incorrect.
Under Texas Rule of Appellate Procedure 30, only “[a] party who did not participate—either
in person or through counsel—in the hearing that resulted in the judgment complained of and
who did not timely file a postjudgment motion or request for findings of fact and conclusions
of law, or a notice of appeal within the time permitted by Rule 26.1(a),” TEX. R. APP. P. 30
(emphasis added) may file a restricted appeal. The United States here filed a timely motion
for new trial– a “postjudgment motion”–by the express terms of the Rule, it therefore cannot
file a restricted appeal. See P & A Real Estate, Inc. v. Am. Bank of Tex., 323 S.W.3d 618, 619
(Tex. App.—Dallas 2010, no pet.) (rejecting putative restricted appeal where appellant had
filed a timely motion for new trial).

                                                6
                                       No. 10-20736

a judgment, removal to federal court is not authorized.”) (citing In re Meyerland
Co., 910 F.2d 1257, 1266 (5th Cir. 1990) (Higginbotham, J., concurring in part
and dissenting in part), same result reached on reh’g en banc, 960 F.2d 512 (5th
Cir. 1992)); Four Keys Leasing & Maint. Corp. v. Simithis, 849 F.2d 770, 774 (2d
Cir. 1988) (“[I]t would be a perversion of the removal process to allow a litigant
who is subject to a final judgment to remove that final judgment to the federal
courts for further litigation.”); Ristuccia v. Adams, 406 F.2d 1257, 1258 (9th Cir.
1969) (“It would seem obvious that to remove an action to the federal courts from
a state court, it must first be pending in the state court.”). The Eleventh Circuit
has expressed its skepticism as well. See Jackson v. Am. Sav. Mortgage Corp.,
924 F.2d 195, 198 n.8 (11th Cir. 1991) (“We need not here address a district
court’s authority to [modify or dissolve a state court injunction] where a party’s
opportunities for relief from the state court judgment are exhausted, either
because the time for relief by motion or appeal has run, leave to appeal has been
denied, or the state’s highest court has rendered a judgment.                    In such a
situation, removal itself may be improper.” (emphasis added) (citing Simithis,
849 F.2d at 774, and Ristuccia, 406 F.2d at 1258)). The weight of authority thus
holds that, by the time the government filed its notice of removal in this case,
there was no pending case to remove, inasmuch as nothing remained for the
state courts to do but execute the judgment.5 Removal is simply not possible
after a final judgment and the time for direct appellate review has run.6


       5
        We express no opinion on whether the government could remove subsequent ancillary
enforcement or collection proceedings initiated in the state courts.
       6
         The only other avenue for attacking a default judgment in Texas is by bill of review,
see TEX. R. CIV. P. 329b(f). The United States did not argue in its brief that the potential
availability of a bill of review rendered the state court judgment still subject to appellate
review (and therefore arguably still pending and removable), so any such argument need not
be considered. In any event, such an argument would be unavailing. A bill of review is a
collateral attack, not an appeal or part of the direct review process. “A bill of review is an
independent equitable action brought by a party to a former action seeking to set aside a

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                                         No. 10-20736

       The only distinction that the United States presses is its argument that
the state trial court lacked jurisdiction, and that removal to federal court, the
exclusive forum under the FTCA, is therefore proper. Carried to its logical
conclusion, this argument implies that, where exclusive jurisdiction lies in the
federal courts, removal at any time, no matter how distant from the state’s final
judgment, is proper.
       The problem with this argument is that, as the case appeared to the state
court at the time, the judgment against Hallbauer and Jennings that is the
subject of this appeal was not rendered without jurisdiction. The state court
judgment was entered by a Texas state court of general (and vast) jurisdiction,7
imposing a money judgment on two named individual defendants, Jennings and
Hallbauer, personally, payable to an individual plaintiff, Oviedo.                          Most
importantly, the judgment does not purport to run against the United States,
nor, on its face, is it enforceable against the United States.
       Instead, the most the United States can argue is that had the case
proceeded in the normal course, Hallbauer and Jennings would have arguably
been entitled to substitution of the United States as a party-defendant, and that
a judgment against the hypothetically substituted United States would then
have been outside the state court’s jurisdiction to enter under 28 U.S.C. §§
2679(b)(1) and 1346(b)(1). See Counts v. Guevara, 328 F.3d 212, 214 (5th Cir.
2003) (“Under the Westfall Act, [viz., § 2679(d)] the Government may remove the


judgment, which is no longer appealable or subject to motion for new trial.” Baker v.
Goldsmith, 582 S.W.2d 404, 406 (Tex. 1979). A bill of review proceeding is “a separate
proceeding from the underlying suit,” not a continuation of it (and not an “appeal,” as it is filed
as a new action in the trial court). Ross v. Nat’l Ctr. for the Emp’t of the Disabled, 197 S.W.3d
795, 798 (Tex. 2006).

       7
         TEX. CONST. art. V, § 8 (“District Court jurisdiction consists of exclusive, appellate,
and original jurisdiction of all actions, proceedings, and remedies, except in cases where
exclusive, appellate, or original jurisdiction may be conferred by this Constitution or other law
on some other court, tribunal, or administrative body.”)

                                                8
                                       No. 10-20736

case and may substitute itself as a party in place of a federal employee who
committed a tort while acting within the scope of his employment. Upon
substitution, the case falls under the [FTCA].” (emphasis added)); cf. Gutierrez
de Martinez v. Lamagno, 515 U.S. 417, 435 (1995) (plurality opinion) (noting
that a claim against a federal employee in which substitution of the United
States as the defendant was not required would not give rise to federal subject-
matter jurisdiction on its own). However, instead of asserting their claimed
right to substitution, Jennings and Hallbauer allowed a default to be taken and
then failed to timely appeal the judgment–or timely remove the case.
       By statute, two factual predicates to substitution of the United States as
the defendant are required: 1) the individual defendants must be deemed federal
employees; and 2) the Attorney General must certify that the individual
defendants were acting in the scope of their employment.                    See 42 U.S.C.
§§ 233(c), (g)(1); 28 U.S.C. § 2679(d). The record shows that the Secretary of the
Department of Health and Human Services had deemed Jennings and Hallbauer
to be federal employees as to the time period at issue (although that fact was not
before the state district court before it rendered judgment).8 However, the only
evidence in the record as to the second predicate–scope of employment–is the
Department of Justice’s certification of scope of employment, dated after the
state court rendered judgment (and after the date of the motion for new trial)
and never, so far as the record shows, filed with the state court.
       Thus, the judgment is not in any respect void on its face; it is only through
the introduction of facts outside the pre-judgment record and unavailable to the
state court when it entered the judgment that the United States can even make


       8
         This issue is especially problematic where the individual defendants were not obvious
federal employees, but only deemed employees by virtue of a letter issued by a federal agency.
This case is, as Oviedo points out, far from the equivalent of Houston v. U.S. Postal Service,
823 F.2d 896, 902 (5th Cir. 1987), in which the plaintiff was hit by a marked United States
Postal Service van.

                                              9
                                        No. 10-20736

a colorable argument that exclusive federal jurisdiction was proper.9 A removal
proceeding where the state court judgment is totally final is simply not the right
mechanism for introducing those new facts.10 It is worth noting that if the
jurisdictional issue had been litigated, an incorrect decision could have been
reversed on appeal, but Hallbauer and Jennings, as well as the United States as
potential substitute defendant, made no such effort to raise the issue until the
judgment became final and no longer pending. The reason that we do not permit
removal in this case is that no case remains pending in the state court to
“remove” once the case is final for purposes of direct review in the state court
system.
                                       IV. Conclusion
       We therefore hold that the United States’ removal of this case did not vest
jurisdiction over the case in the United States District Court for the Southern
District of Texas. All of the federal district court’s orders in this matter are
VACATED.          Following the Ninth Circuit’s conclusion that, in these
circumstances, remand to the state courts is “impossible . . . as a matter of logic,”
as the absence of “a removable cause of action [implies that there is similarly]
no cause of action that can be remanded,” Ristuccia, 406 F.2d at 1258, we




       9
          Relevant Supreme Court precedent supports this conclusion. More than a century ago,
the Court in Des Moines v. Iowa Homestead Co., 123 U.S. 552 (1887) upheld the res judicata
effect of a final disposition despite the argument that the deciding court lacked jurisdiction to
render judgment. 123 U.S. at 559. We acknowledge the imperfect analogy of improperly
invoked federal versus state jurisdiction. The logic, however, is the same. If we reached the
opposite outcome, a case could be removed–and re-opened–months, or even years, late under
the pretense of a “void” judgment.
       10
          Without a conclusive presumption in its favor–and the United States points to no
such presumption–the United States must demonstrate the existence of these predicate facts
in order to prove that the state court judgment was entered without jurisdiction, which is to
say, the United States must—now that it has allowed its opportunities for direct review to
lapse—collaterally attack the judgment. We express no opinion on what means it might have
to do so, but removal after the state court proceedings are “totally final” is not one of them.

                                              10
                                 No. 10-20736

RENDER a judgment of dismissal for want of jurisdiction in the federal district
court in lieu of a remand to the Texas courts.




                                      11
