# United States **Court of Appeals**  **for the Federal Circuit**

______________________ STATE OF VERMONT, Plaintiff

- Appellee,

v.

MPHJ TECHNOLOGY INVE STMENTS, LLC, Defendant

- Appellant.

______________________

2014

- 1481

______________________ Appeal from the United States District Court for the District of V ermont in No. 2:13

- cv

- 00170

- wks, Judge William K. Sessions III.

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IN RE MPHJ TECHNOLOGY INVE STMENTS, LLC, Petitioner.

______________________

2014

- 137

______________________
On Petition for Writ of Mandamus to the United States District Court for the District of Vermont in No. 2:13

- cv

- 00170

- wks , Judge William K. Sessions III.

______________________
ON MOTION

______________________STATE OF VERMONT v. MPHJ TECHNOLOGY INVE STMENTS 2

Before P ROST , Chief Judge

, N EWMAN and H UGHES , Circuit Judges

. N EWMAN , Circuit Judge

. O R D E R
MPHJ Technology Investments, LLC (“MPHJ”) pet itions this court fo r a writ of mandamus

, and also appea ls from an order of the United States District Court for the District of Vermont remanding this case to state court. Because we lack jurisdiction to grant the requested relief,

we dismiss the petition and appeal.

B ACKGROUND

MPHJ owns s everal patents relating to network sca nner systems

. MPHJ through subsidiary license e s wrote to various bus i ness and non

- profit organizations operating in Ver mont , requesting the recipient to confirm it was not in fring ing MPHJ’s patents or , alternatively, to purchase a li cense

. If the offeror did not receive a r esponse, a Texas law firm sent follow

- up correspon dence stating that an infringement suit would be filed

. On May 8, 2013, the State of Vermont through the Ver mont Attorney General

, filed suit against MPHJ in Ve r mont state court . The State alleg ed MPHJ engaged in

un fair and dece p tive trade practices under the Vermont Consumer Prote c tion Act , stating that the letters co ntain ed threat ening

, false

, and misleading statements

. The State filed this case seeking civil penalties and other relief under state law.

MPHJ removed the case to the United States District Court for the District of Vermont on June 7, 2013, asser ting federal question jurisdiction and diversity jurisdiction

. T he State moved to re mand the case back to state court for lack of subject matter jurisdiction. MPHJ opposed the S tate’s motion to remand

, and filed a motion to dismiss for lack of personal jurisdiction and a motion for sanctionsSTATE OF VERMONT v. MPHJ TECHNOLOGY INVE STMENTS 3

under Rule 11 of the Federal Rules of Civil Pr ocedure and 28 U.S.C. § 1927

. The sanctions motion also requested dismissal, asserting that the State’s complaint was friv olous, that the complaint failed to plead that the alleged conduct was both objectively and subjectively baseless, and also that the complaint was preempted by MPHJ’s right to enforce its patents.
After a motions hearing on February 25, 2014, the State—i n response to concerns raised by the district court at the motions hearin g— filed a conditional motion to clarify or amend its com plaint

, to eliminate the request for a permanent injunction requiring MPHJ to stop threatening Vermont businesses with patent infring ement. MPHJ subsequently moved for summary jud gment.

Without deciding any other motions

, the district court granted the State’s motion to remand

. T he district court stated that the com plaint did not raise a substa ntial question of patent law, and that “the State is targeting bad faith conduct irrespective of whether the letter recip ient s were patent infringers” or the patents were invalid. State of Vermont v. MPHJ Tech. Invs., LLC , No. 13

- cv

00170, slip op. at 14 (D. Vt. Apr. 14, 2014)

. The court pointed out that MPHJ’s preemption assertion was a defense to its allegedly unfair and deceptive practic es, and that a def ense can not provide a basis for federal subject matter juris diction. See Metro

. Life Ins. v. Taylor

, 481 U.S. 58, 63 (1987)

. MPHJ appeals the remand to state court, and has filed a petition for a writ of mandamus.

D ISCUSSION MPHJ argues that the district court abused its discr etion (1) in effectively denying its motion for sanctions ; (2) by refusing to decide the motion to dismiss for lack of personal jurisdiction before deciding subject matterSTATE OF VERMONT v. MPHJ TECHNOLOGY INVE STMENTS 4

jurisdiction ; and (3) in “effectively amending t he Original Complaint and then declining to exercise jurisdiction over the complaint as amended, or in remand ing the case . . . without first deciding a controlling federal question of preemption under the First Amendment and federal patent law .” Def.’s N otice of Appeal para. 3 , May 13, 2014

. A.
We start with the issue of appellate jurisdiction over this remand order. Section 1447(d) of Title 28 provides that :
A n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise[.]
The Supreme Court has h eld that this provision a pplies only to remands base d on the grounds specified in § 1447(c )— namely, a defect in removal procedure or lack of subject matter jurisdiction. Thermtron Prods., Inc. v. Hermansdorfer , 423 U.S. 336, 34 3– 45 (1976) . In Kircher v. Putnam Funds Trust

, the C ourt stated that “w e have relentlessly repeated that ‘any remand order issued on the grounds specified in § 1447(c) [is immunized from all forms of appellate review] . . . .’” Kircher , 547 U.S. 633, 640 (2006) (cit ing Thermtron , 423 U.S. at 351 ).
Here the district court remanded on a ground provi ded in § 1447(c); that is, in the district court’s view the complaint did not raise a claim or question of federal law to give rise to federal jurisdiction. Section 1447(d) pr ecludes this court from second- guess ing the district court’s jurisdiction determination regarding subject matter . If the § 1447(d) bar applies, “review is unavailable no ma tter how plain the legal error in ordering the remand.” Briscoe v. Bell , 432 U.S. 404, 413 n.13 (1977) (citing Gravitt v. Sw

. Bell Tel. Co. , 430 U.S. 723 (1977)). In making that determination, we look only to whether “theSTATE OF VERMONT v. MPHJ TECHNOLOGY INVE STMENTS 5

District Court relied upon a ground that is colorably characterized as subject

- matter jurisdiction.” Powerex Corp. v. Reliant Energy Servs., Inc. , 551 U.S. 224, 234 (2007). Here, the district court repeatedly stated the position that “the Court does not have subject matter jurisdiction. ” We therefore lac k jurisdiction to review the remand decision.

B. MPHJ argues that § 1447(d) is “not even relevant” to our review of the district court’s failure to address MPHJ’s motions to dismiss for lack of personal jurisdi ction and for sanctions. A lthough § 1447(d) is not of itself dispositive of the reviewability of a motion for sanctions, the district court’s remand order dominates any procee dings on this appeal.

MPHJ cites the Supreme Court’s decision in Ruhrgas AG v. Marathon Oil Co. , 526 U.S. 5 74 (1999 ), as showing that personal jurisdiction and subject matter jurisdiction are distinct concepts, and that district courts have discr etion under certain circumstances to address personal jurisdiction before turning to subject matter jurisdiction. Id

. at 588. However, Ruhrgas does not create an exce ption to the § 1447(d) bar.

C.

MPHJ offers additional arguments, but none permit s this court to depart from § 1447(d), even if there were legal error on the part of the district court in ruling that it lacked jurisdiction. See Powerex , 551 U.S. at 236.
Accordingly,

I T I S O RDERED T HAT : (1) The State of Vermont’s motion to dismiss is granted. The petition and appeal are dismissed.
(2) Each side shall bear its costs

.STATE OF VERMONT v. MPHJ TECHNOLOGY INVE STMENTS 6

(3) The State’s motions to take judi cial notice are granted.
(4) The State’s motion to strike is moot.

F OR THE C OURT

/s/ Daniel E. O’Toole Daniel E. O’Toole Clerk of Court