### 1998 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

4-15-1998 

# H ud son U nit ed B a nk v

. Lit e nd a M t g C or p

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t 97-5074

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w

. v i l l a no v a

. e du/thir dc ir c uit_1998

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. I t h as be e n a c c e pt e d for inclusion in 1998 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w

. v i l l a no v a

. e du

. 

### R e c omme nde d C it a t ion

" H ud s on U

nit e d B a nk v

. L it e nd a M t g C or p " (1998). 1998 D e cisio n s

. P a pe r 80.
h tt p://d i g it alc ommon s .l a

w

. v i l l a no v a

. e du/thir dc ir c uit_1998/80Filed April 15, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-5074

HUDSON UNITED BANK, banking corporation of the Stat e of New Jersey, Appellant

v.

LITENDA MORTGAGE CORP.; THEODORE H. HOWARD; LINDA M. HOWARD, his wife;
FEDERAL HOME LOAN MORTGAGE CORPORATION, doing business as Freddie Mac;
GARY S. YOUNG; YOUNG, DIMIERO & SAYOVITZ;

RICHARD G. NORWALK AND NORWALK ASSOCIATES

On Appeal from the United States District Court for the District of New Jersey (D.C. No. 96-cv-02204)

Argued Thursday, December 11, 1997

BEFORE: GREENBERG, ROTH, and GARTH, Circuit Judges

(Opinion filed April 15, 1998)Richard W. Mackiewicz, Jr. (Argued)

Burke & Mackiewicz 625 Washington Street Hoboken, New Jersey 07430

Attorneys for Appellant

Lance J. Wolf (Argued) Federal Home Loan Mortgage Corporation Legal Department
8200 Jones Branch Drive McLean, VA 22102

Gerald T. Ford Landman, Corsi, Ballaine &

Ford One Gateway Center
Suite 500 Newark, NJ 07102

Attorneys for Appellees Litenda Mortgage Corp., Theodore H. Howard, Linda M. Howard, his wife, Federal Home Loan Mortgage Corporation d/b/a Freddie Mac

Brian Corrigan Law Office of Brian Corrigan
150 Morris Avenue
P.O. Box 476 Springfield, NJ 07081

Attorney for Appellees
Richard G. Norwalk and
Norwalk Associates

2OPINION OF THE COURT

GARTH, Circuit Judge:

This is an appeal of a district court order denying a motion for reconsideration filed by Hudson United B ank ("Hudson"). The district court had dismissed Hudson 's federal claims, and remanded the state claims to st ate court pursuant to 28 U.S.C. S 1367(c). When Hudson
moved for reconsideration of the dismissal and atte mpted to amend its complaint, the district court held that i t had lost jurisdiction to hear the case when the remand order was sent to state court. Accordingly, Hudson's motion w as denied.

We hold that the district court had jurisdiction to entertain Hudson's motions. Thus, we reverse.

I.

On March 20, 1995, Theodore H. Howard, Linda M. Howard, and their company, LiTenda Mortgage Corp., (collectively, "LiTenda") borrowed almost two milli on dollars from the Hudson United Bank ("Hudson") tofinance LiTenda's mortgage selling and servicing business. At the time, LiTenda was a mortgage seller/servicer approv ed by the Federal Home Loan Mortgage Corporation ("Freddi e Mac").1 As collateral for the loan, Hudson accepted LiTenda's contractual rights to income derived from servicing a portfolio of mortgages for Freddie Mac.

On May 2, 1996, Freddie Mac terminated LiTenda's eligibility as a seller/servicer. In a letter faxed to LiTenda, Freddie Mac stated that LiTenda's eligibility was r evoked

___________________________________________________ ______________

1. Freddie Mac is a federally chartered, sponsored, and regulated corporation that purchases home mortgages from lend ers and sells securities to the public to fund the purchases. Mor tgages are only purchased from, and serviced by, approved seller/se rvicers under the terms of contracts authored by Freddie Mac. See 12 U.S.C. S 1454 (1989 & West Supp. 1997); American Bankers Mortgage Corp. v. Federal Home Loan Mortgage Corp., 75 F.3d 1401, 1404 (9th Cir. 1 996).

3because LiTenda had violated their contractual agre ement

in at least nine different ways--among them, by ple dging LiTenda's contractual rights as collateral to secur e the loan
with Hudson.2 The termination letter directed LiTen da to return all files and mortgage documents to Freddie Mac, who in turn transferred its portfolio to another se rvicer.

Left without Freddie Mac's business, LiTenda's fina ncial condition deteriorated, and the loan with Hudson we nt into default.3 When Hudson sought the contract rights it believed it was owed under the loan agreement with LiTenda, Freddie Mac rejected Hudson's claim.

Hudson responded by filing a complaint in state cou rt containing claims against both LiTenda and Freddie Mac.4 Hudson's claims against Freddie Mac alleged that Fr eddie Mac was illegally withholding from Hudson the benef its it
was due as collateral under the terms of its loan a greement
with LiTenda. Freddie Mac then removed the case to federal court pursuant to 12 U.S.C. S 1452(f), which confer s federal subject matter jurisdiction over any civil action t o which Freddie Mac is a party.

Once in federal court, Freddie Mac filed a motion t o dismiss for failure to state a claim pursuant to Fe d. R. Civ.

___________________________________________________ ______________

2. The contractual relationship between Freddie Mac and LiTenda was governed by a Seller/Servicer Guidebook authored by Freddie Mac. The Guidebook set out the rights and duties to which Li Tenda was subject as a seller/servicer of Freddie Mac's mortgages. The n ine violations of the Guidebook that Freddie Mac alleged included: failur e to account properly for the disposition of funds; failure to fund and s afeguard funds properly; failure to comply with financial responsi bilities; and failure

to maintain qualified facilities and staff.

LiTenda subsequently petitioned Freddie Mac for rev iew of the termination decision. On August 1, 1996, Freddie Ma c affirmed its decision to terminate LiTenda's eligibility, callin g LiTenda's violations

of the contract "especially egregious," and stating th at LiTenda's "record at Freddie Mac was marginal at best."

3. LiTenda filed a petition in the United States Ba nkruptcy Court for the District of New Jersey on November 21, 1996.

4. Hudson also named several other parties as defen dants. For the sake of clarity, however, we will focus our analysis her e on the claims against
LiTenda and Freddie Mac.

4P. 12(b)(6). Freddie Mac argued that Hudson had fai led to

state a claim against Freddie Mac because Hudson's claim under the loan agreement derived solely from LiTend a's rights, and LiTenda's contract rights had been exti nguished when Freddie Mac revoked LiTenda's privileges as a seller/servicer. Because LiTenda had no rights agai nst Freddie Mac, Hudson could not use its claim to LiTe nda's rights to state a cause of action against Freddie M ac.

On November 26, 1996, the district court granted Fr eddie
Mac's motion to dismiss for failure to state a clai m. Agreeing with Freddie Mac that Hudson had no claim against Freddie Mac because LiTenda had no such cla im, the district court dismissed all of the counts agai nst Freddie Mac under Fed. R. Civ. P. 12(b)(6).5 Left w ithout an original basis for federal subject matter jurisdict ion, the
district court exercised its discretion under 28 U. S.C. S 1367(c), and remanded the remaining portions of t he case against LiTenda. A certified copy of the remand ord er was mailed to the state court the next day, on November 27,
1996.

On December 6, 1996, Hudson filed several postdismissal motions in the district court. First, Hud son moved for the district court to reconsider its dism issal pursuant to Fed. R. Civ. P. 59(e) and Fed. R. Civ. P. 60(b). According to Hudson, the district court had wrongly concluded that LiTenda's rights were extinguished w hen Freddie Mac revoked LiTenda's status as a seller/se rvicer. Pointing to the contract between Freddie Mac and Li Tenda, Hudson noted that this was true only if LiTenda's s tatus
had been revoked "with cause." If the termination w as "without cause," Hudson continued, then the contrac t entitled LiTenda (and thus Hudson) to a termination fee equal to the market value of LiTenda's servicing po rtfolio. Although Hudson had not raised this issue previousl y,

___________________________________________________ ______________

5. Properly relying on Pension Benefits Guar. Corp. v. White Consol. Indus., 998 F.2d 1192, 1196 (3d Cir. 1993), the dis trict court considered the portions of the Guidebook attached by the defen dant and relied on by both parties. Those portions of the Guidebook ma de clear that LiTenda had no continuing rights in the servicing c ontract that Hudson could rely on, such that it was clear as a matter o f law that Hudson was
not entitled to relief.

5Hudson now argued that the termination was "without

cause."

Hudson also moved to amend its complaint. The amended complaint contained what Hudson modestly termed "prophylactic" changes in its cause of actio n; in particular, the proposed amended complaint alleged for the
first time that Freddie Mac had terminated LiTenda' s portfolio "without cause."6

The district court denied Hudson's motion in an ord er dated January 13, 1997. The district court quoted T rans Penn Wax Corp. v. McCandless, 50 F.3d 217, 225 (3d Cir. 1995) for the proposition that "a district court lo ses jurisdiction over a case once it has completed the remand by sending a certified copy of the remand order to the state court." Id. Because a certified copy of the remand order had been sent to the state court on November 27, 1996, the district court concluded that its jurisdiction to h ear Hudson's motion for reconsideration had been divest ed on
that date. The district court denied Hudson's motio n without reaching the merits.

Hudson filed a timely appeal.

II.

Although neither party contests our appellate jurisdiction, we have an independent duty to ensure that we have jurisdiction over a case or controversy bef ore we attempt to resolve it. See PAS v. Travelers Ins. Co ., 7 F.3d 349, 352 (3d Cir. 1993). In this case, the inquiry is complicated by the fact that there are three distin ct orders that Hudson has attempted to appeal.

The first is the November 26, 1996 order dismissing Hudson's claims against Freddie Mac under Fed. R. C iv. P. 12(b)(6), which we will refer to as "the dismissal order." The second is the November 26, 1996 order remanding the remaining claims against LiTenda to state court pur suant

___________________________________________________ ______________

6. Hudson also moved for a stay of the remand order . As the remand order had already been sent to state court, however , this motion was

moot.

6to 28 U.S.C. S 1367(c), which we will refer to as " the

remand order." The third is the January 13, 1997 or der denying Hudson's motion for reconsideration, which we will
refer to as "the reconsideration order."

Our cases establish that we have appellate jurisdic tion over the dismissal order pursuant to 28 U.S.C. S 12 91. See Carr v. American Red Cross, 17 F.3d 671, 674-77 (3d Cir. 1994) (holding that a dismissal order preceding aS 1367(c) remand order is reviewable by direct appeal pursuan t to 28 U.S.C. S 1291). The reasoning of Carr also makes cl ear that we have appellate jurisdiction over the reconsidera tion order pursuant to 28 U.S.C. S 1291. See id.

Although we will resolve this case without reviewin g the remand order, we note that we are authorized to exe rcise jurisdiction over the remand order as well. It is c lear that 28 U.S.C. S 1447(d) does not bar appellate review o f the remand order, because it was issued not under S 144 7(d), but rather pursuant to 28 U.S.C. S 1367(c). See, e. g., Pennsylvania Nurses Ass'n v. Pennsylvania State Edu c. Ass'n, 90 F.3d 797, 801 (3d Cir. 1996) (holding tha t S 1447(d) is inapplicable to a remand order made pu rsuant to S 1367(c)), cert. denied, 117 S. Ct. 947 (1997). Second, although we would be able to review the remand orde r only through a petition for mandamus, see PAS, 7 F.3d at 353, we may treat Hudson's notice of appeal as a mandamu s petition. See Korea Exch. Bank v. Trackwise Sales C orp., 66 F.3d 46, 51 (3d Cir. 1995).7

___________________________________________________ ______________

7. Judge Greenberg is of the view that when, as her e, a district court
dismisses the federal claims from a case removed fr om state court and remands the state claims to state court pursuant to 28 U.S.C. S 1367(c)(3), instead of exercising supplemental ju risdiction over them, that, upon reversal of the dismissal of the federal claims, the court of appeals may order that the state claims be reinstat ed without exercising mandamus jurisdiction. He believes that an appeal b y the plaintiff in such a case is, in reality, from the dismissal orde r and not from the remand order, because the plaintiff may be content to litigate the state claims in state court where the plaintiff started t he action. Therefore,

the order from the court of appeals reinstating the sta te claims in federal court is merely incidental to the reversal of the d ismissal and is authorized by 28 U.S.C. S 2106 which provides that after a reversal of a ruling by a district court, a court of appeals "may remand the cause and direct the entry of such appropriate judgment, decr ee or order, or require such further proceedings to be had as may be just u nder the
circumstances."

7III.

The question posed by this case is whether the dist rict court had jurisdiction to adjudicate Hudson's motio n for reconsideration. Our answer is yes.

A.

Congress has designed our federal court system so t hat it affords civil litigants ample opportunity to see k review of adverse decisions in the inferior courts. First, li tigants may request reconsideration of an unfavorable result in the district court. See Fed. R. Civ. P. 59(e), 60(b). S econd, losing parties are entitled to seek review of "all final orders" in the court of appeals. See 28 U.S.C. S 1291. Thir d, litigants may request rehearing by a full court of appeals. See Fed. R. App. P. 35. The animating concept behin d this forgiving structure is that justice is best served by the checks and balances afforded by regular opportuniti es for judicial review.

Despite this general design, the need to deter vexa tious litigation has led Congress to carve out exceptions in which
review is curtailed or even eliminated. One such ex ception is the rule against review of remand orders followi ng improper removal to federal court, currently codifi ed at 28 U.S.C. S 1447(c) and (d).8 This longstanding rule d ivests the

___________________________________________________ ______________

8. The text of 28 U.S.C. S 1447(c) and (d) reads as follows:

(c) A motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction mus t be made within 30 days after the filing of the notice of remov al under section 1446(a). If at any time before final judgment it appe ars that the district

court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees , incurred as a result

of the removal. A certified copy of the order o f remand shall be
mailed by the clerk to the clerk of the State court . The State court may thereupon proceed with such case. (d) An order remanding a case to the State c ourt from which it was removed is not reviewable on appeal or other wise, except that an order remanding a case to the State court fr om which it was removed pursuant to section 1443 of this tit le shall be reviewable by appeal or otherwise.8federal courts of jurisdiction to review a district court's

remand order when the order is based on a defect in removal procedure or lack of subject matter jurisdi ction. See Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 346, 96 S. Ct. 584, 590 (1976); Quackenbush v. Allstate Ins. Co., ___ U.S. ___, ___, 116 S. Ct. 17 12, 1718

___________________________________________________ ______________

28 U.S.C. S 1447 (West Supp. 1997).

Those attempting to divine the meaning of S 1447 fr om its text would do well to recall that sometimes "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U.S. 345, 349, 41 S. Ct. 506, 507 (1921) (Holmes, J.). In Thermtron Products, Inc . v. Hermansdorfer, 423 U.S. 336, 96 S. Ct. 584 (1976), the Supreme Cou rt examined the century-old history of Congress's bar to review of remand orders and
concluded that the bar to review contained in S 144 7(d) covered only remands issued because a case was removed improperl y or the district court was without subject matter jurisdiction. See id. at 346-50; 96 S. Ct. at 590-93. At the time of Thermtron, the text o f S 1447(c) provided

the textual hook for this interpretation. It then read: "If at any time before final judgment it appears that the case was removed improvidently and without jurisdiction, the district court shall rema nd the case, and may order the payment of just costs." Thermtron , 423 U .S. at 342, 96 S. Ct. at 589. Thus, the Court concluded that the bar to r eview contained in S 1447(d) applied only when the remand was based on the grounds specified in S 1447(c). See id. at 346; 96 S. Ct. a t 590.

Congress has since amended S 1447(c) several times, most recently in 1996. The amendments have focused on creating and c larifying time limits concerning when a plaintiff can seek a reman d following removal from state court. These amendments have slightly al tered the grounds for remand "specified" in the text of S 1447(c): th e statute now speaks of remands for lack of subject matter jurisdiction, an d remands for "any defect other than lack of subject matter jurisdicti on." 28 U.S.C. S 1447(c) (West Supp. 1997). Rather than take this change in language as a wholesale rejection of Thermtron and a dramatic exp ansion of S 1447(d), we will assume that Congress did not mean to upset the Thermtron limits on S 1447(d), and that they remain in effect unchan ged by the intervening textual modifications to S 1447(c). Thi s conclusion is supported by the legislative history of the 1996 am endment. See H.R. REP. NO. 104-799 at 2-3 (1996), reprinted in 1996 U .S.C.C.A.N. 3417, 3418-19 (suggesting that the textual changes were d esigned only to clarify Congressional intent on the timing of reman ds made for reasons other than lack of subject matter jurisdiction).

9(1996). The purpose of the rule is to prevent a par ty to a

state lawsuit from using federal removal provisions and appeals as tool to introduce substantial delay into a state action. See Thermtron, 423 U.S. at 354-55, 96 S. Ct . at 594-95 (Rehnquist, J., dissenting). Without S 1447( d), a party to a state action could remove the action to federal court, await remand, request reconsideration of the remand, appeal, request rehearing, and then file a petition for a writ of certiorari, all before being forced t o return to state court several years later. See Greenwood v. P eacock, 384 U.S. 808, 832-33, 86 S. Ct. 1800, 1815 (1966) (contemplating the delay that would result if state criminal defendants could regularly seek removal under 28 U. S.C. S 1443, and then seek review of subsequent remand orders). To avoid this delay, Congress has fashione d an exception to the general rule of review, and made a district
court's initial determination that removal was inappropriate, a nonreviewable one.

B.

In the present case, the district court issued a re mand pursuant to 28 U.S.C. S 1367(c),9 rather than 28 U .S.C. S 1447(c). Section 1367(c) grants district courts t he discretion to refuse to exercise supplemental juris diction when "values of judicial economy, convenience, fair ness, and comity" counsel that the district court remand state claims to a state forum. See City of Chicago v. Int ernational College of Surgeons, ___ U.S. ___, ___, 118 S. Ct. 523, 534 (1997) (quoting Carnegie Mellon Univ. v. Cohill , 4 84 U.S. 343, 350, 108 S. Ct. 614, 619 (1988)). Because the original

___________________________________________________ ______________

9. 28 U.S.C. S 1367(c) (1993) states:

(c) The district courts may decline to exerc ise supplemental jurisdiction over a claim under [28 U.S.C. S 1367](a) if--

(1) the claim raises a novel or complex issu e of State law, (2) the claim substantially predominates ove r the claim or claims over which the district court has original j urisdiction, (3) the district court has dismissed all cla ims over which it has original jurisdiction, or (4) in exceptional circumstances, there are other compelling reasons for declining jurisdiction.

10basis of federal jurisdiction in this case was the presence of

Freddie Mac as a party, see 12 U.S.C. S 1452(f), th e district
court exercised its discretion and declined to exer cise supplemental jurisdiction over the state claims aga inst LiTenda following the dismissal of the claims again st Freddie Mac. See 28 U.S.C. S 1367(c)(3).

The first question posed by this case is whether th e bar to review provided by S 1447(d) is even implicated when a district court enters a remand order pursuant toS 1 367(c). The decisions of the Supreme Court, this court, and our sister circuits make clear that S 1367(c) remands, such as the one entered by the district court here, do not invoke the bar to review prescribed by S 1447(d). See, e.g., C ohill, 484 U.S. at 355 n.11, 108 S. Ct. at 621 n.11 ("Section[ ] 1447(c) . . . do[es] not apply to cases over which a federa l court has pendent jurisdiction. Thus, the remand authority co nferred by the removal statute and the remand authority con ferred by the doctrine of pendent jurisdiction overlap not at all."); Pennsylvania Nurses Ass'n v. Pennsylvania State Edu c. Ass'n, 90 F.3d 797, 801 (3d Cir. 1996) (holding tha t S 1447(d) is inapplicable to a remand order made pu rsuant to S 1367(c)); Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 224 (3d Cir. 1995) (same); PAS v. Travelers In s. Co., 7 F.3d 349, 352 (3d Cir. 1993) (same). See also Thing s Remembered, Inc. v. Petrarca, 516 U.S. 124, 130, 11 6 S. Ct. 494, 498 (1995) (Kennedy, J., concurring) (noting t hat several other circuits have agreed that remands pur suant to S 1367(c) do not implicate the bar to review pro vided by S 1447(d)) (citing cases); Trans Penn, 50 F.3d at 2 24 (same) (citing cases from eight circuits).

Although the sharp distinction between remands authorized by S 1367(c) and remands authorized by S 1447(c) is often misunderstood, the reason behind their different treatment is clear. Review of S 1447(c) r emands is barred to keep parties to state actions from making dubious allegations of federal jurisdiction in orde r to forestall the prompt resolution of state cases. Thu s, S 1447(c) remands are warranted only when a federal court has no rightful authority to adjudicate a state cas e that has been removed from state court. In such cases, the s tatute provides a quick, permanent, and mandatory remedy t o

11return a state case to state court. See Internation al Primate

Protection League v. Administrators of Tulane Educ. Fund, 500 U.S. 72, 89, 111 S. Ct. 1700, 1710 (1991).

By contrast, S 1367(c) serves no such corrective pu rpose. Remands authorized by S 1367(c) may be entered only when federal subject matter jurisdiction has been affirm atively established, via 28 U.S.C. S 1367(a), and are enter ed independently of whether the case originated in sta te or federal court. See International College of Surgeon s, 118 S. Ct. at 530. Thus, a district court's decision to re mand pursuant to S 1367(c) does not imply that the case was improperly filed in federal court. Rather, it refle cts the court's judgment, reviewable on appeal for abuse of discretion, see Sparks v. Hershey, 661 F.2d 30, 33 (3d Cir. 1981), that at the present stage of litigation it w ould be best for supplemental jurisdiction to be declined so tha t state issues may be adjudicated by a state court. See Uni ted Mine Workers v. Gibbs, 383 U.S. 715, 726-27, 86 S. Ct. 1 130, 1139-40 (1966). In such circumstances, there is no pressing need to block the mechanisms of review tha t are generally afforded civil litigants.

Thus, the bar to review codified at S 1447(d) is en tirely inapplicable when the basis of the remand was the d istrict court's discretion pursuant to S 1367(c).

C.

Freddie Mac contends that we should construe the ca ses holding that the S 1447 bar to review is inapplicab le when a remand is issued under S 1367(c) as establishing that only appellate jurisdiction is available. Conceding our appellate jurisdiction, Freddie Mac argues that the bar to review should nonetheless apply to post-remand moti ons filed before the district court. In other words, Fr eddie Mac argues that the district court lacked jurisdiction to adjudicate the post-remand motions, but that we hav e appellate jurisdiction to review the merits of the district

court's orders.

We cannot agree. It is difficult to understand how we can exercise appellate jurisdiction over the merits of a case if the district court in which the notice of appeal wa sfiled did

12not itself have jurisdiction when the notice of app eal was

filed. Federal jurisdiction cannot be "lost" by the district court one day and then "found" by the court of appe als later on. Rather, jurisdiction that is originally a nd properly
vested in the district court becomes vested in the court of appeals when a notice of appeal is filed. See Venen v. Sweet, 758 F.2d 117, 120 (3d Cir. 1985) ("As a gene ral rule, the timely filing of a notice of appeal is an event of jurisdictional significance, immediately conferring jurisdiction on a Court of Appeals and divesting a district court of its control over those aspects of the case involved in the appeal.") Thus, if S 1447(d) does not deny a n appellate court jurisdiction to review a remand ord er, it cannot deny the district court jurisdiction to ente rtain a motion for reconsideration before the notice of app eal is filed. See, e.g., J.O. v. Alton Community Unit Sch. Dist. 11, 909 F.2d 267, 273-274 (7th Cir. 1990) (holding that a district court has the power to reconsider its orde r following a S 1367(c) remand during the time allowed forfilin g a notice of appeal).

D.

We next address whether the mailing of the S 1367(c )
remand order to state court divested the district c ourt of jurisdiction. The primary support for this view der ives from language in Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 224 (3d Cir. 1995), which could be read (and w as read, by the district court) to suggest that the an swer to that question is "yes." However, such a reading of the dicta in Trans Penn would ignore the sharp distinction be tween S 1447(c) remands and those remands authorized by S 1367(c). Accordingly, we conclude that the mailin g of a remand order does not divest a district court of ju risdiction to entertain a motion for reconsideration following a remand order issued under S 1367(c).

Trans Penn was a labor action brought by employees in state court against their employer. Following the e mployer's removal to federal court, the employees withdrew th eir
federal claims and asked the district court to rema nd the remaining state claims to state court. The district court did so, exercising its discretion according to S 1367(c ).

13Subsequently, the employer filed a motion for

reconsideration, which was denied on the merits. Th e employer then petitioned our court for a writ of ma ndamus, arguing that the remand was inappropriate because f ederal issues remained lurking within the remaining state claims.

Before reaching the merits, we addressed at length whether the district court had jurisdiction to reco nsider its remand order on the merits. We began by noting corr ectly that the S 1447(d) bar to review was inapplicable b ecause the remand order was issued pursuant to S 1367(c). See id. at 224. Nonetheless, the court suggested, there was a question as to whether the district court had juris diction to reconsider its own remand order. Our own precedent, the court intimated, was "inconclusive." Id. at 226. F irst, there was a "general rule . . . that a district court los es jurisdiction over a case once it has completed the remand by sending a certified copy of the remand order to the state court." Id. at 225. Second, remands authorized by S 1367(c) were generally reviewable. Finding no evidence that a remand order had been sent to the state court, and noting that the S 1367(c) remand did not implicateS 1447(d ), we held that the district court retained jurisdiction to
reconsider its order of remand. See id. at 227.

The conclusion we have reached in this case is in a ccord with the holding of Trans Penn. In both cases, the district court retained jurisdiction to reconsider its reman d order.
To the extent that dicta in Trans Penn could be rea d as suggesting a different result would be warranted if the

remand order had been sent to state court before th e motion for reconsideration was filed, we disavow th at notion. Indeed, the law in our circuit is clear. Th e mailing of a remand order divests the district court of jur isdiction when the remand is authorized by S 1447(c). See Hu nt v. Acromed Corp., 961 F.2d 1079, 1082 (3d Cir. 1992). When the remand is authorized by S 1367(c), the bar to r eview is inapplicable and the district court may reconsider its remand order just as it would any other order. See Trans Penn, 50 F.3d at 227; Thomas v. LTV Corp., 39 F.3d 611, 616 (5th Cir. 1994); Alton Community Unit Sch. Dist . 11,
909 F.2d at 273-274.

14Because the remand in this case was authorized by

S 1367(c), the mailing of the remand order to state court did not divest the district court of jurisdiction to en tertain
Hudson's motion for reconsideration.

IV.

Having determined that the district court retained jurisdiction to adjudicate Hudson's motion for reconsideration, we must next decide whether to pro ceed to
the merits of the case or reverse and remand to the district court. Hudson argues that we should reverse the reconsideration order of the district court, and re mand this case to the district court so it may entertain Huds on's
motion on the merits. Freddie Mac contends that in the name of judicial economy we should address the meri ts of the motion for reconsideration in this appeal.

When a district court has failed to reach a questio n below that becomes critical when reviewed on appeal, an a ppellate court may sometimes resolve the issue on appeal rat her than remand to the district court. See, e.g., Chase Manhattan Bank, N.A. v. American Nat'l Bank and Tru st Co., 93 F.3d 1064, 1072 (2d Cir. 1996) (summary judgment). This procedure is generally appropriate when the factual record is developed and the issues prov ide purely legal questions, upon which an appellate cou rt exercises plenary review. In such a case, an appell ate tribunal can act just as a trial court would, so no thing is lost by having the reviewing court address the disp uted
issue in the first instance. See Otto v. Variable A nnuity Life Ins. Co., 814 F.2d 1127, 1138 & n.11 (7th Cir. 1986 ).

Such a procedure may be inappropriate, however, whe n the issue to be addressed is not a purely legal que stion. When the resolution of an issue requires the exerci se of discretion or fact finding, for example, it is inap propriate and unwise for an appellate court to step in. As th e Supreme Court has stated, "the proper role of the c ourt of appeals is not to reweigh the equities or reassess the facts
but to make sure that the conclusions derived from those weighings and assessments are juridically sound and supported by the record." Curtiss-Wright Corp. v. G eneral Elec. Co., 446 U.S. 1, 10, 100 S. Ct. 1460, 1466 (1 980).

15The merits of Hudson's motion for reconsideration a nd to

amend its pleadings fall within the zone of discret ion and judgment that is best addressed initially by the di strict court. A district court's decision to deny a motion for reconsideration is placed within the sound discreti on of the district court; factual determinations supporting i ts decision are reviewed by us under a clearly erroneo us standard. See North River Ins. Co. v. CIGNA Reinsur ance Co., 52 F.3d 1194, 1203 (3d Cir. 1995). Similarly, a district court's decision to grant or deny leave to amend pl eadings is reviewed for abuse of discretion. See Heyl & Pat terson Int'l, Inc. v. F.D. Rich Housing, 663 F.2d 419, 425 (3d Cir. 1981). It is not our place to exercise the discreti on normally
afforded the district court.

Accordingly, we will not reach the merits of Hudson 's motion, and instead will remand to the district cou rt so that the district court can take whatever steps are necessary to entertain Hudson's post-dismissal moti ons. If Hudson's reconsideration motion is granted, and if it is permitted to amend its complaint, the district cour t will need to vacate the remand order and give appropriat e notification to the state court. If Hudson's motion s are denied, however, no such steps will be necessary: i t would be a waste of judicial effort (indeed, a needless s pinning of wheels) to reclaim the state action from state cour t, only to have to order a remand again immediately thereafter . Of course, we do not express any opinion as to the mer its of Hudson's motions, leaving it to the sound discretio n of the district court as to how it regards allegations in Hudson's original and amended complaint, as well as the time liness of Hudson's "without cause" theory.

The January 13, 1997 order of the district court wi ll be reversed, and remanded to the district court for fu rther proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

16