United States Court of Appeals

Fifth Circuit

FILED

March 31, 2006

Charles R. Fulbruge III

Clerk

UNITED STATES COURT OF APPEALS

FIFTH CIRCUIT

____________

No. 06-00009

____________

JAMES WALLACE;REBECCAWALLACE; SANDRAQUILLIN;

DELLARENE HODGES; RAPHAEL ORGERON; DIANNE

ORGERON; Individually & On Behalf of All Others Similarly

Situated,

Plaintiffs-Respondents,

versus

LOUISIANA CITIZENS PROPERTY INSURANCE

CORPORATION; ET AL,

Defendants,

LOUISIANA CITIZENS PROPERTY INSURANCE

CORPORATION; ANPAC LOUISIANA INSURANCE COMPANY;

LOUISIANA FARM BUREAU CASUALTY INSURANCE CO;

LOUISIANA FARM BUREAU MUTUAL INSURANCE CO,

Defendants-Petitioners.

Petition for Leave to Appeal 

Under 28 U.S.C. § 1453(c)

Before SMITH, GARZA, and PRADO, Circuit Judges.

EMILIO M. GARZA, Circuit Judge:
1 Petitioners also move for a stay of the district court’s remand order, pending the

outcome of this appeal. 

Each of the defendants adopts the Farm Bureau’s arguments as to § 1453(c)(3) and

§ 1441(d)(1)(B). We do not discuss the other issues raised since these were not addressed by the

district court in the remand order. See In re Shell Oil Co., 932 F.2d 1518, 1521 (5th Cir. 1991)

(noting that on appeal we review the order entered by the district court ). 

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Louisiana Farm Bureau Mutual Insurance Company, Louisiana Farm Bureau Casualty

Insurance Company (“Farm Bureau”), Louisiana Citizens Property Insurance Corporation

(“LCPIC”), and ANPAC Louisiana Insurance Company (“ANPAC”) (collectively “Petitioners”)

petition for this court to accept their appeal under 28 U.S.C. § 1453(c)(1), contending that the district

court erred in remanding the underlying case to state court, because it was properly removed to

federal district court under 28 U.S.C. § 1441(e)(1)(B).1

I

The Insurers listed above are defendants in the action below (“the Wallace action”), a class

action brought in Louisiana State court by individuals (“Plaintiffs”) who incurred flood damage due

to Hurricane Katrina. Farm Bureau (on behalf of themselves and the other defendants) removed to

the United States District Court for the Eastern District of Louisiana, asserting that subject matter

jurisdiction over the case existed under § 1441(e)(1)(B). This section, part of the Multiparty,

Multiforum Trial Jurisdiction Act (“MMTJA”), provides, in part: 

[A] defendant in a civil action in a State court may remove the action to the district

court . . . if . . . the defendant is a party to an action which is or could have been

brought . . . under section 1369 in a United States district court and arises from the

same accident as the action in State court, even if the action to be removed could not

have been brought in a district court as an original matter. 

28 U.S.C. § 1441(e)(1)(B). Petitioners contend that they meet the requirements of § 1441(e)(1)(B)

because they are partiesto a separate class action based on 28 U.S.C. § 1369 (the Chehardy action”)
2

28 U.S.C. § 1369(a) provides:

(a) The district courts shall have original jurisdiction of any civil action involving

minimal diversity between adverse partiesthat arisesfrom a single accident, where at

least 75 natural persons have died in the accident at a discrete location, if))

(1) a defendant resides in a State and a substantial part of the accident took place in

another State or other location, regardless of whether that defendant is also a resident

of the State where a substantial part of the accident took place;

(2) any two defendants reside in different States, regardless of whether such

defendants are also residents of the same State or States; or

(3) substantial parts of the accident took place in different States.

3

28 U.S.C. § 1369(b) provides:

(b) Limitation of jurisdiction of district courts.))The district court shall abstain from

hearing any civil action described in subsection (a) in which))

(1) the substantial majority of all plaintiffs are citizens of a single State of which the

primary defendants are also citizens; and

(2) the claims asserted with be governed primarily by the laws of that State. 

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which arisesfromthe same accident (Hurricane Katrina) asthe instant case.2 Specifically, Petitioners

are defendants in a currently-pending class action suit in the United States District Court for the

Middle District of Louisiana, Chehardy, et al. v. Louisiana Ins. Comm., et al. In the Wallace action,

they aver that because the District Court for the Middle District may exercise subject matter

jurisdiction under 28 U.S.C. § 1369(a) over the Chehardy suit, a case that also deals with insurance

claims flowing from Hurricane Katrina, the District Court for the Eastern District may exercise

supplemental subject matter jurisdiction over the Wallace suit under § 1441(e)(1)(B). 

The district courtremanded to state court, reasoning that themandatoryabstentionprovisions

of § 1369(b) did not permit the suit to be heard in federal court.3 Farm Bureau now ask this court

to accept consideration of their appeal, arguing on the meritsthat the district court erred when it read

§ 1369(b)’s limitations into the removal statute of § 1441(e)(1)(B). 

II

Generally, the power of the federal courts to review a remand order is limited. 28 U.S.C.
4 This additional ground for the exercise of appellate jurisdiction was raised by

petitioners and briefed by both parties. 

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1447(d); Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127 (1995). Petitioners argue,

however, that we may hear the appeal under 28 U.S.C. § 1453(c)(1), part of the recently enacted

Class Action Fairness Act (“CAFA”), which states: 

Section 1447 shall apply to any removal of a case under this section, except that

notwithstanding section 1447(d), a court of appeals may accept an appeal from an

order of a district court granting or denying a motion to remand a class action to the

State court from which it was removed if application is made to the court of appeals

not less than 7 days after entry of the order. 

We disagree that § 1453(c)(1) confers appellate jurisdiction over the instant appeal. The

plain language of this provision indicates that its terms apply “to any removal of a case under this

section,” referring to § 1453, the provision of CAFA which permits the removal of class actions.

Furthermore, the legislative history of CAFA also indicates that § 1453(c)(1) was enacted to ensure

expeditious review of remand decisions in class action suits brought under the new legislation. See

S.REP. NO. 109-14, at 49 (2005). The application of § 1453(c)(1) is therefore limited to the context

of CAFA. Farm Bureau based their notice of removal solely on § 1441(e)(1)(B), a provision of the

MMTJA. Not only was the notice of removal based on the MMTJA, but their opposition to the

plaintiffs’ motion to remand expressly disavowed any reliance onCAFA. There is thus no nexus with

CAFA that would justify the exercise of appellate jurisdiction under § 1453(c)(1). Accordingly, we

lack appellate jurisdiction under § 1453(c)(1) and, therefore, do not reach the question whether to

accept petitioner’s appeal. 

However, we may still possess appellate jurisdiction under 28 U.S.C. § 1291.4 The Supreme

Court has recognized “a narrow class of collateral orders which do not meet th[e] definition of
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finality, but which are nevertheless immediately appealable under § 1291.” Quackenbush v. Allstate

Ins. Co., 517 U.S. 706, 712 (1996). Though ordinarily, 28 U.S.C. § 1447(d) bars consideration of

a remand order, the SupremeCourt hasinstructed usthat the § 1447(d) limitation on appellate review

of remands “must be read in pari materia with § 1447(c).” Quackenbush, 517 U.S. at 711-12. An

“abstention-based remand order does not fall into either category of remand order described in

§ 1447(c), as it is not based on lack of subject matter jurisdiction or defects in removal procedure.”

Id. at 712. We thus have jurisdiction to review the remand order if it was premised on abstention.

See Schexnayder v. Entergy Louisiana, Inc., 394 F.3d 280, 283 (5thCir. 2004) (citing Quackenbush,

517 U.S. at 712). 

The district court based its remand on§ 1369(b), stating that “this court must abstain from

exercising jurisdiction over” the Wallace action. The district court held that even if subject matter

jurisdiction could be said to exist under § 1441(e)(1)(B), the abstention principles of § 1369(b) still

applied and barred the district court from hearing the case. Plaintiffs argue that the remand was not

abstention-based but rather based on a lack of subject matter jurisdiction and that therefore it is not

reviewable on immediate appeal. They bolster their argument by pointing to a later order by the

district court, which suggested that its prior remand order was rooted in a lack of jurisdiction. 

Although the subsequent order states that the remand was based on lack of subject matter

jurisdiction, the originalremand order plainly refersto abstention under § 1369(b). See In re Digicon

Marine, Inc., 966 F.2d 158, 160 (5th Cir. 1992) (allowing appellate review of a remand order,

explaining “[d]espite the district court’s description of the remand as one based on a lack of subject

matter jurisdiction in its order on reconsideration, the district court’s original remand order clearly

indicates on itsface that the remand was not based upon lack of originalsubject matter jurisdiction”).
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Section 1369(b) is an abstention provision. It assumes subject matter jurisdiction under § 1369(a),

but abstains where the “substantialmajority” ofthe plaintiffs and the “primarydefendants” are citizens

of the same state and the claims at issue are “governed primarily by the laws of that State.” It does

not deprive federal courts of subject matter jurisdiction, but rather, acts as a limitation upon the

exercise of jurisdiction granted in § 1369(a). 

Abstention implies that there is subject matter jurisdiction but for some other policy reason,

a court refrains from exercising that power to hear the merits of a case. See England v. Louisiana

State Bd. of Medical Examiners, 375 U.S. 411, 415-16 (1964) (observing that abstention “accord[s]

appropriate deference to the respective competence of the state and federal court systems” while

“recogniz[ing] that abstention does not, of course, involve the abdication of federal jurisdiction”).

The only court to have parsed this relatively new statute also reads 28 U.S.C. § 1369(b) as a

mandatoryabstention provision. Passa v. Derderian, 308 F.Supp. 2d 43, 56-57 (D.R.I., 2004). That

court articulated the logic behind the abstention, explaining:

Congressidentified certainexceptionalcircumstancesindisasterlitigation cases where

the state court’s interest in hearing the matter outweighs the federal interest in

multidistrict, multiforum consolidation))namely, where the tragedy is sufficiently

local in character as to satisfy the tenets of § 1369(b)(1) and (2). In these cases,

although jurisdiction is otherwise proper under § 1369(a), the text of § 1369(b)

instructs district courts to abstain from hearing them.

Id. at 57. Treating § 1369(b) as an abstention provision thus comports with not only the plain

language of the statute but also with the underlying rationale for abstention provisions generally. 

Because the district court based its remand on abstention principles, we have appellate

jurisdiction to hear this appeal from the district court’s remand order under § 1291. 

III
5 Although this case comes to us as a petition to accept the appeal, the parties

sufficiently address the basis for the underlying appeal, thus allowing us to rule on the merits. We

waive the requirements of Rules 3 and 4 of the Federal Rules of Appellate Procedure, governing the

filing of a notice of appeal. FED. R. APP. P. 2 (“[A] court of appeals may . . . suspend any provision

of these rules in a particular case and order proceedings as it directs.”). 

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On the merits of their appeal, Petitioners argue that the district court erred by applying

§ 1369(b) to a case removed under § 1441(e)(1)(B).5 Although the district court recognized that

Farm Bureau removed under § 1441(e)(1)(B), the court did not determine whether the defendants

met the requirements of § 1441(e)(1)(B), instead stating that even if the defendants could meet those

requirements, the abstention provisions of 1369(b) prevented the case frombeing heard in the federal

courts. 

The district court misapplied mandatory § 1369(b) abstention to the exercise ofsupplemental

jurisdiction established by § 1441(e)(1)(B). Section 1369(b) applies only to original jurisdiction

under § 1369(a). By its own terms, § 1369(b) limits its application to “any civil action described in

subsection (a).” Subsection (a) sets out the prerequisites for original jurisdiction under the MMTJA.

Thus, it is proper for a district court to abstain from hearing a case brought as an original matter

under § 1369(a), when the exceptionslisted in § 1369(b) apply. In contrast, § 1441(e)(1)(B) permits

removal in those situations where original federal subject matter jurisdiction does not exist. In so

allowing, § 1441(e)(1)(B) establishes supplemental jurisdiction over the Wallace action, piggybacking jurisdiction on the district court’s original jurisdiction under § 1369(a) over the pending

Chehardy action. When the requirements of § 1441(e)(1)(B) are met, defendants need not establish

the existence of independent subject matter jurisdiction under any other provision, including under

§ 1369(a), because supplemental jurisdiction has been established. Consequently, § 1369(b) is not

an independent bar to the exercise of jurisdiction over a case removed pursuant to § 1441(e)(1)(B),
6

28 U.S.C. § 1441(e)(5) provides:

An action removed under this subsection shall be deemed to be an action under

section 1369 and an action in which jurisdiction is based on section 1369 of this title

for purposes of this section and sections 1407, 1697, and 1785 of this title.

This sub-section does not require an opposite result from the one reached by this court today, as it

merely providesthat, for the purposes of certain proceduralrequirements(venue, service of process,

and subpoenas), a case removed under § 1441(c)(1)(B) should be treated as if it were a § 1369 case.

It does not trigger the application of the substantive requirements governing the exercise of original

jurisdiction under § 1369. 

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as it applies only to the exercise of original jurisdiction under § 1369(a).6

This reading of § 1441(e)(1)(B) is consistent with the purposes of the MMTJA. An early

House Report explained the logic of the proposed legislation:

Current effortsto consolidate allstate and federal casesrelated to a common disaster

are incomplete because current federal statutes restrict the ways in which

consolidation can occur))apparently without an intention to limit consolidation. For

example, plaintiffs who reside in the same state as any one of the defendants cannot

file their cases in federal court because of a lack of complete diversity of citizenship,

even if all parties to the lawsuit want the case consolidated. For those cases that

cannot be brought into the federal system, no legal mechanism exists by which they

can be consolidated, as state courts cannot transfer cases across state lines. In sum,

full consolidation cannot occur in the absence of federal legislative redress.

H.R. REP. NO. 106-276, at 7 (1999). As this report makes clear, the MMTJA was designed to

ameliorate the restrictions on the exercise of federal jurisdiction that ultimately forced parties in

multiple suits arising from the same disaster to litigate in several fora. To hamstring the removal

statute by misapplying the abstention provisions would undercut the MMTJA’s ultimate goal of

consolidation. 

IV

Therefore, we hold there is no jurisdiction to accept this appealunder 28 U.S.C. § 1453(c)(1);

however, we exercise appellate jurisdiction over the appeal under 28 U.S.C. § 1291. Reaching the

merits, we VACATE the order ofremand and REMAND to the district court for further proceedings
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not inconsistent with this opinion. We also DENY as moot the motion to stay the district court’s

remand order.