Opinion ID: 503107
Heading Depth: 2
Heading Rank: 1

Heading: The Reviewability of the Remand Decision

Text: 7 Section 1447(d) of 28 U.S.C. provides, with one exception not pertinent here, that [a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.... 28 U.S.C. Sec. 1447(d). The Supreme Court has interpreted this provision as prohibiting appellate review only with respect to remand orders issued under Sec. 1447(c), which requires the district court to remand a case if it appears, prior to final judgment, that the action was removed improvidently and without jurisdiction. 28 U.S.C. Sec. 1447(c); see Carnegie-Mellon University v. Cohill, --- U.S. ----, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988) (Cohill ); Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976) (Thermtron ). If the action is one that was properly removed to the district court, and the district judge bases his remand on some ground other than the ground that the removal was improvident or without jurisdiction, the remand order is reviewable by the court of appeals. Thermtron, 423 U.S. at 351, 96 S.Ct. at 593; see generally Cohill, 108 S.Ct. at 616-22. 8 Removal in the present case was predicated on the Foreign Arbitral Awards Convention. The Convention deals with arbitration agreements arising out of, inter alia, commercial relationships between citizens of the United States and citizens of foreign states. 9 U.S.C. Sec. 202 (1982). The procedures enacted by Congress for federal judicial treatment of agreements falling under the Convention are set forth in 9 U.S.C. Secs. 201-208 (1982). Section 203 treats an action to enforce an agreement falling under the Convention as one arising under the laws and treaties of the United States and gives the district courts original jurisdiction over such an action. Section 205 provides that where the subject matter of an action pending in a state court relates to an arbitration agreement falling under the Convention, the defendant may, at any time before trial, remove the action to the district court; the ground for removal need not appear on the face of the state court complaint but may be shown in the petition for removal. 9 In the present case, Ardra moved in state court to compel arbitration on the ground that the reinsurance agreements between itself, a Bermudan citizen, and Nassau, a citizen of the United States, provided for arbitration. Prior to trial, Ardra removed the case to the district court. In remanding, the district court did not suggest that it lacked jurisdiction or that the action had not been removed in accordance with the prescribed procedures. Rather, it found that the applicability of the Convention would depend on the powers granted by state law to the Superintendent, and, relying principally on Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943) (Burford ), and to an extent on Colorado River Water Conservation District v. United States, 424 U.S. 800, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) (Colorado River ), it decided to remand as an exercise of its discretion to abstain from the decision of difficult questions of state law. Since the remand was not based on the grounds provided by 28 U.S.C. Sec. 1447(c), our review of the remand order is not barred by Sec. 1447(d). 10 Nonetheless, we are compelled to conclude that Ardra's appeal from the remand order must be dismissed, for Thermtron makes clear that the proper vehicle for review of a remand order is mandamus, not appeal: [B]ecause an order remanding a removed action does not represent a final judgment reviewable by appeal, '[t]he remedy in such a case is by mandamus to compel action, and not by writ of error to review what has been done.'  423 U.S. at 352-53, 96 S.Ct. at 594 (quoting Railroad Co. v. Wiswall, 90 U.S. (23 Wall.) 507, 508, 23 L.Ed. 103 (1875)). We note that some orders that ordinarily are not considered final have been deemed final for reasons that would apparently warrant treating remand orders as final. Thus, in Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 8-10, 103 S.Ct. 927, 932-33, 74 L.Ed.2d 765 (1983) (Moses Cone ), a district court's stay of a diversity action pending resolution of a concurrent state-court action was held to be a final order appealable under 28 U.S.C. Sec. 1291 (1982). The Supreme Court ruled that although a stay is not ordinarily a final decision for purposes of Sec. 1291, since most stays do not put the plaintiff 'effectively out of court,'  a stay that refuses to allow the plaintiff to litigate his claim in federal court is final and appealable when the sole purpose and effect of the stay are precisely to surrender jurisdiction of a federal suit to a state court. Id. at 10-11 n. 11, 103 S.Ct. at 934 n. 11 (emphasis in original). Though it is by no means clear why an order that remands an action to state court is any less final than the stay discussed in Moses Cone, the ruling in Thermtron that a remand order is not reviewable by appeal could not have been more explicit. Under the surrender-of-federal-jurisdiction test used in Moses Cone, we wonder whether it can logically or prudently remain the rule that a reviewable remand order (i.e., one whose review is not barred by Sec. 1447(d)) is not reviewable by direct appeal. If the district court dismisses an action on grounds that are discretionary, its order may be appealed and may be reversed if it has abused its discretion; yet the effect of denying direct appeal of a reviewable remand order is to insulate the order when the district court (1) has the power to dismiss on a discretionary ground, (2) chooses instead to remand on that ground, and (3) would have abused its discretion in dismissing on that ground, for, as discussed in Part II.B below, mandamus will not issue to remedy an ordinary abuse of discretion. It is hardly clear to us that such insulation of a reviewable remand order is necessary or sound. 11 Nonetheless, Thermtron's explicit ruling that review must be by mandamus rather than appeal has recently been reinforced by Cohill, in which the Third Circuit's review by means of mandamus rather than appeal drew no criticism from the Supreme Court, see 108 S.Ct. at 617 & n. 4, in the face of the long established principle that mandamus is not appropriate where a direct appeal would lie, see, e.g., Helstoski v. Meanor, 442 U.S. 500, 505-08, 99 S.Ct. 2445, 2447-49, 61 L.Ed.2d 30 (1979); Ex parte Rowland, 104 U.S. (14 Otto) 604, 617, 26 L.Ed. 861 (1882). Accordingly, we conclude that the remand order at issue in the present case is not appealable and may be reviewed only by petition for mandamus. 12 Our recent decision in Karl Koch Erecting Co. v. New York Convention Center Development Corp., 838 F.2d 656 (2d Cir.1988) (Karl Koch ) is not to the contrary. In Karl Koch, the district court had remanded because it interpreted a forum-selection provision agreed to by the parties as requiring that the controversy be litigated in state court. We held that a remand order based on a district court's interpretation of a forum-selection clause is reviewable on appeal, rather than by mandamus, 838 F. 2d at 659 & n. 1, relying on the Ninth Circuit's decision in Pelleport Investors, Inc. v. Budco Quality Theatres, Inc., 741 F.2d 273, 277 (9th Cir.1984). Pelleport upheld appealability on the ground that that part of the district court's remand order which definitively ruled on the validity and meaning of the parties' forum-selection agreement was a collateral order that was final within the meaning of Sec. 1291 and was appealable under the Cohen doctrine, Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1225, 93 L.Ed. 1528 (1949). The availability of appeal under the Cohen doctrine distinguishes Karl Koch from this case. To be appealable under that doctrine, an order must, inter alia,  'conclusively determine [a collateral] disputed question.'  Moses Cone, 460 U.S. at 11, 103 S.Ct. at 934-35 (quoting Coopers & Lybrand v. Livesay, 437 U.S. 463, 468, 98 S.Ct. 2454, 2458, 57 L.Ed.2d 351 (1978)). In the present case, unlike Karl Koch, there is nothing conclusive about the district court's order. In Karl Koch, the collateral dispute was whether the merits of the litigation should be decided in state court or in federal court; the district court, in remanding the matter to state court, conclusively determined that issue. Here, the collateral issue is whether the matter should be adjudicated by an arbitrator. The district court did not, by remanding to state court, resolve that issue, for if the state court determines that the pertinent powers of the Superintendent are strictly derived from the rights of Nassau, and thus are commercial, the state court itself will be required, under the Supremacy Clause of the Constitution, to order arbitration pursuant to the Convention. Accordingly, we conclude that the abstention-remand order here is not a final order within the meaning of Cohen, and hence, in accordance with Thermtron and Cohill, is not reviewable by means of appeal. 13 Although our normal practice is to decline to treat improvident appeals as petitions for mandamus, see generally Bridge C.A.T. Scan Associates v. Technicare Corp., 710 F.2d 940, 944 (2d Cir.1983), we believe this case warrants a departure from that practice, for there is a strong public interest in promoting the Superintendent's efficient performance of his official duties. The resolution of the present case, which was removed from state court more than two-and-one-half years ago, has already been unduly delayed. We prefer not to prolong matters further by requiring the parties to file new papers in order to obtain review by means of mandamus. Accordingly, we treat Ardra's appeal as a mandamus petition, and turn to the merits.