Opinion ID: 64513
Heading Depth: 1
Heading Rank: 2

Heading: Jurisdiction to Review the Order of Remand

Text: Section 1447(d) states 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. § 1447(d), but the Supreme Court has held that this prohibition applies only when an order of remand is based on one of the grounds specified in section 1447(c): lack of subject matter jurisdiction or a defect in removal procedure, see Schexnayder v. Entergy La., Inc., 394 F.3d 280, 283 (5th Cir.2004) (citing Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-12, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996)). This Court has held that a clear and affirmative use of Section 1367(c) discretion to remand and not exercise supplemental jurisdiction does not involve either of the grounds specified in section 1447(c), and therefore is reviewable on appeal for an abuse of discretion. Regan v. Starcraft Marine, LLC, 524 F.3d 627, 631 (5th Cir.2008) (citing Thomas v. LTV Corp., 39 F.3d 611, 616 (5th Cir. 1994)). [1] Most of our sister circuits have similarly found that a remand order based on declining supplemental jurisdiction is not within the class of remands described in section 1447(c) and is thus not subject to the jurisdictional bar of section 1447(d). See, e.g., Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 223-24 (3d Cir. 1995) (citing precedents in the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Eleventh Circuits). In support of that proposition, this and other circuits have cited the Supreme Court's statement in Carnegie-Mellon University v. Cohill, 484 U.S. 343, 355 n. 11, 108 S.Ct. 614, 98 L.Ed.2d 720 (1988), that [Section] 1447(c)... do[es] not apply to cases over which a federal court has pendent jurisdiction. Thus, the remand authority conferred by the removal statute and the remand authority conferred by the doctrine of pendent jurisdiction overlap not at all. See Hook v. Morrison Milling Co., 38 F.3d 776, 780 (5th Cir.1994) (citing Cohill, 484 U.S. at 355 n. 11, 108 S.Ct. 614); McCandless, 50 F.3d at 223-24 (same). The Supreme Court recently cast some doubt on the proposition that a remand order based on declining supplemental jurisdiction under section 1367(c) does not fall within the class of remands described in section 1447(c), stating in Powerex Corp. v. Reliant Energy Services, ___ U.S. ___, 127 S.Ct. 2411, 168 L.Ed.2d 112 (2007), that [i]t is far from clear ... that when discretionary supplemental jurisdiction is declined the remand is not based on lack of subject-matter jurisdiction for purposes of § 1447(c) and § 1447(d), and that the Court had never passed on whether [such] remands are subject-matter jurisdictional for purposes of post-1988 versions of § 1447(c) and § 1447(d). Id. at 2418-19 & n. 4 (citations omitted); see also Regan, 524 F.3d at 631 (noting the Supreme Court's recent comments but declining to address the issue). Brookshire points out that one circuit that had not addressed the issue prior to Powerex has cited that decision in support of the proposition that remand orders based on declining supplemental jurisdiction under section 1367(c) fall within the class of remands described in section 1447(c), specifically remands for lack of subject matter jurisdiction. In HIF Bio, Inc. v. Yung Shin Pharmaceuticals Industrial Co., 508 F.3d 659 (Fed.Cir.2007), the Federal Circuit found that [b]y ... undercutting the persuasive force of the decisions of the other Courts of Appeals relying on Cohill, Powerex appears to reopen the question of whether § 1367(c) remands are barred from review under §§ 1447(c) and (d). Id. at 666. The court went on to hold that because every § 1367(c) remand necessarily involves a predicate finding that the claims at issue lack an independent basis of subject matter jurisdiction, a remand based on declining supplemental jurisdiction can be colorably characterized as a remand based on lack of subject matter jurisdiction. Accordingly, a remand based on declining supplemental jurisdiction must be considered within the class of remands described in § 1447(c) and thus barred from appellate review by § 1447(d). Id. at 667. [2] Although the Supreme Court has indicated that it considers it an open question whether a discretionary remand under section 1367(c) is based on a lack of subject matter jurisdiction, and is thus unappealable under section 1447(d), it is not an open question in this circuit. Powerex made clear that Cohill did not, as some courts seem to have found, settle the question, but it does not overrule or directly undermine the line of cases in this circuit holding that discretionary remands pursuant to section 1367(c) are appealable. See Cal. Dept. of Water Res. v. Powerex Corp., 533 F.3d 1087, 1091-92 (9th Cir.2008) (discussing HIF Bio and stating that [t]he Federal Circuit's disagreement does not give a three-judge panel in this circuit license to overrule the binding, authoritative decision of a prior three-judge panel, and that [s]imilarly, that the question remains unanswered by the Supreme Court does not relax our obligation to abide by stare decisis ). The Supreme Court in Powerex simply confirmed the rule in this circuit that when a district court remands a properly removed case because it nonetheless lacks subject-matter jurisdiction, the remand is covered by § 1447(c) and thus shielded from review by § 1447(d), 127 S.Ct. at 2417, and held that a reviewing court should find that an order of remand was based on lack of subject matter jurisdiction if the district court colorably characterized it as such, a standard that is consistent with this Court's rule that a district court must clearly and affirmatively invoke non-section 1447(c) grounds in order to avoid the bar imposed by section 1447(d), id. at 2418; see also Smith v. Tex. Children's Hosp., 172 F.3d 923, 926 (5th Cir. 1999) (citation and quotations omitted) ([W]e will only review remand orders if the district court affirmatively states a non-1447(c) ground for remand.). In this case, the district court's order of remand was clearly based on 28 U.S.C. § 1367(c). The district court summarized Brookshire's argument that remand was required under 28 U.S.C. § 1447(c) in the first paragraph of the order, but the court then went on to analyze the remand issue under the discretionary standard set out in 28 U.S.C. § 1367(c), finding that [w]hile it is certainly within our discretion to retain this case for further proceedings, after examining the factors enumerated in § 1367(c), the Court finds that the suit before us contains only issues of State law, and in the interest of comity, these State law issues would be more properly decided by a State forum. [3] The order of remand cannot be colorably characterized as being based on lack of subject matter jurisdiction under section 1447(c). Cf. Powerex, 127 S.Ct. at 2418-19 (finding that there was no reason to believe that the district court's remand was actually based on section 1367(c) because the court never mentioned the possibility of supplemental jurisdiction, there was no indication that the parties ever even argued to the district court that supplemental jurisdiction was a basis for retaining the case, and the court explicitly relied upon lack of subject-matter jurisdiction in its order of remand). Because the order of remand was a discretionary remand pursuant to section 1367(c), that order is reviewable on appeal for abuse of discretion. See Regan, 524 F.3d at 631.