Court Opinion

ID: 4683143
Source: CourtListenerOpinion
Date Created: 2021-05-01 00:00:25.196301+00
Date Added: 2024-06-11T08:04:13.307422
License: Public Domain

Case: 20-30564     Document: 00515844080         Page: 1     Date Filed: 04/30/2021

              United States Court of Appeals
                   for the Fifth Circuit                           United States Court of Appeals
                                                                            Fifth Circuit

                                                                          FILED
                                                                      April 30, 2021
                                  No. 20-30564
                                                                     Lyle W. Cayce
                                                                          Clerk
   Joseph Kolwe, Jr.,

                                                             Plaintiff—Appellee,

                                       versus

   Civil & Structural Engineers, Incorporated,

                                                         Defendant—Appellant.

                  Appeal from the United States District Court
                     for the Western District of Louisiana
                               No. 6:19-CV-1663

   Before Owen, Chief Judge, and Clement and Higginson, Circuit
   Judges.
   Per Curiam:*
          Civil and Structural Engineers, Inc. (CASE) removed this case to
   federal court almost two years after a Louisiana state court rendered final
   judgment, contending that a post-trial contempt motion created federal
   jurisdiction. The federal district court remanded to state court on two

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.
Case: 20-30564        Document: 00515844080              Page: 2       Date Filed: 04/30/2021

                                         No. 20-30564

   grounds: lack of subject matter jurisdiction and Younger abstention. Because
   the district court’s order granting remand is unreviewable, we dismiss this
   appeal for want of appellate jurisdiction.
                                                I
           This case concerns the appealability of an order granting a motion to
   remand from federal to state court. Joseph Kolwe, Jr. was a member and
   shareholder of CASE, a professional engineering firm with two other
   shareholders. After his relationship with the other shareholders soured,
   Kolwe filed suit against CASE in Louisiana state court, alleging shareholder
   oppression. Kolwe sought to have his interest redeemed at fair value, as
   permitted under Louisiana law. Ultimately, by consent judgment, the parties
   agreed that CASE would purchase Kolwe’s interest at a price determined by
   the court. After trial on this valuation issue, the court entered judgment on
   December 22, 2017, awarding Kolwe $871,817 and terminating Kolwe’s
   ownership interest in CASE.
           Both parties filed cross-appeals, and the Louisiana Third Circuit
   ultimately affirmed the judgment as modified, holding that “[w]hile Mr.
   Kolwe’s shares were valued as of the effective date of his withdrawal from
   CASE on November 29, 2015, his obligations, rights, and duties as a
   shareholder of the corporation [were] deemed to have terminated as of
   December 22, 2017.” 1
           In November 2019, Kolwe filed with the state district court a
   document titled “Motion to Enforce Judgment and for Civil Contempt.”
   Noting that his obligations and duties as a shareholder terminated on
   December 22, 2017, Kolwe took issue with CASE sending Kolwe a schedule

           1
            Kolwe v. Civ. & Structural Eng’rs, Inc., 2018-398, p. 42 (La. App. 3 Cir. 2/21/19);
   264 So. 3d 1262, 1289, writ denied, 2019-0483 (La. 5/20/19); 271 So. 3d 1269.

                                                2
Case: 20-30564           Document: 00515844080               Page: 3       Date Filed: 04/30/2021

                                             No. 20-30564

   K-1 tax form for the 2018 calendar year. Because this tax form purported to
   treat Kolwe as an owner beyond the termination date set out in the judgment,
   Kolwe argued that CASE was in contempt of court. One month later, CASE
   filed a notice of removal, contending that “[t]he determination of whether a
   K-1 is correct and accurate, or whether an amended one must be issued,
   arises under federal law and regulations,” thus creating federal jurisdiction.
           Kolwe then filed a motion to remand, and the district court referred
   the matter to a magistrate judge for a report and recommendation, pursuant
   to 28 U.S.C. § 636(b). The magistrate judge recommended the district court
   remand because of a lack of subject matter jurisdiction or, alternatively,
   because “princip[le]s of federalism and comity” weighed in favor of
   abstention. CASE filed timely objections to the report and recommendation,
   notably conceding that abstention was an alternative basis on which the
   magistrate judge based its recommendation. The district court granted
   Kolwe’s motion to remand “[f]or the reasons assigned in the Report and
   Recommendation of the Magistrate Judge.”
                                                   II
           When a party properly objects to a magistrate’s report and
   recommendation, the district court must conduct a de novo review. 2
   Regarding abstention, “[t]his court reviews a district court’s abstention
   ruling for abuse of discretion, but it reviews de novo whether the elements
   for Younger abstention are present.” 3 This court may raise the question of
   its appellate jurisdiction sua sponte. 4

           2
               28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3).
           3
               Bice v. La. Pub. Def. Bd., 677 F.3d 712, 716 (5th Cir. 2012) (citations omitted).
           4
             Fontenot v. Watson Pharms., Inc., 718 F.3d 518, 520 (5th Cir. 2013) (“As a
   threshold issue, this [c]ourt must determine whether it has appellate jurisdiction to review

                                                   3
Case: 20-30564            Document: 00515844080               Page: 4         Date Filed: 04/30/2021

                                             No. 20-30564

           This court lacks appellate jurisdiction to review the district court’s
   remand order. “Congress has severely circumscribed the power of federal
   appellate courts to review remand orders.” 5 Under 28 U.S.C. § 1447(d),
   “[a]n order remanding a case to the State court from which it was removed
   is not reviewable on appeal or otherwise.” 6 However, “[d]espite the plain
   language of the statute and the clear directive it provides to federal appellate
   courts, the Supreme Court has created a limited class of cases that may be
   reviewed.” 7 Namely, this court has jurisdiction to review remand orders
   decided on grounds other than those set out in 28 U.S.C. § 1447(c). 8 But we
   are without jurisdiction to review remand orders based on a ground set forth
   in § 1447(c). 9 “Specifically, this [c]ourt lacks jurisdiction under § 1447 if the
   district court based its remand order on either a lack of subject matter
   jurisdiction or a defect in removal procedure.” 10 This is true “whether or
   not that order might be deemed erroneous by an appellate court.” 11
           The district court’s determination that it lacked subject matter
   jurisdiction to hear Kolwe’s claims strips this court of appellate jurisdiction.

   the district court’s order. Jurisdiction exists to determine the [c]ourt’s jurisdiction.”
   (internal citations omitted)).
           5
               Schexnayder v. Entergy La., Inc., 394 F.3d 280, 283 (5th Cir. 2004).
           6
                Id. (alteration in original) (quoting 28 U.S.C. § 1447(d)).
           7
               Id.
           8
              See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-12 (1996); 28 U.S.C.
   § 1447(c) (providing, in pertinent part, that “[a] motion to remand the case on the basis of
   any defect other than lack of subject matter jurisdiction must be made within 30 days after
   the filing of the notice of removal under section 1446(a)”).
           9
                Quackenbush, 517 U.S. at 712.
           10
                Schexnayder, 394 F.3d at 283.
           11
              Kircher v. Putnam Funds Tr., 547 U.S. 633, 640 (2006) (internal quotation marks
   and citations omitted).

                                                    4
Case: 20-30564           Document: 00515844080              Page: 5      Date Filed: 04/30/2021

                                            No. 20-30564

   In BEPCO, L.P. v. Santa Fe Minerals, Inc., this court considered the
   reviewability of a remand order based on two grounds: contractual waiver and
   timeliness. 12 While the former ground fell outside the purview of § 1447(c)
   and was thus reviewable, the latter timeliness ground was not. 13 This court
   held that “[b]ecause the untimeliness of the removal petition was an
   independent and authorized reason for remanding this case to state court,”
   the court lacked jurisdiction to hear the appeal. 14
          Here, while an abstention-based remand order is reviewable, 15 a
   jurisdictional-based remand order is not. 16 Because the district court’s
   determination that it lacked subject matter jurisdiction was “an independent
   and authorized reason for remanding” to state court, we are without
   appellate jurisdiction to review the propriety of the remand order. 17
                                                 III
          Even assuming arguendo that we have appellate jurisdiction to review
   the abstention basis for the remand order, we conclude that the district court
   properly abstained. As an initial matter, we note that the district court
   appropriately made the de novo determinations required after a party objects
   to the report and recommendation of a magistrate judge. In its judgment, the
   district court stated that it “thoroughly reviewed the record, including the
   written objections filed,” then “concurr[ed] with the findings of the
   Magistrate Judge.” This language does not indicate that the district court

          12
               675 F.3d 466, 470 (5th Cir. 2012).
          13
               See id.
          14
               Id.
          15
               See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 712 (1996).
          16
               See id. at 711-712; 28 U.S.C. § 1447(c).
          17
               BEPCO, 675 F.3d at 470.

                                                    5
Case: 20-30564           Document: 00515844080                 Page: 6   Date Filed: 04/30/2021

                                            No. 20-30564

   failed to make the required de novo determinations. 18 A district court is free
   to accept the entirety of the magistrate’s findings, as the district judge did in
   this case. 19
           Turning to the Younger abstention question, “[w]hen a federal court
   is asked to interfere with a pending state prosecution, established doctrines
   of equity and comity are reinforced by the demands of federalism, which
   require that federal rights be protected in a manner that does not unduly
   interfere with the legitimate functioning of the judicial systems of the
   States.” 20
           Per Younger and its progeny, a state court motion for contempt is not
   removable. 21 In Juidice v. Vail, the Supreme Court extended the abstention
   doctrine to cases involving state contempt proceedings. 22                    The Court
   explained: “The contempt power lies at the core of the administration of a
   State’s judicial system . . . [such that] federal-court interference with the

           18 See Longmire v. Guste, 921 F.2d 620, 623 (5th Cir. 1991) (per curiam) (declining
   to hold that the district court failed to conduct a de novo review of a magistrate’s report
   when the district court’s order granted summary judgment “[f]or the reasons set forth in
   the Magistrate’s Report to which an objection was filed” (alteration in original)); see also
   United States v. Shaid, 916 F.2d 984, 988 (5th Cir. 1990).
           19
                28 U.S.C. § 636(b)(1).
           20
                Kugler v. Helfant, 421 U.S. 117, 123 (1975).
           21
              See Juidice v. Vail, 430 U.S. 327, 335-37 (1977); Asher v. A.G. Edwards & Sons,
   Inc., 272 F. App’x 357, 358 (5th Cir. 2008) (unpublished) (“A.G. Edwards does not clearly
   state the grounds of its concession that a state court motion for contempt is not removable,
   but these are obvious.”).
           22
                See Juidice, 430 U.S. at 335-37.

                                                   6
Case: 20-30564            Document: 00515844080              Page: 7   Date Filed: 04/30/2021

                                              No. 20-30564

   State’s contempt process is ‘an offense to the State’s interest . . . likely to be
   every bit as great as it would be were this a criminal proceeding.’” 23
           We decline to pierce the style and form of Kolwe’s contempt motion
   to assess whether it presents a claim arising under federal law. CASE argues
   that, in substance, Kolwe’s post-judgment contempt motion is a separate
   filing that raises “entirely new claims that are not mentioned in the title [of
   the motion]” and cannot be a contempt motion because it “omits crucial
   components for such a motion.” The same federalism principle outlined in
   Juidice, however, counsels against this court making any substantive
   determination on the merits of Kolwe’s contempt claim. 24 Indeed, this court
   has previously ordered remand after a defendant sought to remove a
   proceeding based on a contempt motion, notwithstanding the defendant’s
   argument that the contempt motion was “a disguised petition for
   damages.” 25 We expressly declined to adjudicate the merits of “a motion
   filed in state court and styled a motion for contempt” because “to do so
   would transgress the very principle of federalism [that] the rule [that
   contempt proceedings are non-removable] seeks to protect.” 26
           As the facts of this case and our precedents make clear, assuming it
   had subject matter jurisdiction, the district court properly abstained from
   exercising that jurisdiction over this post-judgment contempt motion.

           23
             Id. at 335-36 (third alteration in original) (quoting Huffman v. Pursue, Ltd., 420
   U.S. 592, 604 (1975)).
           24
              See Waffenschmidt v. MacKay, 763 F.2d 711, 716 (5th Cir. 1985)
   (“Enforcement . . . through a contempt proceeding must occur in the issuing jurisdiction
   because contempt is an affront to the court issuing the order.”).
           25
                Asher, 272 F. App’x at 358.
           26
                Id. at 357, 358.

                                                   7
Case: 20-30564      Document: 00515844080             Page: 8   Date Filed: 04/30/2021

                                       No. 20-30564

                                   *        *         *
          The district court’s remand order is unreviewable because it was
   based, at least in part, on the lack of subject matter jurisdiction. Moreover,
   even if we had jurisdiction to review the abstention basis cited by the district
   court, we conclude that the district court did not abuse its discretion in
   abstaining from hearing the case.            For these reasons, this appeal is
   DISMISSED.

                                            8