Court Opinion

ID: 145877
Source: CourtListenerOpinion
Date Created: 2010-05-06 00:08:52+00
Date Added: 2024-06-11T09:41:09.804396
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2008                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

    CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC., 

                    ET AL. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                THE FEDERAL CIRCUIT

    No. 07–1437. Argued February 24, 2009—Decided May 4, 2009
Respondents filed a state-court suit alleging that petitioner had vio
  lated state and federal law in connection with a patent dispute. After
  removing the case to Federal District Court under 28 U. S. C.
  §1441(c), which allows removal if the case includes at least one claim
  over which the federal court has original jurisdiction, petitioner
  moved to dismiss the suit’s only federal claim, which arose under the
  Racketeer Influenced and Corrupt Organizations Act (RICO). Agree
  ing that respondents had failed to state a RICO claim upon which re
  lief could be granted, the District Court dismissed the claim; declined
  to exercise supplemental jurisdiction over the remaining state-law
  claims under §1367(c)(3), which allows such a course if the court “has
  dismissed all claims over which it has original jurisdiction”; and re
  manded the case to state court. The Federal Circuit dismissed peti
  tioner’s appeal, finding that the remand order could be colorably
  characterized as based on a “lack of subject matter jurisdiction” over
  the state-law claims, §1447(c), and was therefore “not reviewable on
  appeal,” §1447(d).
Held: A district court’s order remanding a case to state court after de
 clining to exercise supplemental jurisdiction over state-law claims is
 not a remand for lack of subject-matter jurisdiction for which appel
 late review is barred by §§1447(c) and (d). With respect to supple
 mental jurisdiction, a federal court has subject-matter jurisdiction
 over specified state-law claims, see §§1367(a), (c), and its decision
 whether to exercise that jurisdiction after dismissing every claim
 over which it had original jurisdiction is purely discretionary, see,
 e.g., Osborn v. Haley, 549 U. S. 225, 245. It is undisputed that when
 this case was removed, the District Court had original jurisdiction
2          CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                                 Syllabus

    over the federal RICO claim under §1331 and supplemental jurisdic
    tion over the state-law claims, which were “so related to claims . . .
    within such original jurisdiction that they form[ed] part of the same
    case or controversy,” §1367(a). On dismissing the RICO claim, the
    court retained its statutory supplemental jurisdiction over the state
    law claims. Its decision not to exercise that statutory authority was
    not based on a jurisdictional defect, but on its discretionary choice.
    See Chicago v. International College of Surgeons, 522 U. S. 156, 173.
    Pp. 3–6.
508 F. 3d 659, reversed and remanded.

   THOMAS, J., delivered the opinion for a unanimous Court. STEVENS,
J., and SCALIA, J., filed concurring opinions. BREYER, J., filed a concur
ring opinion, in which SOUTER, J., joined.
                        Cite as: 556 U. S. ____ (2009)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 07–1437
                                   _________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF
             BIO, INC., ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FEDERAL CIRCUIT
                                  [May 4, 2009]

  JUSTICE THOMAS delivered the opinion of the Court.
  In this case, we decide whether a federal court of ap
peals has jurisdiction to review a district court’s order that
remands a case to state court after declining to exercise
supplemental jurisdiction over state-law claims under 28
U. S. C. §1367(c). The Court of Appeals for the Federal
Circuit held that appellate review of such an order is
barred by §1447(d) because it viewed the remand order in
this case as resting on the District Court’s lack of subject
matter jurisdiction over the state-law claims. We disagree
and reverse the judgment of the Court of Appeals.
                              I
   In 2005, respondents filed a complaint against peti
tioner and others in California state court, alleging that
petitioner had violated state and federal law in connection
with a patent dispute. Petitioner removed the case to the
United States District Court for the Central District of
California pursuant to §1441(c), which allows removal of
an “entire case” when it includes at least one claim over
which the federal district court has original jurisdiction.
Petitioner then filed a motion to dismiss the only federal
2       CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                     Opinion of the Court

claim in the lawsuit, which arose under the Racketeer
Influenced and Corrupt Organizations Act (RICO), 18
U. S. C. §§1961–1968, for failure to adequately allege a
pattern of racketeering. HIF Bio, Inc. v. Yung Shin
Pharmaceuticals Indus. Co., 508 F. 3d 659, 662 (CA Fed.
2007). The District Court agreed that respondents had
failed to state a RICO claim upon which relief could be
granted and dismissed the claim pursuant to Federal Rule
of Civil Procedure 12(b)(6). The District Court also de
clined to exercise supplemental jurisdiction over the re
maining state-law claims pursuant to 28 U. S. C.
§1367(c)(3), which provides that a district court “may
decline to exercise supplemental jurisdiction over a claim”
if “the district court has dismissed all claims over which it
has original jurisdiction.” The District Court then re
manded the case to state court as authorized by this
Court’s decision in Carnegie-Mellon Univ. v. Cohill, 484
U. S. 343 (1988).
   Petitioner appealed to the United States Court of Ap
peals for the Federal Circuit, arguing that the District
Court should have exercised supplemental jurisdiction
over the state-law claims because they implicate federal
patent-law rights. 508 F. 3d, at 663. The Court of Ap
peals dismissed the appeal, finding that the remand order
could “be colorably characterized as a remand based on
lack of subject matter jurisdiction” and, therefore, could
not be reviewed under §§1447(c) and (d), which provide in
part that remands for “lack of subject matter jurisdiction”
are “not reviewable on appeal or otherwise.” See id., at
667.
   This Court has not yet decided whether a district court’s
order remanding a case to state court after declining to
exercise supplemental jurisdiction is a remand for lack of
subject-matter jurisdiction for which appellate review is
barred by §§1447(c) and (d). See Powerex Corp. v. Reliant
Energy Services, Inc., 551 U. S. 224, 235, n. 4 (2007) (“We
                     Cite as: 556 U. S. ____ (2009)                    3

                          Opinion of the Court

have never passed on whether Cohill remands are subject
matter jurisdictional for purposes of . . . §1447(c) and
§1447(d)”). We granted certiorari to resolve this question,
555 U. S. ___ (2008), and now hold that such remand
orders are not based on a lack of subject-matter jurisdic
tion. Accordingly, we reverse the judgment of the Court of
Appeals and remand for further proceedings.
                             II
  Appellate review of remand orders is limited by 28
U. S. C. §1447(d), which states:
       “An order remanding a case to the State court from
     which it was removed is not reviewable on appeal or
     otherwise, except that an order remanding a case to
     the State court from which it was removed pursuant
     to section 1443 of this title shall be reviewable by ap
     peal or otherwise.”
This Court has consistently held that §1447(d) must be
read in pari materia with §1447(c), thus limiting the
remands barred from appellate review by §1447(d) to
those that are based on a ground specified in §1447(c).
See Thermtron Products, Inc. v. Hermansdorfer, 423 U. S.
336, 345–346 (1976); see also Powerex, supra, at 229;
Quackenbush v. Allstate Ins. Co., 517 U. S. 706, 711–712
(1996); Things Remembered, Inc. v. Petrarca, 516 U. S.
124, 127 (1995).*
  One type of remand order governed by §1447(c)—the
type at issue in this case—is a remand order based on a
——————
  * We do not revisit today whether Thermtron was correctly decided.
Neither the brief for petitioner nor the brief for respondents explicitly
asked the Court to do so here, and counsel for both parties clearly
stated at oral argument that they were not asking for Thermtron to be
overruled. See Tr. of Oral Arg. 16, 22; cf. South Central Bell Telephone
Co. v. Alabama, 526 U. S. 160, 171 (1999). We also note that the
parties in Powerex, Quackenbush, and Things Remembered did not ask
for Thermtron to be overruled.
4       CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                     Opinion of the Court

lack of “subject matter jurisdiction.” §1447(c) (providing,
in relevant part, that “[i]f at any time before final judg
ment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded”). The question
presented in this case is whether the District Court’s
remand order, which rested on its decision declining to
exercise supplemental jurisdiction over respondents’ state
law claims, is a remand based on a “lack of subject matter
jurisdiction” for purposes of §§1447(c) and (d). It is not.
   “Subject matter jurisdiction defines the court’s authority
to hear a given type of case,” United States v. Morton, 467
U. S. 822, 828 (1984); it represents “the extent to which a
court can rule on the conduct of persons or the status of
things.” Black’s Law Dictionary 870 (8th ed. 2004). This
Court’s precedent makes clear that whether a court has
subject-matter jurisdiction over a claim is distinct from
whether a court chooses to exercise that jurisdiction. See,
e.g., Quackenbush, supra, at 712 (holding that an absten
tion-based remand is not a remand for “lack of subject
matter jurisdiction” for purposes of §§1447(c) and (d));
Ankenbrandt v. Richards, 504 U. S. 689, 704 (1992) (ques
tioning whether, “even though subject matter jurisdiction
might be proper, sufficient grounds exist to warrant ab
stention from the exercise of that jurisdiction”); Iowa Mut.
Ins. Co. v. LaPlante, 480 U. S. 9, 16, n. 8 (1987) (referring
to exhaustion requirement as “a matter of comity” that
does “not deprive the federal courts of subject-matter
jurisdiction” but does “rende[r] it appropriate for
the federal courts to decline jurisdiction in certain
circumstances”).
   With respect to supplemental jurisdiction in particular,
a federal court has subject-matter jurisdiction over speci
fied state-law claims, which it may (or may not) choose to
exercise. See §§1367(a), (c). A district court’s decision
whether to exercise that jurisdiction after dismissing
every claim over which it had original jurisdiction is
                  Cite as: 556 U. S. ____ (2009)              5

                      Opinion of the Court

purely discretionary. See §1367(c) (“The district courts
may decline to exercise supplemental jurisdiction over a
claim . . . if . . . the district court has dismissed all claims
over which it has original jurisdiction” (emphasis added));
Osborn v. Haley, 549 U. S. 225, 245 (2007) (“Even if only
state-law claims remained after resolution of the federal
question, the District Court would have discretion, consis
tent with Article III, to retain jurisdiction”); Arbaugh v. Y
& H Corp., 546 U. S. 500, 514 (2006) (“[W]hen a court
grants a motion to dismiss for failure to state a federal
claim, the court generally retains discretion to exercise
supplemental jurisdiction, pursuant to 28 U. S. C. §1367,
over pendent state-law claims”); see also 13D C. Wright,
A. Miller, E. Cooper, & R. Freer, Federal Practice and
Procedure §3567.3, pp. 428–432 (3d ed. 2008) (“Once it has
dismissed the claims that invoked original bases of subject
matter jurisdiction, all that remains before the federal
court are state-law claims. . . . The district court retains
discretion to exercise supplemental jurisdiction [over
them]”). As a result, “the [district] court’s exercise of its
discretion under §1367(c) is not a jurisdictional matter.
Thus, the court’s determination may be reviewed for abuse
of discretion, but may not be raised at any time as a juris
dictional defect.” 16 J. Moore et al., Moore’s Federal Prac
tice §106.05[4], p. 106–27 (3d ed. 2009).
   It is undisputed that when this case was removed to
federal court, the District Court had original jurisdiction
over the federal RICO claim pursuant to 28 U. S. C. §1331
and supplemental jurisdiction over the state-law claims
because they were “so related to claims in the action
within such original jurisdiction that they form[ed] part of
the same case or controversy under Article III of the
United States Constitution.” §1367(a). Upon dismissal of
the federal claim, the District Court retained its statutory
supplemental jurisdiction over the state-law claims. Its
decision declining to exercise that statutory authority was
6       CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                     Opinion of the Court

not based on a jurisdictional defect but on its discretionary
choice not to hear the claims despite its subject-matter
jurisdiction over them. See Chicago v. International Col
lege of Surgeons, 522 U. S. 156, 173 (1997) (“Depending on
a host of factors, then—including the circumstances of the
particular case, the nature of the state law claims, the
character of the governing state law, and the relationship
between the state and federal claims—district courts may
decline to exercise jurisdiction over supplemental state
law claims”). The remand order, therefore, is not based on
a “lack of subject matter jurisdiction” for purposes of the
bar to appellate review created by §§1447(c) and (d).
   The Court of Appeals held to the contrary based on its
conclusion that “every §1367(c) remand necessarily in
volves a predicate finding that the claims at issue lack an
independent basis of subject matter jurisdiction.” 508 F.
3d, at 667. But, as explained above, §§1367(a) and (c)
provide a basis for subject-matter jurisdiction over any
properly removed state claim. See Osborn, supra, at 245;
Arbaugh, supra, at 514. We thus disagree with the Court
of Appeals that the remand at issue here “can be colorably
characterized as a lack of subject matter jurisdiction.” 508
F. 3d, at 667.
                        *     *   *
  When a district court remands claims to a state court
after declining to exercise supplemental jurisdiction, the
remand order is not based on a lack of subject-matter
jurisdiction for purposes of §§1447(c) and (d). The judg
ment of the Court of Appeals for the Federal Circuit is
reversed, and the case is remanded for further proceedings
consistent with this opinion.
                                           It is so ordered.
                 Cite as: 556 U. S. ____ (2009)            1

                    STEVENS, J., concurring

SUPREME COURT OF THE UNITED STATES
                         _________________

                         No. 07–1437
                         _________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF
             BIO, INC., ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FEDERAL CIRCUIT
                         [May 4, 2009]

   JUSTICE STEVENS, concurring.
   In his dissenting opinion in Thermtron Products, Inc. v.
Hermansdorfer, 423 U. S. 336, 360 (1976), then-Justice
Rehnquist remarked that he could “perceive no justifica
tion for the Court’s decision to ignore the express directive
of Congress in favor of what it personally perceives to be
‘justice’ in this case.” He began his dissent with a com
ment that is also applicable to the case before us today:
“The Court of Appeals not unreasonably believed that 28
U. S. C. §1447(d) means what it says. 	It says:
      ‘An order remanding a case to the State court from
    which it was removed is not reviewable on appeal or
    otherwise . . . .’ ” Id., at 354.
Today, as in Thermtron, the Court holds that §1447(d)
does not mean what it says.
  If we were writing on a clean slate, I would adhere to
the statute’s text. But Thermtron’s limiting construction
applies equally to this case as it did to Powerex Corp. v.
Reliant Energy Services, Inc., 551 U. S. 224, 229–230
(2007), Quackenbush v. Allstate Ins. Co., 517 U. S. 706,
711–712 (1996), and Things Remembered, Inc. v. Petrarca,
516 U. S. 124, 127–128 (1995), and stare decisis compels
the conclusion that the District Court’s remand order is
reviewable notwithstanding §1447(d)’s unambiguous
2      CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                   STEVENS, J., concurring

contrary command. The Court’s adherence to precedent in
this case represents a welcome departure from its some
times single-minded focus on literal text. Accordingly, I
join the Court’s opinion.
                     Cite as: 556 U. S. ____ (2009)                    1

                         SCALIA, J., concurring

SUPREME COURT OF THE UNITED STATES
                              _________________

                              No. 07–1437
                              _________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF
             BIO, INC., ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FEDERAL CIRCUIT
                             [May 4, 2009]

  JUSTICE SCALIA, concurring.
  The Court today does nothing more than accurately
apply to the facts of this case our holding in Thermtron
Products, Inc. v. Hermansdorfer, 423 U. S. 336 (1976).
Ante, at 3–6.* As the Court notes, neither party has asked
us to reconsider Thermtron, and we thus have no occasion
to revisit that decision here, see ante, at 3, n.
  I write separately, though, to note that our decision in
Thermtron was questionable in its day and is ripe for
reconsideration in the appropriate case. Title 28 U. S. C.
§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.” The statute provides a single
exception—not remotely implicated in this case—for cer
tain civil rights cases removed under §1443. See §1447(d).
As then-Justice Rehnquist understatingly observed in his
Thermtron dissent, it would not be “unreasonabl[e] [to]
believ[e] that 28 U. S. C. §1447(d) means what it says,”
423 U. S., at 354; and what it says is no appellate review
——————
  *Contrary to JUSTICE BREYER’s suggestion, this case does not involve
reading another “exceptio[n]” into 28 U. S. C. §1447(d)’s language. See
post, at 2 (concurring opinion). Not, that is, if you think Thermtron was
rightly decided. Unlike Osborn v. Haley, 549 U. S. 225 (2007), this case
simply involves applying Thermtron’s in pari materia reading of
§1447(d) to the facts of this case.
2       CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                     SCALIA, J., concurring

of remand orders. See also Osborn v. Haley, 549 U. S. 225,
263 (2007) (SCALIA, J., dissenting). Since the District
Court’s order in this case “remand[ed] a case to the State
court from which it was removed,” it should be—in the
words of §1447(d)—“not reviewable on appeal or other
wise.” Q. E. D.
   Over the years, the Court has replaced the statute’s
clear bar on appellate review with a hodgepodge of juris
dictional rules that have no evident basis even in common
sense. Under our decisions, there is no appellate jurisdic
tion to review remands for lack of subject-matter jurisdic
tion, see Powerex Corp. v. Reliant Energy Services, Inc.,
551 U. S. 224, 232 (2007), though with exception, see
Osborn v. Haley, supra, at 243–244; there is jurisdiction to
review remands of supplemental state-law claims, and
other remands based on abstention, see Quackenbush v.
Allstate Ins. Co., 517 U. S. 706, 711–712 (1996), though
presumably no jurisdiction to review remands based on
the “defects” referenced in §1447(c). See also post, at 2
(BREYER, J., concurring) (discussing similar anomalies). If
this muddle represents a welcome departure from the
literal text, see ante, at 2 (STEVENS, J., concurring), the
world is mad.
   This mess—entirely of our own making—does not in my
view require expert reexamination of this area of the law,
see post, at 2 (BREYER, J., concurring). It requires only the
reconsideration of our decision in Thermtron—and a wel
come return to the Court’s focus on congressionally en
acted text.
                 Cite as: 556 U. S. ____ (2009)            1

                    BREYER, J., concurring

SUPREME COURT OF THE UNITED STATES
                         _________________

                         No. 07–1437
                         _________________

CARLSBAD TECHNOLOGY, INC., PETITIONER v. HIF
             BIO, INC., ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
           APPEALS FOR THE FEDERAL CIRCUIT
                         [May 4, 2009]

   JUSTICE BREYER, with whom JUSTICE SOUTER joins,
concurring.
   I join the Court’s opinion. I write separately to note an
anomaly about the way 28 U. S. C. §1447 works. In this
case, we consider a District Court’s decision not to retain
on its docket a case that once contained federal law issues
but now contains only state law issues. All agree that the
law grants the District Court broad discretion to deter
mine whether it should keep such cases on its docket, that
a decision to do so (or not to do so) rarely involves major
legal questions, and that (even if wrong) a district court
decision of this kind will not often have major adverse
consequences. We now hold that §1447 permits appellate
courts to review a district court decision of this kind, even
if only for abuse of discretion.
   Contrast today’s decision with our decision two Terms
ago in Powerex Corp. v. Reliant Energy Services, Inc., 551
U. S. 224 (2007). In that case, we considered a District
Court’s decision to remand a case in which a Canadian
province-owned power company had sought removal—a
matter that the Foreign Sovereign Immunities Act of 1976
specifically authorizes federal judges (in certain instances)
to decide. See §§1441(d); 1603(a). The case presented a
difficult legal question involving the commercial activities
of a foreign sovereign; and the District Court’s decision (if
2       CARLSBAD TECHNOLOGY, INC. v. HIF BIO, INC.

                    BREYER, J., concurring

wrong) had potentially serious adverse consequences,
namely preventing a sovereign power from obtaining the
federal trial to which the law (in its view) entitled it. We
nonetheless held that §1447 forbids appellate courts from
reviewing a district court decision of this kind. Id., at
238–239.
  Thus, we have held that §1447 permits review of a
district court decision in an instance where that decision is
unlikely to be wrong and where a wrong decision is
unlikely to work serious harm. And we have held that
§1447 forbids review of a district court decision in an
instance where that decision may well be wrong and
where a wrong decision could work considerable harm.
Unless the circumstances I describe are unusual, some
thing is wrong. And the fact that we have read other
exceptions in the statute’s absolute-sounding language
suggests that such circumstances are not all that unusual.
See Osborn v. Haley, 549 U. S. 225, 240–244 (2007);
Thermtron Products, Inc. v. Hermansdorfer, 423 U. S. 336,
350–352 (1976).
  Consequently, while joining the majority, I suggest that
experts in this area of the law reexamine the matter with
an eye toward determining whether statutory revision is
appropriate.