Reed Smith Client Alerts

Type: Client Alerts

The Third Circuit recently clarified the limits of its own jurisdiction, and that of the district court, in connection with orders remanding cases to state court. The court held a firm line on the reviewability of such orders, ruling that just as it has no jurisdiction to review a remand order, it also has no jurisdiction to review a denial of a motion to reconsider a remand order.

The court’s opinion reinforces some parameters already familiar to those who have moved, or opposed a motion, for remand:

  • In opposing a remand motion, energies should be focused on the district court briefing, since a remand order is unreviewable under 28 U.S.C. § 1447.
  • If the district court grants the motion and remands the case to state court, a motion for reconsideration can be filed in the district court.
  • The denial of such a reconsideration motion is unreviewable, just as the remand order itself is unreviewable.

In Agostini (full opinion here), the estates of individuals killed in an airplane crash sued various defendants, including the aircraft manufacturer, in state court in Philadelphia. One of the defendants removed to the U.S. District Court for the Eastern District of Pennsylvania on the basis of diversity jurisdiction. The plaintiffs moved to remand, arguing that there was not complete diversity. The District Court agreed and remanded. The defendant filed a motion for reconsideration, which the District Court denied, and the defendant appealed from that denial of reconsideration.

As an initial point of interest, the Agostini opinion was not written after full merits briefing on the subject matter of the appeal. Instead, Agostini is that rarer breed: a published federal appellate court opinion disposing of a motion. After the defendants appealed, the plaintiffs filed a motion in the Third Circuit to dismiss the appeal. In accordance with Federal Rule of Appellate Procedure 27(c), which provides that a judge may act alone on a motion, but “may not dismiss or otherwise determine an appeal,” the motion was adjudicated by a three-judge panel (Judges Smith, Chagares, and Scirica).

Agostini required the court to delve into the intricacies of 28 U.S.C. § 1447(d), which provides that “[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise” (with limited exceptions that did not apply in Agostini). The purpose of section 1447(d), as the court explained, is to prevent parties from using removal as a delay tactic. Without its limit on reviewability, a party could remove a state case to federal court and then, upon remand, “request reconsideration of remand, appeal, request rehearing, and then file a petition for writ of certiorari, all before being forced to return to state court several years later.” Slip Op. at 10 (quoting Hudson United Bank v. LiTenda Mortg. Corp., 142 F.3d 151, 156-57 (3d Cir. 1998)).

The Court of Appeals, in a unanimous opinion authored by Judge Chagares, rejected the defendant’s argument that an order denying reconsideration of remand is distinct from a remand order, and that only the latter is unreviewable under section 1447(d). Although courts may decide “collateral” issues after remand, such as motions for costs or attorneys’ fees, a denial of reconsideration of a remand order does not involve a collateral issue.

The Court of Appeals also found that the District Court had jurisdiction to entertain the reconsideration motion in the first instance. To make that determination, the court had to consider when jurisdiction had been transferred from federal back to state court. Relying on its own precedent, the court determined that the “jurisdiction-transferring event” was the mailing of the certified copy of the remand order from the district court clerk to the state court. The court concluded that the District Court had jurisdiction to entertain the reconsideration motion because at the time when it did so, the certified copy of the remand order had not yet been mailed to the state court. (There is a circuit split on this issue, as the court noted in a footnote: the Second Circuit has ruled the same way as the Third Circuit in Agostini, while the Fourth Circuit has ruled that once the remand order is entered, the district court may not reconsider it.) For future reference, the court cautioned district courts that once the remand order is mailed, it may not be reconsidered.

Agostini holds a firm line on the unreviewability of remand orders under section 1447(d), reinforcing the conventional wisdom that the time to fight most motions to remand is in the opposition to the motion itself, not in a likely-to-be barred appeal. After a remand order has been entered, the district court’s ability to reconsider turns on whether the certified copy of the order has been mailed to the state court, a factor outside the litigants’ control.

 

Client Alert 2013-320