Under 28 U.S.C. § 1447(c) and (d), as well as Supreme Court precedent, remand orders in removed cases are immune from appellate review when they are based on a lack of subject matter jurisdiction. Until recently, all appellate courts that had addressed the issue had concluded that the remand of supplemental claims under 28 U.S.C. § 1367(c), the supplemental jurisdiction statute, does not constitute a remand for lack of subject matter jurisdiction and therefore is reviewable on appeal.
In 2007, however, the Supreme Court held in Powerex Corp. v. Reliant Energy Services, Inc. that as long as a remand order can be “colorably characterized” as one that is based on a lack of subject matter jurisdiction, then it cannot be appealed. The case did not involve the remand of supplemental claims, but the Court stated in dicta: “It 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 (d).”
Then, in HIF Bio, Inc. v. Yung Shin Pharmaceuticals Indus. Co., the Federal Circuit followed the Powerex Court’s lead and became the first circuit to hold that § 1447(c) remands fall within § 1447(c) and (d) and therefore are unappealable. The HIF Bio court reasoned 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 for lack of subject matter jurisdiction.”
The HIF Bio court reached the wrong conclusion, however, because it misunderstood the language of § 1367 and confused the existence of judicial power with the discretionary decision whether to exercise that power. Thus, while § 1367(c) remands may have the scent of subject matter jurisdiction about them, they do not fall into that category after all and, for better or worse, they are reviewable on appeal. Furthermore, even if the Supreme Court concludes that § 1367(c) remands can be colorably characterized as remands for lack of subject matter jurisdiction, that does not automatically mean that they will fall within § 1447(c) and be unreviewable on appeal. Under the most plausible interpretation of § 1447(c), the statute is applicable only to remands based on lack of subject matter jurisdiction over a whole case, not remands based on lack of jurisdiction over a claim. Finally, if the Court ultimately does conclude both that § 1367(c) remands are based on a lack of subject matter jurisdiction and that they are immune from appellate review under § 1447(c) and (d), then anomalous consequences will result.
The correct conclusion is that § 1367(c) remands are not based on a lack of subject matter jurisdiction. Nevertheless, they do have the scent of subject matter jurisdiction about them because, by definition, supplemental claims lack an independent basis of jurisdiction. It remains to be seen whether the mere scent of subject matter jurisdiction will be enough for the Supreme Court to conclude that § 1367(c) remands can be colorably characterized as remands based on a lack of subject matter jurisdiction.
- subject matter jurisdiction,
- appellate review
Available at: http://works.bepress.com/deborah_challener/1/