One of the defendants sought reconsideration of the remand order, which the district court denied. The defendant then appealed that denial, arguing that while the remand order itself is not appealable, the motion for reconsideration of the remand order was a collateral decision, akin to orders pertaining to attorney fees or costs, and jurisdiction was not stripped by the non-reviewability rule in 28 U.S.C. §1447(d). The defendant pointed to the U.S. Supreme Court’s decision in Waco v. U.S. Fidelity & Guaranty as authority for an exception to the general rule of non-reviewability. In Waco, the Court held that a pre-remand decision made by a district court could be reviewed if that decision is “separable” from the remand order and independently reviewable through a mechanism such as the collateral order doctrine. The Third Circuit rejected this argument, finding that it was not possible to separate the motion for reconsideration of the remand order from the remand order itself.
Allowing Appeal Would Defeat Statutory Prohibition on Review of Remand
While the Third Circuit seemed to grapple with the issue of whether a motion for reconsideration could be reviewed under the circumstances in Agostini, ABA leaders see it as a fairly clear-cut issue. “The Third Circuit did not have jurisdiction, and I saw no merit—none—in the defendants’ argument that the denial of reconsideration was a collateral order. The defendants were trying to obtain appellate review of the remand decision, and that is exactly what Section 1447(d) prohibits,” says William T. Hangley, Philadelphia, PA, cochair of the ABA Section of Litigation’s Federal Practice Task Force.
“Allowing review of the denial of the motion would circumvent the jurisdiction stripping function of Section 1447(d),” agrees Sonia Escobio O’Donnell, Miami, FL, cochair of the Section’s Appellate Practice Committee. “While the district court regularly retains jurisdiction over issues like attorney fees and costs—things that are truly collateral—it would be a stretch for collateral to mean what the defendants were arguing it meant in this case,” says O’Donnell.
Timing of Filing May Come into Play
Although the court of appeals held that it had no jurisdiction to hear the appeal of the motion for reconsideration of the remand order, it found that the district court did have jurisdiction to reconsider the remand order in the first instance. According to the Third Circuit, the “jurisdiction-transferring” event at the district court is the “the mailing of a certified copy of the remand order to state court.” Until that occurs, the district court retains jurisdiction.
“Bright-line rules are good things to have when jurisdiction is in question,” notes Hangley, “and I can’t think of an alternative bright line that would be preferable in situations like this.” Although, as O’Donnell points out, this can lead to similarly situated parties having completely different results. “I found it interesting,” observes O’Donnell, “that the reason the district court had jurisdiction to rule on the motion to reconsider is because it had not sent the certified copy back to the state court yet. So, whether jurisdiction exists at the district court to reconsider the remand depends entirely on the timing of the filing and the efficiency of the clerk’s office—in other words, how fast they send a certified copy back to the state court.”
The Third Circuit’s opinion noted that the purpose of the rule in 28 U.S.C. §1447(d) is to prevent parties to state lawsuits from using federal removal and appeals merely to delay. “Without §1447(d), a party to a state action could remove the action to federal court, await remand, request reconsideration of the remand, appeal, request rehearing, and then file a petition for a writ of certiorari, all before being forced to return to state court several years later,” the court explained, citing a previous opinion.
“I can’t speculate about whether defendants use removal as a delay tactic, but I can say that the reasoning behind Section 1447(d), as explained in the opinion, makes a lot of sense,” observes Hangley. “Post-remand appellate practice in the federal courts could certainly throw a monkey wrench into the proceedings in the state court. I don’t know whether proceedings in state court were stayed during the appeal period, but that certainly wouldn’t surprise me,” Hangley notes.
“The bottom line is that the case was in the federal courts for a long time, during which it is quite likely that the state court proceedings were in irons,” says Hangley.
Katerina Eftimoff Milenkovski is an associate editor for Litigation News.