Powerex Corp. v. Reliant Energy Servs., Inc.

• Citation: 168 L.Ed.2d 112,551 U.S. 224,127 S.Ct. 2411,75 BNA USLW 4437
• Decision Date: 18 June 2007
• Docket Number: No. 05–85.,05–85.
• Parties: POWEREX CORP., Petitioner, v. RELIANT ENERGY SERVICES, INC., et al.
• Court: United States Supreme Court

551 U.S. 224

127 S.Ct. 2411

168 L.Ed.2d 112

75 BNA USLW 4437

POWEREX CORP., Petitioner,

v.RELIANT ENERGY SERVICES, INC., et al.

No. 05–85.

Supreme Court of the United States

Argued April 16, 2007.

Decided June 18, 2007.

Syllabus^*

Plaintiffs-respondents filed state-court suits alleging that various companies in California's energy market had conspired to fix prices in violation of state law. Some of the defendants filed cross-claims seeking indemnity from, inter alios, two United States Government agencies (BPA and WAPA); a Canadian corporation (BC Hydro) wholly owned by British Columbia and thus a “foreign state” under the Foreign Sovereign Immunities Act of 1976 (FSIA); and petitioner Powerex, a wholly owned subsidiary of BC Hydro. The cross-defendants removed the entire case to federal court, with BC Hydro and petitioner relying on the FSIA. Plaintiffs-respondents moved to remand, arguing that petitioner was not a foreign state and that the cross-claims against BPA, WAPA, and BC Hydro were barred by sovereign immunity. The District Court agreed and remanded. As relevant here, petitioner appealed, arguing that it was a foreign sovereign under the FSIA, but plaintiffs-respondents rejoined that the appeal was jurisdictionally barred by 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.” The Ninth Circuit held that § 1447(d) did not preclude it from reviewing substantive issues of law that preceded the remand order, but affirmed the holding as to petitioner's foreign-state status.

Held:Section 1447(d) bars appellate consideration of petitioner's claim that it is a foreign state for FSIA purposes. Pp. 2415 – 2421.

(a) Appellate courts' authority to review district-court orders remanding removed cases to state court is substantially limited by statute. Section 1447(d) is read in pari materia with § 1447(c), so that only remands based on the grounds specified in the latter are shielded by the review bar mandated by the former. Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 345–346, 96 S.Ct. 584, 46 L.Ed.2d 542. For purposes of this case, it is assumed that the grounds specified in § 1447(c) are lack of subject-matter jurisdiction and defects in removal procedure. Cf. Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711–712, 116 S.Ct. 1712, 135 L.Ed.2d 1. Given the proceedings below, review of the remand order is barred only if it was based on lack of subject-matter jurisdiction. Pp. 2415 – 2416. b) Nothing in § 1447(c)'s text supports the claim that a case cannot be remandedfor lack of subject-matter jurisdiction within the meaning of that provision if the case was properly removed in the first instance. Indeed, statutory history conclusively refutes the argument that § 1447(c) is implicitly limited in such a manner. When a district court remands a properly removed case because it nonetheless lacks subject-matter jurisdiction, the remand is covered by § 1447(c) and shielded from review by § 1447(d). Pp. 2416 – 2417.

(c) The District Court relied upon a ground that is colorably characterized as subject-matter jurisdiction and so § 1447(d) bars appellate review. As an initial matter, it is clear from the record that the court was purporting to remand for lack of subject-matter jurisdiction. Even assuming that § 1447(d) permits appellate courts to look behind a district court's characterization of the basis for the remand, such review is hereby limited to ascertaining whether the characterization was colorable. In this case, the only plausible explanation of the District Court's remand was that it believed that it lacked the power to adjudicate the claims against petitioner once it had determined that petitioner was not a foreign state and that the other cross-defendants had sovereign immunity. It is unnecessary to determine whether that belief was correct; it was at least debatable. Petitioner contends instead that the District Court was actually remanding based on Carnegie–Mellon Univ. v. Cohill, 484 U.S. 343, 357, 108 S.Ct. 614, 98 L.Ed.2d 720, which authorizes remand when a district court declines to exercise supplemental jurisdiction. This is implausible. The District Court never mentioned the possibility of supplemental jurisdiction, and petitioner does not appear to have argued that the claims against it could be retained based on supplemental jurisdiction. Pp. 2417 – 2419.

(d) The Ninth Circuit held that § 1447(d) does not preclude reviewing a district court's substantive determinations that precede a remand order, a holding that appears to be premised on Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 55 S.Ct. 6, 79 L.Ed. 244.Waco, however, does not permit an appeal when, as here, there is no order separate from the unreviewable remand order. Pp. 2418 – 2419.

(e) Petitioner's contention that Congress did not intend § 1447(d) to govern suits removed under the FSIA is flatly refuted by this Court's longstanding precedent that “[a]bsent a clear statutory command to the contrary, [the Court] assume[s] that Congress is ‘aware of the universality of th[e] practice’ of denying appellate review of remand orders when Congress creates a new ground for removal.” Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 128, 116 S.Ct. 494, 133 L.Ed.2d 461. Pp. 2419 – 2420.

391 F.3d 1011, vacated in part and remanded.

SCALIA, J., delivered the opinion of the Court, in which ROBERTS, C.J., and KENNEDY, SOUTER, THOMAS, GINSBURG, and ALITO, JJ., joined. KENNEDY, J., filed a concurring opinion, in which ALITO, J., joined, post, p. 2421. BREYER, J., filed a dissenting opinion, in which STEVENS, J., joined, post, p. 2421.

David C. Frederick, Washington, D.C., for petitioner.

Douglas Hallward–Driemeier for United States as amicus curiae, by special leave of the Court, supporting petitioner.

Leonard B. Simon, San Diego, CA, for respondents.

David C. Frederick, Counsel of Record, Scott H. Angstreich, Brendan J. Crimmins, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., Washington, D.C., for Powerex Corp.

William Bernstein, Lieff, Cabraser, Heimann & Bernstein, LLP, San Francisco, CA, Leonard B. Simon, Counsel of Record, Pamela M. Parker, Frank J. Janecek, Jr., Lerach Coughlin Stoia Geller Rudman & Robbins LLP, San Diego, CA, for Plaintiffs–Respondents.

Justice SCALIA delivered the opinion of the Court.

We granted certiorari to decide whether, under the Foreign Sovereign Immunities Act of 1976 (FSIA), petitioner is an “organ of a foreign state or political subdivision thereof.” 28 U.S.C. § 1603(b)(2). When we granted certiorari, however, we asked the parties also to address whether the Ninth Circuit had appellate jurisdiction in light of 28 U.S.C. § 1447(d).

I

The procedural history of this case is long and complicated; we recount only what is necessary to resolve the writ before us. The State of California, along with some private and corporate citizens (hereinafter collectively referred to as plaintiffs-respondents), filed suits in California state courts against various companies in the California energy market, alleging that they had conspired to fix prices in violation of California law. Some of those defendants, in turn, filed cross-claims seeking indemnity from, inter alios, the Bonneville Power Administration (BPA), the Western Area Power Administration (WAPA), the British Columbia Hydro and Power Authority (BC Hydro), and petitioner Powerex. (We shall sometimes refer to these entities collectively as the cross-defendants.) BPA and WAPA are agencies of the United States Government. BC Hydro is a crown corporation of the Canadian Province of British Columbia that is wholly owned by the Province and that all parties agree constitutes a “foreign state” for purposes of the FSIA. See § 1603. Petitioner, also a Canadian corporation, is a wholly owned subsidiary of BC Hydro.

The cross-defendants removed the entire case to federal court. BC Hydro and petitioner both relied on § 1441(d), which permits a “foreign state,” as defined by the FSIA, see § 1603(a), to remove civil actions brought against it in state court. BPA and WAPA invoked § 1442(a), authorizing removal by federal agencies. Plaintiffs-respondents moved to remand, arguing that petitioner was not a foreign state, and that the cross-claims against BPA, WAPA, and BC Hydro were barred by sovereign immunity. Petitioner opposed remand on the ground that it was a foreign state under the FSIA; the other cross-defendants opposed remand on the ground that their sovereign immunity entitled them to be dismissed from the action outright.

The District Court initially concluded (we assume correctly) that § 1442(a) entitled BPA and WAPA to remove the entire case and that BC Hydro was similarly entitled under § 1441(d). App. to Pet. for Cert. 20a. It thus believed that whether the case should be remanded “hinge[d on its] jurisdictional authority to hear the removed claims, not whether the actions were properly removed in the first instance.” Ibid. The District Court held that petitioner did not qualify as a foreign sovereign under the FSIA. Id., at 33a–38a. It also decided that BC Hydro enjoyed sovereign immunity under the FSIA. Id., at 21a–33a. And it concluded that BPA and WAPA were immune from suit in state court, which the court believed deprived it of jurisdiction over the claims against those agencies. Id., at 38a–44a. Having reached these conclusions, the District Court remanded the entire case. Id., at 44a.

Petitioner appealed to the Court of Appeals for the Ninth Circuit, arguing that it was a foreign sovereign under the FSIA. BPA and WAPA (but not BC Hydro) also appealed, asserting that the District Court, before remanding the case, should have dismissed them from the action in light of their sovereign immunity. Plaintiffs-respondents, for their part, rejoined that both appeals were jurisdictionally barred by § 1447(d) and that the...