Com. of Mass. v. V & M Management, Inc.

Citation929 F.2d 830
Decision Date03 April 1991
Docket NumberNo. 91-1111,91-1111
PartiesCOMMONWEALTH OF MASSACHUSETTS, Plaintiff, Appellee, v. V & M MANAGEMENT, INC., et al., Defendants, Appellants.
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

Before BREYER, Chief Judge, CAMPBELL and CYR, Circuit Judges.

ORDER OF COURT

The plaintiff, Commonwealth of Massachusetts, filed suit in state court against the defendants, which are the owners and/or operators of a federally-subsidized low-income housing project. The suit was in thirteen counts and alleged violations of state and federal housing statutes and regulations. Defendants removed the action to federal court. Over plaintiff's objection, which sought a remand to state court, the district court found that five of the counts were based purely upon violations of federal law, falling within the original jurisdiction of the district court, and, thus, removal of the entire action was proper. 752 F.Supp. 519. 28 U.S.C. Sec. 1441(c). The district court indicated, however, that, were those five federal counts dismissed before trial, it might reconsider its decision to exercise jurisdiction in this case.

Subsequently, plaintiff moved to amend its complaint by dropping the five federal counts and sought reconsideration of its request to remand. The motion to amend the complaint was allowed and, four days later, the motion to remand was granted. Defendants filed a notice of appeal from both orders. We issued an order to show cause why this appeal should not be dismissed for lack of jurisdiction since an order remanding a case to a state court from which it was removed is generally not reviewable on appeal or otherwise. 28 U.S.C. Sec. 1447(d).

We have considered defendants' response to our show cause order. They argue that the bar to appellate review found in Sec. 1447(d) is inapplicable to the instant order of remand. Even accepting this argument, however, we conclude that dismissal is appropriate.

Section 1447(d) of Title 28 provides in pertinent part:

An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise [subject to an exception for civil rights cases which is not applicable here].

The Supreme Court has stated that Sec. 1447(d) "prohibits review of all remand orders issued pursuant to Sec. 1447(c) whether erroneous or not and whether review is sought by appeal or by extraordinary writ." Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 343, 96 S.Ct. 584, 589, 46 L.Ed.2d 542 (1976) (emphasis added). Section 1447(c) provides in pertinent part:

A motion to remand the case on the basis of any defect in removal procedure must be made within 30 days after the filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.... 1

There is no allegation in this case as to any defect in the removal procedure. And, the district court did not purport to conclude that it lacked subject matter jurisdiction. In fact, the district court concluded that it had subject matter jurisdiction, but declined to exercise that jurisdiction, in light of the plaintiff's request (which the court granted) to amend its complaint by dropping the federal counts. Because the order to remand was not issued pursuant to Sec. 1447(c), the bar to appellate review of such orders found in Sec. 1447(d) is, as defendants suggest, simply inapplicable. See, e.g., Rothner v. City of Chicago, 879 F.2d 1402, 1406 (7th Cir.1989); Schmitt v. Insurance Co. of North America, 845 F.2d 1546, 1551 (9th Cir.1988); Corcoran v. Ardra Ins. Co., 842 F.2d 31, 33 (2d Cir.1988).

This does not end the matter, however. Although appellate review is not prohibited by Sec. 1447(d), we, nonetheless, must consider what source, if any, does authorize our review, i.e., whether review is by appeal or permissible only pursuant to a writ of mandamus. Our appellate jurisdiction, as a general rule, is limited to a final decision of the district court. 28 U.S.C. Sec. 1291.

Defendants suggest that appellate jurisdiction is proper over the district court's order granting plaintiff's motion to amend its complaint and that, because that order became the basis for the order of remand, appellate jurisdiction should extend to the remand order as well. But we would have jurisdiction over the grant of the motion to amend only upon appeal from the entry of a final judgment. The grant of a motion to amend is not, itself, a final judgment. Cf. City of Waco v. United States Fidelity & Guaranty Co., 293 U.S. 140, 55 S.Ct. 6, 79 L.Ed. 244 (1934) (an order of dismissal of a cross-complaint which preceded an order of remand is reviewable by appeal) (emphasis added); Kozera v. Spirito, 723 F.2d 1003, 1005 n. 1 (1st Cir.1983) (an order of dismissal of a third-party complaint on sovereign immunity grounds which preceded an order of remand is reviewable by appeal) (emphasis added). 2

A conceivable argument can be made that the order of remand is a final judgment since no further proceedings are contemplated in the federal court. See Corcoran v. Ardra Ins. Co., 842 F.2d at 34 (pointing out that a stay of a diversity action pending resolution of a concurrent state-court action has been held to be a final appealable order because its sole purpose and effect is to surrender jurisdiction of a federal suit to a state court, effectively putting plaintiff out of federal court, and commenting that it is by no means clear why an order that remands an action to state court is any less final); see also, 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure, Sec. 3914 (1976). Nonetheless, the Supreme Court has stated that "an order remanding a removed action does not represent a final judgment reviewable by appeal." Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. at 352-53, 96 S.Ct. at 594. We have previously expressed doubt whether, even absent the bar to review found in Sec. 1447(d), a right of appeal would lie. "But even apart from the bar on review in section 1447(d), we question whether [appellant] would have a right to appeal from the district court's order: ordinarily, an order remanding a case to the state court is considered interlocutory, and does not fall within this court's appellate jurisdiction over the final orders of district courts." Nasuti v. Scannell, 792 F.2d 264, 267 (1st Cir.1986) (emphasis in the original). See also 1A J. Moore & B. Ringle, Moore's Federal Practice p 0.169[2.-1] (2d ed. 1990) ("The [remand] order is, however, interlocutory, despite the fact that it sends the case out of the federal court, and is thus not appealable as a final judgment.") (footnote omitted). Thus, if it is not barred by Sec. 1447(d), interlocutory review in the present case may be accorded only under our mandamus power. Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. at 353, 96 S.Ct. at 594; Corcoran v. Ardra Ins. Co., 842 F.2d at 34-35.

"[I]ssuance of the writ [of mandamus, however,] is in large part a matter of discretion with the court to which the petition is addressed." Kerr v. United States District Court, 426 U.S. 394, 403, 96 S.Ct. 2119, 2124, 48 L.Ed.2d 725 (1976). The party seeking the writ must show "a clear and indisputable right to issuance of the writ" and must show that "interlocutory relief is necessary to prevent irreparable harm." Ramirez v. Rivera-Dueno, 861 F.2d 328, 334-35 (1st Cir.1988), cert. denied, --- U.S. ----, 110 S.Ct. 73, 107 L.Ed.2d 40 (1989).

Defendants are unable to show a clear and indisputable right to issuance of the writ. They contend that "[t]he granting of the Motion to Amend for the purpose of permitting the Plaintiff to return to the State court is squarely prohibited by the controlling law of this Circuit," citing this court's opinion in Ching v. Mitre Corp., 921 F.2d 11 (1st Cir.1990). Defendants' interpretation of the Ching decision is erroneous.

Ching was an appeal from a district court grant of summary judgment. Mr. Ching originally filed suit in state court, alleging an unlawful termination from employment based on physical handicap, age, and national origin, in violation of state and federal laws. The case was removed to federal court, where the defendant/employer moved for summary judgment on statutes of limitations grounds. In response, Ching moved to amend his complaint to strike his one federal claim and to remand the action to state court. The district court denied the motion to amend and remand and allowed the motion for summary judgment. On appeal, we reiterated that removal of the case from the state to the federal court was proper. At the time of the removal, the complaint was based, inter alia, upon an alleged violation of federal law. Therefore, removal of the entire action was authorized pursuant to statute. 28 U.S.C. Sec. 1441(c). We further stated that it is immaterial to the existence of federal jurisdiction that, after removal, Ching sought to strike the federal claim. "An amendment to a complaint after removal designed to eliminate the federal claim will not defeat federal jurisdiction." Ching v. Mitre Corp., 921 F.2d at 13 (emphasis in the original).

Defendants seek to transmogrify this statement of law into an absolute bar to an amendment which seeks to drop a federal claim from a complaint. But that attempt distorts not only this statement of law but the holding in the Ching decision itself. In Ching, we were addressing the existence of federal jurisdiction at the time of removal and events after removal, such as striking of the federal claim which supported removal, are simply immaterial to that question. Once a case is properly removed, a district court has jurisdiction over the entire case, whether or not the basis for removal, i.e., the federal claim, thereafter remains. Although the district court has jurisdiction to rule on the remaining state claims, even after the dismissal or withdrawal of all federal...

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