Arnold Crossroads, L.L.C. v. Gander Mountain Co.

• Court: U.S. Court of Appeals — Eighth Circuit
• Writing for the Court: MURPHY
• Citation: Arnold Crossroads, L.L.C. v. Gander Mountain Co., 751 F.3d 935 (8th Cir. 2014)
• Decision Date: 07 July 2014
• Docket Number: No. 13–2020.,13–2020.
• Parties: ARNOLD CROSSROADS, L.L.C., Plaintiff–Appellee City of Arnold, Missouri, Interpleader plaintiff-Appellee v. GANDER MOUNTAIN COMPANY, Defendant–Appellant.

751 F.3d 935

ARNOLD CROSSROADS, L.L.C., Plaintiff–AppelleeCity of Arnold, Missouri, Interpleader plaintiff-Appellee

v.GANDER MOUNTAIN COMPANY, Defendant–Appellant.

No. 13–2020.

United States Court of Appeals, Eighth Circuit.

Submitted: Jan. 14, 2014.

Filed: June 2, 2014.

Rehearing and Rehearing En Banc Denied July 7, 2014.

Dudley W. Von Holt, argued, Saint Louis, MO (Bruce David Ryder, Jason Allen Wheeler, Saint Louis, MO, on the brief), for Appellant.

Jeffery Thomas McPherson, argued, Saint Louis, MO (James E. Mello, Matthew Joseph Reh, Saint Louis, MO, on the brief), for Arnold Crossroads.

Robert K. Sweeney, Hillsboro, MO, on the brief, for City of Arnold.

Before LOKEN, MURPHY, and SMITH, Circuit Judges.

MURPHY, Circuit Judge.

Arnold Crossroads, LLC brought this action against Gander Mountain Company (Gander) in Missouri state court alleging breach of a commercial lease. Since then Gander has initiated removal of the case to the United States District Court for the Eastern District of Missouri on three occasions. Each time the federal district court has remanded to the state court. Now before us is Gander's appeal from the order of the district court ¹ remanding the misrepresentation claim of intervenor the City of Arnold which Gander removed on the eve of trial in state court. We dismiss the appeal for lack of jurisdiction.

I.

Arnold Crossroads operates a commercial real estate business, and in 2005 it entered into a redevelopment agreement with the City of Arnold under a tax increment financing plan. In January 2008 Arnold Crossroads negotiated a 15 year lease with Gander for it to operate a store in a shopping center within the redevelopment area at a site formerly occupied by a K–Mart. Gander planned at that time to open a retail store there featuring outdoor equipment and gear.

Under the terms of Gander's lease with Arnold Crossroads it had a right to terminate, but the parties dispute the last date on which Gander would have been able to take that action. After Gander attempted to terminate the lease in January 2009, Arnold Crossroads sued on February 24 in the Circuit Court of Jefferson County, Missouri for breach of their lease. Arnold Crossroads' state complaint sought approximately $40,000 for one month of unpaid rent.

Gander, a citizen of Minnesota, attempted to remove the case to federal court on the basis of diversity. Arnold Crossroads, a citizen of Missouri, objected that the amount in controversy was too low for federal jurisdiction, and the district court agreed since 28 U.S.C. 1332(a) requires at least $75,000 to be in controversy. United States District Judge Henry Edward Autrey remanded the action to state court for lack of subject matter jurisdiction on January 12, 2010.

Seventeen days after the remand order, Gander filed a new action against Arnold Crossroads in the federal district court. In it, Gander sought a declaratory judgment that it had validly terminated its lease with Arnold Crossroads and that it had no remaining obligations under it. On March 23, 2010, United States District Judge Donald J. Stohr dismissed the case on abstention grounds to avoid interference with the pending state case between the parties. Gander Mountain Co. v. Arnold Crossroads, L.L.C., 2010 WL 1170014, *3 (E.D.Mo. Mar. 23, 2010).

In October 2010 Arnold Crossroads amended its state complaint to include damages for unpaid rent over the entire 15 year term of its lease with Gander, claiming several million dollars. Gander once more attempted to remove the case to the federal district court in November 2010, and Judge Autrey again remanded it to state court, ruling that Gander's removal attempt was untimely under 28 U.S.C. § 1446 since it was seeking to remove an action which had originally been initiated by Arnold Crossroads in February 2009. Section 1446 provided at the time that “a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action.” ²

Subsequently on October 7, 2011, the City of Arnold moved under Missouri Supreme Court Rule 52.12(b)³ to intervene in the state case which Arnold Crossroads had brought against Gander. The City's motion to intervene alleged that “the City of Arnold has been harmed by the misrepresentations of Defendant in connection with the same conduct set forth by Arnold Crossroads, L.L.C.” The City alleged that Gander had falsely represented that it would occupy the Arnold Crossroads shopping center property and that the City had been harmed by expending funds for transportation infrastructure in the development district in reliance on Gander's misrepresentations. The state court granted the City's intervention motion on November 4, 2011. Pretrial discovery continued, and the City served discovery responses in February 2012 indicating that it was seeking $750,000 in damages from Gander.

In March 2012, at a point when trial in the state court was scheduled to begin in ten days, Gander filed its third notice of removal in the federal district court. Gander alleged that the complaint submitted by the City with its motion to intervene in the dispute with Arnold Crossroads had initiated a separate and independent civil action removable under 28 U.S.C. § 1441(a). Gander's notice of removal named only one other party in the state case it sought to remove, that being the City of Arnold. According to Gander, Arnold Crossroads lacked standing because it was not a party in the matter to be removed. The imminent state court trial was postponed, and both the City and Arnold Crossroads filed motions in the federal district court seeking remand to the state court.

The federal district court granted the two motions for remand, citing its own prior remand orders and stating that 28 U.S.C. § 1441(a) allows only entire cases to be removed to federal court. Gander again opposes remand, contending that we have jurisdiction to review the remand order and that the federal district court erred in its interpretation of § 1441(a). The City and Arnold Crossroads seek to dismiss Gander's appeal for lack of jurisdiction, arguing that review of the district court's order is barred by 28 U.S.C. § 1447(d) and also adopting the court's conclusion that § 1441(a) allows removal only of entire cases, not of individual claims.

II.

Section 1441(a) provides that “any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant” to federal district court. 28 U.S.C. § 1441(a). Gander argues that the district court erred when it concluded that the City's intervention in its dispute with Arnold Crossroads was not a separate “civil action” within the meaning of § 1441(a). According to Gander, the federal district court had subject matter jurisdiction over the City's misrepresentation claim because the parties were citizens of different states and the alleged damages satisfied the amount in controversy requirement under 28 U.S.C. § 1332(a); the district court therefore erred by remanding the City's claim to state court.

Our first consideration on review is whether we have appellate jurisdiction over Gander's appeal of the district court's remand order. With the exception of review of certain civil rights cases not applicable here, an order remanding a case to the state court from which it has been removed “is not reviewable on appeal or otherwise.” 28 U.S.C. § 1447(d). The meaning of § 1447(d) has been narrowed by the Supreme Court, which has made it explicit that “only remands based on grounds specified in § 1447(c) are immune to review under § 1447(d).” Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127, 116 S.Ct. 494, 133 L.Ed.2d 461 (1995). The grounds specified in § 1447(c) provide that:

[a] motion to remand the case on the basis of any defect other than lack of subject matter jurisdiction 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.

28 U.S.C. § 1447(c).

By including § 1447(d) in the judicial code, Congress attempted to “expedite the process of choosing a forum for litigation” in order to avoid lengthy proceedings over removal issues. Adkins v. Illinois Cent. R. Co., 326 F.3d 828, 832 (7th Cir.2003). Congress has decided that in the ordinary case the federal district court should have the final word on removal since “at some point litigation over the choice of a courtroom must end.” Id. This congressional judgment makes perfect sense for “[t]he only thing that is at stake is the forum that will hear a claim,” and this issue is “not so fundamental that a second or third layer of judges must test its correctness.” Id.

Our court has recognized that appellate jurisdiction is lacking over remand orders which are “based on a procedural defect or lack of subject matter jurisdiction.” Carlson v. Arrowhead Concrete Works, Inc., 445 F.3d 1046, 1050 (8th Cir.2006). This jurisdictional bar applies to all § 1447(c) remand orders, even those that may have been erroneously decided. Roberts v. BJC Health System, 452 F.3d 737, 739 (8th Cir.2006). In contrast, we do have appellate jurisdiction over remand orders not based on procedural defects or the lack of subject matter jurisdiction. Notable examples of such appellate jurisdiction have been discussed by the Supreme Court in Quackenbush v. Allstate Insurance Co., 517 U.S. 706, 711–712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (jurisdiction to review a remand order after a decision to abstain), and Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336, 344, 351–52, 96 S.Ct. 584, 46 L.Ed.2d 542 (1976) (jurisdiction to review remand based on a federal court's crowded docket). In contrast, we recognized that jurisdiction was lacking because Article III standing had not been shown in Roberts, 452 F.3d at 738–39, and that...