Forty Six Hundred LLC v. Cadence Educ., LLC
| Decision Date | 30 September 2021 |
| Docket Number | No. 20-1784,20-1784 |
| Citation | 15 F.4th 70 |
| Parties | FORTY SIX HUNDRED LLC, Plaintiff, Appellee, v. CADENCE EDUCATION, LLC, d/b/a Next Generation Children's Centers, Defendant, Appellant. |
| Court | U.S. Court of Appeals — First Circuit |
Paul B. Lewis, with whom Bruce E. Falby and DLA Piper LLP were on brief, for appellant.
Douglas T. Radigan, with whom Jared A. Fiore and Bowditch & Dewey LLP were on brief, for appellee.
Before Thompson, Selya, and Hawkins,* Circuit Judges.
This appeal, which rises like the mythical phoenix from the ashes of an eviction action removed from a Massachusetts state court, poses a series of gnarly questions related to the propriety of the district court's abstention-based remand order and the premature return of the underlying action to the state court. After sifting through the parties' arguments, we conclude that the district court erred in ordering the remand. We further conclude that the court's premature return of the case to the state court does not constrain our ability to remedy this error. Accordingly, we reverse the remand order and direct the district court to retrieve the removed action and resume jurisdiction over it. We also offer some guidance to district courts generally, aimed at avoiding the unnecessary shuttling of removed cases back and forth between state and federal courts.
We start by rehearsing the relevant facts and travel of the case. In 1997, defendant-appellant Cadence Education, LLC (Cadence) and plaintiff-appellee Forty Six Hundred LLC (FSH) executed a lease through which Cadence, as lessee, rented a property in Westborough, Massachusetts from FSH, as lessor. The lease arrangement was uneventful for more than two decades. The relationship soured, though, when (according to FSH) Cadence failed to pay the rent due for the months of April, May, and June 2020.
On June 10, 2020, FSH served Cadence with a pleading styled as a "Summary Process (Eviction) Summons and Complaint." The original complaint was filed in a Massachusetts state court (the Westborough District Court), where it would have been governed by the Massachusetts Trial Court Uniform Summary Process Rules (the Uniform Rules) and the provisions of chapter 239 of the Massachusetts General Laws. The action sought both to evict Cadence for nonpayment of rent and to recover $83,553.90 in damages (for rent arrearages).
On July 9, Cadence seasonably removed the action to the federal district court, alleging the existence of diversity jurisdiction.1 See 28 U.S.C. §§ 1332, 1441(b). FSH countered by moving to remand the action to the state court. In its motion papers, FSH did not dispute that the action satisfied the statutory imperatives for federal diversity jurisdiction but, rather, argued (as pertinent here) that the federal district court was entitled to abstain from adjudicating the action under Burford abstention principles. See Burford v. Sun Oil Co., 319 U.S. 315, 334, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943). Cadence opposed this motion.
On August 10, 2020, the district court granted FSH's motion to remand. See Forty Six Hundred LLC v. Cadence Educ., LLC, 478 F. Supp. 3d 84, 87 (D. Mass. 2020). Although the court acknowledged that federal courts may have original jurisdiction over removed summary eviction proceedings, it concluded that "this is the rare ca[s]e where abstention is appropriate." Id. at 86. In order "to preserve the state statutory scheme" — a reference to the applicable Massachusetts rules of summary process for eviction cases — the court declined to exercise jurisdiction over the action. Id. at 87.
On the same day that the district court entered its remand order, Cadence appealed that order. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 715, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) (). Cadence also asked the district court to stay its remand order. The district court denied Cadence's motion to stay without explanation and proceeded immediately to execute the remand, returning the action to the state court.2 The action remains pending in the state-court system.
To begin, Cadence takes aim at the district court's decision to refrain from exercising jurisdiction over the action. Its challenge rests primarily on the contention that the Burford abstention doctrine is inapplicable here. Thus, Cadence says, the district court's allowance of FSH's motion to remand must be reversed.
Before grappling with Cadence's argument, we pause to note an oddity. Although both parties have proceeded in this court on the understanding that the Burford abstention doctrine lies at the heart of the matter, the district court never explicitly mentioned Burford. It falls to us, then, to determine at the outset whether the district court's decision to abstain was actually grounded on Burford principles.
A close review of the proceedings below, including the district court's stated reasoning, reveals that the court did indulge in Burford abstention. For one thing, the Burford doctrine was the only basis for abstention put forward by FSH. For another thing, the district court — in choosing to abstain — relied on the decision in Glen 6 Associates, Inc. v. Dedaj, 770 F. Supp. 225, 229 (S.D.N.Y. 1991). That court, in turn, supported its abstention decision by citation to case law applying the Burford abstention doctrine. See id. at 228. This case law included, for example, Alabama Public Service Commission v. Southern Railway Co., 341 U.S. 341, 345, 71 S.Ct. 762, 95 L.Ed. 1002 (1951) (), and Tonwal Realties, Inc. v. Beame, 406 F. Supp. 363, 364 (S.D.N.Y. 1976) (). See Glen 6 Assocs., Inc., 770 F. Supp. at 228. To cinch the matter, the district court's stated concern about potential interference with a "comprehensive [state] legislative scheme," Forty Six Hundred, 478 F. Supp. 3d at 87, tracks the language we have used to articulate the purpose of the Burford abstention doctrine, see Sevigny v. Emps. Ins. of Wausau, 411 F.3d 24, 28 (1st Cir. 2005) (). Given these telltale signs, the only plausible reading of the district court's rescript is that it abstained on the basis of the Burford abstention doctrine.
Having dispelled any uncertainty about the doctrinal underpinnings of the district court's abstention-based remand order, we turn to the supportability of that order. A district court's decision to abstain has two elements. The court first must determine whether certain preconditions for abstention are met and, if so, must then determine whether abstention is appropriate. See DeMauro v. DeMauro, 115 F.3d 94, 99 (1st Cir. 1997). We review de novo the district court's threshold determination as to "whether the requirements for [ Burford ] abstention have been met." Chico Serv. Station, Inc. v. Sol P.R. Ltd., 633 F.3d 20, 30 (1st Cir. 2011) (quoting Guillemard-Ginorio v. Contreras-Gómez, 585 F.3d 508, 516 (1st Cir. 2009) ). If the decision passes through that screen, we then review the court's bottom-line decision to abstain for abuse of discretion. See id.; Vaquería Tres Monjitas, Inc. v. Irizarry, 587 F.3d 464, 474 (1st Cir. 2009) ; Sevigny, 411 F.3d at 26-27.
Cadence argues that Burford abstention is inapposite here. We tee up its arguments by tracing the legal contours of the Burford abstention doctrine. The baseline rule, of course, is that "federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress." Quackenbush, 517 U.S. at 716, 116 S.Ct. 1712 ; see Colo. River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976) (); Chico Serv. Station, 633 F.3d at 29 ().
Though strict, this duty is not absolute. See Quackenbush, 517 U.S. at 716, 116 S.Ct. 1712. The Supreme Court has carved out certain "exceptional circumstances" — circumstances in which "denying a federal forum would clearly serve an important countervailing interest" — that may warrant a federal court's eschewal of jurisdiction. Id. (first quoting Colo. River Water Conservation Dist., 424 U.S. at 813, 96 S.Ct. 1236 ). Even so, "[t]he circumstances that fit this mold are rare." Chico Serv. Station, 633 F.3d at 29. And "because abstention runs so firmly against the jurisprudential grain," we treat abstention as "the exception, not the rule." Id. (quoting Fragoso v. Lopez, 991 F.2d 878, 882 (1st Cir. 1993) ).
The Burford Court identified one such exception to a federal court's duty to exercise jurisdiction. See 319 U.S. at 334, 63 S.Ct. 1098. There, the plaintiff asked a federal court to invalidate, under state law, an order issued by the Texas Railroad Commission (the Commission), which had granted the defendant a permit to drill for oil in a field where hundreds of other producers also had wells. See id. at 316-17, 319, 63 S.Ct. 1098. At the time, the power to decide who could extract what oil from a commonly drilled field rested with the Commission. See id. at 320, 63 S.Ct. 1098. The Commission's judgments entailed consideration of a multitude of factors, including the oil supply, market demand, protection of the individual operators and the public interest, spacing of the wells, as well as highly technical geologic data. See id. at 321-22, 63 S.Ct. 1098. To achieve consistency in judgments, to...
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