Moody v. Great Western Ry. Co.

• Decision Date: 12 August 2008
• Docket Number: No. 07-1285.,No. 07-1287.,07-1285.,07-1287.
• Citation: 536 F.3d 1158
• Parties: J. Gale MOODY, Plaintiff-Appellee, and Rodney L. Nelson, Plaintiff-Intervenor/Cross-Claimant-Appellee, v. The GREAT WESTERN RAILWAY COMPANY, a corporation; The Western Construction Company, a Colorado corporation; Great Western Trail Authority, an intergovernmental authority; Keith McIntyre, Chair, Great Western Trail Authority; Doug Moore, Vice Chair, Great Western Trail Authority; Peggy Johnson, Secretary, Great Western Trail Authority; Jim Campbell; Tom Jones; Tim Krebs; Mike Ketterling; Barbara Labarbara; Alex Ryer, Board Members, Great Western Trail Authority; Any Unknown Person Who May Claim Any Interest in the Subject Matter of this Action, Defendants-Appellants.
• Court: U.S. Court of Appeals — Tenth Circuit

536 F.3d 1158

J. Gale MOODY, Plaintiff-Appellee, and Rodney L. Nelson, Plaintiff-Intervenor/Cross-Claimant-Appellee, v. The GREAT WESTERN RAILWAY COMPANY, a corporation; The Western Construction Company, a Colorado corporation; Great Western Trail Authority, an intergovernmental authority; Keith McIntyre, Chair, Great Western Trail Authority; Doug Moore, Vice Chair, Great Western

Trail Authority; Peggy Johnson, Secretary, Great Western Trail Authority; Jim Campbell; Tom Jones; Tim Krebs; Mike Ketterling; Barbara Labarbara; Alex Ryer, Board Members, Great Western Trail Authority; Any Unknown Person Who May Claim Any Interest in the Subject Matter of this Action, Defendants-Appellants.

No. 07-1285.

No. 07-1287.

United States Court of Appeals, Tenth Circuit.

August 12, 2008.

Timothy L. Goddard of Hasler, Fonfara & Maxwell, L.L.P., Fort Collins, CO, for Plaintiff-Appellee.

Joshua D. McMahon (William Perry Pendley of Mountain States Legal Foundation, on the brief), Lakewood, CO, for Plaintiff-Intervenor-Cross-Claimant-Appellee.

Jennifer Lynn Peters (Fred L. Otis of Otis, Coan & Peters, L.L.C., on the briefs), Greeley, CO, for Defendants-Appellants.

Andrea C. Ferster, General Counsel of Rails-to-Trails Conservancy, Washington, DC, for Amicus Curiae.

Before KELLY and TYMKOVICH, Circuit Judges, and FRIZZELL,^* District Judge.

PAUL KELLY, JR., Circuit Judge.

Defendants-Appellants Great Western Railway Company, Western Construction Company, Great Western Trail Authority, and various members of the Great Western Trail Authority Board appeal from the district court's order remanding this case to Colorado state court. Because we conclude that we do not have appellate jurisdiction to review the remand order, we dismiss the appeal.

Background

Plaintiff-Appellee J. Gale Moody filed a Colorado state-court complaint in June 2003 seeking to quiet title to real property formerly used as a railroad right-of-way. Mr. Moody contended that the railroad had abandoned its right-of-way and that the land had, as a result, reverted to him in fee simple. Great Western Railway answered, claiming a lack of jurisdiction as an affirmative defense. Indeed, the state court could not grant relief on Mr. Moody's theory because Congress has given the Surface Transportation Board (STB) exclusive jurisdiction to determine whether a railroad has abandoned a right-of-way. 49 U.S.C. § 10501(b); see Phillips Co. v. Denver & Rio Grande W. R.R., 97 F.3d 1375, 1377 (10th Cir.1996). In October 2003, Great Western Railway brought the matter to the STB by filing an Exemption of Abandonment, a procedure which allows for an expedited finding of abandonment of the right of way. See 49 C.F.R. § 1152.50. A few months later, several local municipalities filed a Notice of Interim Trail Use. This procedure permits a state, locality, or private organization to acquire a former railroad right-of-way and turn it into a recreational trail, as provided by the National Trails System Act. 16 U.S.C. § 1247(d). Should the railroad come to an agreement with another party regarding the assumption of financial and managerial responsibility over the former right-of-way, the Notice of Interim Trail Use prevents the abandonment of the right-of-way and the vesting of any reversionary interest. See id.; see also Preseault v. ICC, 494 U.S. 1, 6-7, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990). Mr. Moody's state court action was effectively stayed during the pendency of the negotiations between the municipalities and the railroad.

In August 2006, the state court action was revived when Plaintiff-Appellee Rodney Nelson filed a motion to intervene as a plaintiff/cross-claimant and filed a complaint in intervention. Shortly thereafter, Great Western Railway reached an agreement with an organization called the Great Western Trail Authority, effectively preserving the right-of-way as a trail and preventing the abandonment of the right-of-way. In response, Mr. Nelson amended his complaint, adding Great Western Trail Authority and various individuals affiliated with the organization as defendants. In his amended complaint in intervention, Mr. Nelson stated a claim to quiet title and a claim for injunctive relief.

Defendants responded by removing the action to federal court on the basis of federal-question jurisdiction. See 28 U.S.C. § 1331. In support, Defendants asserted that the resolution of Plaintiffs' claims necessarily involved federal law, given the Congressional grant of authority over railroad abandonments to the STB. Days later, Defendants filed a joint motion to dismiss the action that they had removed, based on a lack of subject-matter jurisdiction. Defendants claimed that the statutory language granting the STB exclusive jurisdiction over the determination of abandonment precluded the federal district court from exercising subject-matter jurisdiction over the suit. Plaintiff Nelson conceded that the federal court had no subject-matter jurisdiction over the determination of abandonment, but filed a motion to remand asserting that there were pending issues of state law. Defendants countered that dismissal, and not remand, was appropriate because any state-law issues were entirely preempted by federal law and the applicable federal law denied the district court jurisdiction over the claims. Defendants also noted that several of the state claims raised by Plaintiff Nelson in the motion to remand were not raised in the complaint.

The district court denied Defendants' motion to dismiss and granted Plaintiff's motion to remand. The district court held that it lacked jurisdiction to decide the federal question on which the Defendants based removal, but that resolution of the question of abandonment would not resolve the state claims raised by Plaintiffs, including (1) whether Great Western Railway had subsurface mineral rights, (2) whether Plaintiffs were entitled to just compensation in the event their reversionary interests were deemed invalid, and (3) whether Plaintiffs obtained title through adverse possession. After observing that the state court may not have jurisdiction to decide some of these claims, the district court granted the motion to remand.

On appeal, Defendants contest the remand and assert that all of the "state law issues" are actually preempted by federal law, and that the STB has exclusive jurisdiction to decide all the claims in this case. Defendants contend that the district court should have dismissed all of Plaintiffs' claims with prejudice.

Discussion

The threshold issue in this case is whether we may review the district court's remand order. Under 28 U.S.C. § 1447(d), "[a]n order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise." This statutory bar, while seemingly broad, has been construed to apply only to remands based on a lack of subject-matter jurisdiction or a timely raised defect in removal procedure, the grounds specified in 28 U.S.C. § 1447(c). Things Remembered, Inc. v. Petrarca, 516 U.S. 124, 127, 116 S.Ct. 494, 133 L.Ed.2d 461 (1995) (noting that "§ 1447(d) must be read in pari materia with § 1447(c), so that only remands based on grounds specified in § 1447(c) are immune from review under § 1447(d)") (emphasis in original). Thus, remands based on grounds other than defects in removal procedure or a lack of subject-matter jurisdiction are reviewable. See Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 711-12, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996).

Some of our prior cases suggested that, in making the determination whether § 1447(d) bars review, we could independently review the actual grounds upon which the district court believed it was empowered to remand. See, e.g., Dalrymple v. Grand River Dam Auth., 145 F.3d 1180, 1184 (10th Cir.1998); Archuleta v. Lacuesta, 131 F.3d 1359, 1362 (10th Cir. 1997). However, the Supreme Court has clarified that the scope of this determination is narrower. When a district court states that it based its remand on a lack of subject-matter jurisdiction, our inquiry is limited to determining whether the basis for the district court's decision can be "colorably characterized as subject-matter jurisdiction." Powerex Corp. v. Reliant Energy Servs. Inc., ___ U.S. ___, 127 S.Ct. 2411, 2418, 168 L.Ed.2d 112 (2007). This narrower standard applies regardless of whether the district court's decision to remand was based on an erroneous legal conclusion. See Kircher v. Putnam Funds Trust, 547 U.S. 633, 642, 126 S.Ct. 2145, 165 L.Ed.2d 92 (2006) ("[w]here the order is based on one of the [grounds enumerated in 28 U.S.C. § 1447(c)], review is unavailable no matter how plain the legal error in ordering the remand") (internal quotations omitted).

Thus, when the district court characterizes its remand as one based on subject-matter jurisdiction, our inquiry is essentially a superficial determination of plausibility. See Powerex, 127 S.Ct. at 2418. If the district court invokes subject-matter jurisdiction as the rationale for remand, and subject-matter jurisdiction was a plausible rationale for that remand, our ability to further review that remand is barred by § 1447(d).

Defendants attempt to avoid this bar by asserting that the district court did not actually remand on the basis of subject-matter jurisdiction, but rather because it found that certain issues would be more appropriately determined by the state court. Aplt. Br. at 9. Plaintiffs, in contrast, assert that the district court remanded based on a lack of subject-matter jurisdiction and that this remand was mandatory, as the district court concluded that it lacked jurisdiction over the federal question on which removal was based. Aplt.Br. at 5, 13.

We conclude that the district court purported to remand based on subject-matter jurisdiction. Defendants removed the case, contending that the reversionary interests claimed by Nelson in his amended complaint required a determination regarding the abandonment of the...