Opinion
No. C19-4030-LTS
2021-02-17
Luis ACEVES, Plaintiff, v. NORTHWEST IOWA PORK, a division of Itoham America, Inc., Defendant.
Terry A. White, Carlson & Burnett LLP, Omaha, NE, for Plaintiff. Christopher E. Hoyme, Jackson Lewis, LLP, Jessica Kallstrom-Schreckengost, Jackson Lewis PC, Omaha, NE, for Defendant.
Terry A. White, Carlson & Burnett LLP, Omaha, NE, for Plaintiff.
Christopher E. Hoyme, Jackson Lewis, LLP, Jessica Kallstrom-Schreckengost, Jackson Lewis PC, Omaha, NE, for Defendant.
ORDER
Leonard T. Strand, Chief Judge
This matter is before me on a motion (Doc. 35) by defendant Itoham America, Inc. (Itoham), requesting that I reconsider my order (Doc. 34) remanding this case to the Iowa District Court for Woodbury County. Plaintiff Luis Aceves has filed a response (Doc. 37) and Itoham has filed a reply (Doc. 39). Oral argument is not necessary. See Local Rule 7(c).
I. PROCEDURAL HISTORY
Aceves commenced an action against Itoham on June 17, 2019, in the Iowa District Court for Woodbury County. Doc. 8. Aceves alleged one count of wrongful discharge in violation of public policy and one count of Itoham violating Iowa's Occupational Safety and Health Act. Id. at 6–11, ¶¶ 16–32. Itoham removed the case to this court, alleging that the court had federal question and diversity of citizenship jurisdiction pursuant to 28 U.S.C. §§ 1331 and 1332. With regard to federal question jurisdiction, Aceves alleged in his complaint that Itoham violated state and federal law but did not identify the particular federal law Itoham allegedly violated. Doc. 8 at 2. In fact, his two claims both arose solely under Iowa law, making federal question jurisdiction inapplicable.
As for diversity of citizenship jurisdiction, Itoham is a citizen of Iowa. Doc. 8 at 3, ¶ 2. Pursuant to the "forum defendant rule," Itoham was not entitled to invoke diversity jurisdiction to remove a case from an Iowa state court to an Iowa federal court. At the time of my order, a violation of the forum defendant rule was a jurisdictional defect that could not be waived in this circuit. See, e.g., Horton v. Conklin , 431 F.3d 602, 605 (8th Cir. 2005). For this reason, and in light of the lack of federal question jurisdiction, I remanded this case to the Iowa District Court for Woodbury County on September 25, 2020. Doc. 34.
Before ordering remand, I invited the parties to submit briefing on the issue of whether remand was required. Doc. 31. Both parties submitted responses (Docs. 32, 33), with Itoham agreeing that the forum defendant rule "operates to deprive the federal court of jurisdiction in this case because Defendant is a citizen of Iowa." Doc. 32 at 3. Aceves agreed, as well. Doc. 33.
Itoham now requests that I reconsider my order. On December 30, 2020, the United States Court of Appeals for the Eighth Circuit overruled its precedent treating violations of the forum defendant rule as jurisdictional defects:
In short, over "a century's worth of precedent and practice in American courts," see Bowles [v. Russell], 551 U.S. [205] at 209 n.2, 127 S. Ct. 2360 [168 L.Ed.2d 96 (2007) ], including our own (Hurt and Horton aside), supports the nonjurisdictional view of the forum-defendant rule. This means that text, context, and precedent all militate in favor of that view. Accordingly, we hold that violating the forum-defendant rule results in a nonjurisdictional defect in removal, and we overrule Hurt and Horton to the extent they held to the contrary.
Holbein v. TAW Enters., Inc. , 983 F.3d 1049, 1051 (8th Cir. 2020) (en banc). Itoham argues that this change is retroactive, such that I should reverse my order remanding the case and that I should resume jurisdiction. Doc. 36 at 1. Itoham argues that this would not prejudice either party because the state court has yet to reopen the case. Id. Aceves resists, arguing that the Federal Rules of Civil Procedure bar reconsideration of the remand order and noting that Itoham failed to inform the court that the parties had agreed to stay the state court litigation while attempting mediation. Doc. 37 at 4–5.
II. LEGAL STANDARD
Whether I may reconsider my order implicates 28 U.S.C. § 1447. Section 1447(c) provides:
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. An order remanding
the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal. A certified copy of the order of remand shall be mailed by the clerk to the clerk of the State court. The State court may thereupon proceed with such case.
Section 1447(d) provides:
An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.
This prohibition of review includes review by district courts. See, e.g., In re Lowe , 102 F.3d 731, 734 (4th Cir. 1996) ("Indisputably, ‘otherwise’ in § 1447(d) includes reconsideration by the district court."); In re La Providencia Dev. Corp. , 406 F.2d 251, 253 (1st Cir. 1969) ("Both [appellate and district court review] are foreclosed; nothing could be more inclusive than the phrase ‘on appeal or otherwise.’ "). However, courts are split as to when § 1447(d) operates to bar review. Some courts have held that a remand order is unreviewable as soon as it is filed. See In re Lowe , 102 F.3d at 735 ("In sum, the plain language of the statute, the policy behind it, and logic all support the conclusion that § 1447 divests a district court of jurisdiction upon the entry of its remand order."); Aetna U.S. Healthcare, Inc. v. Hoechst Aktiengesellschaft , 67 F. Supp. 2d 1242, 1245–46 (D. Kan. 1999) (holding similarly); Pohl v. Junick , No. CIV. 06-0495 RB/RLP, 2006 WL 8443831, at *4 (D.N.M. Aug. 28, 2006) (holding similarly).
Sections 1447(c) and 1447(d) are to be read "in pari materia. " Things Remembered v. Petrarca , 516 U.S. 124, 127, 116 S.Ct. 494, 133 L.Ed.2d 461 (1995). The consequence of this is that § 1447(d) bars reviewing remand orders only when the order is premised on a ground listed in § 1447(c) : lack of subject matter jurisdiction or defects in removal procedure. See Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 711–12, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996). The remand order was based on the lack of subject matter jurisdiction. Doc. 34 at 1. It therefore falls within § 1447(d).
Other courts have held that a district court may reconsider its remand order as long as the clerk of court has yet to mail it. See, e.g., Cook v. J.C. Penney Co., Inc. , 558 F. Supp. 78, 79 (N.D. Iowa 1983) ("[T]he federal court is not completely divested of jurisdiction to reconsider or vacate the order of remand until the order of remand has been entered and a certified copy of the order has been mailed to the clerk of the state court."); Trans Penn Wax Corp. v. McCandless , 50 F.3d 217, 225 (3d Cir. 1995) ("The general rule is that a district court loses jurisdiction over a case once it has completed the remand by sending a certified copy of the remand order to the state court.") (citing Hunt v. Acromed Corp. , 961 F.2d 1079, 1081 (3d Cir. 1992) ); Shapiro v. Logistec USA, Inc. , 412 F.3d 307, 312 (2d Cir. 2005) (holding similarly). These courts often emphasize that the mailing functions as a jurisdictional event with "legal significance" because remand orders are not "self-executing." Shapiro , 412 F.3d at 312 (quoting Arnold v. Garlock, Inc. , 278 F.3d 426, 437, 438 (5th Cir. 2001) ). A third set of courts has held that federal jurisdiction is divested when the state court receives the remand order and resumes jurisdiction. See, e.g., Fed. Deposit Ins. Corp. v. Santiago Plaza , 598 F.2d 634, 636 (1st Cir. 1979) (finding that § 1447(d) bars reconsidering remand order once the state court resumes jurisdiction); cf. Aetna U.S. Healthcare, Inc. , 67 F. Supp. 2d at 1247 n.6 (declining to follow this approach but acknowledging that "[t]he difference between mailing and receipt is not necessarily irrelevant").
The holding and argument in Trans Penn Wax Corp. v. McCandless , 50 F.3d 217 (3rd Cir. 1995), has been characterized as the "strongest articulation" of this position. Pohl v. Junick , No. CIV. 06-0495 RB/RLP, 2006 WL 8443831, at *3 n.2 (D.N.M. Aug. 28, 2006). Yet Pohl , see id. , and In re Lowe , 102 F.3d 731, 735 (4th Cir. 1996), note that the Trans Penn Wax Corp. court was reviewing a remand order based on non-§ 1447(c) grounds. See Trans Penn Wax Corp. , 50 F.3d at 223–24 (noting that the district court dismissed the federal claims at issue and then declined to exercise supplemental jurisdiction over pendent state claims). Thus, Trans Penn Wax Corp. 's holding "that the failure to send a certified copy permits reconsideration is an alternative holding at best ...." In re Lowe , 102 F.3d at 735 (citations omitted).
III. DISCUSSION
Itoham points out that the state court docket does not reflect receipt of this court's remand order. Doc. 39 at 2. Moreover, the Clerk of this court does not appear to have documentation conclusively establishing that a certified copy of the remand order was mailed to the state court. Thus, for purposes of Itoham's motion I will assume that the certified copy was not mailed.
Nonetheless, I conclude that it would be inappropriate for this court to review or reconsider the remand order. Having reviewed the caselaw described above, and finding no binding circuit precedent, I conclude that it is the filing of a remand order pursuant to § 1447(c), not the clerical act of mailing it, that renders the order unreviewable. Section 1447(d) states plainly that courts may not review remand orders "by appeal or otherwise." 28 U.S.C. § 1447(d). It does not condition reviewability on any other action. Even if a remand order is not self-executing, an order that has been signed and docketed is no less an order because it has yet to be mailed. There is no logical reason why the filing of the remand order cannot serve as the "determinable jurisdictional event," Trans Penn Wax Corp. , 50 F.3d at 225, after which the federal court may not exercise control over the case. The legal consequence of the federal court losing jurisdiction should result from the legal decision itself, not from the clerical question of when (or if) the Clerk of Court mails the decision to the state court. Van Ryn v. Korean Air Lines , 640 F. Supp. 284, 285 (C.D. Cal. 1985) ("Logic also indicates that it should be the action of a court (entering an order of remand) rather than the action of a clerk (mailing a certified copy of the order) that should determine the vesting of jurisdiction.").
Even if the court were to maintain jurisdiction until the mailing occurs, that does not mean the court has license to exercise its jurisdiction to review the order. See Aetna U.S. Healthcare, Inc. v. Hoechst Aktiengesellschaft , 67 F. Supp. 2d 1242, 1245 (D. Kan. 1999) ("In the Court's view, however, even if the Court retains general jurisdiction over the action, Section 1447(d) prohibits the Court from exercising that jurisdiction to review its remand order—a decision which Congress expressly stated is nonreviewable.").
In addition to being consistent with the statutory language, this conclusion comports with the underlying policy of § 1447. Remand orders are nonreviewable because of a policy preference against having a case "ricochet back and forth depending upon the most recent determination of a federal court." In re La Providencia Dev. Corp. , 406 F.2d at 252 ; cf. In re Lowe , 102 F.3d at 735 ("Thus, this nonreviewability rule rests on a ‘policy of not permitting interruption of the litigation of the merits of a removed cause by prolonged litigation of questions of jurisdiction of the district court to which the cause is removed.’ ") (quoting United States v. Rice , 327 U.S. 742, 751, 66 S.Ct. 835, 90 L.Ed. 982 (1946) ). Even if the federal court wrongfully remands, this interest in finality controls. In re La Providencia Dev. Corp. , 406 F.2d at 253 ("The district court has one shot, right or wrong."). To allow a party to obtain review of a remand order because a clerical act has yet to occur would undermine this policy by allowing the court to second-guess what should be final. In re Lowe , 102 F.3d at 735 ("One party should not arbitrarily receive a second opportunity to make its arguments due to a clerical error.").
Finally, this conclusion is consistent with the interrelationship between § 1447(c) and § 1447(d). See, e.g., Trans Penn Wax Corp. , 50 F.3d at 225 (noting that its holding "is premised on the language of § 1447(c) and (d)"). Indeed, courts should construe these sections together. See Things Remembered, Inc. v. Petrarca , 516 U.S. 124, 127, 116 S.Ct. 494, 133 L.Ed.2d 461 (1995) ("[ Section] 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)."). The link between the two sections concerns the underlying reason for the remand order. If the case is remanded for a reason listed in § 1447(c) (such as lack of subject matter jurisdiction), then § 1447(d)'s bar on reviewability operates. Id. at 127–28, 116 S.Ct. 494. If remanded for a non- § 1447(c) reason, § 1447(d)'s bar on review does not apply. Quackenbush v. Allstate Ins. Co. , 517 U.S. 706, 712, 116 S.Ct. 1712, 135 L.Ed.2d 1 (1996) ("The District Court's abstention-based remand order does not fall into either category of remand order described in § 1447(c), as it is not based on lack of subject matter jurisdiction or defects in removal procedure."). The fact that these sections are to be construed together does not undercut § 1447(d)'s bar on the review of remand orders.
The remand order in this case was based on this court's lack of subject matter jurisdiction. Pursuant to 28 U.S.C. § 1447(d), it is not reviewable. Thus, I must decline to reconsider it.
If my analysis of the legal framework is incorrect, I note that to the extent this court would have discretion to resume jurisdiction over this case, I would decline to do so. The remand order correctly applied then-existing, binding circuit precedent and was filed three months before the court of appeals issued its en banc opinion in Holbein . No legitimate policy goal would be advanced by snatching back a case that was correctly remanded months before the law changed. Thus, I would do so only if such an outcome was compelled by binding precedent.
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IV. CONCLUSION
For these reasons, Itoham's motion (Doc. 35) for reconsideration is denied . The Clerk of Court is directed to mail a certified copy of the remand order (Doc. 34) to the Iowa District Court for Woodbury County.