Filed: Jul. 20, 2000
Latest Update: Feb. 21, 2020
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT JULY 20 2000 THOMAS K. KAHN No. 99-12705 CLERK _ D. C. Docket No. 98-00259-CV-4 MICHAEL POORE, BRUCE BIAS, Individually and on behalf of all others similarly situated, Plaintiffs-Appellees, versus AMERICAN-AMICABLE LIFE INSURANCE COMPANY OF TEXAS, Defendant-Appellant. _ Appeal from the United States District Court for the Southern District of Georgia _ (July 20, 2000) Before AN
Summary: [PUBLISH] IN THE UNITED STATES COURT OF APPEALS FILED FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS _ ELEVENTH CIRCUIT JULY 20 2000 THOMAS K. KAHN No. 99-12705 CLERK _ D. C. Docket No. 98-00259-CV-4 MICHAEL POORE, BRUCE BIAS, Individually and on behalf of all others similarly situated, Plaintiffs-Appellees, versus AMERICAN-AMICABLE LIFE INSURANCE COMPANY OF TEXAS, Defendant-Appellant. _ Appeal from the United States District Court for the Southern District of Georgia _ (July 20, 2000) Before AND..
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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JULY 20 2000
THOMAS K. KAHN
No. 99-12705 CLERK
________________________
D. C. Docket No. 98-00259-CV-4
MICHAEL POORE, BRUCE BIAS,
Individually and on behalf of all others similarly situated,
Plaintiffs-Appellees,
versus
AMERICAN-AMICABLE LIFE INSURANCE
COMPANY OF TEXAS,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Georgia
_________________________
(July 20, 2000)
Before ANDERSON, Chief Judge, BLACK and HALL*, Circuit Judges.
BLACK, Circuit Judge:
*
Honorable Cynthia Holcomb Hall, U.S. Circuit Judge for the Ninth Circuit, sitting by
designation.
Appellant American-Amicable Life Insurance Company of Texas appeals the
district court’s order remanding the case filed by Appellees Michael Poore and Bruce
Bias to state court pursuant to 28 U.S.C. § 1447(c). Appellant claims the district court
did not have the authority to remand the case based on Appellees’ post-removal
amended complaint. We agree. Accordingly, we reverse the district court’s order and
remand with instructions.
I. BACKGROUND
Appellees filed a class action complaint on October 19, 1998, in the Superior
Court of Liberty County, Georgia. On behalf of a nationwide class of persons who
purchased life insurance policies from Appellant, Appellees sought compensatory and
punitive damages, recission, restitution, and injunctive relief against Appellant for
alleged fraudulent life insurance policies. Appellees asserted that the relief sought
would amount to less than $75,000 per class member.
On November 12, 1998, Appellant filed a Notice of Removal to the United
States District Court for the Southern District of Georgia alleging diversity
jurisdiction, pursuant to 28 U.S.C. § 1332, as the basis for removal. Appellant
claimed the amount in controversy requirement was met by aggregating the punitive
damages sought in the complaint.
2
On November 25, 1998, Appellees filed a motion for leave to amend their
complaint. The amended complaint deleted the claims for punitive damages and
injunctive relief, and redefined the class to exclude any individual plaintiffs “who
wish to assert punitive damages claims . . . [or] claims where the matter in controversy
exceeds . . . $75,000 . . . .” The district court granted the motion to amend on
December 7, 1998.
Subsequently, on December 15, 1998, Appellees filed a Motion to Remand,
claiming the district court lacked subject matter jurisdiction. On July 21, 1999,
pursuant to 28 U.S.C. § 1447(c), the district court remanded the case to the state court,
finding that the amended complaint did not satisfy the amount in controversy
requirement.
On appeal, Appellant claims the district court erred in relying on the amended
complaint to determine whether the court had subject matter jurisdiction. We find the
district court did so err, and therefore reverse and remand for the district court to
determine whether the amount in controversy was met at the time of removal.
II. ANALYSIS
We review de novo a district court’s decision to remand based on 28 U.S.C. §
1447(c). See United States v. Veal, 153 F.3d 1233, 1245 (11th Cir. 1998). A district
3
court’s order pursuant to § 1447(c) is only reviewable if the case is remanded on
“grounds wholly different from those upon which § 1447(c) permits remand.”
Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 346,
96 S. Ct. 584, 589
(1976); see 28 U.S.C. 1447(d). In this case, the reviewability and merits of the order
are inextricably intertwined. As discussed below, we conclude the district court’s
order is reviewable and that the district court erred in granting the order. For ease of
discussion, we first will discuss the district court’s error.
A. District Court’s Authority to Remand
Pursuant to 28 U.S.C. § 1447(c), a district court may remand cases when the
court lacks subject matter jurisdiction. As originally enacted, § 1447(c) stated “[i]f
at any time before final judgment it appears that the case was removed improvidently
and without jurisdiction, the district court shall remand the case . . . .” In analyzing
this version of § 1447(c), courts made clear that removal was the critical jurisdictional
juncture. See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 293, 58 S.
Ct. 586, 592 (1938) (stating “events occurring subsequent to removal which reduce
the amount recoverable . . . do not oust the district court’s jurisdiction”). That is,
under the original version of § 1447(c), the proper inquiry was whether the court had
jurisdiction at the time of removal. If the court did have jurisdiction at the time of
removal, that jurisdiction was unaffected by subsequent acts, such as loss of diversity
4
or loss of the required amount in controversy. See Freeport-McMoRan, Inc v. KN
Energy, Inc., 498 U.S. 426, 428,
111 S. Ct. 858, 860 (1991) (noting the Supreme
Court has “consistently held that if jurisdiction exists at the time an action is
commenced, such jurisdiction may not be divested by subsequent events”); St. Paul
Mercury
Indemnity, 303 U.S. at 293, 58 S. Ct. at 592; Doddy v. Oxy USA, Inc.,
101
F.3d 448, 456 n.4 (5th Cir. 1996) (explaining that a district court’s jurisdiction is fixed
at the time of removal); Van Meter v. State Farm Fire & Cas. Co.,
1 F.3d 445, 450
(6th Cir. 1993) (same).
Section 1447(c), however, was amended in 1988 to read as follows: “If at any
time before final judgment it appears that the district court lacks subject matter
jurisdiction, the case shall be remanded.” The district court concluded § 1447(c), as
amended, authorized it to look at post-removal events to determine whether it had
subject matter jurisdiction. On appeal, Appellant argues the district court’s
interpretation of § 1447(c) was incorrect and contends the amended statute still
prohibits courts from relying on post-removal events in examining subject matter
jurisdiction. We agree.
While the district court concluded the amended § 1447(c) suggests that the time
of removal is no longer the focus of the inquiry, “courts have not construed it in this
revolutionary way.” Baldridge v. Kentucky-Ohio Trans., Inc., 983 F.2d 1341, 1348
5
n.11 (6th Cir. 1993). Rather, every Circuit that has addressed this issue has held that
the proper inquiry is still whether the court had jurisdiction at the time of removal.1
For example, the Sixth Circuit has held that “the timing question is dispositive
because, despite the change in the wording of § 1447(c) . . . courts still read that
section as authorizing remand when a district court determines that jurisdiction had
been lacking at the time of removal, rather than later . . . .” Baldridge, 983 F.3d at
1348. See Matter of Shell Oil Co.,
966 F.2d 1130, 1133 (7th Cir. 1992) (stating that
“[n]either the text of the revised § 1447(c) nor its legislative history implies that
Congress altered the traditional view. . . that jurisdiction present at the time a suit is
filed or removed is unaffected by subsequent acts”); Hudson United Bank v. LiTenda
Mortgage Corp.,
142 F.3d 157 n.8 (3d Cir. 1998) (commenting “we will assume
Congress did not mean to upset [the focus on jurisdiction at the time of removal] and
that they remain in effect unchanged by the intervening textual modifications to §
1447(c)”);
Doddy, 101 F.3d at 456 n.4 (5th Cir. 1996) (explaining that Ҥ 1447(c)
cannot be read to overrule the repeatedly expressed view that changes after removal
cannot eliminate jurisdiction and require remand”); see also Wisconsin Dep’t of
Corrections v. Schacht,
524 U.S. 381, 391,
118 S. Ct. 2047, 2053 (1998) (in
1
In discussing a different issue, we have noted the amendments to § 1447(c) were “legally
insignificant” and were not intended to change the meaning of the original section. See Snapper v.
Redan, 171 F.3d 1249, 1256-57 n.14 (11th Cir. 1999).
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discussing a different issue, noting that “[a] case such as this one is more closely
analogous to cases in which a later event, say the change in the citizenship of a party
or a subsequent reduction of the amount at issue below jurisdictional levels, destroys
previously existing jurisdiction. In such cases, a federal court will keep a removed
case.”); Freeport-McMoran, 498 U.S. at 428, 111 S. Ct. at 860 (in dicta, commenting
that jurisdiction is fixed at the time of removal).
Finally, as noted by several other Circuits, the legislative history of § 1447(c)
does not indicate that Congress intended the amendment to cause a drastic change in
the law. See H.R. Rep. No. 104-799 at 2-3 (1996) (indicating that § 1447(c), as
amended, was intended only to clarify Congressional intent with respect to the
timeliness of remands made for reasons other than lack of subject matter jurisdiction);
Hudson United Bank, 142 F.3d at 156 n.8 (noting “Congress did not mean to upset”
the established interpretation of § 1447(c)).
We join our sister Circuits and conclude the amendments to § 1447(c) did not
alter the fact that, in this case, the district court must determine whether it had subject
matter jurisdiction at the time of removal.2 That is, events occurring after removal
2
We note that other post-removal events, however, may divest the district court of
jurisdiction. See, e.g., In re Merrimack Mut. Fire Ins. Co., 587 F.2d 642, 646 (5th Cir. 1978)
(holding that a district court must remand if indispensable parties have not been joined). This case
is binding on this Court pursuant to Bonner v. City of Prichard,
661 F.2d 1206, 1209 (11th
Cir.1981) (en banc), in which this Court adopted as binding precedent all decisions
of the former Fifth Circuit handed down prior to close of business on September 30,
7
which may reduce the damages recoverable below the amount in controversy
requirement do not oust the district court’s jurisdiction. In this case, Appellees
amended their complaint after the case was removed to the district court. The district
court thus erred in relying on the amended complaint to conclude the parties did not
meet the amount in controversy requirement.
B. Reviewability of District Court’s Remand Order
Under 28 U.S.C. § 1447(d), an order remanding an action to state court
pursuant to § 1447(c) is not reviewable on appeal or otherwise, even if the remand
order is clearly erroneous.3 See Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S.
336, 342-43,
96 S. Ct. 584, 589 (1976). The Supreme Court, however, has explained
that § 1447(d)’s bar to appellate review is not as broad as it seems. See
id. at 345-46,
96 S. Ct. at 590; Matter of Amoco Petroleum Additives Co.,
964 F.2d 706, 708 (7th
Cir. 1992) (noting §1447(d) “does not mean what it says”). In Thermtron, the district
court had remanded a diversity suit due to the crowded federal docket. Relying on the
§ 1447(d) bar, the Sixth Circuit refused to consider the defendant’s mandamus
petition. The Supreme Court reversed, holding that §1447(d) precludes review only
1981.
3
28 U.S.C. § 1447(d) reads as follows: “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 1443 of this title shall be
reviewable by appeal or otherwise.”
8
of those remand orders issued pursuant to §1447(c). See id. at 346, 96 S. Ct. at 590
(stating “only remand orders issued under section 1447(c) and invoking the grounds
specified therein—that removal was improvident and without jurisdiction—are
immune from review under section 1447(d)”). Because the district court had not
remanded on the basis of § 1447(c), but rather on “grounds wholly different from
those upon which Section 1447(c) permits remand,” the district court had exceeded
its authority and the remand order was thus reviewable.
Id. at 344, 96 S. Ct. at 589.
In this case, the district court determined it lacked diversity jurisdiction
because the amount in controversy did not meet the jurisdictional minimum set forth
in 28 U.S.C. § 1332. This determination would seem to fall directly under Section
1447(c), and Section 1447(d) would prevent review. However, as discussed above,
the district court exceeded its authority under § 1447(c) by relying upon a post-
removal amendment to the complaint to determine the amount in controversy.
Because the district court acted beyond the scope of its § 1447(c) authority, § 1447(d)
does not act as a bar to appellate review. See In re: Bethesda Mem’ Hosp., Inc., 123
F.3d 1407, 1410 (11th Cir. 1997) (noting “because the district court exceeded the
grounds for remand contained in § 1447(c), § 1447(d) poses no bar to our review”);
Trans Penn Wax Corp. v. McCandless,
50 F.3d 217, 223 (3d Cir. 1995) (holding “a
remand only falls under § 1447(c) if the removal itself was jurisdictionally improper,
9
not if the defect arose after removal . . . . Remand decisions based on grounds other
than . . . that jurisdiction was improper at the time of removal . . . are therefore
reviewable . . . as they do not implicate § 1447(c).”); Baldridge v. Kentucky-Ohio
Trans., Inc., 983 F.2d 1341, 1348 (6th Cir. 1992) (explaining if a district court “had
thought that the removal had been jurisdictionally proper but that jurisdiction had
‘vanished’ when [a party] dropped out, the remand—even though based on a finding
of lack of jurisdiction—would be reviewable, as § 1447(c) envisions remands only for
defective removal”); Amoco
Petroleum, 964 F.2d at 708 (permitting appellate “review
when the district judge believes that removal was proper and that later developments
authorize remand”); but see Linton v. Airbus Industrie,
30 F.3d 592, 599 (5th Cir.
1994) (concluding “that jurisdictional remands premised on post-removal events are
not reviewable”). Upon our review of the record, as discussed above, we conclude the
district court committed reversible error by remanding based on Appellees’ post-
removal amended complaint.
III. CONCLUSION
The district court erred in remanding the case to the state court based on the
amount recoverable alleged in Appellees’ amended complaint. Because the district
court exceeded its authority pursuant to § 1447(c), § 1447(d) does not act as a bar to
10
our review. Accordingly, we reverse and remand to the district court to determine
whether it had subject matter jurisdiction at the time of removal.
REVERSED AND REMANDED.
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