§1447(d) Notwithstanding, Certain District Court Remand Orders To State Courts Are Appealable

Author:Mr Paul Devinsky
Profession:McDermott Will & Emery

In Carlsbad Technology Inc. v. HIF Bio, Inc., theSupreme Court ruled that district court orders remanding cases backto state courts are subject to appeal.On May 4, 2009, the Supreme Court of the United States ruledthat district court orders remanding cases back to state courtsafter declining to exercise supplemental jurisdiction areappealable, despite the language of 28 U.S.C. §1447(d) statingthat remand orders are "not reviewable on appeal,"reversing a decision by the U.S. Court of Appeals for the FederalCircuit. Carlsbad Technology Inc. v. HIF Bio, Inc., CaseNo. 07-1437 (May 4, 2009) (Thomas, J.; Stevens, J. and Scalia, J.,concurring; Breyer, J., concurring joined by Souter, J.)The respondents initiated the action in 2005 by filing acomplaint in a California state court alleging that the petitionerviolated several state laws and a single federal statute, theRacketeer Influenced and Corrupt Organizations Act (RICO), 18U.S.C. §§1961-68. The petitioner successfully removed theentire case, including the state law claims, to the U.S. DistrictCourt for the Central District of California pursuant to§1441(c), which allows for removal when at least one claimexists over which the federal court has original subject matterjurisdiction.Once in federal court, the petitioner successfully moved underRule 12(b)(6) to dismiss the respondents' RICO claim. Inaddition to dismissing the RICO claim, the district court decidednot to exercise supplemental jurisdiction over the remaining statelaw claims pursuant to 28 U.S.C. §1367(c)(3), which gives adistrict court discretion to choose whether to exercisesupplemental jurisdiction over a claim where the district court hasdismissed all of the claims over which it had originaljurisdiction. The district court consequently remanded the case tothe state court. Carlsbad appealed the decision.On appeal to the Federal Circuit, the petitioner argued that thedistrict court should have exercised supplemental jurisdiction overthe state law claims because those claims implicated federal patentlaw rights (in this case, ownership of an invention andinventorship). Without getting to the merits of thepetitioner's argument, the Federal Circuit dismissed theappeal, finding that the remand by the district court could"be colorably characterized as a remand based on lack ofsubject matter jurisdiction" and, thus, could not be reviewedunder §§1447(c) and (d).The Supreme Court granted certiorari to consider thenovel issue of whether a district court's...

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