Adkins, Billy E. v. IL Central RR Co ( 2003 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
Nos. 01-3081 & 01-3418
BILLY E. ADKINS, Administrator of the
ESTATE OF HELENA R. ADKINS,
Plaintiff-Appellee,
v.
ILLINOIS CENTRAL RAILROAD COMPANY,
Defendant-Appellant.
____________
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 01 C 2165—James F. Holderman, Judge.
____________
ARGUED FEBRUARY 11, 2002—DECIDED MARCH 6, 2003
____________
Before RIPPLE, DIANE P. WOOD, and WILLIAMS, Circuit
Judges.
DIANE P. WOOD, Circuit Judge. Although the underlying
facts of this case relate to a tragic train accident that
occurred several years ago in Bourbonnais, Illinois, the
question before us in this appeal is a narrow procedural
one: can this court review the district court’s decision to
remand the case to the state court in which it was orig-
inally filed? We conclude that the best way to interpret
the district court’s order is as one finding that it had no
subject matter jurisdiction over the claims that were
2 Nos. 01-3081 & 01-3418
remanded. That being the case, this court has no appel-
late jurisdiction over the district court’s remand order.
Furthermore, even if we are wrong and the order was
simply a decision to remand all supplemental state claims
to the state court, we would exercise our jurisdiction to
find that there was no abuse of discretion in that decision.
We therefore dismiss this appeal for lack of appellate
jurisdiction.
I
On March 15, 1999, an Amtrak passenger train known
as the City of New Orleans (made famous in a song writ-
ten by Steve Goodman and performed by Arlo Guthrie
and later Willie Nelson) collided with a semi-tractor trailer
loaded with steel rebar at a railroad crossing in Bourbon-
nais, Illinois. The City of New Orleans derailed as a result
of the collision, resulting in significant injury and the
loss of many passengers’ lives. This suit, along with
more than fifty others, was filed in Illinois state court
by injured passengers and the estates of those killed as a
result of the collision. The plaintiffs alleged negligence,
strict products liability and breach of implied warranties
on the part of several defendants, including General
Electric, which designed and manufactured the locomo-
tive that pulled the City of New Orleans. The additional
defendants were the manufacturers, owners, and opera-
tors of the equipment involved in the accident. Two from
that group are relevant to this appeal: Illinois Central,
which operates the tracks on which the City of New Or-
leans traveled, and Birmingham Steel Company, which
loaded the steel rebar onto the trailer involved in this
collision from its adjacent manufacturing facility. Amtrak,
though not initially named as a defendant in this suit, plays
a role in the issues before us as well.
Nos. 01-3081 & 01-3418 3
Essentially, the procedural posture of this case can be
boiled down to a simple pattern. Plaintiffs (A) filed suit
in state court raising a number of state law claims
against a set of defendants (B through n). One of those
defendants, GE, removed the case to federal court, assert-
ing as a basis for removal the argument that the federal
Locomotive Inspection Act, 49 U.S.C. § 20701, et seq.,
“completely preempted” the state law claims. (In other
words, GE claimed that any lawsuit these plaintiffs were
bringing was inevitably and necessarily based on a fed-
eral question, and thus removal was available under 28
U.S.C. § 1441(a) and (b).) Later, defendant Birmingham
Steel filed a third-party complaint pursuant to FED. R.
CIV. P. 14 against Amtrak, which is a federal instrumental-
ity. The district court initially concluded that GE’s “com-
plete preemption” argument was correct, and thus that
the removal was properly based on the presence of a fed-
eral question (and supplemental jurisdiction over the re-
maining claims). The court then dismissed all claims that
the plaintiffs had asserted against GE (all of which re-
lied on state law) on preemption grounds. Finally, turning
to the other defendants, the court ascertained that none
of them was arguing that federal question jurisdiction
existed based on the “complete preemption” idea. In the
absence of a federal question, and in the absence of the
complete diversity required by 28 U.S.C. § 1332, he con-
cluded that the case had to be remanded to state court.
Believing that the order of remand was erroneous, Illinois
Central filed an appeal to this court. (Plaintiffs have not
filed a cross-appeal from the order dismissing their claims
against GE, and thus we have no occasion to rule on the
correctness of the findings supporting that order.)
II
The first question we must decide is whether we have
appellate jurisdiction over Illinois Central’s challenge to
4 Nos. 01-3081 & 01-3418
the remand order. After devoting scant attention to this
threshold question in its opening brief, Illinois Central
urged us to find such jurisdiction in its reply brief. Plain-
tiffs-appellees squarely challenged appellate jurisdiction
in their brief. Even if they had not, however, we would
have had an independent duty to satisfy ourselves that
jurisdiction existed before we could proceed to the merits
of the appeal.
The reason why appellate jurisdiction is problematic, at
best, comes from the language of the statute governing
removals and remands. In deceptively simple words, 28
U.S.C. § 1447(d) says
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 [which applies only to
civil rights cases] shall be reviewable by appeal or
otherwise.
The naive reader might think that this meant no appel-
late consideration by appeal, by writ of mandamus, or
by any other device that lawyers might serve up, but
that reader would be wrong. In a line of cases that began
with Thermtron Products, Inc. v. Hermansdorfer, 423 U.S.
336 (1976), the Supreme Court has adopted a more nuanced
interpretation of the statute, and it is therefore the
Thermtron approach we are bound to follow.
In Thermtron itself, the Court faced an insubordinate
district court judge who had remanded cases to the state
court because his docket was overcrowded. The court of
appeals had reviewed the propriety of these remands by
means of a writ of mandamus, and the question before the
Supreme Court was whether this was possible in light of
the § 1447(d) ban on review “on appeal or otherwise.” Using
Nos. 01-3081 & 01-3418 5
a close reading of the statute as a whole, the Court con-
cluded that the § 1447(d) ban on appellate consideration
of remand orders had to be linked to the reasons for re-
mand found in § 1447(c). 423 U.S. at 346. If the district
court announced that its remand order was based on one
of the grounds for remand recognized in § 1447(c) (essen-
tially, defects in removal procedure or want of subject
matter jurisdiction), then review was barred. If the dis-
trict court’s order fairly read indicated that it was re-
manding for some other reason—if it was potentially ultra
vires—then some form of appellate review could proceed. Id.
In Thermtron itself, after accepting jurisdiction, the Court
concluded that overcrowded dockets was not a permissible
reason for remand. In the later case of Quackenbush v.
Allstate Insurance Co., 517 U.S. 706, 711-12 (1996), the
Court agreed that remand in conjunction with a decision
to abstain fell outside the scope of the § 1447(c) reasons
and was thus reviewable despite § 1447(d); it then con-
cluded on the merits that the remand order was unwar-
ranted.
The Court has made it clear, however, that the Therm-
tron holding was not an open-ended invitation to exercise
appellate review over remand decisions. To the contrary,
it has three times cautioned that the Thermtron excep-
tion to § 1447(d) is to be narrowly construed. Just over a
year after Thermtron was decided the Court issued a
terse, per curiam opinion reversing the Fifth Circuit’s
decision to reverse and remand a case to the district court
for reconsideration of a remand order that had been
based upon a (possibly erroneous) finding that diversity
jurisdiction was lacking. See Gravitt v. Southwestern Bell
Telephone Co., 430 U.S. 723, 723-24 (1977). In doing so
the Court stressed the fact that the appeals courts are
entirely without jurisdiction to review a remand order
based on jurisdictional grounds, and that nothing in
Thermtron was to the contrary. Id. Nearly a decade later
6 Nos. 01-3081 & 01-3418
in Carnegie-Mellon University v. Cohill, 484 U.S. 343, 356
(1988), the Court described Thermtron as “a response to
a clearly impermissible remand,” and hence as some-
thing that did not forbid a district court from remanding
pendent state-law claims. Finally, in Things Remembered,
Inc. v. Petrarca, 516 U.S. 124, 128 (1995), the Court held
that a district court’s order remanding a bankruptcy
case to state court on the basis of untimely removal fell
within the review prohibition of § 1447(d). Interestingly,
Justice Kennedy (joined by Justice Ginsburg) filed a
concurring opinion in Things Remembered in which he
characterized Carnegie-Mellon as an opinion limiting
Thermtron’s scope. He specifically distinguished between
the legitimacy of remanding a pendent or supplemental
state claim to state court, on the one hand, and the possibil-
ity of judicial review of such an order, on the other. See
516 U.S. at 130. The latter issue, he pointed out, was not
before the Court in Things Remembered. Id.Before turning to the further development of Thermtron
in the lower courts, it is worth pausing for a moment to
consider why Congress might have included § 1447(d) in the
Judicial Code. The answer is apparent: it wanted to expe-
dite the process of choosing a forum for litigation and to
avoid exactly the kind of lengthy proceeding we are hav-
ing in the present case. It is a one-bite-at-the-apple scheme,
with the narrow Thermtron exception for truly abusive
situations, plus the Quackenbush exception for unwar-
ranted applications of the slippery abstention doctrines.
Normally, however, a litigant is entitled to remove a case
from state court (a very mechanical procedure), to have
the federal court test the propriety of the removal, and
then to proceed with the case in either the federal court
or the state court without further ado. The only thing that
is at stake is the forum that will hear a claim. This is
certainly not an unimportant matter, but it is not so
fundamental that a second or third layer of judges must
Nos. 01-3081 & 01-3418 7
test its correctness. And as the Court has noted in a
case not involving § 1447(d), an order resolving a dispute
over where litigation shall proceed is not an appealable
final order, nor does it fall within the exception carved
out by the collateral order doctrine for significant claims
that are otherwise effectively unreviewable on appeal. See
Lauro Lines s.r.l. v. Chasser, 490 U.S. 495, 498 (1989). This
and the Supreme Court’s receptivity to arbitral fora as
alternatives to courts, its acceptance of forum selection
clauses in contracts, and its frequent reminders that the
state courts are fully capable of adjudicating federal
claims and are entitled to respect by federal courts, all
support the idea that at some point litigation over the
choice of a courtroom must end. Section 1447(d) establishes
that endpoint for almost all cases that are removed to
federal court: it comes when the district court judge makes
the call, and it therefore falls outside the normal pattern
of cases in which an appeal is either immediately or
ultimately available. While we are certainly obliged to
apply Thermtron and Quackenbush, we must also take
seriously the cautionary language in Gravitt, Carnegie-
Mellon and Things Remembered. Otherwise, § 1447(d) will
cease to play any meaningful function. Perhaps that
would be good policy, but it is a policy that only Con-
gress can implement; as long as the statute is on the
books, it is binding on the federal courts.
It is against that background that we must evaluate
one possible approach that arguably would support our
appellate jurisdiction here. Some courts appear to fol-
low a rule under which appellate review is permissible
if a jurisdictional remand occurs as a result of “later
events” in a case. See In re Amoco Petroleum Additives Co.,
964 F.2d 706, 708-09 (7th Cir. 1992) (“[W]e understand
Carnegie-Mellon to permit review when the district court
believes that removal was proper and that later develop-
ments authorize remand.”); In re Shell Oil Co., 966 F.2d
8 Nos. 01-3081 & 01-3418
1130, 1132 (7th Cir. 1992) (same). See also Poore v.
American-Amicable Life Ins. Co., 218 F.3d 1287, 1291 (11th
Cir. 2000); Trans Penn Wax Corp. v. McCandless, 50 F.3d
217, 223 (3d Cir. 1995); Bogle v. Phillips Petroleum Co., 24
F.3d 758, 761-62 (5th Cir. 1994); Van Meter v. State Farm
Fire & Cas. Co., 1 F.3d 445, 450 (6th Cir. 1993). But see
Angelides v. Baylor College of Med., 117 F.3d 833, 836 &
n.3 (5th Cir. 1997) (“a remand order based on § 1447(c)
jurisdictional grounds is not reviewable even if based on
a post-removal event”); Linton v. Airbus Industrie, 30 F.3d
592, 599-600 & n.38 (5th Cir.), cert. denied, 513 U.S. 1044(1994) (same); Nutter v. Monongahela Power Co., 4 F.3d
319 (4th Cir. 1993) (declining to address whether appel-
late review exists for remand for lack of subject matter
jurisdiction because of post-removal occurrences).
In our view, however, it would be a mistake to think
that there was a hard-and-fast rule to that effect (and we
thus have no necessary quarrel with the holdings of the
cases cited in the previous paragraph). All later events
are not equal. Some, such as a district court’s conclusion
that an initial acceptance of a claim of “complete preemp-
tion” was erroneous, reveal that the federal court never had
jurisdiction of the case to begin with. Other later events,
such as a bona fide loss of diversity of citizenship or an
ultimate judgment for less than the jurisdictional
amount, may not have any jurisdictional significance at
all. Still others affect only the supplemental jurisdiction
of the court. If we are dealing with the first of these
categories—a later decision that jurisdiction never existed
at all over the case—there is nothing in the language of
§ 1447(c) that makes the timing of the district court’s
jurisdictional determination significant. To the contrary,
that statute makes it clear that defects other than the lack
of subject matter jurisdiction must be raised within 30 days
after the notice of removal, but a district court must
remand a case “at any time before final judgment” if it
Nos. 01-3081 & 01-3418 9
concludes that it lacks subject matter jurisdiction. 28 U.S.C.
§ 1447(c). Thermtron instructed that § 1447(c) and (d)
must be read together, as a unit; if that is true, then the
most logical result would be to say that any remand
based on a conclusion that jurisdiction was lacking at
the time of removal is covered by § 1447(c), no matter
when that fact becomes apparent, and thus that appel-
late consideration of any such remand is barred by
§ 1447(d).
The present case, in our view, is best regarded as one
in which the court never had any jurisdiction over the
claim. Granted, the court’s order is not as clear as it might
be with respect to its own jurisdiction. In the order ad-
dressing Illinois Central’s motion for reconsideration of
the remand order, the judge actually said “this court
likely enjoys subject matter jurisdiction over this ligita-
tion,” but it then found that Illinois Central had waived
any claim that complete preemption supported jurisdic-
tion. We agree with our dissenting colleague that the
jurisdiction of the court cannot be conferred by consent,
and cannot in a certain sense be defeated by waiver. On
the other hand, courts normally do not force parties to
file particular defenses or claims; our reported cases are
replete with examples of both claims and defenses that are
waived. Illinois Central’s concession here that the only
pertinent form of preemption that could be asserted
was conflict preemption made it clear to the court that
nothing but state law claims over which it had no juris-
diction were before it. On that understanding, we read
the court’s remand order as one based on an ultimate lack
of its own subject matter jurisdiction over the claims. We
note that the court did not say that it had jurisdiction over
the claims under the supplemental jurisdiction statute,
28 U.S.C. § 1367. But the fact that the court may have
made a mistake about its jurisdiction over the remaining
claims does not defeat the bar found in § 1447(d). See, e.g.,
10 Nos. 01-3081 & 01-3418
Gravitt, 430 U.S. at 723; Briscoe v. Bell, 432 U.S. 404, 413
n.13 (1977).
But wait, the defendants argue: remember that Birming-
ham Steel impleaded Amtrak under Rule 14 before the
case was remanded. Even though the original case of A
vs. B through n did not belong in federal court, what
happens when defendant C files a third-party claim against
Amtrak? Can the later third-party claim save federal
jurisdiction over the whole suit? It cannot, for the reasons
we explain in more detail in Part III of this opinion. For
present purposes, however, the only important point is
that the district court did not think that Amtrak saved
its jurisdiction. As we just noted, the rule of nonreview-
ability found in § 1447(d) means that even remands based
on an erroneous belief in the lack of federal subject matter
jurisdiction cannot be reviewed. Thermtron, 423 U.S. at
343. Otherwise the rule means nothing at all, because
appeals will be taken and sustained in those cases where
the district court made a mistake, and rejected in cases
where the district court was correct. Even if the district
court was wrong that it lacked jurisdiction over the claims
that it remanded, the remand would nevertheless be
jurisdictional. The only consequence of a mistake is that
the case would proceed in state court even though it
could have stayed in federal court. The drafters of § 1447(d)
must have known that a few such mistakes would occur,
but they were willing to accept them. In this case, if
Amtrak found itself before a state court as a third-party
defendant, it would have the right to remove its own case
under federal question jurisdiction, because it is a federal
entity in which the United States owns more than 50%
of the outstanding stock. See 28 U.S.C. §§ 1331, 1349. It
is true that this means it might take Amtrak two steps to
remain in federal court instead of one, but it also means
that Congress’s intent in enacting § 1349 will not be
thwarted.
Nos. 01-3081 & 01-3418 11
Since the district court’s order does not indicate that
it believed that either supplemental jurisdiction or the
presence of Amtrak saved its jurisdiction, we find that
the order of remand was indeed a jurisdictional one. That
means it fell within the scope of § 1447(c) and thus that
appellate review of the order is unavailable because of
§ 1447(d). Even if it is proper to rely on a temporal element
to the ban on reviewability of jurisdictional remands in
some circumstances, this is not one of them. To do other-
wise would be to go significantly beyond the holdings of
the Supreme Court and the language and purpose of
§ 1447(c) and (d). That is something we are not willing
to do.
III
Because reasonable people might disagree over the best
reading of the district court’s remand order, we think it
prudent to address the alternative possibility that the
court believed that it did have jurisdiction over the case
after GE was dismissed, but that a remand was appropri-
ate for some other reason (waiver by the defendants of
the “complete preemption” theory of defense, or discretion-
ary exercise of the power to decline supplemental juris-
diction). If that reading is the correct one, then our appel-
late jurisdiction would be secure and we would have
to consider the merits of the district court’s decision.
The starting point for that determination would be, once
again, a jurisdictional inquiry. What, if anything, sup-
ported the district court’s jurisdiction (as opposed to our
own)? Diversity jurisdiction never existed, because citi-
zens of Illinois appeared on both sides of the case. That
means that jurisdiction over the case as a whole had to
be based upon a federal question. GE claimed below
and Illinois Central urges on appeal that the doctrine of
“complete preemption” formed the basis of federal ques-
12 Nos. 01-3081 & 01-3418
tion jurisdiction in this case. But we simply cannot agree
with the district court that “complete preemption” sup-
ported the claims against either GE or the defendants
who were left after GE was dismissed. That means, of
course, that there was nothing in the case to which sup-
plemental jurisdiction could attach. Our conclusion has
nothing to do with the fact that the lawyers for the non-GE
defendants appear to have disclaimed any reliance on
complete preemption. This is a question on which appel-
late review must be de novo, wholly apart from the dis-
trict court’s decision, party waivers, or other stipulations.
See Rogers v. Tyson Foods, Inc., 308 F.3d 785, 787 (7th Cir.
2002).
Federal law has not swept away all state law in this
field, thereby making any claim the plaintiffs were trying
to assert against GE necessarily federal. The discussions
in our recent decisions in Tyson Foods, supra, and Vorhees
v. Naper Aero Club, Inc., 272 F.3d 398 (7th Cir. 2001),
and the Supreme Court’s latest word on the question in
Sprietsma v. Mercury Marine, ___ U.S. ___, 123 S. Ct. 518,
526-30 (2002) (analyzing Federal Boat Safety Act’s pre-
emptive effect), underscore how narrow the ill-named
“complete preemption” doctrine is. As we stressed in Tyson
Foods and Vorhees and as we stress again here, this
does not mean that the federal statute in question—here
the Locomotive Inspection Act—does not have preemptive
force. To the contrary, ordinary conflict preemption may
well exist with respect to some or all of the claims. But
“conflict” preemption, as we noted in Vorhees, “is merely
a defense to the merits of a claim. As such, according to
the well-pleaded complaint rule, it does not provide a
basis for federal question jurisdiction.” 272 F.3d at 403. We
see nothing in the Locomotive Inspection Act to indicate
that Congress “clearly intended completely to replace
state law with federal law and create a federal forum” at
the same time. Id. That is what would be necessary to
Nos. 01-3081 & 01-3418 13
create “complete” or “field” preemption, as opposed to the
more routine conflict preemption. Furthermore, the dis-
trict court did not inquire into the question whether “the
federal claim includes the same ingredients as the state
claim and provides some recovery,” id., even though that
is a prerequisite to finding “complete” preemption. See
Rogers, 308 F.3d at 788 (emphasizing the need to find a
private right of action under the federal law in question).
Both with respect to GE’s assertion of complete preemp-
tion, where the district court erred, and with respect to
the other defendants, as to whom the district court prop-
erly recognized that only a question of conflict preemp-
tion within the competence of the state courts was pre-
sented, we believe that the district court itself lacked
jurisdiction and thus that remand was required under
§ 1447(c). (Naturally, the existence of a federal defense to
a state claim is not enough to support federal jurisdic-
tion. See, e.g., Louisville & Nashville R.R. v. Mottley, 211
U.S. 149, 152 (1908).) Without the “complete preemption”
theory to support the claims against the other defendants
(and some certainly had nothing to do with locomotive
manufacture or safety), there simply was no federal ques-
tion.
Even if federal jurisdiction was lacking at the outset, the
question arises again whether jurisdiction over the case
as a whole was somehow created when Birmingham
Steel filed its third-party complaint against Amtrak. It
is clear that an original, stand-alone lawsuit against
Amtrak would fall within the original subject matter
jurisdiction of the federal court, pursuant to 28 U.S.C.
§§ 1331 and 1349. Nevertheless, we must consider wheth-
er the existence of a third-party complaint affects the
court’s subject matter jurisdiction over the original ac-
tion. We conclude that it does not. The Supreme Court
considered a closely related problem in Holmes Group, Inc.
v. Vornado Air Circulation Systems, Inc., 535 U.S. 82614 Nos. 01-3081 & 01-3418
(2002), where the question was whether the Court of
Appeals for the Federal Circuit had appellate jurisdic-
tion over a case in which the complaint did not allege
a claim under the federal patent law, but a compulsory
counterclaim filed pursuant to Rule 13(a) of the Fed-
eral Rules of Civil Procedure did. Because the Federal
Circuit’s appellate jurisdiction extends only to claims
that “arise under” the patent laws, the Court had to de-
cide whether the counterclaim was enough to support
hat jurisdiction. It answered no. 122 S. Ct. at 1893. Most
of its discussion is a general consideration of the well-
pleaded complaint rule, and thus is just as applicable to
eliance on pleadings under Rule 14 as it was to plead-
ings under Rule 13. If the plaintiff’s well-pleaded com-
plaint is not based on a federal question, there is no
§ 1331 jurisdiction. Id. at 1893-94. To allow even a compul-
sory counterclaim (which arguably presented a stronger
case for jurisdiction than a permissive counterclaim or a
permissive third-party action like the one before us) to
govern jurisdiction would potentially defeat the plain-
tiff’s choice of forum and “radically expand the class of
removable cases.” Id. at 1894.
The third-party claim might, however, permit the court
to exercise supplemental jurisdiction over the original
case, if everything arises out of the same constitutional
case or controversy. But it is not clear in the present
case (because the district court never considered the
question) whether all the claims of the plaintiffs arose
out of the same transaction or occurrence as the Birming-
ham Steel third-party complaint against Amtrak. Without
a better record, we cannot venture a guess on that point.
This kind of constitutional “case or controversy” link is a
prerequisite to the assertion of supplemental jurisdiction
under 28 U.S.C. § 1367. See Board of Trustees, Sheet
Metal Workers’ Nat’l Pension Fund v. Elite Erectors, Inc.,
212 F.3d 1031, 1037 (7th Cir. 2000). That statute author-
Nos. 01-3081 & 01-3418 15
izes supplemental jurisdiction only over claims “that are
so related to claims in the action within such original
jurisdiction that they form part of the same case or con-
troversy under Article III of the United States Constitu-
tion.” 28 U.S.C. § 1367(a). The statute goes on to permit
supplemental jurisdiction over claims involving the
joinder or intervention of additional parties, and so the
fact that very few of the parties to the original action
were involved in Birmingham Steel’s third-party com-
plaint is not necessarily a bar to the exercise of supple-
mental jurisdiction.
Once again, however, we will assume for the sake of
argument that the third-party claim against Amtrak is
part of the same Article III case as the entire rest of
the action. We cannot find that the district court was
compelled to exercise supplemental jurisdiction over the
remainder of the case, once Amtrak was before it in one
capacity. The normal rule is that district courts have
discretion to retain or remand supplemental claims. Groce
v. Eli Lilly & Co., 193 F.3d 496, 500-01 (7th Cir. 1999).
Here, Judge Holderman appears to have been proceeding
on the assumption that he (probably) had jurisdiction
over the original GE case. One possible interpretation of
his remand order is that he was deciding what to do
with the supplemental claims that remained after the GE
case was resolved (although he used the language of
waiver rather than this terminology). No matter what
words he used, however, it is clear enough from his order
that he thought the remainder of this case belonged in
the state court, and thus he exercised whatever discretion
he may have had and chose to remand those claims. If
someone wants to litigate Amtrak’s derivative liability
for this most unfortunate accident, he or she can do so in a
separate federal court action. In fact, now that even
more cases have been filed, it is possible that there will
be an eventual consolidation of cases in the Northern
16 Nos. 01-3081 & 01-3418
District of Illinois. As of now, however, there is no rule
that permits federal courts to reach out and prevent
state courts from proceeding with claims under state law
that do not fall within the jurisdiction of the federal
courts. The Anti-Injunction Act, 28 U.S.C. § 2283, has no
exception for this situation, even though this type of
consolidation might be efficient. Furthermore, we have
just been reminded by the Supreme Court that a desire
to protect federal jurisdiction is not enough to support
the removal of essentially state law claims. See Syngenta
Crop Prot., Inc. v. Henson, ___ U.S. ___, 123 S. Ct. 366(2002).
IV
For these reasons, we dismiss this appeal for want of
appellate jurisdiction. In the alternative, we conclude
that the district court’s remand was proper because of a
lack of its own subject matter jurisdiction over the case,
or (resolving all issues as generously as possible in Illi-
nois Central’s favor), there was no abuse of discretion in
the decision to relinquish these state law claims among
non-diverse parties.
APPEAL DISMISSED.
Nos. 01-3081 & 01-3418 17
RIPPLE, Circuit Judge, dissenting. As set forth in greater
detail below, I believe that 28 U.S.C. § 1447(d) does not
bar review of the present appeal. Furthermore, I believe
that the district court erred in remanding this case to
state court because of Illinois Central’s “waiver” of its
right to a federal forum; a district court’s exercise of ju-
risdiction over federal claims is mandatory and not sub-
ject to waiver. I therefore respectfully dissent.
I
A.
Although the majority opinion presents some back-
ground, my own review of the record indicates that a
more detailed recounting of the factual and procedural
underpinnings of the issues presented would be helpful
to the reader.
The present case centers on a March 15, 1999, Amtrak
passenger train collision near Bourbonnais, Illinois. The
injured victims and the deceased victims’ estates (collec-
tively the “plaintiffs”) filed more than fifty personal injury
and wrongful death actions in the Circuit Court of Cook
County, Illinois. The complaints alleged negligence, strict
products liability and breach of implied warranties on the
part of several defendants. General Electric (“GE”), which
designed and manufactured the locomotive, also filed an
action for declaratory judgment in the Northern District
of Illinois seeking a judgment that suits arising out of
the Bourbonnais accident were preempted by the Loco-
motive Inspection Act, 49 U.S.C. § 20701, and that GE
had complied with applicable federal law.1
1
The defendants are the manufacturers, owners and/or opera-
tors of the apparatus and machines allegedly involved in the
(continued...)
18 Nos. 01-3081 & 01-3418
B.
1.
GE removed the state cases to federal court and ar-
gued that the Locomotive Inspection Act occupied the
field of locomotive safety regulation and therefore pre-
vented the plaintiffs from bringing negligence and strict
liability claims in state court. All of the defendants con-
sented to removal. On May 8, 2001, the plaintiffs moved
to remand. The cases were consolidated with GE’s action
for declaratory judgment. GE then moved to dismiss the
claims against it, contending that they were barred by
the Locomotive Inspection Act. On May 23, Birmingham
Steel moved for leave to file a third-party complaint
against Amtrak. The motion was granted, and Birming-
ham Steel’s complaint was docketed.
On June 12, 2001, the district court held a status hear-
ing. It informed the parties that it had reached a decision
on GE’s motion to dismiss the counts against it on the
ground of preemption and on the plaintiffs’ motion to
remand. The court further explained that it was circulat-
ing a draft opinion to the other judges who had been
assigned these cases. Just before this hearing, counsel for
General Signal had informed the district court by letter
1
(...continued)
accident. Illinois Central operates the tracks. Safetran Systems
Corporation designed, manufactured and sold the grade cross-
ing protection system. General Signal Company produced and
installed the automatic crossing gates. Birmingham Steel Com-
pany owned and operated a manufacturing facility adjacent to the
accident site. Birmingham Steel loaded the rebar onto the trailer
and permitted off-duty railroad cars to be stored on its land
along the side of the tracks. Melco Transfer, Inc. owned and
operated the truck. John Stokes was the truck’s driver. And,
as noted above, GE designed, manufactured and sold the locomo-
tive that pulled the City of New Orleans.
Nos. 01-3081 & 01-3418 19
that it was withdrawing its motion to dismiss, which had
been based on the preemptive effect of the Federal Rail-
road Safety Act (“FRSA”), 49 U.S.C. §§ 20101 et seq. At
the hearing, the following colloquy occurred between the
district court and counsel for Illinois Central and Amtrak:2
The Court: Is there any other defendant who desires
to raise any of these [preemption] claims other than
those who have already raised the issue of preemption?
I notice that some defendants raised as affirmative
defenses but did not move on the question, and I just
want to know from the other defendants.
Ms. Laing: Your Honor, Susan Laing on behalf of
the Illinois Central and Amtrak. We have, in fact,
raised preemption as to certain claims—
The Court: Yes.
Ms. Laing: —against the railroad but not all claims.
And, therefore—
The Court: Do you want me to address those, or do
you want to just wait, as an affirmative defense.
Ms. Laing: As a basis for asserting federal jurisdic-
tion, I have taken no position one way or the other.
The Court: All right.
Ms. Laing: As for an affirmative defense, I have a
very strong position that federal law will control and
preempt those state-law claims.
The Court: Okay. Well, perhaps as to those defen-
dants, such as Amtrak, that have raised the issues
2
Because Amtrak’s time for answering the third-party com-
plaint had not expired at the time of the hearing, Amtrak had
not yet filed any papers with the district court and counsel had
not entered an appearance on behalf of Amtrak.
20 Nos. 01-3081 & 01-3418
but have not moved, maybe my opinion will be helpful
in understanding what I believe to be the application
of the law. . . . Maybe I won’t just go ahead and individ-
ually address it and say, well, Amtrak has raised as
an affirmative defense certain issues to certain claims.
I will just go ahead and address the claims that
have been presented and briefed and then that won’t
add to the clutter of the opinion, if that’s all right?
Ms. Laing: It’s—obviously, I—again, if you’re asking
my permission, it’s absolutely fine. I think that the
issues are one and the same whether, in fact, federal
law does preempt those areas. So, to that extent, if
your opinion wants to address that, it probably would
make most sense since everybody is here and all the
cases are together.
June 12, 2001 Tr. at 39-40.
After the status hearing, Ms. Laing sent the court a let-
ter dated June 12, 2001. This letter informed the court
that, with respect to two of the cases subject to the court’s
May 16, 2001, consolidation order, there had been no
motion to remand. In those cases, Amtrak had been named
as a defendant and had removed, asserting federal juris-
diction under 28 U.S.C. §§ 1331 and 1349. In the letter,
Ms. Laing also made reference to the district court’s in-
quiry about the cases that had been removed by General
Signal but that were now before the court in General
Signal’s motion to withdraw opposition to remand. The
letter stated: “It is my understanding that counsel for
General Signal will be providing you with the ‘definitive’
list of those cases.” R.40. The record does not reveal when
or whether General Signal provided such a list. By a
minute order dated June 12 and entered on the docket
on June 13, the district court granted General Signal’s
motion to withdraw its motion for judgment on the plead-
ings and its opposition to the plaintiffs’ motion to remand.
Nos. 01-3081 & 01-3418 21
As far as can be gleaned from the record, Ms. Laing’s letter
was the last communication between Illinois Central
and the district court before the court issued its decision.
2.
The district court issued its decision on June 26, 2001.
The court initially noted that because “General Signal
withdrew its opposition to plaintiffs’ motion to remand
and its motion for judgment on the pleadings,” “this court
does not consider the effect of the Federal Railroad Safe-
ty Act . . . , upon which General Signal initially relied,
and which contains an express preemption clause, on this
court’s subject matter jurisdiction or the possible pre-
emptive effect of the FRSA on plaintiffs’ claims.” R.44 at
2-3 n.2.
The court then analyzed GE’s complete preemption
argument with respect to the Locomotive Inspection Act.
It held that the Locomotive Inspection Act occupied the
field of locomotive safety regulation and that, conse-
quently, any state law cause of action touching on sub-
jects of regulation under the Act implicitly states a fed-
eral cause of action. In the court’s view, “the removed
cases against General Electric fall within the broad scope
of actions preempted by the [Locomotive Inspection Act].”
R.44 at 9. Therefore, it continued, “all the claims asserted
against General Electric in the removed cases are pre-
empted by federal law.” Id. at 14. Thus, the court concluded,
GE had the right to remove these cases from state court.
The court then dismissed the claims against GE without
prejudice. Because the plaintiffs had not alleged any
violation of federal law, the court also dismissed Count 2
of GE’s action for declaratory judgment, which sought a
judgment that GE had complied with applicable federal
regulations.
22 Nos. 01-3081 & 01-3418
After both concluding that removal had been proper and
dismissing the claims against GE, the district court re-
manded the remainder of the cases to state court. “Because
no other defendants have asserted federal preemption as
a basis for removal or opposed the state court plaintiffs’
motion to remand, all cases which were removed by Gen-
eral Electric are hereby remanded forthwith to the Cir-
cuit Court of Cook County.” R.44 at 21.
3.
Illinois Central filed a motion to reconsider under Rule
59 on July 6, 2001. Illinois Central advanced two argu-
ments in support of its motion. First, it contended that
the district court had jurisdiction because of the presence
of Amtrak, which had been added as a third-party defen-
dant in a third-party complaint filed by Birmingham
Steel on June 8, 2001. Second, Illinois Central submitted
that the court had jurisdiction because the FRSA, like
the Locomotive Inspection Act, occupied the field of rail-
road safety completely; consequently, the district court
had subject matter jurisdiction.
The district court denied the motion to reconsider. It
stated:
This court agrees with Illinois Central that this court
likely enjoys subject matter jurisdiction over this
litigation, as recognized in the court’s June 26, 2001
order. Nevertheless, this court finds that remand of
these cases is warranted because Illinois Central has
expressly waived federal preemption or other federal
law as a basis for federal subject matter jurisdiction.
R.51, Ex.E at 1. The court concluded that, in the above-
quoted colloquy, counsel for Illinois Central waived federal
jurisdiction by taking no position on whether the FRSA
provided an independent basis for federal subject matter
jurisdiction.
Nos. 01-3081 & 01-3418 23
The clear import of this exchange between counsel for
Illinois Central and the court was that Illinois Central
did not intend to assert federal subject matter jurisdic-
tion in this court, but intended to raise its federal pre-
emption defenses in the state court, or at least had
no objection to this court remanding this litigation to
state court.
Id. The court took the view that our decision in Rothner
v. City of Chicago, 879 F.2d 1402, 1416 (7th Cir. 1989),
left open the possibility that the doctrine of waiver
might apply in the removal context. The court did not
address Illinois Central’s specific argument about Amtrak,
but determined that Illinois Central had waived reliance
on any ground of federal jurisdiction by its failure to
respond to the plaintiffs’ motion to remand. Illinois Cen-
tral filed a notice of appeal on August 8, 2001.3
II
APPELLATE JURISDICTION
As the majority notes, the first issue before this court
is whether we have jurisdiction to consider Illinois Cen-
3
On July 27, 2001, plaintiffs in the remanded action filed
complaints arising out of the Bourbonnais collision against Am-
trak in the United States District Court for the Northern District
of Illinois. Illinois Central filed a motion under Rule 60(b)(6)
seeking relief from the remand order, arguing that this develop-
ment would lead to Amtrak’s filing third-party actions against
the other defendants. The result, according to Illinois Central,
would be parallel litigation proceeding in state and federal court,
on the same issues, arising out of the same event and involv-
ing the same parties. Thus, Illinois Central asked the district
court to vacate its remand order to prevent this situation. The
district court denied the motion. Illinois Central appealed, and
the two appeals were consolidated in this court.
24 Nos. 01-3081 & 01-3418
tral’s challenge to the remand order. The plaintiffs con-
tend that 28 U.S.C. § 1447(d) bars appellate review of the
district court’s remand order. For the reasons set forth
below, I believe that this court has jurisdiction over the
appeal.
A.
The plaintiffs submit that appellate jurisdiction is barred
by 28 U.S.C. § 1447(d). 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 1443 of this title shall be reviewable by
appeal or otherwise.
28 U.S.C. § 1447(d).4
Read in isolation, the plain language of § 1447(d) would
seem to bar appellate jurisdiction. The Supreme Court,
however, has interpreted § 1447(d) narrowly. The Court
has ruled that Ҥ 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).” Things Remembered, Inc. v. Petrarca, 516
U.S. 124, 127 (1995). Section 1447(c) provides, in relevant
part:
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 be-
fore final judgment it appears that the district court
4
Section 1443 concerns removal in civil rights cases and thus
is inapplicable here.
Nos. 01-3081 & 01-3418 25
lacks subject matter jurisdiction, the case shall be
remanded.
28 U.S.C. § 1447(c). “As long as a district court’s remand
is based on a timely raised defect in the removal proce-
dure or on lack of subject-matter jurisdiction . . . a court
of appeals lacks jurisdiction to entertain an appeal of
the remand order under § 1447(d).” Things Remembered,
516 U.S. at 127-28.5 The plaintiffs identify no defect in
the removal procedure, or any other defect fitting the
first sentence of § 1447(c).
Attention to the development of the rule articulated
in Things Remembered, both in the Supreme Court and
in the courts of appeals, provides significant guidance to
the analysis of this case. In Thermtron Products, Inc. v.
Hermansdorfer, 423 U.S. 336 (1976), the Supreme Court
held that § 1447(d) did not bar appellate review of a dis-
trict court’s remand order that was based on the court’s
overburdened docket. See Thermtron, 423 U.S. at 345.
The Court traced the history of § 1447(d) and concluded
that Congress had intended to link § 1447(d) with § 1447(c).
See id. at 346-51. After doing so, the Court concluded that
“[t]here is no indication whatsoever that Congress in-
tended to extend the prohibition against review to reach
remand orders entered on grounds not provided by statute.”
Id. at 350. Thus, “[s]ection 1447(d) is not dispositive of
the reviewability of remand orders in and of itself.” Id. at
5
Things Remembered was decided before the 1996 revision to
§ 1447(c). Before 1996, the statute read “any defect in the removal
procedure . . .” and now it reads “any defect other than lack of
subject matter jurisdiction . . . .” Compare 28 U.S.C. § 1447(c)
(2002 Supp.) with 28 U.S.C. § 1447(c) (1994). I do not believe this
statutory amendment makes any difference in the present case,
nor does it overrule the line of Supreme Court cases beginning
with Thermtron Products, Inc. v. Hermansdorfer, 423 U.S. 336(1976).
26 Nos. 01-3081 & 01-3418
345. Appellate jurisdiction is proper when “the District
Court’s order was based on grounds wholly different from
those upon which § 1447(c) permits remand.” Id. at 344.
In Quackenbush v. Allstate Insurance Co., 517 U.S. 706,
711-12 (1996), the Supreme Court concluded that appel-
late jurisdiction was proper over an abstention-based
remand order. The district court in Quackenbush had
decided that abstention under the Burford doctrine was
appropriate to prevent federal interference with the state’s
regulation of an insurance company’s insolvency; the
district court remanded the properly-removed action to
state court on that ground. See Quackenbush, 517 U.S. at
709-10. The Supreme Court disposed of the § 1447(d)
argument, noting that “[t]he 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.” Id. at 712.
The courts of appeals have elaborated on the rule an-
nounced in Thermtron. For instance, in Benson v. SI
Handling Systems, Inc., 188 F.3d 780, 782 (7th Cir. 1999),
we reviewed a district court’s decision to remand to state
court on the ground that successive removals are im-
proper. We held: “Neither § 1447(c) nor anything else in
the sections of the Judicial Code devoted to removal for-
bids successive removals. The rule against them—if
there is such a rule—is an extra-statutory judicial in-
vention, and thus subject to the appellate process.” Id.
In Clorox Co. v. United States District Court, 779 F.2d
517, 520 (9th Cir. 1985), the Ninth Circuit held that a
remand on the ground that the removing party had
waived its right to remove was reviewable on appeal.
See also Pelleport Investors, Inc. v. Budco Quality Theatre,
Inc., 741 F.2d 273, 277 (9th Cir. 1985). Several courts of
appeals, including ours, have held that sua sponte re-
mands based on defects in the removal procedure are
Nos. 01-3081 & 01-3418 27
outside of § 1447(c) and thus subject to appellate review.
See In re Continental Cas. Co., 29 F.3d 292, 294 (7th Cir.
1994); Whole Health Chiropractic v. Humana Med. Plan,
254 F.3d 1317, 1319 (11th Cir. 2001); In re FMC Corp.
Packaging Sys. Div., 208 F.3d 445, 450-51 (3d Cir. 2000);
Page v. City of Southfield, 45 F.3d 128, 133 (6th Cir. 1995);
In re Allstate Ins. Co., 8 F.3d 219, 223-24 (5th Cir. 1993).
In setting the limits of our jurisdiction in conformity
with the Supreme Court’s interpretive mandates in Therm-
tron, Things Remembered and Quackenbush, we have
said that, when a district court asserts jurisdiction but
later events call that jurisdiction into question and ulti-
mately result in a later remand, we have jurisdiction to
review that remand order. See In re Shell Oil Co., 966
F.2d 1130, 1132 (7th Cir. 1992); In re Amoco Petroleum
Additives Co., 964 F.2d 706, 708-09 (7th Cir. 1992); Bogle
v. Phillips Petroleum Co., 24 F.3d 758, 761-62 (5th Cir.
1994). In Shell Oil, we reviewed a district court’s deci-
sion to remand a case, previously removed based on the
court’s diversity jurisdiction, after the plaintiffs stipu-
lated that they would seek damages below the jurisdic-
tional amount. See Shell Oil, 966 F.2d at 1131-32. There,
we held that resolution of the case depended on the rea-
son for the district court’s remand. See id. at 1132. “If
the district court believed that the case was properly
removed, but that the stipulation justified a remand, then
we may review the order.” Id. “If, however, the district
court believed . . . that jurisdiction was missing at the
outset, then 28 U.S.C. § 1447(d) would block any review,
even though we might disagree with that decision.” Id.;
accord Van Meter v. State Farm Fire & Cas. Co., 1 F.3d 445,
450 (6th Cir. 1993) (“[I]f a district court determines sub-
ject matter jurisdiction to have existed at the time of
removal, yet remands for alleged lack of subject matter
jurisdiction based on some post-removal event(s), the
remand order is not a Section 1447(c) remand order and
28 Nos. 01-3081 & 01-3418
is reviewable . . . .”). “When the district court appears to
have asserted jurisdiction, the possibility that the re-
mand order was issued pursuant to § 1447(c) for lack
of jurisdiction is removed.” Lyons v. Alaska Teamsters
Employer Serv., 188 F.3d 1170, 1173 (9th Cir. 1999). Stated
another way, once the district court makes the unre-
viewable decision under § 1447(c), unless new facts emerge
that call the initial removal into question, any subse-
quent remand order is subject to appellate review.6
These decisions acknowledge that § 1447(c) is “necessarily
tied to a temporal reference point, namely, the time of
removal.” Van Meter, 1 F.3d at 450. “The dispositive
question is: ‘When?’ Was there subject-matter jurisdic-
tion at the time of removal, vanishing because of the
change in the identity of the plaintiffs? If so, we . . . may
review the remand order.” Amoco Petroleum, 964 F.2d
at 708. “[W]e understand [Carnegie-Mellon University v.
Cohill, 484 U.S. 343 (1988),] to permit review when the
district judge believes that removal was proper and
that later developments authorize remand.” Id. “If the
district court believed that the case was properly removed,
but that [subsequent events] justified a remand, then we
may review the order.” Shell Oil, 966 F.2d at 1132.
B.
It is with these principles in mind that this court
should evaluate the district court’s opinion to determine
the precise grounds of its decision. If it was based on one
of the grounds set forth in § 1447(c), review is barred. If,
however, the district court grounded its decision in a rea-
son not set forth in § 1447(c), then § 1447(d) does not
prohibit review by this court.
6
The majority reads these cases as creating a narrow exception.
Nos. 01-3081 & 01-3418 29
A “plain and common sense reading” of the district court’s
June 26 opinion is the starting point for this analysis.
Heaton v. Monogram Credit Card Bank, 231 F.3d 994,
997 (5th Cir. 2000). The removing defendant, GE, removed
this case from state court on the ground that the Loco-
motive Inspection Act completely preempted any state
regulation of locomotive safety; therefore, the court con-
cluded, removal was proper. The district court agreed
that the Locomotive Inspection Act occupied completely
the field of locomotive safety and therefore permitted
removal on the basis of federal question jurisdiction. Had
the district court determined that this Act did not oc-
cupy the field of locomotive safety and that no other
ground for removal was present, and remanded on those
grounds, our review would be barred by § 1447(d). However,
after resolving the jurisdictional issue in favor of GE, the
court proceeded to grant GE’s motion to dismiss, a deci-
sion also based on the ground of preemption. At this point,
GE was no longer a party to the case.
The district court then turned to the remainder of the
case. Another defendant, General Signal, had maintained
that the FRSA preempted completely the plaintiffs’ claims
and therefore served as a basis for removal to federal
court. After the plaintiffs filed a motion to remand, Gen-
eral Signal initially filed an opposition and moved for
judgment on the pleadings on the ground of complete
preemption. However, General Signal later withdrew its
opposition to the remand and apparently withdrew from
the litigation pursuant to a settlement. The district court
then remanded the remaining cases to state court “[b]e-
cause no other defendants have asserted federal preemp-
tion as a basis for removal or opposed the state court
plaintiffs’ motion to remand. . . .” R.44 at 21. Notably, the
court did not remand the case because it believed that, once
GE was dismissed, federal subject matter jurisdiction
had been lost. Nor did it hold that there was not complete
30 Nos. 01-3081 & 01-3418
preemption under the FRSA, as General Signal had urged
prior to its withdrawal. Indeed, the court specifically noted
that it believed that it had subject matter jurisdiction. In
its order denying Illinois Central’s motion to reconsider, it
stated:
This court agrees with Illinois Central that this court
likely enjoys subject matter jurisdiction over this
litigation, as recognized in the court’s June 26, 2001
order. Nevertheless, this court finds that remand of
these cases is warranted because Illinois Central has
expressly waived federal preemption or other federal
law as a basis for federal subject matter jurisdiction.
R.51, Ex.E at 1.
The district court therefore made clear that its remand
was not based on § 1447(c), but on an extra-statutory, or
non-statutory ground—the election of the remaining par-
ties not to persist in the position taken by General
Signal prior to its withdrawal from the litigation that the
FRSA totally preempted the field of railway safety. Cf. In
re Shell Oil Co., 631 F.2d 1156, 1157 (5th Cir. 1980)
(holding “that the ban on reviewability contained in
§ 1447(d) is not applicable where the trial judge articu-
lated a reason for remanding the case that is not found in
§ 1447(c)”).
Assessing the district court’s statements in the proce-
dural context in which they arose, I cannot agree with
the majority that “[t]he present case . . . is best regarded
as one in which the court never had any jurisdiction
over the claim.” See supra at 9. The district court did not
conclude that it lacked the authority to decide the case.
It accepted jurisdiction and resolved one aspect of the
case when it determined that the state claims against GE
were preempted by the Locomotive Inspection Act. It then
reviewed the remainder of the case. It decided to remand
the case, not because it believed that it lacked juris-
Nos. 01-3081 & 01-3418 31
diction, but because no remaining party continued to as-
sert another ground for removal. The court did not cite
§ 1447(c) as a basis for its action. Indeed, it stated ex-
plicitly that it did not believe that it lacked jurisdiction.
The district court remanded the case on the ground of
waiver, a ground not listed in § 1447(c). “Neither § 1447(c)
nor anything else in the sections of the Judicial Code
devoted to removal” authorizes a remand for waiver. See
Benson, 188 F.3d at 782 (noting that there was nothing
in the Judicial Code forbidding successive removals and
thus the court of appeals had jurisdiction to review the
district court’s decision to remand on that ground). Such a
rule would be “an extra-statutory judicial invention, and
thus subject to the appellate process.” Id. Therefore,
contrary to the view taken by my colleagues, I be-
lieve that this court has jurisdiction over this appeal.7
III
REMAND
Because I believe this court has appellate jurisdiction,
I next must consider Illinois Central’s contention that
the district court should not have remanded the case to
state court. The district court stated in its order denying
Illinois Central’s motion to reconsider that “[t]his court
agrees with Illinois Central that this court likely enjoys
subject matter jurisdiction over this litigation . . . . Never-
theless, this court finds that remand of these cases
7
Even if the district court concluded that there was no longer a
federal question in the case, the court would be called upon to
make a supplemental jurisdiction determination under 28 U.S.C.
§ 1367. Such a decision to remand under § 1367 would also be
subject to appellate review. See Carnegie-Mellon, 484 U.S. at355 n.11; Hudson United Bank v. LiTenda Mortgage Corp., 142
F.3d 151, 157 (3d Cir. 1998).
32 Nos. 01-3081 & 01-3418
is warranted because Illinois Central has expressly
waived federal preemption or other federal law as a basis
for federal subject matter jurisdiction.” R.51, Ex.E.
In this court, Illinois Central claims that there are two
bases for the district court’s jurisdiction and that the
district court incorrectly ignored both. First, Illinois Cen-
tral contends that, because Amtrak was a party to the
litigation, having been added by Birmingham Steel’s third-
party complaint, the court had federal question juris-
diction under 28 U.S.C. § 1331. Second, Illinois Central
argues that the FRSA occupies the field of railroad safety;
therefore the plaintiffs’ claims, although styled as state
law tort actions, were really federal claims that invoked
the district court’s federal question jurisdiction.
A.
The district court was confronted with a highly com-
plex, unusual and fluid situation. Yet, after reflection, I
must conclude that the court misapprehended the lim-
itations on its authority to remand and its corollary re-
sponsibility to exercise jurisdiction over federal claims. It
appears that this misstep may be due to a failure to
distinguish sufficiently the criteria governing removal
from the situations in which a remand is permitted.8 The
Fifth Circuit has had occasion to explain this distinction:
8
In my view, the majority attaches far too little significance to
this distinction. See supra at 13-15. The question before this
court is not whether a third party complaint, with Amtrak as
the third-party defendant, initially can be removed to federal
court; the question is whether a third-party complaint against
Amtrak, that originated in district court, can be remanded to
state court given the statutory restrictions on remand. This
question is addressed infra at Part III.B.
Nos. 01-3081 & 01-3418 33
Unquestionably, a party may implicitly waive its right
to remove a case by failing timely to file a notice of
removal. Likewise, a party may implicitly waive its
right to contest the removal of a case on procedural
grounds by failing timely to move for remand. Never-
theless, the ability of a party to remove a case and
the ability of a court to remand a case that has been
properly removed by a party, are distinct concepts not
necessarily subject to the same rules. Although parties
may waive their rights to remove a case or to contest
the removal procedure, they may neither confer sub-
ject matter jurisdiction on the district court nor strip
it of such jurisdiction by agreement or waiver. The
authority of a district court to remand a properly
removed case is dependent on the nature of the
claims which the case comprises and the nature of
the district court’s jurisdiction over those claims. The
fact that the FDIC waived its right to remove the
instant case is irrelevant to the determination of
whether the case should have or could have been
remanded once it had been properly removed by an-
other party who had not waived the right to remove.
Buchner v. FDIC, 981 F.2d 816, 818 (5th Cir. 1996) (cita-
tions omitted). Consequently, the inquiry this court
must address is whether the district court had the author-
ity to remand the third-party action involving Amtrak in
the circumstances presented here.
The authority of a district court to remand a case is
not discretionary. Indeed, as explained by the Supreme
Court in Thermtron Products, Inc. v. Hermansdorfer, 423
U.S. 336, 351 (1976), that power is quite circumscribed:
“[W]e are not convinced that Congress ever intended to
extend carte blanche authority to the district courts to
revise the federal statutes governing removal by remand-
ing cases on grounds that seem justifiable to them but
34 Nos. 01-3081 & 01-3418
which are not recognized by the controlling statute.” The
Court reinforced and elaborated on its Thermtron decision
in Carnegie-Mellon University v. Cohill, 484 U.S. 343(1988):
The Thermtron decision was a response to a clearly
impermissible remand, of a kind very different from
that at issue here. In Thermtron, the District Court had
no authority to decline to hear the removed case. The
court had diversity jurisdiction over the case, which
is not discretionary. Thus the District Court could
not properly have eliminated the case from its docket,
whether by a remand or a dismissal.
Id. at 355-56. I believe, therefore, that this court must
turn to the statutory bases for remand to determine if a
remand was appropriate in the circumstances presented
here.
B.
1.
There are three statutory provisions that address a
district court’s authority to remand. One grant of remand
authority is found among the removal provisions, 28 U.S.C.
§ 1447(c). Section 1447(c) states:
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 be-
fore final judgment, it appears that the district court
lacks subject matter jurisdiction, the case shall be
remanded.
28 U.S.C. § 1447(c). It is well established that the dis-
trict court’s jurisdictional inquiry for purposes of § 1447(c)
is determined as of the time the removal petition is filed.
Nos. 01-3081 & 01-3418 35
See Gossmeyer v. McDonald, 128 F.3d 481, 487 (7th Cir.
1997) (“[W]hether subject matter jurisdiction exists is a
question answered by looking at the complaint as it
existed at the time the petition for removal was filed.”
(emphasis in original)).
2.
28 U.S.C. § 1441 also speaks to a district court’s author-
ity to remand. Specifically, § 1441(c) provides that
[w]henever a separate and independent claim or cause
of action within the jurisdiction conferred by section
1331 of this title [federal question jurisdiction] is
joined with one or more otherwise non-removable
claims or causes of action, the entire case may be
removed and the district court may determine all
issues therein, or, in its discretion, may remand all
matters in which state law predominates.
28 U.S.C. § 1441(c). By its terms, § 1441(c) applies only
to “separate and independent” claims. In American Fire &
Casualty Co. v. Finn, 341 U.S. 6, 12 (1951), the Su-
preme Court explained that “[t]he addition of the word
‘independent’ gives emphasis to congressional intention to
require more complete disassociation between the fed-
erally cognizable proceedings and those cognizable only
in state courts before allowing removal.”9 The claims to
which § 1441 applies is further limited by the requirements
that the claims be “joined” and “removed.” Section 1441(c)
applies only to claims that were joined with a federal
9
The requirements of separateness and independence have
caused this court to question whether any third-party complaints
can be removed pursuant to this section, because they most
often are “dependent,” if not “parasitic,” to the federal claim.
See Thomas v. Shelton, 740 F.2d 478, 486 (7th Cir. 1984).
36 Nos. 01-3081 & 01-3418
question claim while in state court, cf. First National Bank
of Pulaski v. Curry, 301 F.3d 456, 465 (6th Cir. 2002)
(interpreting “joined” “narrowly to apply only to claims
joined by the plaintiff in the original state court action”),
and also that were “removed”; § 1441(c) does not en-
compass claims added in federal court.
3.
28 U.S.C. § 1367 provides a final statutory basis for
remanding a claim to state court.10 Under § 1367(c), a court
may decline to exercise supplemental jurisdiction over
a claim that is related to the underlying action if “the
claim substantially predominates over the claim or claims
over which the district court has original jurisdiction,” or
if “the district court has dismissed all claims over which
it has original jurisdiction.” 28 U.S.C. § 1367. Although
§ 1367, strictly read, does not speak in terms of a “remand,”
§ 1367 codifies the common-law doctrine of pendent juris-
diction. In Carnegie-Mellon, the Supreme Court estab-
lished the right of a district court to remand, as opposed
to only dismiss, a pendent claim:
10
Section 1367 codified the principles of pendent jurisdiction
discussed by the court in Carnegie-Mellon. In that case, the Su-
preme Court held that a district court had the discretion to
remand pendent state-law claims once the federal claims on
which a proper removal were based dropped out. See Carnegie-
Mellon, 484 U.S. at 357. “The discretion to remand enables dis-
trict courts to deal with cases involving pendent claims in the
manner that best serves the principles of economy, convenience,
fairness, and comity which underlie the pendent jurisdiction
doctrine.” Id. The Supreme Court specifically noted in Carnegie-
Mellon that “the remand authority conferred by the removal
statute and the remand authority conferred by the doctrine
of pendent jurisdiction overlap not at all.” Carnegie-Mellon, 484
U.S. at 355 n.11.
Nos. 01-3081 & 01-3418 37
[A] district court has discretion to remand to state
court a removed case involving pendent claims upon
a proper determination that retaining jurisdiction
over the case would be inappropriate. The discretion
to remand enables district courts to deal with cases
involving pendent claims in the manner that best
serves the principles of economy, convenience, fairness,
and comity which underlie the pendent jurisdiction
doctrine.
Carnegie-Mellon, 484 U.S. at 357. The power to remand,
however, is limited to claims over which the district court
has only “supplemental” jurisdiction; the power does not
extend to claims over which the district court has orig-
inal jurisdiction. See In re City of Mobile, 75 F.3d 605, 607
(11th Cir. 1996); Borough of W. Mifflen v. Lancaster,
45 F.3d 780, 787 (3d Cir. 1995).11
Thus, absent a claim for abstention, a district court
may remand when one of three situations arises: 1) it
discovers that it lacked subject matter jurisdiction for
the initial removal; 2) it concludes that state law pre-
dominates in a removed claim that is separate and inde-
pendent from the removed federal question claim; or 3)
it determines that it should not exercise supplemental
jurisdiction over a state law claim.
C.
Evaluating the district court’s action against the statu-
tory options outlined above, I believe that the district
11
The district court also may remand, as opposed to dismissing,
a case on abstention grounds if “the relief being sought is equita-
ble or otherwise discretionary.” Quackenbush v. Allstate Ins.
Co., 517 U.S. 706, 731 (1996). However, there is no claim that
considerations of abstention motivated, or could motivate, the
district court’s decision to remand in the present action.
38 Nos. 01-3081 & 01-3418
court’s remand order may have “seem[ed] justifiable” to
the court, but was not cognizable under “the controlling
statute[s].” Thermtron, 423 U.S. at 351. First, § 1447(c)
does not provide a basis for the remand ordered by the
district court. As noted previously, § 1447(c) is “necessarily
tied to a temporal reference point, namely, the time of
removal.” Van Meter v. State Farm Fire & Cas. Co., 1 F.3d
445, 450 (6th Cir. 1993). With respect to the initial re-
moval, the district court agreed with the removing defen-
dant, GE, that the Locomotive Inspection Act occupied
completely the field of locomotive safety, that this complete
preemption provided a basis for federal question jurisdic-
tion and, therefore, that removal was proper. Consequently,
the district court did not, and could not, rely on § 1447(c)
to remand Amtrak’s claim after it made the determina-
tion that initial removal was proper.
Neither can the district court’s order be grounded in
§ 1441(c). Section 1441(c) allows a district court to re-
mand only “separate and independent” claims joined
and removed with a federal question claim. However, as a
third-party claim, the claim against Amtrak is not sep-
arate and independent from the actions brought by the
plaintiffs against the original defendants. More fundamen-
tally, the action was not “joined” and “removed” with the
action against GE; the third-party action against Amtrak
was instituted in district court.
Finally, the district court’s remand order finds no sup-
port in § 1367. Section 1367 allows a district court to
remand a claim based on the court’s “supplemental juris-
diction.” The authority to remand pursuant to § 1367 does
not encompass claims over which the district court
has federal question jurisdiction. Here, the presence of
Amtrak in the litigation constituted a valid basis for fed-
eral question jurisdiction. Because Amtrak is a federally
chartered corporation in which the United States owns
more than 50% of the outstanding stock, it may litigate in
Nos. 01-3081 & 01-3418 39
federal court. See 28 U.S.C. § 1349; see, e.g., Wyant v.
Nat’l R.R. Passenger Corp., 881 F. Supp. 919, 920 (S.D.N.Y.
1995) (stating that it is “well-settled” that federal courts
have jurisdiction over cases in which Amtrak is a party).
Cases involving federally chartered corporations such as
Amtrak arise under the laws of the United States and,
therefore, come within the court’s federal question juris-
diction, 28 U.S.C. § 1331. See Wayne v. Tenn. Valley Auth.,
730 F.2d 392, 397 (5th Cir. 1984) (“[A] claim against
a wholly owned federal corporation created under an Act
of Congress, such as TVA, falls within the general grant
of federal question jurisdiction found in § 1331 . . . .”);
Hollus v. Amtrak Northeast Corridor, 937 F. Supp. 1110,
1113-14 (D.N.J. 1996) (stating that “federal courts have
subject matter jurisdiction over any action involving Am-
trak” and that jurisdiction is based on the “federal ques-
tion” statute); In re Rail Collision Near Chase, Maryland
on January 4, 1987 Litig., 680 F. Supp. 728, 731 (D. Md.
1987) (“Congress created Amtrak and Conrail as private
corporations under state law, but subject to federal ques-
tion jurisdiction as long as the federal government held
majority ownership.”). Consequently, the district court
had original federal question jurisdiction over the claims
involving Amtrak. Because the district court’s jurisdic-
tion over the claim is original, and not supplemental,
§ 1367 cannot provide a basis for remand of that claim.
D.
In addition to having jurisdiction because of Amtrak’s
presence, the district court also had been presented with
the contention that the FRSA completely preempted the
field of railroad safety and, therefore, provided an inde-
pendent basis for retaining jurisdiction. The district court
made it clear in denying the post-trial motion that it did
not consider that claim to be a frivolous one. It also
40 Nos. 01-3081 & 01-3418
was incumbent on the district court to determine wheth-
er the FRSA did, in fact, preempt the field of railroad
safety—thereby providing an independent basis for federal
jurisdiction—and, if so, to retain jurisdiction over the
claims affected. See Buchner v. FDIC, 981 F.2d 816, 821
(5th Cir. 1993) (discussed infra at Part III.E.).
E.
The plaintiffs submit that, even if the district court had
subject matter jurisdiction over the third-party claim
against Amtrak, this court should affirm the district
court’s judgment on the basis of waiver. However, because
the district court had a duty to exercise its subject mat-
ter jurisdiction, I believe the decision to remand to state
court on the ground of waiver was erroneous.
Two decisions—the Fifth Circuit’s decision in Buchner
v. FDIC, 981 F.2d 816 (5th Cir. 1993), and the Ninth
Circuit’s decision in Brockman v. Merabank, 40 F.3d 1013(9th Cir. 1994),—not only provide guidance with respect
to the issue of waiver, but also speak to the broader issue
of a district court’s remand authority. In Buchner, the
FDIC sued the Buchners in state court to collect monies
they owed a bank under the FDIC’s receivership. See
Buchner, 981 F.2d at 817. The Buchners asserted coun-
terclaims against the FDIC; the FDIC then removed the
case to the district court. See id. Removal was untimely,
however, and the district court remanded the case to
state court. See id. After amending their pleadings several
times, the Buchners added an FBI agent and the Dallas
office of the FBI to the case by filing a motion for sanctions
against them; the agent timely removed the entire case
to federal court pursuant to 28 U.S.C. §§ 1442(a)(1) and
1446(b). See id. The Buchners moved to dismiss their
claims against the FBI and moved to remand the case
after those parties were dismissed. See id. at 818. The
Nos. 01-3081 & 01-3418 41
FDIC opposed the motion to remand, but the district
court found that it had waived its right to removal. See
id. The court declined to exercise supplemental jurisdic-
tion over the remainder of the case and remanded it to
state court. See id. The FDIC appealed, and the Fifth
Circuit reversed. See id. at 820.
Noting the general principle that parties may neither
confer jurisdiction on a federal court, nor take it away, see
Buchner, 981 F.2d at 818, the court first determined that
jurisdiction was proper in the district court because the
FDIC was a party. See id. at 819. The court then as-
sessed the scope of the district court’s statutory power to
remand under 28 U.S.C. §§ 1441(c) and 1447(c).
Under these two sections, the district court has gen-
eral authority to remand a case under any of the
following circumstances: 1) it has discretion to re-
mand state law claims that were removed along with
one or more federal question claims; 2) it must act on
a timely motion to remand based on a defect in the
removal procedure; and 3) it must remand a case
over which it has no subject matter jurisdiction.
Id. Finally, the court noted that, under Carnegie-Mellon,
484 U.S. at 357, a district court could remand a case
after all the federal claims dropped out, leaving only state-
law claims. See id. at 820. The court determined that
none of those remand options were present because the
district court had original subject matter jurisdiction
over the case under 28 U.S.C. § 1331. See id. at 819-20. In
conclusion the court stated:
The case thus having been correctly removed, the
district court could only have remanded it under
authority of one of the limited number of enumerated
grounds for remand, none of which are present in the
instant case. The district court has subject matter
jurisdiction over all of the Buchners’ claims against
42 Nos. 01-3081 & 01-3418
the FDIC by virtue of 12 U.S.C. § 1819(b)(2)(A) and
28 U.S.C. § 1331. Subject matter jurisdiction can
neither be conferred nor destroyed by the parties’
agreement or waiver. Here the FDIC’s earlier waiver
of its right to remove the case cannot affect the courts
subject matter jurisdiction over the Buchners’ claim
against the FDIC. . . . As all of the Buchners’ claims
against the FDIC are treated as arising under the
laws of the United States, the district court’s subject
matter jurisdiction over those claims is mandatory so
it has no discretion to remand them to state court.
Id. at 821.
In Brockman v. Merabank, 40 F.3d 1013, 1017 (9th Cir.
1994), the Ninth Circuit concurred with the Fifth Circuit’s
analysis in Buchner. In Brockman, the plaintiff sued
Merabank, which was later placed in receivership by the
Resolution Trust Corporation (“RTC”). See id. at 1015. The
plaintiff amended her complaint to add the RTC. See id. She
later filed a third amended complaint, which added the
FDIC as a party. See id. The FDIC removed the action, and
then moved to dismiss the complaint. See id. The district
court granted the motion, and the FDIC was dismissed
as a party. See id. Then, at a “pretrial conference, the
district court sua sponte ordered the case remanded to
state court for lack of jurisdiction. The court reasoned
that it lacked jurisdiction because the party seeking
removal, the FDIC, had been dismissed from the case.” Id.“In a subsequent order, the court stated that ‘[i]n its
discretion, the Court could have retained the case but
a decision was made not to retain it.’ ” Id.The RTC appealed, and the Ninth Circuit reversed. See
Brockman, 40 F.3d at 1017. First, the court found that
remand was not warranted by § 1447(c) because the
district court “did not lack subject matter jurisdiction.” Id.
at 1016. The court further held: “A remand order was
Nos. 01-3081 & 01-3418 43
not authorized by § 1441(c) either. The claims against the
non-RTC defendants are not ‘separate and independent.’ ”
Id. at 1016-17. The Ninth Circuit determined that the
district court had no “jurisprudential authority” to re-
mand: “Like diversity jurisdiction, original jurisdiction is
not discretionary. Thus, the district court could neither
dismiss the entire case for lack of jurisdiction nor re-
mand it.” Id. at 1017. The Ninth Circuit also rejected
the plaintiff’s argument that the RTC had waived its right
to proceed in federal court by its failure to remove. “Al-
though the RTC waived its right to seek removal, it did
not waive its right to a federal forum.” Id. The court
found that the “district court’s retention of this case was
mandatory, not discretionary.” Id.
Brockman and Buchner make clear that the district
court has an independent obligation to determine wheth-
er it has subject matter jurisdiction. If that examination
reveals the existence of subject matter jurisdiction, the
exercise of that jurisdiction is mandatory, not discre-
tionary, and the actions of a party cannot affect the
court’s responsibility to exercise its jurisdiction. Conse-
quently, because the district court had subject matter
jurisdiction over the claim involving Amtrak, the district
court’s exercise of that jurisdiction was mandatory, and
the actions of Amtrak’s counsel did not divest the court of
its responsibility to adjudicate the claim at issue.
In sum, I believe that this court has jurisdiction over the
present appeal because 28 U.S.C. § 1447(d) does not
bar appellate review. Furthermore, I believe that the
district court erred in remanding the case on the ground
that Illinois Central had waived its right to a federal forum.
The court had jurisdiction over the third-party claim
against Amtrak; the exercise of jurisdiction over that claim
is mandatory and not subject to waiver. Even if the dis-
trict court was justified in overlooking the presence of
Amtrak as an initial matter in the June 26 ruling, it was
44 Nos. 01-3081 & 01-3418
made aware of Amtrak’s presence and the jurisdictional
implications of that presence in Illinois Central’s Rule 59
motion to reconsider.
For these reasons, I would remand this case to the dis-
trict court to retain jurisdiction of the claim against
Amtrak and then to consider the appropriate disposition
of the remainder of the claims before it. Specifically, I
believe that the district court ought to determine whether
the state law claims are preempted by the FRSA. If they
are preempted, the district court should retain jurisdiction
of the claims; if they are not, the district court must
determine whether, according to the criteria set forth in
28 U.S.C § 1367, it ought to retain jurisdiction over the
claims or remand them to the state court. Consequently,
I would reverse the judgment of the district court and
remand the case for further proceedings.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-6-03