Dudley, Steve v. Putnam Invest Mgmt ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
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Nos. 07-1695, 07-2053, 07-2142 & 07-2244
IN THE MATTER OF:
MUTUAL FUND MARKET-TIMING LITIGATION
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Appeals from the United States District Court
for the Southern District of Illinois.
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SUBMITTED JULY 2, 2007—DECIDED JULY 13, 2007
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Before EASTERBROOK, Chief Judge, and KANNE and
WOOD, Circuit Judges.
PER CURIAM. We have for decision multiple motions
in three cases: Dudley v. Putnam Investment Funds,
No. 07-1695; Potter v. Janus Investment Fund, Nos. 07-
2053 & 07-2244; and Spurgeon v. Pacific Life Insurance
Co., No. 07-2142.
The motion for voluntary dismissal in Spurgeon, see
Fed. R. App. P. 42(b), has not been opposed by the ap-
pellee and is therefore granted. Costs are taxed against
appellants. This also means that motions to defer briefing
in Dudley and Potter pending the disposition of Spurgeon
are denied. Both Dudley and Potter must be dismissed, in
turn, for lack of appellate jurisdiction.
These suits are among the many that were remanded to
state court by In re Mutual Fund Market-Timing Litiga-
tion, 468 F.3d 439 (7th Cir. 2006) (Kircher IV), in the wake
2 Nos. 07-1695, 07-2053, 07-2142 & 07-2244
of the Supreme Court’s decision in Kircher v. Putnam
Funds Trust, 126 S. Ct. 2145 (2006) (Kircher III). The
district judges assigned to these suits had held that fed-
eral jurisdiction was lacking. That belief was incorrect,
see Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dabit,
547 U.S. 71 (2006), but Kircher III held that a district
judge’s error in applying the Securities Litigation Uniform
Standards Act of 1998 does not support appellate re-
view of a remand, given 28 U.S.C. §1447(d).
After the cases returned to state court, defendants
filed renewed notices of removal, asserting that Dabit is
a new “order” that creates another opportunity for re-
moval under 28 U.S.C. §1446(b). Chief Judge Murphy, who
handled Dudley and Potter, disagreed, holding that the
word “order” in §1446(b) means a decision about subject-
matter jurisdiction in the current litigation, made by the
state judge before whom the suit is pending, and not the
decision in some other case (such as Dabit) with different
litigants. Dudley and Potter were remanded again. See
Dudley v. Putnam Investment Funds, 472 F. Supp. 2d 1102(S.D. Ill. 2007); Potter v. Janus Investment Fund, 483
F. Supp. 2d 692 (S.D. Ill. 2007).
Defendants have appealed. Just as in Kircher III,
§1447(d) precludes appellate review.
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.” The Supreme Court
has held that this statute, despite the breadth of its
language, affects only remands made on the authority of
§1447(c), which covers lack of jurisdiction or defect in
removal procedure. See, e.g., Powerex Corp. v. Reliant
Nos. 07-1695, 07-2053, 07-2142 & 07-2244 3
Energy Services, Inc., 127 S. Ct. 2411 (2007) (summarizing
the Court’s understanding of §1447(d)).
Dudley and Potter were remanded on the ground that the
notices of removal not only were untimely, having been
filed years after the suits commenced, but also were
successive and represented attempts to relitigate issues
decided adversely to defendants in Kircher IV. Just one
removal is allowed per case, the court believed. See
Midlock v. Apple Vacations West, Inc., 406 F.3d 453 (7th
Cir. 2005). Successive and untimely removals are pro-
cedurally defective, and thus within the scope of §1447(c),
so §1447(d) and the holding of Kircher III are fully ap-
plicable.
Defendants reply that a motion to remand based on a
defect in removal procedure must be filed within 30 days
(a limit set by §1447(c) itself), yet plaintiffs did not
advance their reading of the word “order” before that time
expired. A district court’s failure to respect the 30-day
limit is reviewable on appeal, see In re Continental Casu-
alty Co., 29 F.3d 292, 295 (7th Cir. 1994), and it is on this
ground that defendants maintain that we have appellate
jurisdiction.
This line of argument misunderstands the relation
between §1447(c) and §1446(b). The remands are not
based on any reading of §1446(b); they are based on a
conclusion that notices of removal have come too late
and too often. Plaintiffs did not exceed the 30 days allowed
to seek remand, nor did the district court remand sua
sponte; Continental Casualty therefore is irrelevant.
Defendants invoked §1446(b) in response to plaintiffs’
motion; the district court held that §1446(b) does not
vindicate defendants’ strategy. Such a holding does not
invent an extra-statutory ground of remand; it just
implements a statutory ground. Contrast Benson v. SI
Handling Systems, Inc., 188 F.3d 780 (7th Cir. 1999).
4 Nos. 07-1695, 07-2053, 07-2142 & 07-2244
Plaintiffs’ motions to remand did not need to anticipate
and refute the defendants’ potential response to the
problems the motions identified.
Now it may be that Chief Judge Murphy misunder-
stands the meaning of the word “order” in §1446(b) and
that the removals were proper. But §1447(d) blocks
appellate inquiry into whether the district judge is mis-
taken. That’s the holding of Kircher III and Powerex,
among many other decisions. See, e.g., Gravitt v. South-
western Bell Telephone Co., 430 U.S. 723 (1977). Otherwise
§1447(d) would mean only that proper remands can’t be
reversed, and then it would have no effect at all. Thus
“[a]ny remand order falling within the scope of §1447(c)
lies outside our jurisdiction, regardless of the correct-
ness of the district court’s reasoning.” Holmstrom v.
Peterson, No. 05-3670 (7th Cir. July 3, 2007), slip op. 12.
District Judge Reagan, who declined to remand
Spurgeon, disagrees with Chief Judge Murphy’s under-
standing of §1446(b). See Spurgeon v. Pacific Life Insur-
ance Co., 2007 U.S. Dist. LEXIS 15663 (S.D. Ill. Mar. 7,
2007). Appellate review within the federal system to
resolve this conflict is possible only when the district
judge keeps the suit and rules on the merits.
The appeals in Dudley and Potter are dismissed for
want of jurisdiction.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—7-13-07