First Nat'l Bank of Boston, In Re:

PUBLISH
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
No. 95-5008
In re FIRST NATIONAL BANK OF BOSTON
a national banking association,
Petitioner.
On Petition for Writ of Mandamus
to the United States District Court for the
Southern District of Florida
(November 30, 1995)
Before KRAVITCH, BIRCH and BLACK, Circuit Judges.
BIRCH, Circuit Judge:
This petition for writ of mandamus requires us to decide whether a district court can remand a case sua
sponte within the thirty-day period following a removal notice provided in 28 U.S.C. § 1447(c) for motions to
remand. The district court remanded the removed case back to state court during this time period. Because we
conclude that the 1988 amendments to section 1447(c) precluded the district court from sua sponte remand, we
grant the petition for writ of mandamus.
I. BACKGROUND
The origin of the present petition is the related federal case filed in 1989 by Society for Savings in
the Southern District of Florida concerning a consumer loan, secured by a motor yacht, extended to Jerome H.
Rogers. Society for Savings v. M/Y "CONJA", No. 89-6167-CIV-PAINE (S.D. Fla. 1989). That case was settled by
surrender of the vessel to Society for Savings and the agreed payment of $13,000, representing the difference
in the value of the vessel and the outstanding debt. Thereafter, various credit reporting agencies showed this
loan as a bad debt.
In 1995, Rogers sued petitioner First National Bank of Boston ("Bank of Boston"), which he alleges is
the successor to Society for Savings with offices in Palm Beach County, Florida, in the Fifteenth Judicial
Circuit for Palm Beach County, and claimed damages exceeding $15,000 for Bank of Boston's failure to correct
credit information relating to Rogers. Rogers v. Bank of Boston, No. CL 95 347AB (Fla. Cir. Ct. filed Jan. 17,
1995). Subsequently, Rogers filed a settlement demand requesting compensatory and punitive damages of $650,000.
Bank of Boston filed an amended answer and affirmative defenses that denied the material allegations of the
complaint, including the allegation that Bank of Boston maintained an office in Palm Beach County. On June 13,
1995, Bank of Boston removed the case to federal court for the Southern District of Florida pursuant to 28
U.S.C. §§ 1441 and 1446 and asserted complete diversity. Rogers v. Bank of Boston, No. 95-8366-CIV-NESBITT
(S.D. Fla. filed June 13, 1995) ("Rogers"). Bank of Boston represented that it is a national banking
association with its principal place of business in Massachusetts, making it a Massachusetts citizen, that
Rogers is a Florida citizen, and that the amount in controversy exceeded $50,000 in compliance with 28 U.S.C.
§ 1332(a).
On June 19, 1995, the district court sua sponte remanded the case to the Eleventh Judicial Circuit for
Dade County. The district court determined that Bank of Boston's failure to allege the state in which it is
incorporated constituted an inadequate showing of its citizenship for diversity jurisdiction:
A review of the Notice of Removal reveals that Defendant has failed
to adequately demonstrate that the controversy is between citizens of
different states. Defendant merely alleges that it is "a national banking
association with its principal place of business in Boston, Massachusetts,
and is therefore a Massachusetts citizen." (Not. of Removal at 1.)
Defendant, however, fails to allege the state by which it has been
incorporated. Therefore, because Defendant has failed to adequately allege
its own citizenship, as is required in order to demonstrate the Court's
original jurisdiction, it appears that the Court lacks subject matter
jurisdiction over this case.
This order was filed in the clerk's office on June 22, 1995, and the case was closed.
2
On June 28, 1995, Bank of Boston moved for reconsideration and vacation of the district court's remand
order and for leave to amend its notice of removal. Bank of Boston explained that, as a national banking
association, it is not incorporated under any state's law and that its citizenship is determined by its
principal place of business. Bank of Boston also filed an amended notice of removal stating this explanation
of its citizenship and clarified that it maintains no branch offices in Florida, although its independent
subsidiary mortgage corporation maintains at least one branch office in Florida. Bank of Boston subsequently
filed an affidavit by its legal supervisor for its consumer finance department in support of the accuracy of
these representations.
On July 21, 1995, the district court entered an order striking Bank of Boston's motion for
reconsideration and leave to file an amended notice of removal because it no longer had jurisdiction over the
case. Bank of Boston then petitioned this court for a writ of mandamus directing the district court to recall
its remand and to reinstate the case on its docket. Pursuant to Federal Rule of Appellate Procedure 21(b), we
directed the district judge to respond to Bank of Boston's argument that the district court's remand was
unauthorized under 28 U.S.C. § 1447(c). By letter to the Clerk of Court, the district judge stated that she
did not desire to appear in this proceeding other than through her orders remanding the case to state court and
striking Bank of Boston's motion for reconsideration and leave to file an amended notice of removal. From her
letter, it appears that the district judge considers the response by respondent Rogers to be the response that
we required of her in accordance with Federal Rule of Appellate Procedure 21(b). Rogers's response argues that
the district court's determination of subject matter jurisdiction is not reviewable pursuant to 28 U.S.C. §§
1447(c) and (d).
II. DISCUSSION
Initially, we must determine if we have jurisdiction to review the district court's remand order in this
petition. Under 28 U.S.C. § 1447(d), "[a]n order remanding a case to the State court from which it was removed
is not reviewable on appeal or otherwise."1 While we note that the district court remanded Rogers to the
Eleventh Judicial Circuit for Dade County instead of the Fifteenth Judicial Circuit for Palm Beach County, from
which it came, we do not limit our reviewability to this basis. The Supreme Court has proscribed a broad,
literal interpretation of section 1447(d). Thermtron Prods., Inc. v. Hermansdorfer, 423 U.S. 336, 96 S.Ct. 584(1976); accord Carnegie-Mellon University v. Cohill, 484 U.S. 343, 108 S.Ct. 614 (1988). Reading sections
1447(c) and (d) in conjunction, the Court explained that "only remand orders issued under §1447(c) and invoking
the grounds specified therein . . . are immune from review under § 1447(d)." Thermtron, 423 U.S. at 346, 96
S.Ct. at 590. Thus, mandamus is appropriate "where the district court has refused to adjudicate a case; and
has remanded it on grounds not authorized by the removal statutes." Id. at 353, 96 S.Ct. at 594; see Page v.
City of Southfield, 45 F.3d 128, 132 (6th Cir. 1995) (the interpretation of section 1447(d) in Thermtron "does
1
Although § 1447(d) permits an exception to nonreviewabilty
for certain civil rights actions under 28 U.S.C. § 1443, this
exception is inapplicable here.
3
not prohibit us from determining whether the district court exceeded its statutory authority by issuing the
remand"). As we will clarify, we can review the remand order presented by this petition because the district
court remanded Rogers sua sponte on procedural grounds unauthorized by section 1447(c). We are aided greatly
in our analysis by a Fifth Circuit case that is directly on point, In re Allstate Ins. Co., 8 F.3d 219 (5th Cir.
1993). See Page, 45 F.3d 128 (reversing district court's sua sponte remand for a procedural defect within
thirty days after filing the notice of removal as unauthorized under section 1447(c)); In re Continental
Casualty Co., 29 F.3d 292 (7th Cir. 1994) (issuing writ of mandamus ordering district court to reinstate case
that it sua sponte remanded for a procedural defect within thirty days after filing of the notice of removal
because the remand was unauthorized under section 1447(c)).
As amended in 1988,2 section 1447(c) provides in pertinent part:
A motion to remand the case on the basis of any defect in removal
procedure must be made within 30 days after the filing of the notice of
removal under section 1446(a). If at any time before final judgment it
appears that the district court lacks subject matter jurisdiction, the case
shall be remanded.
28 U.S.C. § 1447(c). The district court based its sua sponte remand order on the lack of subject matter
jurisdiction under section 1447(c), specifically, absence of diversity. Bank of Boston contends that it clearly
explained the complete diversity between it and Rogers in its notice of removal.
Although Bank of Boston stated in its removal notice that it is a national banking association with its
principal place of business in Boston, Massachusetts, making it a Massachusetts citizen, the district court
concluded that this representation was insufficient for diversity jurisdiction because the place of
incorporation was not stated. Diversity citizenship for a corporation is "either the corporation's state of
incorporation or principal place of business." Taylor v. Appleton, 30 F.3d 1365, 1367 (11th Cir. 1994) (citing
28 U.S.C. § 1332) (emphasis added); see United Steelworkers v. R.H. Bouligny, Inc., 382 U.S. 145, 152, 86 S.Ct.
272, 276 (1965) ("[I]n 1958 Congress thought it necessary to enact legislation providing that corporations are
citizens both of the State of incorporation and of the State in which their principal place of business is
located."); Jerguson v. Blue Dot Inv., Inc., 659 F.2d 31, 33 (5th Cir. Unit B 1981) ("[C]orporations can be
citizens in two places: the State of incorporation and the State of its principal place of business."), cert.
denied, 456 U.S. 946, 102 S.Ct. 2013 (1982). Thus, a company whose principal place of business is in
Massachusetts is a Massachusetts citizen under 28 U.S.C. § 1332(c). Pay Tel Sys., Inc. v. Seiscor Technologies,
Inc., 850 F. Supp. 276, 278 (S.D.N.Y. 1994). As to its status as a national banking association, Bank of Boston
cited in its removal notice Landmark Tower Assocs. v. First Nat'l Bank of Chicago, 439 F. Supp. 195, 196 (S.D.
Fla. 1977), which states that "a national banking association [is] organized under the laws of the United
2
Prior to its amendment by the Judicial Improvements and
Access to Justice Act of 1988, Pub. L. No. 100-702, 102 Stat. 4642,
4670, § 1016(c), § 1447(c) allowed a district court to remand a
case to state court "[i]f at any time before final judgment it
appear[ed] that the case was removed improvidently and without
jurisdiction." 28 U.S.C. § 1447(c) (1973) (repealed 1988).
4
States. . . . Under 28 U.S.C. § 1348, national banks not chartered by any state are deemed citizens of the
states in which they are located. See Fulton National Bank of Atlanta v. Hozier, 267 U.S. 276, 45 S.Ct. 261,
69 L.Ed. 609 (1925)." Id. With this authority, it was inconsistent and unwarranted for the district court sua
sponte to have remanded Rogers to state court because of the lack of Bank of Boston's incorporation state, which
is irrelevant because there is no incorporation state for this national banking association.3
Reasoning that "a 'procedural defect' within the meaning of § 1447(c) refers to 'any defect that does
not go to the question of whether the case originally could have been brought in federal district court,'" the
Fifth Circuit determined that failure to allege the plaintiff's citizenship at the time of filing the removal
notice was a "procedural, rather than [a] jurisdictional, defect." In re Allstate, 8 F.3d at 221 (quoting
Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1544 (5th Cir.), cert. denied, 502 U.S. 963, 112 S.Ct. 430(1991)). That court decided that, although there had not been a demonstration of complete diversity, there was
no record evidence to show that diversity did not exist factually. Id. Furthermore, "any qualms" that the
district court had concerning diversity jurisdiction should have been resolved "by allowing Allstate to amend
the removal petition to cure the defect under 28 U.S.C. § 1653" instead of sua sponte remanding the case to
state court. Id. at 222 n.4.
This petition is even stronger. The only possible omission by Bank of Boston in its removal petition
was not fully explaining that, as a national banking association, it is not incorporated in any state rather
than merely citing supporting caselaw. Bank of Boston should not be deprived of its federal forum simply
because the district court neglected to research the status of national banking associations to determine that
principal place of business governs corporate diversity citizenship.4
3
Although the district court based its remand order solely on
Bank of Boston's failure to give its state of incorporation, we
additionally note that there is no actual evidence in the record
that Bank of Boston was "located" in Florida through a branch
office. See Rush v. Savchuk, 444 U.S. 320, 328, 100 S.Ct. 571, 577
(1980) (holding that "a corporation is 'present,' for
jurisdictional purposes, wherever it does business"). While
Rogers's complaint in state court alleges that Bank of Boston had
offices in Palm Beach County, and that it is the successor to
Society for Savings, Bank of Boston denied these allegations in its
answer. To date, Rogers has not provided any substantiation for
these bare allegations, such as an address for an alleged office of
Bank of Boston in Palm Beach County or anywhere in Florida. In its
proffered amended notice of removal, struck by the district court,
Bank of Boston explains that its independent subsidiary mortgage
corporation maintains at least one branch office in Florida, but
that Bank of Boston does not.
4
The dissent's position is disconcerting indeed. Although
conceding that the district court "erroneously" remanded Rogers to
state court, the dissent apparently would allow this obvious error
to stand and force Bank of Boston to litigate in state court, when
5
We further agree with the Fifth Circuit's interpretation of section 1447(c). The phrasing of the
statute that "'[a] motion to remand the case . . . must be made,' implies that only a party to the case may
initiate it" within the thirty-day period after the filing of a removal notice under the plain language of
section 1447(c). Id. at 223 (quoting 28 U.S.C. § 1447(c)); accord Page, 45 F.3d at 133 ("Not only did Congress
it is entitled to be in federal court. The dissent bases its
position on the In re Allstate dissent, which finds that our
analysis is contrary to congressional will in § 1447(c) and
Thermtron, decided before Congress amended § 1447(c), the version
of the statute at issue in this petition. See infra pp. 6-8 & n.2.
As we explain in this opinion, Congress specifically changed the
language in § 1447(c) to permit the district court to remand
pursuant to a motion by a party alleging a defect in the removal
procedure, and not the court on its own motion, within the first
thirty days following a removal notice. See infra pp. 12-13.
Under the majority's analysis and that of the Fifth Circuit in In
re Allstate, the Sixth Circuit in Page, and the Seventh Circuit in
In re Continental Casualty Co. , the district court was not
authorized under § 1447(c) to remand sua sponte for a defect in the
removal procedure during this thirty-day period.
There clearly was complete diversity in Rogers. Bank of
Boston stated that it was a national banking association with its
principal place of business in Boston, Massachusetts, making it a
Massachusetts citizen, and it gave supporting authority. The
district court erred in failing to perform basic legal research,
which would have confirmed that Bank of Boston's corporate
citizenship is Massachusetts as enunciated by the Supreme Court and
our circuit. See infra pp. 8-10. This lapse in responsibility by
the district court has caused an unnecessary expenditure of
judicial time and effort, when Bank of Boston factually and legally
exhibited diverse citizenship. This is not consistent with
congressional intent. See infra note 5.
The dissent chooses to condone the district court's error and
would uphold its remand simply because the district court decided
that it "appear[ed]" to lack subject matter jurisdiction, the
"magic words" to trigger §§ 1447(c) and (d). For us to allow this
clearly incorrect remand to stand would be shirking our review
responsibility and would result in an injustice for Bank of Boston
in the selection of its federal forum. The district court's
wrongful remand should not be shielded and effectuated by our
refusal to perform our review responsibility to the disadvantage of
Bank of Boston, a litigant expecting the federal courts to review
its case fairly. The dissent's view would establish a review
standard that would preserve and perpetuate similar abuses of
discretion by district courts and preclude our review. The
majority cannot endorse that this would ever be the intent of
Congress or the Supreme Court. Therefore, we join the analyses
adopted by the Fifth, Sixth, and Seventh Circuits in interpreting
§ 1447(c) in our review of this petition.
6
incorporate the word 'motion' in the 1988 amendments where it had previously been absent, but it did so only
in the first sentence, i.e., for procedural defects."); In re Continental Casualty Co., 29 F.3d at 294 ("[I]f
a motion for remand is essential to action under the first sentence of § 1447(c), then the lack of a motion
deprives a district judge of power to return a case to state court."). Thus, the first sentence of section
1447(c) "consigns procedural formalities to the care of the parties," while the second sentence "assigns to the
court concern for its jurisdictional prerequisites." In re Allstate, 8 F.3d at 223. Considering this to be
a "wise and warranted distribution," supported by legislative history, the Fifth Circuit concluded that, "where
subject matter jurisdiction exists and any procedural shortcomings may be cured by resort to § 1653, we can
surmise no valid reason for the court to decline the exercise of jurisdiction."5 Id.
On the bases of statutory interpretation and the policy consideration of judicial efficiency, we agree
with the Fifth Circuit that district courts are without discretion to remand sua sponte for procedural defects
within the thirty-day period after filing a removal notice.6 Id. at 223-24; see In re Continental Casualty Co.,
5
The Fifth Circuit determined that congressional intent
sanctioned this result from the legislative history for the 1988
amendments, which states that
[s]o long as the defect in removal procedure
does not involve a lack of federal subject
matter jurisdiction, there is no reason why
either State or Federal courts, or the
parties, should be subject to the burdens of
shuffling a case between two courts that each
have subject matter jurisdiction.
In re Allstate, 8 F.3d 223 (quoting H.R. Rep. No. 889, 100th Cong.,
2d Sess. 72 (1988), reprinted in 1988 U.S.C.C.A.N. 5982, 6033); see
FDIC v. Loyd, 955 F.2d 316, 323 (5th Cir. 1992) ("Because there was
subject matter jurisdiction, the district court had no valid
interest in remanding the case under § 1447(c).").
6
Rogers argues in responding to this court's request of the
district judge to respond to the petition for mandamus that Bregman
v. Alderman, 955 F.2d 660 (11th Cir. 1992) (per curiam) precludes
our review of the remand order in this petition. We distinguish
Bregman factually and analytically. The sua sponte remand order in
Bregman occurred more than two and one-half years following removal
or "911 days after the expiration of the thirty-day time period
contemplated by § 1447(c)." Id. at 663. Clearly, Bregman did not
concern the specific issue in this petition of whether a district
court can sua sponte remand a case to state court under § 1447(c)
within thirty days after removal. Additionally, the district court
in Bregman remanded that case pursuant to § 1447(c) because of the
failure to allege the citizenship of the plaintiffs and the
defendants, whereas the diverse citizenship of Rogers and Bank of
Boston was alleged in the notice of removal in Rogers.
7
29 F.3d at 295 ("The 30-day limit serves a function similar to § 1447(d)--it prevents shuttling of cases between
state and federal court, and it prevents extended litigation that does no more than determine where litigation
shall proceed."). District judges' careful review of removed cases to identify defects in removal is important
to litigants and the efficient functioning of our legal system.
But because not all potential problems are fatal, the court should alert the
parties before . . . remanding the cases. Litigants may have sufficient
answers to the court's concerns . . . . Quick notice is a boon; quick action
without inviting the parties' submissions may illustrate the adage that haste
makes waste. The remand in this case has stopped this litigation dead in its
tracks. It should now get back under way, and in federal court.
In re Continental Casualty Co., 29 F.3d at 295; see Page, 45 F.3d at 132 ("If a sua sponte remand is
unauthorized by § 1447(c), . . . we may vacate the remand order and direct the district court to reinstate the
case to its docket.").
III. CONCLUSION
Following the district court's sua sponte remand of Rogers to state court within thirty days after it
filed a notice of removal, Bank of Boston petitioned this court to mandamus the district court to reinstate
Rogers on the district court docket. As explained herein, we conclude that the district court was not
authorized to remand Rogers sua sponte for a procedural defect within thirty days of the notice of removal.
Accordingly, we grant Bank of Boston's petition and direct the issuance of a writ of mandamus instructing the
district court to recall the remand and to reinstate Rogers on its docket.
Analytically, Bregman relied on Gravitt v. Southwestern Bell
Tel. Co., 430 U.S. 723, 97 S.Ct. 1439 (1977) (per curiam), which
was decided pursuant to the former version of § 1447(c) and not the
present form of the statute at issue here after congressional
amendment in 1988. Furthermore, Gravitt cannot be directly
applicable because there is no indication that it addressed
precisely the issue before us: sua sponte remand under the current
version of § 1447(c) within thirty days of filing the removal
notice. Gravitt arose from the Fifth Circuit, which clearly did
not consider it an obstacle in deciding In re Allstate. We agree
with the post-amendment rationale of the Fifth Circuit in In re
Allstate.
8