No Appellate Jurisdiction Over Remand Order Under 28 U.S.C. § 1447(d) Except on Federal-Officer Ground, Holds First Circuit

In State of Rhode Island v. Shell Oil Prods. Co., LLC, No. 19-1818 (1st Cir. Oct. 29, 2020), the First Circuit joins the majority of circuits in holding that the appeal of a federal-officer removal argument under 28 U.S.C. § 1447(d) does not expose the entire remand order to appellate review. (This issue is now pending before the Supreme Court in BP P.L.C. v. Mayor & City Council Baltimore, No. 19-1189 (U.S. Oct. 2, 2020).)

The case is a high-stakes one for the oil- and gas-company defendants, sued for property “damage caused by fossil fuels while those companies misled the public about their products’ true risks.” (A huge list of prominent attorneys and amici are published in the opinion.) “Most Rhode Island cities and towns are below the floodplain and New England as a whole is losing ground to the ocean at a rate three to four times faster than the global average (and Rhode Island is hardly big enough to sacrifice so much of its land). Those rising sea levels have already increased erosion and the damage of storm surges along Rhode Island’s coast.”

The state sued in state court on solely state-law grounds and included in-state defendants, parrying the usual diversity and federal-question jurisdiction grounds for removal. Nevertheless, “[t]he oil companies … argued that any of a flock of specific jurisdiction statutes provided the necessary hook to keep the case in federal court, citing the federal-officer removal statute, the Outer Continental Shelf Lands Act, federal-enclave jurisdiction, the bankruptcy-removal statute, and admiralty jurisdiction.”

A federal district court denied removal on all of these grounds and ordered a remand to state court. A grant of remand is typically not appealable under 28 U.S.C. § 1447(d), with two exceptions: civil rights cases (not at issue here) and federal-officer removal under 28 U.S.C. §  1442. Defendants invoked the latter theory, then argued that this exception allowed the court to review all other grounds.

Section 1447(d) provides in full: “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 1442 or 1443 [civil rights] of this title shall be reviewable by appeal or otherwise.”

The First Circuit holds that it has no appellate jurisdiction to consider any argument other than federal-officer removal. It notes, off the bat, that nearly every circuit to reach the issue has agreed that appellate jurisdiction is limited to the two categories specified by section 1447(d).

The defendants, citing the only circuit to hold otherwise (the Seventh), argued that “a plain text reading of § 1447(d) … answers this question” because the word “order” in that section means “the district court’s entire remand order” and not just the limited part falling under the exception.

But the First Circuit demurs, finding the language is not “plain.” The section “is latently ambiguous because § 1447(d) ‘does not expressly contemplate the situation in which removal is done pursuant to [federal officer removal] and other grounds’ …. In that circumstance (which is the case here), the provision leaves open whether the entire remand order or only the part that rejects federal-officer removal is reviewable.”

Thus, considering the purpose of the section is to limit appellate jurisdiction, “we are persuaded that to allow review of every alleged ground for removal rejected in the district court’s order would be to allow § 1447(d)’s exception clause to swallow the general rule prohibiting review and, thus, a narrow construction is appropriate …. The final feather in the cap of this analysis … is that Congress amended this section as recently as 2011 and yet again refrained from clearly permitting plenary review of remand orders.”

The panel finally considers the federal-officer argument and affirms the district court. Defendants argued that they were operating under federal-officers’ authority (pointing to federal contracts they have for gas and oil). But whatever such contractual obligations might mean in other contexts, the panel holds that they lack a nexus to this litigation. “Rhode Island is alleging the oil companies produced and sold oil and gas products in Rhode Island that were damaging the environment and engaged in a misinformation campaign about the harmful effects of their products on the earth’s climate. The contracts the oil companies invoke as the hook for federal-officer jurisdiction mandate none of those activities.”