Injunctive Order in State-Court Action Removed to Federal Court Not Immediately Appealable Under 28 U.S.C. § 1292(a)(1), Holds Sixth Circuit

In Schuler v. Adams, No. 21-1613 (6th Cir. Mar. 7, 2022), the Sixth Circuit faces the novel question of whether a preliminary injunction entered in a state-court action before it is removed to federal court can be immediately appealed under 28 U.S.C. § 1292(a)(1). The panel dismisses the appeal, holding that it has “jurisdiction only over injunction orders ‘of’ district courts, not state courts.”

“Robert and Carol Adams want to build a home on their property, but their neighbors, Robert and Nancy Schuler, believe that their plans violate a restrictive covenant running with the land. A state court granted the Schulers a preliminary injunction stopping the construction. After the court’s order, the Adamses filed a third-party complaint against the U.S. Army Corps of Engineers, which responded by removing the case to federal court” under 28 U.S.C. § 1442(a)(1), the federal-officer removal statute.

The Schulers filed a motion to remand the action to state court, which was not ruled upon, while the Adamses filed a notice of appeal of the state court’s preliminary-injunction order (from August 13) and its order denying reconsideration of the injunction (from September 10).”

The panel dismisses the appeal for lack of appellate jurisdiction. “Federal courts of appeals generally have jurisdiction only over ‘final decisions’ of the district courts. 28 U.S.C. § 1291. It should be obvious that no final decision exists in this case because the district court has not issued a judgment that ends the dispute . . . . The Adamses rely on the exception that permits early appeals of injunction-related orders. 28 U.S.C. § 1292(a)(1). Because the state court granted a preliminary injunction, they argue, they may take this jurisdictional path to our court.”

Section 1292(a)(1) states that “courts of appeals shall have jurisdiction of appeals from . . . [i]nterlocutory orders of the district courts of the United States, . . . or of the judges thereof, granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court[.]” The panel holds that “orders of the district courts” means that injunctive orders originating from state courts are not appealable under this section. The panel notes that First Circuit reached the same conclusion in Concordia Partners, LLC v. Pick, 790 F.3d 277, 279 (1st Cir. 2015).

“To transform the state court’s order into an order of the district court, the Adamses turn to different text in 28 U.S.C. § 1450. After setting forth other rules for a civil action removed to a federal court from a state court, this section provides: ‘All injunctions, orders, and other proceedings had in such action prior to its removal shall remain in full force and effect until dissolved or modified by the district court’ . . . . ” But this section provides “only that the state court’s injunction remains in effect until the district court issues its own order ‘dissolv[ing] or modif[ying]’ the injunction.” The panel holds that this provision does not transmute a state-court order into a federal one.  

“One last point. Just because parties cannot immediately appeal state-court orders under § 1292(a)(1) does not mean that state-court orders are completely unreviewable. If, for example, a district court issues a final judgment under § 1291, that final judgment incorporates all interlocutory rulings entered along the way—whether by a federal court or a state court.”

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