Split Eleventh Circuit Panel Holds That 28 U.S.C. § 1453(c)(1) Grants No Appellate Jurisdiction Over Remand to State Court Under CAFA If the District Court Grants It Sua Sponte

In Ruhlen, et al. v. Holiday Haven Homeowners, Inc., No. 21-90022 (11th Cir. Mar 10, 2022), owing to a quirk in the statutory language, a 2-1 panel holds that 28 U.S.C. § 1453(c)(1) – which ordinarily allows a U.S. Court of Appeals to hear an appeal “from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed” – does not apply if the district court grants the remand on its own without a motion.

The Class Action Fairness Act (CAFA) of 2005 created a whole new category of cases that could be removed to federal court under 28 U.S.C. § 1441: class or “mass” actions where there is at least partial diversity between defendants and plaintiffs. One of the defendant-protective measures added to the law was 28 U.S.C. § 1453(c)(1), which conferred appellate jurisdiction to review remands of class actions.

Here, “a group of current and former mobile homeowners and their homeowners’ association, filed this action in Florida state court against numerous defendants, alleging violations of the Florida Antitrust Act and the Americans with Disabilities Act.” The defendants removed to federal court under CAFA. Plaintiffs then amended their complaint to strike the ADA claim and add another state statutory count.

“The district court then sua sponte remanded the case to state court. In so doing, the district court determined that federal-question jurisdiction no longer existed because the amended complaint asserted only state-law claims and that CAFA didn’t provide jurisdiction because a claim brought in a representative capacity under Florida Rule of Civil Procedure 1.222 ‘is not a class action, as that term is understood for CAFA jurisdiction.’”

Although the defendants filed a petition to appeal, the panel majority holds in an unsigned order that it has no jurisdiction to hear it.

“As a general rule, we may not review a district court’s decision to remand a case based on its determination that it lacks subject-matter jurisdiction . . . . As relevant here, however, there is a statutory exception to the general rule that applies where the appeal is ‘from an order of a district court granting or denying a motion to remand a class action to the State court from which it was removed.’ 28 U.S.C. § 1453(c)(1).”

While acknowledging that “this case may involve a ‘class action’ that was ‘removed’ from a ‘State court’,” nevertheless there was one statutory prerequisite missing: “a motion to remand.” Because the district court granted the remand before a motion could be filed, the panel majority holds that this exception to the general rule does not apply.

Citing various legal reference works, the panel concludes that “in ordinary legal parlance, a ‘motion is a request or an application made by a party” (emphasis in original). “Accordingly, we find ourselves constrained to conclude (colloquialisms aside) that when a court sua sponte orders a remand, it is not ‘granting’ its own ‘motion’ within the meaning of § 1453(c)(1)—any more than it would be ‘denying’ its own motion in the absence of such an order.”

The panel majority seems more than a little abashed by this outcome. It is constrained to note that its decision causes a split with the Ninth Circuit’s decision in Watkins v. Vital Pharms., Inc., 720 F.3d 1179 (9th Cir. 2013). It allows that “omitting sua sponte orders from the statute’s scope may seem a little (or perhaps more than a little) odd . . . . but it’s the one that the statute’s plain language requires.”

Dissenting, Judge Rosenbaum finds this outcome “hypertechnical” and “absurd.” “If the majority’s interpretation of ‘motion’ is correct, then Congress thought it important enough to make a special exception to the final-judgment rule and § 1447(d) appellate bar so orders granting (or denying) a party’s motion to remand in a CAFA case may be immediately appealed, but it completely shielded from review of any type exactly the same result when the court remands the CAFA case on its own motion. I can conceive of no logical reason why the same action should be exposed to two opposite results, depending on whether a party made a motion before the court issued its order. Nor does the majority offer any convincing reason that Congress would have viewed sua sponte orders as an exception to the rule of immediate appellate review it imposed on remand orders in response to a party’s motion.”

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: