Once District Court Enters Remand Order Under 28 U.S.C. § 1447(c), It Cannot Revisit That Decision Under Fed. R. Civ. P. 59, Holds Eighth Circuit

In Stone v. J&M Securities, LLC, No. 21-3422 (8th Cir. Dec. 19, 2022), the Eighth Circuit vacates an amended judgment entered in response to a motion for reconsideration under Fed. R. Civ. P 59(e). The panel holds that the order dismissing the plaintiffs’ state-law claims on the merits, though erroneous, could not be corrected post-judgment owing to the jurisdictional limitations of 28 U.S.C. § 1447(c).

“Felicia and Jerome Stone have appealed an order of the district court granting summary judgment for J&M Securities, LLC, in an action arising from disputes over debt collection. The district court concluded that the Stones lacked Article III standing to bring claims under federal law, and dismissed their claims under Missouri law on the merits.”

There then followed two more amended judgments. The first was in response to a Rule 59(e) motion to reconsider, when the district court concluded that it lacked jurisdiction to dismiss the state-law. The court thus entered an amended judgment and remanded the case to Missouri state court under 28 U.S.C. § 1447(c) “for lack of subject matter jurisdiction.” In a second amended judgment, “the court changed its mind, concluded that it had lacked jurisdiction to amend the judgment because the Stones had earlier filed a notice of appeal, and vacated the remand order. The court reinstated the original judgment dismissing the Stones’ complaint with prejudice.”

The Eighth Circuit vacates and remands the matter, “conclud[ing] that the district court erred by vacating the amended judgment, and that the case should be remanded to state court.”

First, the panel observes that the district court erred in holding that the notice of appeal divested it of jurisdiction. “Under Federal Rule of Appellate Procedure 4(a)(4)(A)(iv) . . . the time to file an appeal does not run until the entry of an order disposing of a motion to alter or amend judgment under Civil Rule 59(e). Because the Stones filed their notice of appeal after the district court entered judgment, but before the court ruled on their pending motion under Rule 59(e), the notice of appeal did not become effective until the district court ruled on the motion. Fed. R. App. P. 4(a)(4)(B)(i).”

Second, the panel holds that the district court had no power to enter the second amended judgment. It had already entered order remanding the claims to state court. “’An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.’ 28 U.S.C. § 1447(d). Although the limit on reviewability applies only to remands based on grounds specified in § 1447(c), . . .  this case involves a remand based on one of those grounds—subject matter jurisdiction.”

“’Here, the district court reconsidered its own remand order before any appeal. Under the statute, however, the remand order is “not reviewable on appeal or otherwise.’ 28 U.S.C. § 1447(d) (emphasis added).” Citing a 1988 case from the Ninth Circuit, the panel holds that “or otherwise” precludes review by a district court of its own remand order, just as it does a direct appeal to a U.S. Court of Appeals. “For these reasons, we conclude that the district court mistakenly vacated its amended judgment and should not have reinstated its original judgment dismissing the Stones’ complaint with prejudice.”

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