In Spivey v. Chitimacha Tribe, No. 22-30436 (5th Cir. Aug. 16, 2023), the Fifth Circuit joins the majority of circuits in holding that there is no “futility” exception to ordering the remand of a case to state court under 28 U.S.C. § 1447(c) when it determines that it lacks subject matter jurisdiction over a removed case.
The plaintiff filed two actions: the first in federal court and the second in Louisiana state court. Both alleged that various parties—including the casino that employed him and the casino’s owner, the Chitimacha Tribe of Louisiana—conspired to violate his civil rights by a series of events that allegedly “led to Spivey’s arrest and the suspension of his gaming license” which “effectively froze Spivey out of the casino industry.”
“Spivey initially sued the Tribe, the Casino, and four tribal council members in federal court under 42 U.S.C. §§ 1983 and 1985 and Louisiana tort law. The magistrate judge recommended the dismissal of all Spivey’s claims because tribal sovereign immunity barred them. The district court adopted the magistrate judge’s recommendation and dismissed the case without prejudice.”
The plaintiff, prior to entry of final judgment in federal court, filed essentially the same case in state court. “The defendants removed, and Spivey moved to remand. The same magistrate judge recommended denying Spivey’s remand motion. She concluded ‘sua sponte that these claims should be dismissed with prejudice’ because Spivey’s complaint was ‘essentially identical to the previous complaint filed in federal court’ and ‘[a]ll claims are barred by tribal immunity.’ The district court, over Spivey’s objections, again adopted the magistrate judge’s recommendations, denied Spivey’s remand motion, and dismissed all Spivey’s claims with prejudice.”
The Fifth Circuit reverses and remands to state court. Because the “parties don’t dispute that tribal sovereign immunity bars Spivey’s claims against the Tribe, the Casino, and the tribal council members in federal court,” the issue presented is whether the district court properly held onto the case on the ground that it was futile to remand it.
The panel holds that under the plain language of 28 U.S.C. § 1447(c) and controlling Supreme Court authority, “when a district court determines that it lacks subject matter jurisdiction over a removed case, it must remand.” Yet the panel observes that “when it comes to allegedly futile remands, there appears to be some confusion over the Fifth Circuit rule.” Some nonprecedential circuit decisions appeared to recognize a futility exception. In the absence of prior, published authority on this issue, the panel finds the question of a futility exception to remand to be an open one.
“We . . . hold, in accordance with the statute’s plain text and the great weight of authority from across the country, that § 1447(c) means what it says, admits of no exceptions, and requires remand even when the district court thinks it futile.” The panel thus reverses the district court’s decision to dismiss rather than remand. (In a footnote the panel cites several U.S. Courts of Appeal that had also so held, though also noting that the Ninth Circuit recognizes a futility exception.)
(The panel goes on to hold that the district court, admittedly lacking in jurisdiction, also erred in granting defendants dismissal with prejudice.)
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