In Wu v. Liu, No. 24-10397 (11th Cir. Mar. 19, 2025), the Eleventh Circuit has to reconcile 28 U.S.C. § 1447(d), which bars appellate review of a district court remand of a removed case, and 9 U.S.C. § 16(a)(1)(C), which affirmatively grants appellate jurisdiction to review orders denying arbitration. For an order that both denies arbitration and remands a case to state court, the Eleventh Circuit holds that § 1447(d) takes precedence and review is barred.
“[Plaintiff Wu] set up investment funds for aliens with promises of opportunities to immigrate to the United States. After Wu . . . fraudulently diverted millions of those funds, an investor sued them in a Florida court. Wu . . . removed the action to the district court and moved to compel arbitration.” The federal-law ground for removal was a statute, 9 U.S.C. § 205, that permits removal of cases to federal court that “relate[] to an arbitration agreement” under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
“In a single order, the district court denied Wu’s motion to compel arbitration and remanded the action. It ruled that Wu failed to meet the ‘jurisdictional prerequisites for the arbitration agreement to fall under the Convention’ because Wu ‘[was] not a signatory to the Purchase Agreement and, therefore, to the arbitration clause.’ And it ruled that Wu failed to ‘provide[] any additional basis for . . . jurisdiction’ aside from section 205 of the Arbitration Act.” The district thus remanded the case to state court.
The Eleventh Circuit dismisses the appeal for lack of appellate jurisdiction.
“Congress has provided a general rule that remand orders are unreviewable on appeal. See 28 U.S.C. § 1447(d) . . . . [W]e cannot review remand orders premised on lack of subject-matter jurisdiction or procedural defect ‘no matter how plain the legal error.’” At the same time, under the Federal Arbitration Act, “Section 16(a)(1)(C) gives us jurisdiction to hear denials of motions to compel arbitration filed in federal district court as an original matter. Our question is whether section 16 also serves as a statutory exemption for the typical ‘procedure’—section 1447(d)—‘otherwise provided by law’ [under § 205] for orders that deny a motion to compel arbitration and remand the suit for lack of subject-matter jurisdiction.”
The panel holds that “Section 16(a)(1)(C) of the Arbitration Act—which gives us jurisdiction to hear appeals of orders that deny motions to compel arbitration—does not except orders that both deny a motion to compel arbitration and remand the suit for lack of jurisdiction from section 1447(d)’s jurisdictional bar.” This construction of the statutes “pays heed to section 205’s direction that the ‘procedure[s] . . . otherwise provided by law shall apply.’ 9 U.S.C. § 205. At the same time, it honors the grant of appellate jurisdiction in section 16(a)(1)(C) because we retain jurisdiction to hear denials of motions to compel arbitration filed in district courts as an original matter.”
The panel also weighs two other exceptions to § 1447(d) recognized in decisional law—the matter-of-substantive-law exception and the Waco exception—yet holds that neither principle attends here. These exceptions apply when the district court, in the course of ruling on a remand petition, issues a ruling that affects the substantive issues in the case and is effectively unreviewable in state court. The panel finds, though, that the district court holding that the arbitration clause did not apply to this dispute was indeed reviewable. “On remand, the state court remains ‘free’ to reject the ruling by the district court that Wu cannot enforce the arbitration agreement.”
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