Appealing a Remand Order, and Intra-Circuit Stare Decisis

When I was in BigLaw, removing a case to federal court seemed a virtually automatic response to any suit that we believed implicated federal jurisdiction. If the federal district court refuses to exercise supplemental jurisdiction and remands the case back to the state court, how do you contest that ruling?

That was the question facing the court in California Dept. of Water v. Powerex, case no. 06-15285 (9th Cir. July 22, 2008), and the answer required it to answer two jurisdictional questions. First, does 28 USC §1447(d) preclude the court from exercising jurisdiction to review the remand order in any fashion? If not, then what is the method by which the order may be reviewed: appeal or writ of mandamus?

Powerex removed to federal court, claiming that the case arose under federal law. The district court denied DWR’s motion to remand and dismissed, finding that the case was within the sole jurisdiction of the Federal Enerergy Regulatory Commission. DWR amended its complaint to request only declaratory relief in order to take the case outside FERC’s jurisdiction and renewed its motion to remand. The district court held that the amended complaint raised only state law contract issues, declined to exercise supplemental jurisdiction, and remanded the case to state court. Powerex appealed, asserting that the complaint still had claims that arise under federal law.

Section 1447(d) appears to deny review of any remand order unless removed under 28 USC §1443 [applicable to certain civil rights cases]. The court notes, however, that section 1447 has been held to prohibit review only of remand orders based on grounds specified in section 1447(c); remands based on other grounds may be reviewed.

That obstacle cleared, the court turned to the question of whether review is by writ or appeal. Here, the court departs from its prior line of rulings, which held that review was by way of writ, because the intervening SCOTUS case of Quackenbush v. Allstate Insurance Co. (1996) 517 U.S. 706, undercut the rationale of the Ninth Circuit’s prior cases. Remand orders resulting from a refusal to exercise supplemental jurisdiction are reviewable by appeal.

Besides a pretty good discussion about the scope of section 1447(d), DWR v. Powerex is worth reading for its explanation of intra-circuit stare decisis; that is, when can a panel depart from circuit precedent that has not been overruled by an en banc decision in the circuit?